Thomas Jefferson

Thomas Jefferson (1743-1826) was the third president of the United States and the principal advocate who signed the Embargo Act of 1807, the early republic's experiment in "peaceable coercion" and the canonical case of an economic weapon inflicting more damage on the sender than on its targets. Jefferson's wager was that Europe's belligerents needed American commerce so badly that its withdrawal could substitute for war; the result was a collapse of American trade, a smuggling economy, and repeal within fifteen months.

Role

Jefferson held a considered doctrine of commercial coercion long before 1807, having argued from the 1790s that American trade gave the republic leverage over European powers without recourse to armies. The occasion arrived when the Napoleonic economic war made neutral commerce prey to both sides: the Berlin Decree (1806) and British Orders in Council (1807) each penalised American shipping, and the British attack on USS Chesapeake in June 1807 brought war sentiment to a head. Jefferson chose the economic weapon instead, over the doubts of advisers who warned that a self-embargo would cost America more than its targets. The Embargo Act, signed on 22 December 1807, prohibited American vessels from sailing for foreign ports, cutting off American exports to the world; it was general rather than targeted, indefinite rather than time-bound, and enforced against Americans rather than foreigners.

Campaign and outcome

The embargo was a self-blockade, and its incidence was perverse. American exports collapsed and the commercial economy of New England was devastated; Douglas Irwin's econometric estimate puts the embargo's welfare cost at about five per cent of 1807 gross national product. Britain found substitute suppliers and markets, and France welcomed a measure that harmed Anglo-American trade. Enforcement escalated through successively harsher supplementary acts against rampant smuggling by land to Canada and by sea, straining Jefferson's own constitutional principles. Domestic opposition broke the policy before any concession was extracted: Congress repealed the embargo effective 1 March 1809, replacing it with the narrower Non-Intercourse Act (US, 1809) in the final days of Jefferson's presidency. The dispute with Britain remained unresolved and ran on to the War of 1812. A lasting side effect was import substitution: the embargo years stimulated early American manufacturing.

Significance

Jefferson's embargo is a foundation case in the Sanctions effectiveness debate and appears throughout the literature as the standard illustration of three failure modes: unilateral denial fails when the target has alternative suppliers; self-imposed trade destruction concentrates political pain in the sender's own constituencies faster than economic pain reaches the target's decision-makers; and enforcement against one's own citizens corrodes the legitimacy of the coercing government. It also stands as an early demonstration that economic weapons are not necessarily cheaper or safer than war for the state that wields them, a lesson rediscovered in later sender-cost debates.

See also

Jefferson's Embargo Act (1807-1809) · Non-Intercourse Act (US, 1809) · Napoleon's Continental System (1806-1814) · British Orders in Council (1807) · Sanctions effectiveness debate · Economic warfare · Economic statecraft

Sources

• United States Congress, Embargo Act of 1807, 2 Stat. 451 (22 December 1807).
• Louis M. Sears, Jefferson and the Embargo (Duke University Press, 1927).
• Douglas A. Irwin, "The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo, 1807-09", *Review of International Economics* 13, no. 4 (2005).
• Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg, Economic Sanctions Reconsidered, 3rd ed. (Peterson Institute for International Economics, 2007).