By Michael Lind, Economics Editor at Commonplace.
Ironically, it was the administration of President Ronald Reagan, an ardent Cold Warrior, that crippled American shipbuilding and America’s merchant marine. The individual most responsible for the destruction of America’s commercial ship construction industry was Martin Anderson, who served in the Reagan White House as assistant to the president for policy development, in charge of economic and domestic policy.
Martin Anderson was an anti-statist radical, who, with his wife Annelise Graebner Anderson, belonged to the cult-like Objectivist circle led by the Russian-American libertarian guru Ayn Rand in the 1960s. The Andersons took courses in Objectivist ideology at the Nathaniel Branden Institute, named for one of Rand’s disciples and lovers. Through Ayn Rand, this fringe-libertarian power couple met another one of her disciples, the future Federal Reserve Chairman Alan Greenspan, who helped Anderson pursue a career in government as an adviser to Richard Nixon and later as the only full-time economic advisor on Reagan’s presidential campaigns in 1976 and 1980.
In a eulogy in 2015, the Atlas Society, named after Ayn Rand’s libertarian novel “Atlas Shrugged,” boasted that Martin Anderson, true to libertarian ideology, had successfully thwarted federal efforts to identify and deport illegal immigrants:
For example, at a cabinet meeting early in Reagan’s first term, Attorney General William French Smith presented a plan to require a national ID card for anyone working in the United States, in part to deal with illegal immigrants. Anderson, who normally didn’t speak at those meetings, raised his hand and, when called on by Reagan, explained that such a card could easily be faked or lost. So why not tattoo a number on everyone’s wrist? Reagan immediately understood the illusion to Nazi practices and the threat such a “Papers please” dictate would pose to liberty. The proposal died there and then.
Martin Anderson was as indifferent to maritime security as he was to border security. Acting on the advice of Anderson, who dogmatically opposed government subsidies, President Reagan in 1981 ended the existing subsides for U.S. ship construction through the Merchant Marine Act of 1970, signed into law by President Nixon: Title V (subsidies for the construction of foreign-trade ships), Title VI (subsidies for operation of foreign-trade ships), and Title XI (loan guarantees for U.S.-flag ships built in U.S. shipyards).
Annelise Graebner Anderson, Anderson’s wife and fellow Randite libertarian, who had been appointed to head Reagan’s Office of Management and Budget, eliminated the subsidies for U.S. shipbuilding from the administration’s first budget request.
The results were devastating to the United States as a maritime power. As one history notes, “when the Reagan Administration decided to stop subsidizing US merchant shipbuilders, they did so without any similar actions taken by other shipbuilding countries. This means that while the American shipbuilders had to walk on their own two feet, foreign shipyards were being heavily subsidized by their country.”
In 1975, the U.S. had 77 commercial ships on order. As a result of the Reagan administration’s abolition of construction differential subsidies, the U.S. sold only eight commercial ships over 1,000 gross tons between 1987 and 1992.
This piece was excerpted from Trump’s Shipbuilding Imperative published on Commonplace by Michael Lind on March 13. 2025. Read the full piece to learn more.
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