BRITISH MERCANTILISM AND CROP CONTROLS IN THE TOBACCO COLONIES:ASTUDY OF RENT-SEEKING COSTS Gary M. Pecquet Tobacco played a prominent role in the development of the Ameri- can colonies. The “stinking weed” dominated the economy of the Chesapeake Bay colonies and became the first colonial-produced commodity subjected to mercantilist restrictions. Although today to- bacco is condemned and its consumption discouraged for its nega- tive health consequences, it is after all an agricultural product, and the nature of tobacco production is similar to most other crops. The British mercantilist laws protected British merchants from foreign competitors by requiring all tobacco to be shipped to England, and the colonies sometimes imposed their own crop control measures to secure higher prices. Present-day agricultural programs throughout the developed world also protect domestic farmers from foreign com- petition and impose crop controls to reduce farm surpluses. There is much that can be learned from the study of mercantilism and the colonial crop controls to help us to appreciate some of the problems of present-day agricultural market regulation. The sheer economic waste resulting from mercantilist trade barri- ers (including higher prices to consumers, dislocations of capital, and colonial warfare) has been well known since the time of Adam Smith. More recently, economists Robert Ekelund and Robert Tollison (1981) have analyzed British mercantilism as a rent-seeking society. 1 Cato Journal, Vol. 22, No. 3 (Winter 2003). Copyright © Cato Institute. All rights reserved. Gary M. Pecquet is Assistant Professor of Economics at Our Lady of Holy Cross College. He thanks Jay Marchand, Clifford Thies, Gordon Tullock, and an anonymous referee for helpful comments. 1 Rent seeking occurs whenever government establishes an entitlement and potential re- cipients respond by expending resources in order to take advantage of the entitlement (Tullock 1967). In the case of a state-imposed license monopoly, the total social cost can far exceed the misallocation effects of higher prices to consumers. This is because the political costs (lobbying, bribery, etc.) needed to secure monopoly privileges tend to dissipate the 467