The Illicit Trade & Conflict Connection: Insights from U.S. History

Abstract

A great deal of scholarly and policy attention has been given in recent years to the relationship between illicit trade and armed conflict. Much of the focus has been on how violent non-state actors have exploited illicit commerce to fund and sustain rebellion. It is commonly asserted that this is a distinctly post-Cold War phenomenon — even a defining characteristic of so-called “new wars.” In this brief paper I attempt to “bring history back in” to contemporary debates about illicit trade and conflict by critically examining the early American experience, arguing that illicit commerce and its connection to armed conflict played an essential role in the very making of the nation, and that the distinction between a patriot and profiteer was often a blurry one. I focus on three cases: the American War of Independence, the War of 1812, and the American Civil War. In all three cases, illicit trade profoundly shaped the nature, duration, and outcome of the conflict. In the case of the War of Independence, illicit trade successfully supplied the rebellion but also complicated postwar reconstruction. In the case of the War of 1812, illicit trade in the form of “trading with the enemy” extended the conflict, helped to turn it into a stalemate, and subverted U.S. efforts to annex Canada. In the case of the Civil War, illicit cotton exports via blockade running helped to prolong the conflict, allowing the Confederacy to persist far longer than would otherwise have been the case.