May 25, 2009

Pirates and the Invisible Hook

  • Peter Leeson

    Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
  • Russell Roberts

    Affiliated Senior Scholar
Key materials
Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Peter Leeson of George Mason University and author of The Invisible Hook talks with EconTalk host Russ Roberts about the economics of 18th century pirates and what we can learn from their behavior. Leeson argues that pirates pioneered a number of important voluntary institutions such as constitutions as a way to increase the profitability of their enterprises. He shows how pirates used democracy and a separation of powers between the captain and the quartermaster to limit the potential for predation or abuse on the part of the captain. He explains the role of the Jolly Roger in limiting damages from conflict with victims. The conversation closes with a discussion of the lessons for modern management.