The very illegality of piracy was responsible for desirable features of their system: by removing the legal penalty for mutiny, it destroyed the captain's opportunism, and by depriving pirates of external financiers (forcing them to steal ships), it eliminated the principal-agent problem that made merchant ships adopt autocratic captains, allowing pirates to organize as a seagoing workers' co-op.

causalpending

Speaker

Peter Leeson

Evidence Quote

pirates in contrast because they're outlaws don't have external financiers so how do they get their ships they steal them and this is why... a pirate crew to a seagoing stock company

Source

Peter Leeson on Pirates and the Invisible Hook 05/25/2009EconTalk
Created: 6/17/2026, 10:31:31 AM

My Notes

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