a1 Professor of Economic and Organizational Sociology, School of Social Sciences, University of Mannheim, A5, 6, D-68131 Mannheim, Germany. E-mail: [email protected].
a2 Assistant Professor, Department of Economics, University of Mannheim, L7, 3-5, D-68131 Mannheim, Germany. E-mail: [email protected].
Using a novel data set on 2,483 British privateering cruises, we show that state-licensed raiding of commercial vessels was a popular and flourishing business among merchants that took a serious toll on enemy trade from 1689 to 1815. Why, then, did privateering merchants gradually turn away from these profitable endeavors? We show that the expansion of overseas trade increased the opportunity costs for merchants and resulted in the decline of privateering. Our findings document that the decline of privateering had as much to do with an expanding maritime economy as with the rising naval power of the British state.
(Online publication September 13 2011)
We gratefully acknowledge financial support from the National Science Foundation (SES-0550848) and the Stanford OTL Research Incentive Fund. We thank the former editor, Phil Hoffman, and current editor, Jean-Laurent Rosenthal, the anonymous referees as well as participants at the All-UC Economic History conference, ASSA meeting, Cliometrics conference, MIT-Harvard Economic Sociology Seminar, Stanford's SCANCOR and Social Science History workshops, and the World Congress of Economic History in Utrecht for their valuable comments. Jackie Hwang, Laure Negiar, Andrew Parker, Diana Peng, and Denis Trapido contributed excellent research assistance. All remaining errors are our own.