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Working Paper #41

Privateering and National Defense: Naval Warfare for Private Profit

Abstract: The claim that all legitimate defense functions can and must be privately supplied flies in the face of certain economic doctrines that are almost universally accepted. Almost all economists declare that national defense is a “public good” that will be provided in sub-optimal quantities—or not provided at all—by private, profit-seeking firms. The purpose of this paper is to challenge just that sort of statement. The attack on national defense as a public good which must be provided by the state will be two-pronged. One part, the briefer of the two, will raise theoretical questions about public goods in general and national defense in particular. The second part will be devoted to a detailed survey of privateering, a form of naval warfare conducted by privately-owned ships which lasted from the twelfth century to the nineteenth century. What privateers were, how they operated, the legal customs that grew up around them, how effective they were, how profitable they were, and why they disappeared will all be addressed. The common employment of privateers during wartime will be offered as empirical evidence that defense need not be monopolized by the state.

Until his death on October 30, 2008, Larry J. Sechrest was a Research Fellow at The Independent Institute in Oakland, California, and a professor of economics at Sul Ross State University.

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