Leeson on Pirates and the Invisible Hook

Peter Leeson talks with host Russ Roberts about the economics of 18th century pirates. He argues that pirates pioneered important voluntary institutions such as constitutions as a way to increase the profitability of their enterprises. He shows how pirates used democracy and separation of powers between the captain and the quartermaster to limit the potential for abuse on the part of the captain. He explains the role of the Jolly Roger. The conversation closes with a discussion of lessons for modern management.