From Privateering to Navy: How Sea Power Became a Public Good

Abstract:     
Using novel archival data on British privateering voyages, we show that state-licensed commerce raiding by merchants was not only a popular and profitable business, but also effective in harming enemy trade. Despite the success of this private provision of sea power, great investments were undertaken to expand the Royal Navy during the eighteenth century. We provide systematic evidence that the expansion of overseas trade and ensuing decline in the profitability of commerce raiding facilitated the decline of British privateering and the transition to a public provision of sea power at the end of the Napoleonic Wars.

Keywords: Public Good, National Defense, Privateering, Navy, Trade, Britain

JEL Classifications: N73, N43, N13, K42, H56, B15, D23

Working Paper Series