THE INVISIBLE HOOK: THE LAW AND ECONOMICS OF PIRATE TOLERANCE* Peter T. Leeson† Abstract.................................................................................................. 140 Introduction .......................................................................................... 140 I. Pirates, Inc.: The Organization of the Piratical Firm ................................................................................................. 146 II. Equal Pay for Equal Prey: Black Pirates and their Status............................................................................................... 154 III. The Law and Economics of Pirate Slavery................................. 160 A. Dispersed Benefits, Concentrated Costs, and Pirate Tolerance...................................................................... 160 B. Conditions for the Profitability of Pirate Slavery ..................................................................................... 165 IV. Concluding Remarks .................................................................... 169 * I thank Chris Coyne and Tyler Cowen for helpful comments and suggestions and the editorial staff of this journal for helpful edits. I also thank the Kaplan Fund and the Mercatus Center at George Mason University for generously supporting this research. † Email:
[email protected]. Address: Department of Economics, George Mason Uni- versity, MSN 3G4, Fairfax, VA 22030. 139 140 New York University Journal of Law & Liberty [4:139 ABSTRACT Can criminal profit-seeking generate socially