The Costs of State-Sponsored Terrorism: The Example of the Barbary Pirates

G. Thomas Woodward

National Tax Journal, 2004, vol. 57, issue 3, 599-611

Abstract: From 1785 to 1815, U.S. shipping was subject to capture by the Barbary powers in North Africa. The U.S. government paid these powers for treaties to reduce the predation, and maintained a naval presence to protect its shipping. The Barbary powers appear to have price–discriminated in ransoming captives. Using 1805 as a reference year, the U.S. appeared to be spending between 0.5 to one million dollars in combined costs of protection payments for treaties, naval operations, and disruption to shipping. This probably amounted to 0.1 to 0.2 percent of income, equivalent to $10 billion to $20 billion in today's economy.

Date: 2004
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