Rational Bandits: Plunder, Public Goods, and the Vikings
Author(s): Peter Kurrild-Klitgaard and Gert Tinggaard Svendsen
Source: Public Choice, Vol. 117, No. 3/4, Essays in Memory of Mancur Olson (Dec., 2003), pp.
255-272
Published by: Springer
Stable URL: http://www.jstor.org/stable/30025905
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Public Choice 117: 255-272, 2003.
© 2003 KluwerAcademic Publishers. Printed in the Netherlands.
255
Rational bandits: Plunder, public goods, and the Vikings *
PETER KURRILD-KLITGAARD1& GERTTINGGAARDSVENDSEN2
1Departmentof Political Science and Public Management, Universityof SouthernDenmark,
Campusvej55, DK 5230 Odense M, Denmark;2Departmentof Economics, Aarhus School of
Business, 4 Fuglesangs Alld, DK-8210 Aarhus V,Denmark
Abstract. The paper applies and extends insights from MancurOlson's study of state making
to the Vikings. In a world of roving bandits, a sub-optimalprovision of public goods exists,
most notably of security. Roving banditryleads to over-plunderingand zero profits for the
plunderers,which makes stationarybanditryprofitable.The most efficient bandits monopolize violence, begin to tax and provide some amounts of public goods in order to stimulate
economic growth. The analysis demonstrateshow the Vikings' activities and settlements are
consistent with such an explanation, with the dynamics of the process being reflected in the
variationin the numberof raids and the amountof wealth extracted.
1. Introduction
The standardpicture of Vikings is that of savages runningberserkwho roved
the European coasts, robbed towns, burned churches, raped women, killed
innocents and just generally created havoc and mayhem before eventually
celebratingtheir deeds by gorging and drinkingday and night.
This picture has something to it but is also somewhatone-sided. We will,
drawing upon work by Mancur Olson, Gordon Tullock, and other public
choice theorists, provide a new perspectiveand arguethat the Vikings simply
acted as economically rational bandits (Section 2).1 Simultaneously we will
add a dynamic element to this analysis of plunder.Specifically,we will argue,
first, that roving bandits such as the Vikings move from roving to stationary
banditrybecause it pays better in the long run. Roving and looting results in
collective over-plunderingand the loss of potentialprofits,but by settling and
taxing bandits may profit even more. Furthermore,even if stationarybandits
redistributein their own favor,they may also be providingsome public goods
in orderto stimulate tradeand economic growth.Finally,we will engage in a
* Earlier versions of the
paper were presented at meetings of the EuropeanPublic Choice
and
the
Public
Choice
Society. We appreciate helpful comments and suggestions
Society
from Norman Frohlich, Joe Oppenheimer,MartinPaldam,TorEriksson,Erik StrejerMadsen,
Hans Linderoth,Urs Steiner, Edward Miguel, and Yoav Wachsmann,as well as many useful
conversationswith MancurOlson and GordonTullock.
256
"theoreticalhistory"of the Viking phenomena, offering a numberof empirical observationsthat show how the analysis contributesto the explanationof
importantpartsof the Viking phenomenon (Section 3).
This type of economic history is important because it contributes new
and empirical dimensions to the explanation of both state building and the
Vikings. Other, more traditional explanations of the Viking phenomenon
have focused on, e.g., climatic changes or the supposedly bellicose "culture" of the Nordic people, while Marxists have tried to explain the Viking
phenomenon as the supposed result of over-populationfollowing the privatization of land. Our contributionis to present a theoretical model of Viking
behavior, which draws attention to the possibility that the Vikings were
simply reactingrationallyto changes in constraintsand as entrepreneurially
exploiting opportunities.
2. From roving to stationary banditry
In pre-agriculturalperiods, primitive tribes organized voluntarily into relatively small bandsfor gatheringfood and hunting,where a peaceful orderwas
maintainedspontaneously.However, in larger agrariansocieties a stable and
peaceful ordercould not be established voluntarily.A typical individual in a
society with, say, one thousandpersons, will get only about one-thousandth
of the gain from the productionof a public good, but will bear the whole cost
of any contribution.Thus, the individualhas little or no incentive to establish
or contributeto the supply of, e.g., law and order.As such, large groups are
usually incapableof achieving the benefits of voluntarycollective action.2
The Vikings, who roved the coasts of Europe from the 8th to the 11th
centuries, is an example. At the expense of society as a whole, they received
large, individualbenefits from plundering.A roving bandit, such as a Viking,
bears only a small share of the reductionin national income associated with
his or her actions but receives the full benefits of those actions. In a world
without strongmoralside-constraintsand with low risk of detection and punishment, it is individually rational to use violence and plunder in this way.
Roving bandits impose a negative externality on society and this common
pool problem leads to economic decline. As such, the logic of concentrated
benefits for special interestgroups leads to chaos.
What then initiatedthe organizationof larger societies and allowed them
to move from chaos to order? Olson (1993: 568) found an answer to this
question in his readingsabout the war history of medieval China. In medieval
China, local people preferredthat a roving bandit settled down in their area
even though he robbed them throughheavy taxation. He could protect them
against roving banditryby defining propertyrights, by prohibiting arbitrary
257
$/unit
MB
B(P**)
TC
TB
p**
P*
Plunderingeffort units
Figure 1. Roving banditryand over-plundering.
confiscation of property, and by monopolizing violence, thereby making it
possible to keep up production. Gigantic gains to the local people emerged
from the introduction of well-defined property rights compared to those
achievedbefore "security"and enforcementof propertyrights were provided.
This example may be compared to that of roving Vikings, who settled down
and therebywere able to collect increasedprofitsthroughtax revenues.
2.1. Plunder as a commonpool resourceproblem
This explanation must consider the question of when the Vikings will
"switch"from roving to stationarybanditry,and a "switch point" must exist.
We will argue that the Vikings settled down because the initial profitability
of being a roving Viking attractedcompetitors. Plundering corresponds to
fishing or hunting: During roving banditry,confiscating goods from farmers,
traders,etc., is a free-access resource(or common-pool resource).Therefore,
we simply suggest that eventually the roving banditsbecome too many; they
over-plunderand lose profits as shown in Figure 1.3
The difference (vertical distance) between total benefits (TB) and total
costs (TC) shows the net benefits from plundering.This difference between
TB and TC is maximized at plunderingeffort P**.This is the efficient level
where marginalbenefits (MB) are equal to marginalcosts (MC). MB represents the slope of the TB curve and the MC tangent can be identified as the
constantslope of the TC curve.
Access to plunder is in principleunrestricted,and an increasingnumberof
roving bandits will thereforeexpandplunderingeffort beyond P**.Why does
such over-plunderingoccur? The case of roving Vikings is similarto thatof an
258
individual fishermantrying to catch as much fish as possible (cf. Anderson,
1984). Each Viking will likewise try to "harvest"as much as possible and
increase plundering efforts until profits are zero, i.e., to P* in Figure 1. At
this point, total revenuefrom plunderingis reduced and total costs increased
comparedto the optimal level, P**.
Formally,Viking numberi, i E [0, 1], decides whether or not to plunder.
Let pi be equal to 1 if he decides to plunder and equal to 0 if he decides not
to plunder,hence pi E 0, 1}. Thus, the total amount of plundering,called P,
is given by:
P=
f1
pidi
i=O
The individual benefit from plunderingis dependent on the total amount of
plundering,so that the individualutility is ui = piB(P). Assume that B' < 0,
meaning that the more plundering,the less benefit from plundering.
Because each Viking will maximize his plundering effort under the assumption that his individual effort has an insignificant effect on P, he will
not take into account how his effort affects total plundering resulting in the
non-optimal outcome of P*, that is:
max ui =
Pi
pi*= 1.
Total amountof plunderingis equal to 1, since f1 p* di = 1 = P*.
i=O
The optimal amount of plunderingcan be found by maximizing the sum
of all Vikings' utility with respect to P.
uidi= P**.
max
p
1fi=0
Here, it is taken into account that increased plundering reduces benefit, that
is, we get the effect from B' < 0, and consequently, P** < P*.
In other words, roving bandits, such as the Vikings, will plunder more
than what is efficient in orderto maintainthe efficient amountof production
factors. These uncoordinatedactivities reduce the stock of productionfactors
for farming, trading,etc., and thereby future economic growth rates, i.e., the
steady state profitlevel from plunderingwill be lower.
It will pay individual roving bandits to change behavior, when overplundering eradicates profits. By becoming stationary, they will be able to
259
$/unit
MC
A
MB
B
Rovingbanditryreduction
R*
Figure 2. Stationarybanditryand the reductionof roving banditry.
exclude others from plundering that area and starttaxing. The optimal level
of plunderingwith a stationarybanditryis where the marginalcosts equal the
marginalbenefits of reducing roving banditry.
Figure 2 suggests that total benefits from reducingroving banditryto the
optimal level R* amount to areas A + B, whereas the total costs of doing so
amount to area B (cf. Anderson, 1984). Thus, areaA shows the positive net
gain from having a stationaryruler settling down and protecting his citizens
against roving banditry.
In conclusion, by excluding other roving banditsthe now stationarybandits prevent further over-plunderingand maximize their own future profits.
In this way the Vikings presumably learned - as though they were led by
an invisible hand - that they gained more from settling down and becoming
stationarykings than by continuing as roving Vikings. By initially engaging
in banditryand reducing the expected returnfrom legitimate activities, the
Vikings created their own competition, which eventually drove the profits
from roving banditry to zero. The Vikings essentially acted as an external
shock on a system that caused increases in roving banditry and eventually
made it more profitableto become stationary.
2.2. Taxation,time horizons and public goods
Only by settling and excluding competing roving bandits will a stationary
bandit be able to steal by taxation and provide the public good of a peaceful
order. However, such governments do not arise because of voluntary social
contracts,but because of rational self-interestamong those who can impose
organization (cf. McGuire and Olson, 1996). It is in this way not a con-
260
tractarianexplanationbut rathera by-product theory of state making, where
political entrepreneurstake on the task of providing public goods in orderto
reap profits personally.4
A stationary bandit has, as the "owner" of all wealth, an incentive to
establish a relatively peaceful order, i.e., one where nobody else can successfully challenge his position. He will then impose a tax and maximize tax
revenue by choosing the top point on the well-known Laffer curve, where
the product of the tax rate and national income is maximized. The method of
stealing, taxation or confiscation,depends on the time horizon (cf. Frohlich
and Oppenheimer,1974). If the bandit expects to stay in control indefinitely,
then it will be optimalfor him to tax some ratherthan confiscate everything.
Assume, for example,that the optimal tax rate, To, is 1/3. If the tax rate were
any higher, then the loss in the society's income would be largerand result in
a reduction in the bandit'stax income. With an infinite time horizon, there is
accordingly a limit to the amountthat can be taken by the bandit (cf. Olson,
1993: 569). In contrast, if the bandit expects a short tenure, then he may
consider confiscation of propertywhenever the total tax payments over time
fall short of the value of the assets belonging to citizens.5
The optimal provisionof public goods is analogous to setting the optimal
tax rate. In general, any rulerwill provide public goods up to the point where
the last dollar generatesa dollar's increase in the ruler's shareof the national
income (the gain to society being the reciprocal of the ruler's share). A stationary bandit, who were to reduce looting by other banditsso that peace and
prosperitycould be kept, would invest up to the point where $1 spent would
result in a $3 rise in income so that he could get back again the $1 spent.
Consequently, the stationarybandit will have an incentive to provide public
goods such as building bridges, establishing a legal system to reduce crime
and secure the healthand productivityof his citizens (see Olson, 1993: 568).
Citizens benefit from both the increase in national income and the provision
of public goods (Olson, 2000).
3. The Vikings
The analysis suggests three hypotheses when applied to a case such as the
Vikings. First, when access to plunder is unrestricted,an increasing number
of roving Vikings will expandplunderingeffort beyond the profitmaximizing
level and do so until profits are zero. Second, in order to maximize profits,
it pays a roving Viking to switch and become stationarythereby excluding
others from plundering. Stationary Vikings will then maximize profits by
taxing the stock of human capital and equipment. Third, the Vikings who
become stationarywill seek to maximize their revenues by providing some
261
public goods, most notably securityand legal institutions,and this in turn will
tend to produce economic growth and furtherincreasefuturetax revenues.
These theoretical propositions will be applied to the historical evidence,
by considering first the move from roving to stationarybanditry,and second
the productionof various types of public goods by Vikings. Such an analysis
will quite naturallybe highly conjecturaland must of course be considered
with the appropriatereservations.
3.1. Phases of the Vikingphenomenon
The term"Viking"is often used somewhatindiscriminatelyto refer to a large
number of rather different phenomena, associated with the "Viking Age,"
i.e., the period generally accepted to cover the approximatelythree hundred
years ca. 780-1080.6 However, in order to analyze the Vikings as roving
and stationary bandits, it is necessary to distinguish between at least four
differentphases of the West EuropeanViking experience:7
1. Before ca. 835: In the early medieval period Norse pirates occasionally
raided northwesternEuropean coasts in small, sporadic attacks, but by
the 790s these became larger in scale, more frequent and widespread,
although they were still largely "private"hit-and-runraids, directed towards coastal targetsduring the summer,afterwhich the raidersreturned
home. The attacks accelerated dramatically in the early 9th century,
especially after internal disputes among the Franks from 830. Viking
activities then increasingly became "public"activitiesconducted by Nordic princes, as partof their accumulationof revenue,or as a career choice
for those currentlyunwelcome in their homelands.
2. Ca. 835-ca. 895: Raiding Vikings began to bandtogether in large fleets
and armies and established temporarybases, from which they sacked
towns and markets, both on the coasts and inland. Occasionally the
forces disbanded, while at other times they re-united in the so-called
"GreatArmy."The Vikings developed the extremely lucrative and lowcost practice of extorting so-called Danegeld, i.e., money paid as tributes
by communities in returnfor not being attacked.8The phase ended with
a numberof Viking defeats and the breakingup of the last "GreatArmy"
in 896.
3. Ca. 850-ca. 925: Some Vikings continuedas free-lance bandits, offering
their services for hire, but the majority went from being roving bandits to being stationary.Some established Viking kingdoms in Dublin,
Northumbria,York and the Isles, while others simply settled peacefully
in, e.g., East Anglia, Deira, London, parts of Scotland, etc. Others received land as fiefs (e.g., on the Frisian coast and in Normandy), or
262
sought out entirelynew worlds to colonize (e.g., Iceland, Greenlandand
Newfoundland).Subsequentlyfollowed more than half a centurywithout
significantViking activities.
4. Ca. 980-1066: Vikings became literal conquerors, with strong national
kings leading massive fleets and armies against England. This began ca.
980 and culminatedwith conquests of England by Sven Forkbeard(ca.
960-1014) in 1012-13 andby Canutethe Great(988-1035) in 1016. This
phase ended with the invasion by the Norwegian King Harald Hardrada
(1015-66) in 1066, who was killed in the Battle of StamfordBridge.
3.2. From Vikingsto kings
The historical facts of the Viking exploits in the West fit the theoretical
analysis quite nicely. The focus here is primarily upon the transition from
the second to the third and fourth phases, i.e., of how and why the Vikings
stopped being rovingbanditsand the consequences thereof.
The reasons for this change are complex, but an explanation taking its
departure in the previous analysis may be based in three observations of
which the two are capturedby our theoretical analysis. First, the long-term
profits from settlingmay have exceeded those of continuing to rove. Over the
decades, the tributesextractedfrom the English and the Franksby the Vikings
were indeed significant,thus indicatingthe presence of a considerablewealthbase thatmight be exploited (see, e.g., Jones [1968] 1984: 365-366; Roesdahl
[1991] 1997: 252-255). Second, there seem in some periods to have been a
"rush"to participatein the raids, or at least that the number of raids and
participantsincreased,thus reducing the spoils per capita. Third and finally,
the costs of rovingbanditryseems to have risen on a couple of occasions after
the middle of the 9th century,where King Alfred the Greatsuccessfully united
the Anglo-Saxons againstthe Vikings, and where internaldisputes among the
Frankswere settled,thus creatinga less divided object of spoilage.
It is extremely hard, if not impossible, to find data even remotely qualifying as satisfactoryaccording to the strictest, modern criteria.Nonetheless,
there are indicia, which could seem relevantto consider, e.g., how the waves
of plunderingdevelopedover time. Table 1 gives the numberof Viking raids
on Irish churches recorded in the Annals of Ulster for the decades of the
period 800-910 and adds some of the relevanthistorical events.
The observationsare broadlyconsistent with the expectations. The Viking
raids began slowly and then escalated; subsequent to a peak, the Vikings
settled the areasthey had raided. Then the numberof raids flattenedout, and
the remainingVikings sought other,more profitablecoasts.
Another approachis to consider how much the Vikings extorted, e.g., the
amount of tributespaid as Danegeld. In the 9th and 10th centuries the Franks
263
Table1. Number of recordedViking raids on Irish churches in Annals of Ulster, 800-910
Decade
beginning
Number of
recorded
raids
Events
795: First Viking raids on Ireland
790
800
810
820
830
840
8
25
10
850
860
870
880
890
900
910
2
2
1
1
1
0
2
839: First winteringof Vikings in Ireland
841: Viking fortresses and settlements at Dublin and Annagassan; Viking attackson the continent
845: First Danegeld paid by Franks
Source. Annals of Ulster, according to Sawyer (1982: 84).
paid at least fifteen Danegelds on behalf of larger areas. Neither the exact
amountsnor the numberof Vikings are known. Furthermore,there were also
local Danegelds, and there may have been many such, but these are unknown
today. Nevertheless, totals for those known are given in the upper part of
Table 2 and may serve as an illustration.
In the case of the Frankishrealmthe amountsof silver seem to have almost
peaked at the beginning, and then to have declined, while there no doubt was
an increase in the numberof Vikings. This suggests that there was a decline
in the per capita spoils, and eventuallythe Vikings who had raidedthe Franks
settled in Normandy in the late 9th and early 10th centuries.
In the case of England almost no examples of Danegeld are known from
the first wave of attacks in the 9th century, but such extortions became a
centralaspect of the raids in the 10th and early 11th centuries,and this period
is perhapsthe best possible illustrationof the hypothesis, compare the lower
part of Table 2. When the raids resumed the amount of silver extorted remained relatively stable, but in reality it probably declined somewhat due
to an increasing number of participants,and eventually the amount extorted
264
Table2. GeneralDanegelds paid by the Franksand the English in the 9th- 11th centuries
Year
Pounds of silver
Events
7.000
Unknown
5.000
6.000
Unknown
4.000
5.000
Unknown
Unknown
12.000
700
Unknown
Unknown
Unknown
Unknown
Startof Viking attacks
Franks
845
853
860-61
862
864
866
877 (Seine)
877 (Loire)
882
884
886
889
897
923-24
926
ca. 900-915: Viking settlements in Normandy
End of Viking attacks
England
991
994
997-1000
1001
1002
1003
1004
1006
1007
1009
1012 (tax)
1018 (tax)
22.000
16.000
Unknown
Unknown
24.000
Unknown
Unknown
Unknown
36.000
3.000
48.000
ca. 83.000
980: Resumption of Viking attacks
Conquestby Danish army
1016: Re-conquest
Sources. Jones [1968] 1984: 365-366; Logan [1983] 1991: 122, Table 1; 173-174, Table 4;
Roesdahl [1991] 1997: 252-255.
265
droppeddramatically.Immediately after that the Vikings shifted from periodic plunderto a full-scale invasion andconquestin 1012-13, which resulted
in absolutelyunprecedentedamountsbeing extorted.Then, in 1012 the Danegeld was substitutedfor a more regulartax structure,where an annualtax was
levied on all and with a special heregeld (army tax) taking precedence over
all other taxes.
3.3. Thesupply of public goods
The thirdhypothesis is that the Vikings, when moving from roving to stationarybanditry,would begin to invest resourcesin the supply of variousforms of
public goods. To consider this we may keep the previously outlined phases in
mind as well as consider the fact thattherewere basically four differentways
of obtaining income from being Viking: Plunder;the payment of extorted
tributes (Danegeld); payment for services rendered;direct taxation.9 Given
these differenttypes of behavior we may distinguishbetween several different kinds of ways Vikings could be seen as producingpositive externalities:
Some Vikings simply plundered,andto the extent thatthey merely consumed
the spoils, no direct positive externalitiesmay be seen as being generated.
Local princes also hired Vikings to supply protection,while others settled as
autocratswho supplied protection and law enforcement, etc., themselves in
returnfor taxes. Finally, several of the roving Viking princes used raids to
extractrevenue which they then used to financepublic goods elsewhere.
3.3.1. Protection, security, etc.
Some Vikings roved for their own direct benefit, while others functioned as
a kind of mercenaries, sometimes being employed by local princes, other
times fighting these themselves, and thus playing a role in supplying security
(or the very opposite). In Ireland, for example, the Dublin Vikings fought
both alongside and against the indigenous kings, while both sides in the
conflicts between Franks and Bretons used the Loire Vikings, sometimes
simultaneously(see Sawyer, 1982: 98, 1997: 9; Nelson, 1997: 32-33).
A good example of a roving Viking-for-hire is the chieftain Weland
(t863), who in 860 was hired for £3,000 silver by Charles II the Bald (82377), King of the West Franks(and lateremperor),to attacka group of Vikings
at Oissel on the Seine. The payment was later increased to £5,000 silver
plus livestock and corn, but instead Welandand his 200 ships were hired for
£6,000 gold by the very Vikings he was supposed to attack and then joined
these. Charles eventually hired Weland again (see Nelson, 1997: 36). Another, later example is the Danish Viking chieftain Pallig, who was hired by
AethelredII the Unready (ca. 968-1016), King of England,but later changed
sides andjoined a raiding fleet, while Aethelredsubsequentlyhired Thorkild
266
the Tall and his 45 ships of Vikings to protect London against their Danish
colleagues. Even after the Danes had lost all English possessions in 1042,
the new English king, Edwardthe Confessor (ca. 1014-1066), continued to
maintain a Scandinavianfleet until 1051 (see Sawyer, 1982: 146; Roesdahl
[1991] 1997: 252).
Such mercenary-like activities often contributed to the Vikings' move
from being roving to stationarybandits, namely when the inhabitantsoccasionally welcomed them as protection against other attackers(see Sawyer,
1982: 99). In Devon and Cornwall,for example, the local Britons formed an
alliance with Vikings as early as 838, to secure themselves againsttheir West
Saxon enemies of the kingdom of Wessex (see Sawyer, 1982: 99). In 866 the
"greatarmy"of Vikings based in East Anglia took the opportunitycreatedby
a civil war in Northumbriato seize York, and built a Danish kingdom of their
own, thereby establishinga new peace.
Another way to enjoy the Vikings' comparativeadvantagein violence was
to grant land to them. This was a more efficient method, since it gave the
Vikings a long-term personal interest in defending the area and preventing
others from attackingit, i.e., a strategyquite consistent with Olson's theoretical analysis. The raids on the Frankspeaked in the 830s and 840s and after
a treaty between the Danish king Horik and Louis the German,King of the
East Franks, in 848 somethingresembling peace ensued, with only a few occasional raids over the next 34 years. The explanationfor this change was that
the Frankswere willing to accept the more or less permanentpresence of the
Vikings in returnfor peace (see Sawyer, 1982: 87 f.). Already in 841 the Danish exile-king HaraldKlak (t844) had been granted the island of Walcheren
and its surroundingsas fief by LotharI in orderto preventfurtherattacks,and
afterthe treatyLotharI grantedland in Frisia to Harald'snephew,the Viking
prince Rorik in 852, because, as the Frank Annals say, he "could not crush
him" and in orderto protect areasnearby.Later, in 882, his relative Godfred
was similarly grantedthe same territoryand for the very same reasons (see,
e.g., Sawyer, 1982: 91, 98; Roesdahl [1991] 1997: 197). In 911 Charles the
Simple (t929), King of the West Franks, in a formal treatyconceded Rouen
and the lower Seine Valley to the Viking leader Rollo (t932). He did so "for
the protection of the kingdom,"i.e., in order to get Rollo to protectParis and
its vicinity. A few years later Rollo and the king themselves acknowledged
Vikings holding Nantes and the lower Loire Valley (see, e.g., Sawyer, 1982:
5, 98, 1997: 13; Roesdahl [1991] 1997: 206 f.; Nelson, 1997: 31).
In yet other cases the revenueobtained from plunderingabroadwas used
for state building at home. Indeed, for most Nordic kings of the Viking age,
especially the 10thand 11th centuries,their main source of the wealth needed
for their activities seems to have come from plunder and extortion abroad
267
(see Savoyer, 1982: 144, 1997: 17). The revenuewas used for, such things as
paying soldiers, rewardingsupporters,and creatingmilitaryfortifications.
3.3.2. Law
Revenue-accumulatingstationarybanditshave an interestin supplying some
form of legal institutions and law-enforcementin orderto stimulate production and trade. While the Vikings today largely have a reputation of being
lawless savages, Norse society in reality cultivatedthe idea of rule by law
and had quite well developed legal institutions,which they took great pride
in. Furthermore,wherever the Norse peoples went, they brought their legal
institutions with them and developed these further,e.g., on the Faeroe Islands, the Hebrides, the Orkneys, the Shetlands,Man, Greenland, and most
importantlyIceland (see Jones [1968] 1984: 373-374). Finally, the Vikingsturned-kingswere often innovative and effective in their attempts to reform
the legal systems of the nations they came to rule over, e.g., the Viking Guthrum (t890), King of East Anglia, and Canutethe Great, King of England,
Denmark and Norway and parts of Sweden, whom historians consider one
of the major lawmakers of the medieval period, especially because of his
English legal code's securing of rights, settlementsof conflicts and efficiency
in enforcement.10The same applies to a lesser extentto the Norwegian Viking
prince, Olav Haraldson,who had served in EnglandunderThorkild the Tall,
but conqueredhis own homeland and became King Olav the Holy (ca. 9951030). Despite his backgroundas warrior,he becamewell known for securing
peace and security in his hitherto unstable country,e.g., by continuing and
strengtheningthe local thing (parliaments)while simultaneously developing
a nationallegal code (see Jones [1968] 1984: 376-377).
3.3.3. Tradeand economic growth
The establishment of trade and production has always been an interest to
autocratsseeking to increase their revenue by increasing economic growth,
and whereas the Vikings today are primarilyknown as raiders, they seem in
their own time to have been known almost as much as traders,just as they
facilitated trade between others by establishingor cultivatingmarketplaces.
Some of the largest, most prosperous,and fastest growingEnglish markets in
the 10th- I th centurieswere in the so-called "Danelaw,"in Yorkand Lincoln
where the Danes ruled from ca. 900 (see Sawyer, 1982: 107-108), while the
Rouen, capital of the Viking dukedom in Normandy,flourished as a trading
center partly due to being fueled by Viking loot (see Roesdahl [1991] 1997:
208. Most illustratively,the city of Dublin was originallyfounded as a Viking
armybase andby the mid-10th centuryhadbecome a flourishinginternational
tradecenter for all kinds of goods (see Roesdahl [1991] 1997: 224-232).
268
The Danish king Godfred(t810), who ruled at least the Southernpart of
present Denmark, is an illustration of a public good producing bandit. He
may have begun as a Viking, and he spent the first years of the 9th century raiding the Frisian and Slav coasts and extracting tribute.From this he
accumulated considerablewealth, and he is the first Danish king known to
have controlled a fleet and a cavalry and to have engaged in major public
works. The wealth was probably what made it possible for him to rebuild
and expand the fortificationsagainst the South, which are a part of the great
Dannevirke, the old border"wall" between Danes and Germans. In 808 he
attacked,plunderedand destroyedthe wealthy Slavic merchanttown of Reric
and forcibly moved its merchantsto the town of Hedeby, which he probably
founded. In turnthis became the wealthiest town of Viking Scandinavia and
a source of considerablerevenue through tolls (see, e.g., Jones [1968] 1984:
98-99; Sawyer 1982: 73; Roesdahl [1991] 1997: 120; Nelson 1997: 21). In
this respect the Viking-like activities of a king increased trade and wealth
accumulation as well as financed a national defense strong enough to deter
the mighty Charlemagne,Emperorof the Franks(742-814).
In fact, the revenue broughthome from Viking activities and from controlling trade is often seen as being one of the main elements of making
possible the centralizationof power during and institutionalizationof trade
in the Viking age.11In Denmarka numberof smaller,more or less independent kingdoms were united into a larger, and the same process seems to have
characterizedNorwayand Sweden, and in each case Norsemen who had been
Vikings seem to have played an importantrole (see, e.g., Jones [1968] 1984:
11; Sawyer 1982: 144).
4. Conclusion
This study has offeredthree theoreticalpoints for the explanationof the Viking phenomena as well as empirical analysis giving some supportfor these,
albeit necessarily of a tentativeand somewhat anecdotal character.
First, by combining Olson's framework of roving and stationarybandits
with a common-pool resource model it has been demonstratedhow Vikinglike banditsengagingin roving banditrymay have been over-plundering,with
profits from plunderingand roving banditryeventually approachingzero.
Second, Viking rulers with a relative advantage in the use of coercion
thus had an economic incentive to move to stationarybanditry where they
would increase profits by settling down and taxing local people ratherthan
roving and looting. This is consistent with empirical observations detailing
the developments over time in the number of raids and the amount of wealth
extorted.
269
Third, by settling the Vikings were able to build organizationsthat could
offer solutions to public good problems. They did so by accumulating revenue from a numberor sources, ranging from simple plunderto extortion of
tributeand taxes, as well as by selling their services. Consequently,they produced protection and law enforcement, engaged in public works, supported
the growth of trade, etc., while simultaneouslyreapingrents for themselves.
Increasedproductionincreased their tax collections.
This view of the Vikings is somewhat at odds with the colorful view
held by most people, as well as with that of some historians (however, see,
e.g., Roesdahl [1991] 1997: 65; Sawyer 1997: 7). Most strikingly, such an
entrepreneurialperspective is fundamentally opposed to, e.g., the Marxist
and cultural explanations of the Viking phenomena,which sees it either as
the result of the grand materialistlaws of history or as events that may only
be understood in their own isolated context. And while it may be combined
with more traditionalexplanations of the Viking phenomenon(e.g., climatic
changes) it adds importantnew perspectives.
The present analysis is somewhat speculativeandthe hypotheses have not
been submitted to systematic attempts at falsification. The character of the
historical data alone would make such an attemptdifficult, and the findings
of the present research must accordingly be seen as a preliminary.It is in
particularimpossible to say whether the Viking activities made an over-all
positive net-contributionto their societies or not. To make such an estimate
would involve a complicated comparison of what can be determined with a
reconstructive analysis of what would have been the case, but the present
study offers some new perspectives when it comes to making a more balanced, qualitative assessment. It is, of course, obvious that the activities of
the Vikings were not welfare-increasingin strictlyParetianterms;while some
were better off, other people quite evidently were significantlyworse off, to
say the least, due to the Vikings. But it should also be clear that the Vikings
may not necessarily have been all that bad all of the time. Indeed, it seems
quite unlikely that the Vikings were any more violent and brutal than their
contemporary Franks, Brits, Saxons, and Slavs; ratherit was simply their
circumstances,which were different (see, e.g., Jones [1968] 1984: 2; Sawyer
1982: 95).
Notes
1. See, e.g., Olson (1993). For the best overview of Olson's theory, see Olson (2000).
Olson's economic theory of autocracy was in many respects initially formulated by Tullock (1974); cf. also Tullock (1987, 2001). Other,relatedrationalchoice perspectives on
state making, state building, political entrepreneurshipand autocracymay be found in the
works of, e.g., Frohlich, Oppenheimer, and Young (1971), Frohlich and Oppenheimer
270
(1974), Auster and Silver ([1979] 1981), Levi (1988), Benson (1999), Barzel (2000),
Moselle and Polak (2001), Grossman(2002).
2. This is, of course, essentially the Hobbesian analysis of the interaction of the stateof-nature; for contemporaryrestatements in the public choice tradition. For a critical
perspective on the extension of this to all political settings, see, e.g., Kurrild-Klitgaard
(2002).
3. Cf. Tietenberg(2000: 284), Svendsen (2003). This idea derives from common resource
economics, cf. Tietenberg(2000) for the basic theory and Schaefter (1957) for a model
on common resourcemanagementsuch as fishery.The "common-poolresource"of plundering farmers is not a pure public good because it only fulfills the first condition of
non-exclusivity (where everyone can exploit the resource). The second condition of nondivisibility (where consumption does not change the good) is not fulfilled. Because the
capturemust be subtractedfrom the amount available to others, plundering is not a true
public good buta "semi-publicgood," i.e., a privategood with open access. Therefore,the
first-come, first-servedprinciple applies: no individualor group hold power (or it does not
pay) to restrictaccess. Examples of such "open-access-resources,"the so-called "tragedy
of the commons,"could be the rainforest,common graze lands, and bison hunting (Hardin,
1968).
4. Cf. Olson (1993: 568). For public choice analyses of the constitutionalcharacterof such
autocraticregimes, see also Tullock (1974, 1987); Kurrild-Klitgaard(2000).
5. See De Long and Shleifer (1993) for historical accounts on this issue. Such exploitative
behavior by an autocratmay even under the worst of circumstances make it preferable
to remainin a state-of-naturewith roving bandits, cf. Moselle and Polak (2001), KurrildKlitgaard (2002). On the other hand, this may make it worthwhile for the autocrat to
constitutionallyconstrainhimself voluntarily,cf. North and Weingast (1989).
6. See Jones ([1968] 1984: 1). The meaning of the term "Viking"is disputed. It was originally used by the English to refer to Danish and Norwegian raiders, but today has a wider
meaning, referringto various aspects of Nordic society in what is now called the "Viking
Age," cf. Sawyer (1997: 2). We use the term somewhat narrowly to refer to a particular
type of activity (roving and plundering)ratherthan as synonymous with Norse peoples in
general.
7. The activities of Swedish Vikings in Eastern Europe were in many respects a separate
story and are not consideredhere.
8. Historically the term Danegeld was used only in England but may be applied to
fundamentallysimilarcircumstanceselsewhere, cf. Logan ([1983] 1991: 121-122).
9. Cf. Sawyer (1982: 146). For a theoretical analysis of such alternative strategies in the
entrepreneurialorganizationof collective action, see Frohlich, Oppenheimer,and Young
(1971).
10. On the often neglected legal institutions created by the Norse settlers, see Lindal (1981);
on the self-enforcing, decentralized and polycentric legal system of the Iceland Commonwealth, see Nordal ([1942] 1990: PartII); Friedman(1979); Solvason (1992); Byock
(2001).
11. For example, King Sven Forkbeardis the first Danish king known to have engaged in the
minting of coinage, and he did so just when he had startedraiding the English coasts.
271
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