General Average and All the Rest: The Law and Economics of Early Modern Maritime Risk Mitigation

Abstract

General Average is probably the longest existing maritime trade institution, first used by Greek and Roman sailors in antiquity and still in use today by the global maritime industry. Premium-based marine insurance is much younger. The first evidence for its use is from around 1300 CE. Why did the two institutions originate more than a millennium apart? This timing question cannot be resolved solely by analysing the primary historical records. The answer to this significant question was not written down by contemporaries and will not be found in the texts they left behind. We need theories in order to approach it. While theories about the mitigation of risk might not be the only relevant theories for addressing the question, they are sufficiently instructive to serve as the core of this article.