"I cannot live without books." -- Thomas Jefferson

Thursday, April 8, 2010

Peter T. Leeson reveals the Invisible Hook

A professor of economics examines the economic life of the pirate...

Leeson, in his introduction, admits he's not an historian. And this isn't so much a pirate history as a portrait of pirate economics, hierarchy and democracy.

He states:

"Normally, we define and distinguish societies by individuals' citizenship of, residence in, and allegiance to particular nations and governments. None of these traditional demarcators of society make sense in the context of pirates, however. Although born as citizens of recognized countries, most pirates had abandoned associations with their governments before the age of thirty... [they] heeded no flag but the black one they sailed under. They boasted that 'they acknowledged no countrymen' and 'had sold their country' and would 'do all the mischief they could.'"

This is an interesting thought because typically we don't think of pirates coming from anywhere, as though they spontaneously come into being as fully-formed societal misfits. They relinquish one economy which they cannot control for one that they could. Sounds romantic, doesn't it? Wouldn't we all love to excuse ourselves from the world economy?

As we've seen from movies and read in fiction, or history books, there was a hierarchical structure, a system for maintaining order. It may seem something of a paradox, but Leeson calls this mechanism the 'Pirate Democracy.' Here arises the paradox presented any government: if someone (a Pirate Captain, in this case) is given power, how do the subjects ensure that power isn't abused? Well, the pirates utilized a form of democracy by which one pirate one vote was the law. And upon being elected to the office of Captain, the Captain-Elect would vow to be faithful to the pirate's society and its customs. There were even separation of powers through other officer pirates, such as the Quarter-Master (similar to the Roman Tribunes, elected officials who could check, or basically veto Senate lawmaking, or the decisions of the two Consuls).

Leeson in Chapter 3, AN-ARRGH-CHY: THE ECONOMICS OF THE PIRATE CODE, Leeson writes that "[c]ontrary to conventional wisdom, pirate life was orderly and honest. This isn't counterintuitive on recollection of pirates' purpose, which was profit." The incentive was strong for 'social harmony,' which would allow them to gather more plunder. How did they do this? By establishing rules outlawing thievery aboard ship (ironic), minimizing the problem of free-riding or excessive drinking beyond certain hours (no way!)...

That's just a taste of what you'll find in this book. I highly recommend it.

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