Sunday, December 13, 2009

The Invisible Hook - book

The Invisible Hook The Hidden Economics of Pirates, by Peter T. Leeson (Princeton University Press, 2009)

I must say this is the first book I have ever read where the dedication is a proposal (I believe she accepted).

Peter T. Leeson is not a historian, anthropologist, or sociologist, he is an economist. Thus his approach to this analysis of Pirates and their behavior begins with the usual economic assumptions: (1) individuals are self-interested, (2) they are rational, and (3) they respond to incentives. Beginning with these rather formulaic assumptions, Leeson goes on to (quite predictably) demonstrate that Pirates, far from being irrational, lustful, revengeful, or insanely criminal, were in fact rational beings that acted in their own self interest most of the time. He describes how Pirates basically invented democracy far earlier than it came to England or the United States (or most anywhere else exceed ancient Greece). They did so out of necessity, he argues, because being beyond the laws of anywhere, they were forced to govern themselves and democracy proved the most useful way of doing so. According to Leeson, Pirate Captains were elected officials who could be replaced by their crews if they did not act properly. They also invented checks and balances because in addition to the Captain there was also an elected Quartermaster with a great deal of power, including the right to divvy up the loot. The Captain and the Quartermaster usually received a slightly larger share than the others but this was not excessive. The Captain’s main responsibility was to lead the crew in battle when taking over other ships. Both the captain and the Quartermaster could be voted out of office if they were found violating the terms of their offices. There was also, according to Leeson, a well-established Pirate Code that was followed by most if not all Pirates. This code, like most everything else, was designed to help Pirates maximize profits, and it limited in many ways what they were permitted to do to captives and each other.

Even the Pirate flag, the “Jolly Roger” (usually but not always a skull and crossbones) was designed for the purpose of helping to maximize profits. It did this by instilling such fear in their prey they would more or less gladly turn over their wealth rather than meet what were believed fearsome tortures and such that Pirates employed. And even the tortures were controlled and designed to maximize profits, in ways that Leeson explains in some detail. Walking the plank, he assures us, did not actually occur, and torture was not as widespread as everyone believed, as it would not have been economically rewarding beyond a certain point.

Pirate conscription is also discussed in detail in this interesting account. As you probably know, the British and others were notorious for the ways they conscripted individuals to serve in their navies, and you also doubtless are aware that service in the maritime industry was for ordinary seamen a most unpleasant experience. Not only were their floggings and other methods of severe punishment meted out at the whim of Captains, the pay was also very slight. It was from these regular navy vessels that many Pirates were recruited, as they could potentially make more money in a year than in forty years in the regular service (this is one reason the powers of Pirate Captains came to be limited). Part of the Pirate Code held that if a pirate was injured he would be paid a recompense geared to the seriousness of his injuries, a custom that did not exist in the regular service. Leeson also discusses the practice of equal pay for all (except for the Captain and Quartermaster), and the fact that this held even in the case of black Pirates (again, this was not because of lack of racial prejudice, but, rather, economic practicalities).

There is a chapter on “The Secrets of Pirate Management” that is of interest as compared with other management techniques, the conclusion being that Pirate Management was designed over time to deal with the unusual demands of Pirate society, being essentially lawless and otherwise unrestrained, but at the same time needing to always maximize profits for these early 17th and 18th century entrepreneurs. They were for a couple of hundred years pretty successful for a variety of reasons discussed, but of course quite a few eventually ended up on the gallows. There is little concern in this book with such uneconomic matters such as lust, sadism, revenge, pathology, or other human emotions or motives. Rape, for example, is not even mentioned as a possibility, and interpersonal relations on shipboard are deal with rather casually (he does claim that women and boys were not allowed on ships, however). Leeson does mention, more or less in passing, that such things might have occurred, but apparently for him they were somewhat rare aberrations. Nor does he deal with the basic question of leadership, assuming that all Captains were democratically elected and generally followed the rules. I find this not very convincing and I suspect that some Pirate Captains were not as democratic as he wants to believe.

In any case, this is an interesting book, and it does give a picture of Piracy that I am sure bears some resemblance to the real thing. While reading this account I began to wonder why all men do not act so rationally and inevitably become democratic, towards the end he discusses this. As for the “Invisible Hook,” he explains: “If the invisible hand examines the hidden order behind the metaphorical “anarchy of the market,” the invisible hook examines the hidden order behind the literal anarchy of pirates.”


jesse said...

What Do Austrians Mean by "Rational"?

Scott Kohlhaas said...

Reading "Manning Pamphlets 1693-1873" shows how the brits conscripted sailors. Makes the War of 1812 seem more justified from a US point of view.

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