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A Great Arrrgggument

One of my and Russ’s impressive young colleagues, Pete Leeson, has his research discussed in today’s edition of the Boston Globe.  (HT Pete Boettke)

Leeson makes clear that pirates on the high-seas evolved their own social order, one that makes good sense from the perspective of positive economics.  Here’s a slice from the article:

The pirates who roamed the seas in the late 17th and early 18th
centuries developed a floating civilization that, in terms of political
philosophy, was well ahead of its time. The notion of checks and
balances, in which each branch of government limits the other’s power,
emerged in England in the Glorious Revolution of 1688. But by the
1670s, and likely before, pirates were developing democratic charters,
establishing balance of power on their ships, and developing a nascent
form of worker’s compensation: A lost limb entitled one to payment from
the booty, more or less depending on whether it was a right arm, a left
arm, or a leg.

The idea of enlightened piracy is strange swill to
swallow for those steeped in a pop culture version of the pirate –
chaos on the high seas, drinking and pillaging, damsels forced onto the
plank. Sure, there’s something about the independence of piracy that
still speaks to people today. (Even the founders of International Talk
Like a Pirate Day acknowledge that there is, in people who love to say
"Aargh," a yearning for a certain kind of freedom.) But it turns out
that pirate life was more than just greedy rebellion. It offers
insights into the nature of democracy and the reasons it might emerge –
as a natural state of being, or a rational response to a much less
pleasant way of life.

To Leeson, pirate democracy was an
institution born of necessity. In one successful cruise, a pirate could
take home what a merchant sailor earned in 50 years. Yet a business
enterprise made up of the violent and lawless was clearly problematic:
piracy required common action and mutual trust. And pirates couldn’t
rely on a government to set the rules. Some think that "without
government, where would we be?" Leeson says. "But what pirates really
show is, no, it’s just common sense. You have an incentive to try to
create rules to make society get along. And that’s just as important to
pirates as it is to anybody else."

So just as Buchanan, Tullock, and Mancur Olson were pioneers in using economics to help us to better understand the behaviors and institutions of stationary bandits, Pete Leeson is using economics to help us to better understand the behaviors and institutions of floating bandits


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