Using Economics to Understand 18th Century Pirates

Both remarkable and humorous, an excerpt from a review by Katherine Mangu-Ward at Reason.com of The Invisible Hook: The Hidden Economics of Pirates:

Pirates, by contrast, were outlaws, with no recognized authorities to settle disputes. So they invented their own ways of doing business. Decades before the American Founders got their act together, pirates were drafting documents full of voting rights, juries, checks and balances, rules for property allocation, even methods for impeachment. The buccaneers may have been less concerned with natural rights than with survival and claiming their fair share of booty, but the end result feels surprisingly like the kind of self-governance we expect from enlightened modern republics. Perhaps even better, since the deal was truly voluntary (for the pirates if not their prey). No one is born a pirate, and everyone has to swear into the contract on each venture.

[...]men lived under a kind of constitution, a contract for behavior with rules for the political and the personal all spelled out (albeit with pretty poor spelling). The guidelines were surprisingly tame: Lights out by 8 p.m. No drinking below decks after bedtime. No gambling. No smoking. No brawling. Many a modern American high school student lives a wilder life than pirates did in their heyday.

The punchline -

Leeson convincingly argues that “without economics, pirates...are a veritable ball of contradictions. They’re sadistic pacifists; womanizing homosexuals; treasure-lusting socialists...and lawless anarchists who lived by a strict code of rules.” With economics, they’re a bunch of gossipy racists who go to bed early, ban women from the premises, and bluster to avoid fighting. These fastidious, calculating pirates may have been a far cry from the romantic, mad buccaneers of legend. But Peter Leeson’s economical actors have an appeal all their own.