Pirate democracies and market dynamics

The following excerpts reflect on a ongoing debate on how much pirate democracies were linked to market dynamics, as Peter Leeson argues, against many left historians.

Book: Peter T. Leeson. The Invisible Hook: The Hidden Economics of Pirates.

First, Joanna Weiss in the Boston Globe:

“Long before they made their way into the workings of modern government, the democratic tenets we hold so dear were used to great effect on pirate ships. Checks and balances. Social insurance. Freedom of expression. So Leeson, an economics professor at George Mason University, will argue in his upcoming book, “The Invisible Hook: The Hidden Economics of Pirates.”

Yes, those stereotypically lawless rum-chuggers turned out to be ardent democrats. And in their strange enlightenment, Leeson sees the answer to a riddle about human nature, worthy of “Lord of the Flies” or an early episode of “Lost.” In the absence of government and law enforcement, what becomes of a band of men with a noted criminal streak? Do they descend into violence and chaos?

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.

Marcus Rediker, the author of the pirate histories “Between the Devil and the Deep Blue Sea” and “Villains of All Nations,:

– pirate democracy was purer than what was practiced in Athens: The Greeks didn’t give slaves the vote, but pirates offered the right to everyone, black or white. (It’s probably also safe to say that pirates didn’t have superdelegates.) Before each voyage, the crew elected a captain who could be deposed at any time, as well as a quartermaster whose main purpose was to make sure the captain didn’t have too much power. A written charter outlined ship rules, which tended to prohibit theft and violence aboard and set strict rules for the presence of women. (Contrary to popular myth, Leeson, says, pirates usually set limits on drinking. “A drunken pirate crew,” he points out, “would be less effective than a sober crew.”)

Pirates even conducted a version of a fair trial, Rediker says, when determining the fate of captured captains. If any pirate on board knew the man from his merchant ship days, he could testify about his treatment. A captain who turned out to be kind was sometimes spared his life. ”

The following excerpts were selected by Paul Fernhout from a review by Caleb Crain:

“The men who sailed with Morgan were known as buccaneers. They were French and English men who had gone native on Hispaniola, the island now occupied by Haiti and the Dominican Republic, and on Tortuga, a tiny island to the north. Their name came from a wooden frame, called a boucan by the Carib Indians, on which they smoked wild boar and cattle. They were the ones who developed the first pirate code of ethics, the Custom of the Coast, at the core of which was an explicit agreement about the sharing of booty, power, and responsibility called a chasse partie. Before attacking Panama, for instance, the buccaneers stipulated that Morgan was to get a hundredth part of the loot, with the rest divided into shares for the more than two thousand men in the expedition: each captain under Morgan was to get eight shares, and each man one share. They also allocated set-asides for professionals (two hundred pesos for each surgeon, a hundred for each carpenter), incentive payments (fifty to anyone who captured a Spanish flag, five to anyone who threw a grenade into a fort), and compensations for injury (a hundred for a lost eye, fifteen hundred for two legs). Pirates usually further agreed to maroon pilferers, to give “good quarter” to any victim who asked, and to keep their weapons clean. Sometimes they went so far as to forbid gambling and onboard romance (“No Boy or Woman to be allowed amongst them,” one such contract read) and to restrict late-night drinking to the deck.

Because criminal agreements have no legal force, it’s tempting to think of pirate articles as quaint—if not misguided, considering how often they showed up in court as evidence against their signatories. Leeson is at pains to show the articles as a rational choice, enabling pirates to create a voluntary association that was stable and orderly. By setting terms in advance, punishing embezzlement harshly, and keeping the pay gap between captain and men low, the articles reduced conflict over property claims. By limiting drinking and requiring clean weapons, they curbed individual behaviors that might otherwise have damaged the crew’s fighting ability. And by rewarding special achievements and providing health insurance they encouraged enthusiasm and risk-taking. The results were impressive.

“As great robbers as they are to all besides,” a sea cook observed in 1709, they “are precisely just among themselves.” No one could join a pirate crew without swearing to the articles, which, Leeson explains, reduced what economists call the “external costs” of decision-making—in this case, the discontent of anyone who thought them unfair, a dangerous sentiment when betrayal meant hanging. Articles also made it harder for leaders to cheat, because their public nature enabled every pirate to tell if a rule had been broken. The only rules as tough and flexible, Leeson provocatively suggests, were the covenants that founded New England’s Puritan churches.

Friendships and working relationships linked pirate society across ships. Most captains knew one another personally, and many hunted together for a spell. Through their shared culture, they refined shipboard democracy. The supreme power aboard a pirate ship was the common council, which Marcus Rediker calls a “floating town meeting.” Whoever had sworn to the articles could vote. Captains were elected, and ate the same food as their men. Only when the ship was fighting or fleeing could a captain make decisions on his own, and he could be deposed if the crew thought him cowardly or his treatment of prisoners too cruel or too kind. In daily matters, his power was checked by that of another elected official, the quartermaster, who distributed food and booty and administered minor punishments.

In Leeson’s opinion, there was a sound economic basis for all this democracy. Most businesses suffer from what economists call the “principal-agent problem”: the owner doesn’t work, and the workers, not being stakeholders, lack incentives; so a certain amount of surveillance and coercion is necessary to persuade Ishmael to hunt whales instead of spending all day in his hammock with Queequeg. Pirates, by contrast, having stolen the ships they sailed, were both principals and agents; they still needed a captain but, Leeson explains, “they didn’t require autocratic captains because there were no absentee owners to align the crew’s interests with.” The insight suggests more than Leeson seems to want it to—does inequity always entail political repression?—and late in the book he backtracks, cautioning that the pirate example “doesn’t mean democratic management makes sense for all firms,” only that management style should be adjusted to the underlying ownership structure. But a certain kind of reader is likely to ignore the hedging, and note that the pirates, two centuries before Lenin, had seized the means of production.

Leeson’s analysis unriddles a number of Snelgrave’s mysteries. Merchant sailors quietly gave in to pirate attacks because of a principal-agent problem—it wasn’t their cargo—and because doing so enabled them to adopt a way of life that was a hundred to a thousand times more lucrative. Snelgrave may have been under the impression that pirates forced men to join, but this was for the most part a myth, devised for the sake of a legal defense if caught. Until their final, desperate days, pirates took few conscripts, because so many sailors begged to enlist and because conscripts had the unpleasant habit of absconding and testifying against pirates in court. As for the death-defying attitude—“a merry Life and a short one” was Bartholomew Roberts’s motto—pirates cultivated it to convince people that they had what economists call a high discount rate. If future punishments meant so little, their wildest threats were credible. ..

Piracy seems to thrive when capitalism is advancing—when it has put enough wealth in motion to tempt criminals to kill for it but not yet enough for sailors to die in its defense—and perhaps, as in Somalia, when government is retreating. In several ways, Somalia’s contemporary pirates resemble those of three centuries ago. Violent and dangerous, they nonetheless are careful not to hurt coöperative hostages; they look to piracy to take them from poverty to a life of leisure; they have been known to regulate their own behavior with written rules; and they believe that their cause is just. The timing of their end, too, will probably be similar, coming whenever a major power decides that a crackdown costs less than the nuisance.

Are pirates socialists or capitalists? Lately, it’s become hard to tell the categories apart. Toward the end of his book, Leeson suggests that pirate self-governance proves that companies can regulate themselves better than governments can, as if he sees the pirate ship as a prototype of the modern corporation, sailing through treacherously liberal waters. Such arguments haven’t aged well over the past year, but even in piracy’s golden age people were aware that an unregulated marketplace invites predators. During the South Sea Bubble of 1720, speculators claiming to be able to make wealth out of debt fleeced British investors and ruined many banks. Pirates who spent that year killing and plundering, Nathaniel Mist grumpily wrote, could salve their guilty consciences, if they had any: “Whatever Robberies they had committed, they might be pretty sure they were not the greatest Villains then living in the World.”

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