THE INVISIBLE HOOK: THE HIDDEN ECONOMICS OF PIRATES
By Peter T. Leeson
Princeton University Press, $24.95, 271 pages
Reviewed by Claude Berube
One unfortunate consequence of the increase in piracy off the Horn of Africa is that it has again propagated misconceptions about this scourge, emanating from popular myths, movies and children’s stories.
One former Capitol Hill staffer told me that today’s pirates are “brave,” “courageous” and “modern-day Robin Hoods.” But pirates are not now, nor have they ever been, Johnny Depp in “Pirates of the Caribbean,” Errol Flynn in “Captain Blood” or Ragnar Danneskjold in Ayn Rand’s “Atlas Shrugged.” They were and are not philanthropists; they are parasites. They aren’t driven by the romance of the sea, but by the profit they can steal from those whom Neptune is unable to protect.
Authors including John Burnett and Martin Murphy have done yeoman’s work in shedding light on the realities of modern piracy. Others, such as Virginia Lunsford and Doug Burgess, have offered their research on the golden age of piracy during the 17th and 18th centuries. Now Peter T. Leeson has done his part to dispel the pirate myths by using economic theory to explain pirate behavior and organization in his exemplary new book.
“The Invisible Hook: The Hidden Economics of Pirates” is aptly taken from the “invisible hand” metaphor employed by Adam Smith in “The Wealth of Nations.”
“Smith’s invisible hand,” the author writes, “is as true for criminals as it is for anyone else.”
Mr. Leeson found that pirates establish their own governments, relying on the three essential criteria:
c Establish rules and a means to enforce them.
c Regulate behaviors that generate significant externalities.
c Provide important public goods for crew members.
Mr. Leeson appropriately invokes the philosophies of John Locke, Thomas Hobbes and David Hume (in theory, if not by name in two cases) as well as the Federalist Papers during his discussion of pirate governance to support his contention.
Democracy apparently thrived on many ships; a system of checks and balances between the crew, quartermaster and captain ensured all performed their work according to contractual agreements, and crew members who lost a limb in battle were protected by a form of insurance. Mr. Leeson is correct that these pirates could neither exist nor prosper in anarchic conditions; there had to be rules in order to capture ships and prize money.
Pirates were not benevolent. Torture was not a preferred method, but it was not uncommon. The brief descriptions make some of the atrocities by the Taliban in Afghanistan or al Qaeda early in the Iraq war appear almost tame in comparison. Mr. Leeson states that these methods were used to find onboard prizes, to exact vengeance and to broadcast to future victims what to expect if they did not comply with boardings.
At times, Mr. Leeson takes a less-than-serious approach in the narrative, inviting the reader to “go a-pirating.” He also makes the point - repeatedly and more often than is necessary - that pirates were motivated by money. Some readers may object to some of his terminology. For example, he suggests that pirates “earned” their money when it might have been more apt to state that they simply were taking or stealing money and goods.
Moreover, when Mr. Leeson discusses the pirates’ “progressivism in other areas, such as governance, social welfare, and race relations,” he seems to legitimize piracy. One could argue that pirates were regressive because they relied on primal force and fear to violate the laws of innocent passage and take what they would from those who simply were weaker.
However, given that this was an era of slavery and monarchies with their disparities in wealth and power, the debate turns once again in Mr. Leeson’s favor on who, if anyone, during that era held the moral high ground.
There are other issues the author might have addressed in a lengthier version of the book. First, what was the impact of piracy on those upon whom the pirates preyed? What were the costs in terms of life, insurance rates or lost revenue? The second issue is a point Mr. Leeson addresses, citing the impact of the legal changes that he suggests led to the quick decline of piracy in the 1720s. However, he could have explored the causality in more depth.
Mr. Leeson does note that between 1715 and 1725, the Caribbean alone had more than 700 active pirates - about 15 percent of the size of the Royal Navy at the time. Were pirates simply deterred by legislation, or did nations increase their patrols and enforcement mechanisms as a result of the law? As it stands, this is discussed only briefly in the postscript. Both might be good topics for the author’s next endeavor.
The reader also might take exception to Mr. Leeson’s comparison of pirates to Fortune 500 companies, noting that both exist for profit. Companies, however, provide goods, whereas pirates simply feed off legitimate commerce.
Through Mr. Leeson’s work, readers will easily identify elements of modern piracy. One critical difference, he notes, is that pirates of old formed “floating societies” where pirates were more dependent on each other while aboard a ship for extended periods. Today’s more land-bound pirates instead use small skiffs and mother ships.
Mr. Leeson is an accomplished and widely published young scholar who teaches in the economics department at George Mason University. Though in his preface he admits he is not a historian, one might remember that Barbara Tuchman wrote that a historian should have an affinity for his subject and, in this regard, Mr. Leeson’s love of his subject shines through.
Together with his academic expertise, Mr. Leeson has produced a fresh perspective on an old topic. With barely more than 200 pages of text, “The Invisible Hook” is quick-paced but thought-provoking. Based on this work, the reader should look forward to more books by the author.
Claude Berube teaches at the U.S. Naval Academy.