Pirates and other economists

Pirates are a practical lot, at least in theory. The theory was supplied in 2007 by Peter T Leeson, an assistant professor of economics at West Virginia University. The professor is of the opinion that pirates pioneered some basic economics.

In a study called Pirational Choice: The Economics of Infamous Pirate Practices, Leeson “investigates the internal governance institutions of violent criminal enterprise by examining the law, economics and organisation of pirates”.

These were the classical pirates of the 17th and 18th century, especially those who practised professionally in and around the West Indies and/or in the waters around Madagascar. Leeson’s study appeared before the chestsful of information began to surface in 2008 and 2009 about their current equivalents on Wall Street, in the City of London, and at other romantic places where peril and opportunity drive many a captain of finance to pursue plunder.

“Pirate governance created sufficient order and co-operation to make pirates one of the most sophisticated and successful criminal organisations in history,” writes Leeson. “To effectively organise their banditry, pirates required mechanisms to prevent internal predation, minimise crew conflict, and maximise piratical profit.” …

So begins this week’s Improbable Research column in The Guardian.