Micro-Institutions Everywhere: Pirates

Image credit: Matt Collins/Scientific American

Kokai: What’s the most important thing we should know about how pirates acted economically?

Leeson: I think the most important takeaway from the economics of piracy is the idea of self-governance. It’s common to think about social rules, some system of law and order, as only being capable of being provided by a state, by a government, a monopoly on the use of force. And pirates give us pause to rethink that conventional wisdom, because pirates as outlaws, of course, couldn’t rely on the formal apparatuses provided by the state as a way to produce social order among them. …

It’s not only that they had rules, they had very specific, detailed rules — rules that were surprisingly, at least for pirates anyway, rather puritanical. For example, it appears to be the case that on some pirate ships at least, drinking was quite restricted. Bedtimes were restricted; they had an early bedtime of 8 o’clock on one ship. Gambling was prohibited. Allowing women [was] prohibited on pirate ships.

From the Carolina Journal interview with Peter Leeson. Leeson is a professor at George Mason University, and the author of The Invisible Hook: The Hidden Economics of Pirates and numerous journal articles. A good place to start with further reading is here.

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