Tuesday, September 15, 2009
Caleb Crain of the New Yorker discusses three books about pirates that consider their history as well as their economic and moral motivations. The essay reminds me somewhat of a similar look at so-called ghetto capitalism by Patrick Radden Keefe as he reviewed some of the work of economist Sudhir Venkatesh.
The essay differs in that it is written from a leftish perspective. Or at least it seems to be, based on its reports of how modern academics are evaluating this subject matter, as well as its apparent acceptance of common misconceptions about selfishness and capitalism. In particular, there seems a flimsier grasp than Keefe's of the nature of capitalism as well as a marked tendency to romanticize the pirates for their altruism.
Perhaps the below passage -- occurring a little after the author reports that, "the idea that pirates are in some way dissident, rather than merely criminal, entered the mainstream" -- most efficiently illustrates these weaknesses. According to Peter T. Leeson's The Republic of Pirates:
[T]here 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 [sic], and the workers, not being stakeholders, lack incentives [sic]; 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.The means of production?!?! Who knew that all those so-called "merchant" ships were really, in fact, floating factories/mines/farms? A "certain kind of reader" might think that the captains of industry don't work, and that stealing is the same thing as producing, but that kind of reader doesn't know what he is talking about.
Any decent manager knows that it takes more than brute force to produce wealth. It takes brain power: to understand what others are willing to pay for, to know how to bring those values into existence, and to know how to organize the effort necessary to create and transport the tangible goods or services. It also takes freedom from threats -- such as those posed by pirates -- that the fruits of one's effort will be taken away by force.
And anyone who has any realistic idea of what it would take to fend for himself in the wild can appreciate the great bounty made possible by division of labor, physical and intellectual: Trade among free individuals creates greater wealth than all, alone and not trading, can produce. Not only is wealth not a fixed "pie" that exists by magic only to be divvied up and consumed, but it is continually created by and sustains civilized people because of their rational effort, which voluntary trade and intelligent management coordinates. Trade and theft are completely different phenomena. An employee who can't see that he is, in fact, a "stakeholder" in a capitalist system simply does not understand the trader principle.
The review, probably following the lead of the source material, refers to the economic system of the colonial period as "capitalism," but like other analyses (e.g., of "ghetto 'capitalism'"), this is not accurate. If capitalism is, "a social system based on the recognition of individual rights," then how is a system that includes slavery capitalism? The economic system of those times was freer than many, and it did have elements of capitalism, but it was a mixed economy.
This fact leads us to one of the more interesting passages in the essay, in which we see that to the (very) limited extent pirates did act in their rational self-interest, some of them partially grasped what was wrong with slavery. (Others did own slaves, however.)
Though some pirates kept slaves and others traded in them, blacks composed a quarter to a third of some pirate crews, and on some ships they bore arms, had voting rights, and shared the booty. Leeson proposes that pirates had an economic incentive to treat blacks as equals instead of keeping them as slaves. Prejudice needlessly deprives a business of skilled labor, he points out. Also, while the benefit of a slave would be diluted among a pirate crew, the potential cost would not be: an embittered slave who betrayed a pirate ship could cost every pirate his whole neck.This is interesting, and shows the strengths and weaknesses of cost-benefit analysis all at once. Some pirates saw the foolishness of slavery, but, as looters, remained on the run from the law and bound to a collective. (That the black pirates in such scenarios faced the "alternative" of slavery does not damn capitalism. Rather, it shows that the governments of the time, in failing to respect individual rights, were not capitalist.)
Despite my reservations, I found the article quite thought-provoking, particularly when it showed both modern pirates and those of old claiming altruistic "justifications" for their actions. In the past, some held Robin Hood up as the moral ideal. Today, Somalian pirates claim moral superiority on altruistic grounds more in tune with today's enthusiasms, where the earth is "the other": "We don't consider ourselves sea bandits. We consider sea bandits those who illegally fish in our seas and dump waste in our seas."
Crain asks whether pirates are socialists or capitalists. That's a good question to ask, but cost-benefit anaylsis is too limited a tool to answer that question. As a minimal first step, one has to define moral and political terms to answer that with any clarity.
Let's review what we know here. Pirates "justify" theft on altruistic grounds. They reject the trader principle. They do not respect individual rights. So what if they make an occasional cost-benefit analysis? One can not remain alive by consistently practicing altruism or collectivism, so altruists and collectivists are necessarily inconsistent hypocrites.
My answer? Pirates are anything but capitalists -- and it's not a good thing that they aren't.
Today: (1) Added link to article from New Yorker. (HT: Chuck) (2) Clarified last ending.