Inside the Pirates' Boardroom

The maritime world has seen new traffic of late. In piracy, notably: recent incidents of Somali piracy in the Gulf of Aden seem borrowed from the archives of any number of recent popular history books and scholarly articles on the broader topic of the forms taken by sea banditry in the last 500 years. We might see three primary reasons for this, each of which speaks to a different form that piracy has taken historically. For one, the bicentennials of the abolition of the Anglo-American transatlantic slave trade have spurred new interest in the piratical forms taken by the subsequent, continuing illegal slave trade. Further, North African Barbary piracy of the eighteenth and early nineteenth centuries has been rediscovered by popular and academic history to some degree because of the current U.S.-Iraq War. And finally, the multibillion-dollar worldwide success of the Pirates of the Caribbean film franchise beginning in 2003 has propelled popular attention, at all age levels, to the forms of buccaneer piracy practiced in and around the islands and coasts of the Americas.

It is this latter historical category—piracy in the eighteenth-century Americas—that is of interest to Peter T. Leeson, an economics professor at George Mason University, where he is the BB&T Assistant Professor for the Study of Capitalism. The biggest achievement of The Invisible Hook: The Hidden Economics of Pirates is that it brings a promising new critical approach to scholarly inquiry into piracy: economic analysis. In a breezy, conversational style more familiar to management books than to historiography, Leeson argues for an ordered, rational, and democratic structure to forms of piracy popularly seen as anarchic. The "invisible hook" of the book's title is a nod to Adam Smith's notion of the invisible hand, the force that regulates self-interest and encourages market cooperation. Leeson examines how the lessons of Smith's economic legacy—that individuals are self-interested, rational, and responsive to incentive—apply to an extralegal system like piracy. "It's not just that economics can be applied to pirates," Leeson writes; "rational choice is the only way to truly understand" their practices. This emphasis on the exemplarity of classical or free-market economics as a critical tool is consistent throughout a book that sees history as the "raw material" and economics as the analytical "lens" for understanding piracy (6).

For Leeson, the only motivation for piracy was financial gain. This conclusion is in contradiction to the influential work of Marcus Rediker, who saw pirates as revolutionary actors resisting state capitalism. (Leeson does not critically engage with Rediker's work, although he relies on it for a good portion of the evidence in The Invisible Hook.) Pirates are not "bizarre" or "unusual," in this analysis, but rational actors who used legible if criminal means to achieve business success. Economics can explain certain famous particularities of piracy, Leeson argues. The flying of the Jolly Roger, for example: the skull-and-crossbones flag was a form of economic "signaling," an effective tool for inspiring fear (i.e., strengthening incentives to submit) and minimizing the potential costs of actual conflict. Leeson sees pirate society as democratic in its use of checks and balances and invokes James Madison's work in the Federalist Papers in arguing that pirates anticipated such restraints a century earlier. Another chapter relies on the distinction between government and governance to examine how pirates used coercive power. The forms that such power took—torture, frequently—emerge in another chapter as a process of "branding" (120), by which pirates made their product and its association well known. Leeson also considers why pirate crews were racially diverse. Failing to find the expected racism among white pirates, he concludes that the expense of intolerance would have made it cost-ineffective to practice prejudice. The Invisible Hook closes with a seminar on management, taught by one "Professor Blackbeard," who with the help of his amanuensis Leeson shares what he has learned about being an effective captain of...