Blackbeard Economics

The surprising, and surprisingly tame, self-organization of pirates.

The Invisible Hook: The Hidden Economics of Pirates, by Peter T. Leeson, New Jersey: Princeton University Press, 296 pages, $24.95

Pirates are alluring to novelists and moviemakers because we know they really existed but don't know enough hard facts to get in the way of a good story. Contemporaneous newspaper accounts and other tales from the early 18th century are colorful but unreliable, tending toward propaganda. They report that these appalling yet appealing "Hell-hounds" marauded for the Jolly Roger, enslaved passing sailors, and tortured the innocent for fun. "Danger lurked in their very Smiles," one pirate chronicler reported. Pirates were "violators of all Laws, Humane and Divine."

Portraying the freebooters in the worst possible light worked to the advantage of everyone concerned. For governments, crusading against the outlaws who robbed their merchants and treasury ships was a way to keep public opinion firmly on the side of the state. Practicing pirates, meanwhile, were happy to be depicted as violent and unpredictable outlaws, as this encouraged their prey to surrender and cooperate. In fact, the marauders went to great lengths to ensure that their reputation as heartless ship wreckers and torturers remained intact. The famous Blackbeard, for instance, used to stick sulfur fuses in his great, bushy beard and light them on fire before battles to create a general sense of the demonic. He also occasionally killed his pals without warning, just to keep the fear alive.

But a pirate's life had less publicized qualities as well: Ships were known among sailors for their relatively decent living conditions, profitsharing opportunities, democratic practices, and racially integrated crews. Life "on the account," as pirating was known, was often far more civilized than legitimate seamanship.

So how can these two images be reconciled?

Bloodthirsty buccaneers and their progressive alter egos both want the same thing: booty. Cold, hard doubloons drove pirates and their persecutors alike. In The Invisible Hook, George Mason University economist Peter T. Leeson digs into the dollars and cents of piracy. He urges us to see pirates as economic actors, their behavior shaped by incentives, just like the rest of us. Once you're in an economic state of mind, you can begin to understand actions such as lighting one's beard on fire, voting, being decent to black people, and torturing captives "for fun"—all equally nutty behaviors to the average 18th-century observer. When Leeson is done guiding you through the pirate world, life on a rogue ship starts to look less like a Carnival cruise with cutlasses and cannons and more like an ongoing condo association meeting at sea.

Robbery on the high seas has existed since ancient times, but the seafaring pirates of popular imagination first arose in the 16th century as agents of the state. These privateers, as they were known, were charged with raiding the ships of enemies—or, more accurately, anyone who couldn't immediately prove to the pirates that he was a friend. Sir Henry Morgan (yes, the real-life Captain Morgan, for those of you doing rum shots at home) was a big name in 17thcentury state-sponsored piracy. The Welsh-born brute sacked Panama and burned the richest city in New Spain to the ground. For his accomplishments, he was knighted and made lieutenant governor of Jamaica.

Once the War of the Spanish Succession, and with it many opportunities for legally approved pillage, came to an end in 1714, many plunderers realized they preferred piracy to the life of an honest seaman. Others who might rather have stayed on the up and up were unable to find work as the world's navies contracted.

So the great age of piracy began, and it lasted about a decade. During this period, between 1,000 and 2,000 pirates terrorized the seas at any given time. That may not seem like many, but keep in mind that the entire population of the North American colonies back then was only about 150,000. Navies and merchant sailors outnumbered pirates, with 13,000 men in the British Navy alone, but pirates had the better gig.

Leeson begins with a look inside the piratical pocketbook. In peaceful years, annual pay for legit sailors was £25, equivalent to around $4,000 today. A big haul for a pirate crew, on the other hand, might bring in between £300 and £1,000 per man for a few months' work. If legally sanctioned sailor pay was bad, the working conditions were worse. Captains on merchant ships held absolute power over their crews, and they regularly ordered floggings, revoked pay or rations, or tied men to the mast. Sailors could sue when they got home, and they occasionally won, but that's cold comfort when you're six months at sea, stripes from the lash stinging your back, and ordered to forfeit your rum ration.

This commercial setup, Leeson argues, was the result of a bad incentive structure, not a surfeit of sadistic captains. A ship is a big investment. Once its owner sends it out to sea, lots of bad things can happen. Weather. Navigational errors. Even pirates. If you're just a schmo sailor on the payroll, it makes sense to slack off when no one is looking and bail out as soon as things get rough. Why not steal from the cargo hold? Why not stay up late drinking and gambling? If pirates attack, of course you will hand over the cargo and beg them to spare your life. It's not like the slaves, spices, or gold were yours to begin with. Indeed, pirates often compensated the conquered crew so that the sailors would be none the worse for having surrendered, even if their masters were out a significant sum. Captains, who often held a small ownership stake in the ship or were family to the merchant owners, had every incentive to rule by force over their less invested crew.

Pirates, by contrast, were outlaws, with no recognized authorities to settle disputes. So they invented their own ways of doing business. Decades before the American Founders got their act together, pirates were drafting documents full of voting rights, juries, checks and balances, rules for property allocation, even methods for impeachment. The buccaneers may have been less concerned with natural rights than with survival and claiming their fair share of booty, but the end result feels surprisingly like the kind of self-governance we expect from enlightened modern republics. Perhaps even better, since the deal was truly voluntary (for the pirates if not their prey). No one is born a pirate, and everyone has to swear into the contract on each venture.

In his 1724 General History of the Pyrates, Charles Johnson, a probable one-time pirate about whom almost nothing is known, described Capt. Bartholomew Roberts like this: "How indeed Roberts could think that an Oath would be obligatory, where Defiance had been given to the Laws of God and Man, I can't tell." Johnson then answers his own question: "He thought their greatest Security lay in this, That it was every one's Interest to observe them if they were minded to keep up so abominable a Combination."

So it was that Roberts' men lived under a kind of constitution, a contract for behavior with rules for the political and the personal all spelled out (albeit with pretty poor spelling). The guidelines were surprisingly tame: Lights out by 8 p.m. No drinking below decks after bedtime. No gambling. No smoking. No brawling. Many a modern American high school student lives a wilder life than pirates did in their heyday.

Yet the outlaw existence between raids wasn't all wholesome and smoke-free. Going on the account meant agreeing to some unpleasant terms as well. Punishments were harsh on the high seas: Holding back more than a dollar's worth of treasure from your pirate brethren could result in marooning, "a Barbarous Custom of putting the Offender on Shore, on some desolate or uninhabited Cape or Island," wrote Johnson, "with a Gun, a few Shot, a Bottle of Water, and a Bottle of Powder, to subsist with, or starve." Quarrels were to be settled not with fists on deck but with swords or pistols on shore. To bring a lady on board in disguise was punishable by death. Failing to chip in with the fighting could also result in death or marooning.

But this "rougish Commonwealth" also had due process. Caprtains were elected, and they could be removed by a vote of the crew. Speeches were given for and against candidates. One of Capt. Roberts' sailors, for example, urged his fellows to vote for a leader "who by his Counsel and Bravery seems best able to defend this Commonwealth… such a one I take Roberts to be. A Fellow! I think, in all Respects, worthy of your Esteem and Favour." Speeches also contained warnings and reminders of the power of the people: "Should a Captain be so saucy as to exceed Prescription at any time, why down with him! it will be a Caution after he is dead to his Successors, of what fatal Consequence any sort of assuming may be."

A ship's captain received the same lodging and rations as ordinary sailors, and very similar pay. His one unique power was absolute command during battle; in this way, pirates got the advantage of quick decisions from a powerful commander and total obedience from his fighters when the heat of battle was upon them, while enjoying the leisurely indulgence of deliberation and voting when things were calmer. Roberts' constitution allowed "the Captain and Quarter-Master to receive two Shares of a Prize; the Master, Boatswain, and Gunner, one Share and a half, and other Officers, one and a Quarter." Additional payments, agreed upon in advance, went to those who lost eyes or limbs, a primitive sort of workers' compensation.

Balancing the powers of the captain was the quartermaster, the captain's peacetime counterpart. Sort of a den mother with a blunderbuss, he oversaw the distribution of loot and generally kept peace on the ship by enforcing the rules and arbitrating disputes. He too could be replaced at any time by a vote.

They may have been outlaws "without government," Lesson writes, "but they weren't without governance." And here's where Leeson gets to his lesson. The book is actually an argument for extralegal systems of regulation—for ordered anarchy.

When it came time for pirates to swing into action, the main goal was not to have to do battle at all. Thinking economically, intimidation, not cannons, was the buccaneer's chief weapon. Everyone is familiar with the skull and crossbones, designed to remind prey of the death and torture facing them if they were so foolish as to fight. Less well known is that some pirates added extra flourishes to their Jolly Rogers, advertising which specific murderous madman was about to rain hell on the hapless merchants.

That's one reason why so many accounts of piracy feature tales of torture. Cruel and unusual punishment was a kind of bloody marketing campaign, Leeson suggests. The problem is that once you've concocted a reputation for being crazy and tough, you have to a) keep it, b) brand it, and c) prevent other ships from stealing your brand. As the fictional Dread Pirate Roberts (not to be confused with the historical Capt. Bartholomew Roberts) put it in the cult film The Princess Bride, "Once word leaks out that a pirate has gone soft, people begin to disobey you, and then it's nothing but work, work, work, all the time."

The sea is big, and we're talking about a time before there was a reliable way to calculate longitude, so encountering prey was a challenge. One of the reasons pirates used torture was to save themselves time looking for the next ship. When they boarded a merchant vessel, plunderers went first to the captain's quarters to find records, maps, and other indications of trade routes and future voyages. These were the real booty, since they bought tomorrow's income as well. Threats of torture made captives more eager to divulge the whereabouts of plans.

As convincing as Leeson's account of piratus economicus might be, he's hardly the first to use pirates to illustrate a broader point about social organization. Charles Kingsley, a 19th-century Christian socialist, wrote a poem, "The Last Buccaneer," about pirate ships as workers' cooperatives. In the 1987 book Between the Devil and the Deep Blue Sea, University of Pittsburgh historian Marcus Rediker suggested that pirate ships transported 17th-century English radicalism to American revolutionaries. Eugène Delacroix's famous painting of a bare-breasted Liberty brandishing the French revolutionary flag, Rediker noted, looked awfully similar to engravings of the notorious lady pirate Anne Bonny, who was typically depicted in similar dishabille.

The cross-dressing exploits of Anne and her fellow disguised lady pirates, coupled with the rules against bringing attractive young lads or gals aboard and a form of mutual insurance called matelotage in which two pirates pledged their support to one another, has prompted Arizona State historian B.R. Burg to create a cottage industry of books on queer pirate theory. In Sodomy and the Pirate Tradition (1984), he claims an "almost universal homosexual involvement among pirates."

In his 1995 article "Black Men Under the Black Flag," Kenneth J. Kinkor, a historian and piratologist at the Expedition Whydah Sea-Lab and Learning Center in Provincetown, Massachusetts, compiled the available data on the racial composition of pirate crews. By Kinkor's reckoning, 25 percent to 30 percent of the average golden-age pirate crew was black. Because of this large minority presence, some have argued that pirates were somehow more enlightened than other whites of their age, recognizing blacks as fellow victims of the system.

But what scant evidence there is suggests that Caucasian pirates felt the same way about blacks as did most whites of the time. It seems likely that they simply worked with black pirates if that was the best way to get treasure. Many blacks were worth more as free colleagues than as slaves. "Sometimes," writes Leeson, "the invisible hook led pirates to display a racial progressivism in practice that didn't accord with the racial views in their minds."

Unfortunately, there isn't much data to support the notion of pirate ships as Enlightenment-born societies of revolutionary republicans and tolerant liberals. For every apparently compassionate act, there is an act of enslavement or murder. For every cooperative effort, there is a brutal maiming or marooning. Everyone wants a piece of the pirates, but most accounts struggle to explain the ways pirates stubbornly deviate from the progressive ideal. Leeson convincingly argues that "without economics, pirates…are a veritable ball of contradictions. They're sadistic pacifists; womanizing homosexuals; treasure-lusting socialists…and lawless anarchists who lived by a strict code of rules." With economics, they're a bunch of gossipy racists who go to bed early, ban women from the premises, and bluster to avoid fighting. These fastidious, calculating pirates may have been a far cry from the romantic, mad buccaneers of legend. But Peter Leeson's economical actors have an appeal all their own.

Katherine Mangu-Ward ([e-mail]) is an associate editor at reason.