Pirate profit probe a jolly good read

"The Invisible Hook: The Hidden Economics of Pirates," by Peter T. Leeson (Princeton University Press, $25)

Even pirates need to make a profit. That, actually, is what piracy really is all about, Peter T. Leeson explains in his delightful and instructive "The Invisible Hook," which joins the recent rash of books describing seagoing brigandage of the 18th century.

The book, however, is not about pillage and plunder, except to show that such activity was counterproductive to profit-making, and therefore pirates did not engage in it to nearly the extent portrayed in popular media. They were, in a word, businessmen. You know, like the Corleones.

Leeson, a professor of economics at George Mason University, takes an appreciative but not condoning attitude toward pirates. The "invisible hook" of his title is the piratical analog to Adam Smith's "invisible hand that guides economic cooperation," which "is as true for criminals as it is for anyone else" - with two differences.

First, whereas the invisible hand examines the hidden order behind the metaphorical anarchy of the market, the invisible hook examines the hidden order behind the literal anarchy of pirates. Second, pirates were not in the business of buying, making and selling, but thrived parasitically off others' production; they did not benefit, but harmed, society.

The book covers primarily the years 1716-26, the final stage of the great age of piracy, when anywhere from 1,000 to 2,000 sea bandits prowled the Caribbean and Indian and Atlantic oceans in any one year.

We must view piratical activity through the economic notion of rational choice, Leeson emphasizes. Pirates did what they did for money - big money, sometimes thousands of times what a seaman could earn on a merchant ship or in the Royal Navy.

Pirates may have been outlaws, but they were not lawless. A pirate ship was an egalitarian democracy. On the basis of one pirate, one vote, they organized their ships to avoid "captain tyranny" and other abuses of merchant ships, elected their captain and other leaders and erected a system of checks and balances and separation of powers.

Compensation scales were astonishingly flat. Pirate captains typically received no more than twice the share of booty that ordinary pirates received.

They flew the black Jolly Roger flag with skull-and-crossbones to induce terror and thereby reduce fights, signaling: "Surrender and no one gets hurt, resist and you will all be killed."

"The Invisible Hook" is entertaining and educational, and it's certainly timely, considering recent events off the coast of Somalia. However, it is a bit textbookish - the author repeats what he has already said in a summation at the end of each chapter. There is scarcely a lesson herein, including the dislike of most government regulation, that could be objected to by the National Association of Manufacturers or the U.S. Chamber of Commerce.

Pirates were libertarian? Who knew?