The Invisible Hook: The Hidden Economics of Pirates is a non-fiction book detailing the similarities between economics and piracy. Author Peter T. Leeson (born July 29, 1979), shows in this book how pirates instigated democratic practices for their mutual profit, ideas which preceded the methods of society in the 16th century.[1][2]
Leeson is an economics professor who has been credited with several respected positions throughout his career. Growing up with a strong admiration for pirates, he was inspired by piracy and how it intertwined with economics. The Invisible Hook explores several economic phenomena, including signaling and branding. The book also explores other themes including the implementation of democracy and constitutions, as well as tolerance and the use of conscription.
The book has been academically criticised, with many scholars praising Leeson's work for the books’ interesting insights and well thought-out ideas. The book also has opposing evaluations which offer insight from different points of view.[3][4][5]
Author background
Peter Leeson, an American economist, had a love for pirates all his life. He grew up "pirate-obsessed".[6] He cherished his skull ring from Disney World, appreciated the themes in "Goonies", and when he became an economics professor combined his favourite interests to his professional career. Leeson earned the title of a Fellow of the Royal Society of Arts, and after holding faculty positions at both West Virginia University and the University of Chicago, he rose to the position of the Duncan Black Professor of Economics and Law at George Mason University. Besides his teaching career, Leeson is known for exploring the obscure economic practices in different communities, including the democratic behaviour of pirates.
Importance of the title
Leeson penned the title after Adam Smith’s “Invisible Hand” theory. Smith’s concept outlined that an individual pursuing his self-interest is led by an invisible hand to promote societal interest. The idea behind Leeson’s book is that pirates are also driven by their self-interest, however rather than generating wealth, the “invisible hook” destroys wealth and allows pirates to pillage more freely.
Overview
This work is a chapter book containing Leeson’s earlier writings. It was written from an economical standpoint and explains why pirate practices and decisions were rational, through an economical way of thinking. Considered a “fascinating perspective” into the world of pirates, Leeson argues that pirate customs took the form of rational and democratic forward-thinking. The book’s chapters cover:
Battle between Pirates and the Dutch Navy by Bonaventura Peeters
Chapter 1. The Invisible Hook: an introduction for the following chapters
Chapter 2. Vote for Blackbeard – The Economics of Pirate Democracy: explores the origination of pirate democracy and how it was adopted from the experiences of sailors on merchant ships
Chapter 3. An-arrgh-chy – The Economics of the Pirate Code: explains how pirates developed constitutions to govern their societies, effectively creating a democracy
Chapter 4. Skull & Bones – The Economics of the Jolly Roger: identifies the economic phenomenon of "signaling" to the Jolly Roger flag
Chapter 5. Walk the Plank – The Economics of Pirate Torture: details how the use of “brand names” by creating reputations of barbarity were implemented in order to ensure pirate revenue was not reduced at any level
Chapter 6. Pressing Pegleg – The Economics of Pirate Conscription: investigates how pirates used conscription to fill their ranks by drafting sailors from vessels they overtook
Chapter 7. Equal Pay for Equal Prey – The Economics of Pirate Tolerance: delves into pirate tolerance, and the integration of black bondsmen as free crew members on their ships, and how this tolerance was formed by the cost-benefit considerations
Chapter 8. The Secrets of Pirate Management – discusses management[7] in piracy and the lessons which can be learned
Epilogue. Omnipresent Economics
Summary
The Invisible Hook is a non-fiction story that reveals the democratic and economic forces which drove pirates. Leeson identifies economic ways of thinking and how they administered in actions of piracy, and how these customs resulted from a national response to the economic conditions of the 18th century. Leeson uncovered that pirates were “pioneers of democracy” (Weiss, 2008). Long before these methods were used in modern government, they were used effectively on pirate ships.
Lesson explores how pirates were the first developed “orderly and honesty societies” [8] to rebel against 17th and 18th century governments. Pirates formed their own democratic ways, many of these adopted from experiences on merchant ships, and created a system of checks and balances to reduce the captain’s control over many aspects of pirate life.
Leeson also explains how the implementation of constitutions governed pirate societies through “pirate codes” – a system of rules – upon the ship. These rules prevented “negative externalities” and created a “rule of law” that placed captains on equal footing to their crew. Quartermasters [9] were also elected to ensure the captain would not abuse his power. Captains were allowed to "control the governed", but not break the rules bound to themselves. Pirate leaders could be violent to their prisoners, but they respected their crew – they were "lawless" but "not without laws" (Leeson, 2009). Charters were created before the 1670s to ensure equality among members. Conscription was "executed" through the drafting of sailors from overturned vessels.
The book also explores other elements that made piracy successful. The Jolly Roger flag was not flown by coincidence, but instead was used as an element of branding. It was a substantial element to the success of their "business" – pirates capitalised on this operation. The flag among other elements were used to build pirate reputation. Their notoriety for barbarity created a fearsome "brand name" which would ensure their success was maximised. Torture also deterred authoritative figures from interfering.
The book ends with the use of management methods and the contemporary lessons which can be learnt from 17th and 18th century pirates. These "pioneers of democracy"[10] had more to offer than just insanity and bloodshed.
Throughout the book, Leeson claims that pirate actions had economic reasoning, both for mutual benefit as well as the success of their society. Pirates’ actions were also just "common sense"[11] and had an incentive to create rules to make “society get along.”
Themes
Democracy
In rebellion to the autocratic notions of the 17th and 18th century merchant ships and governments, pirates elected their leaders through democracy. All crew members would vote on important matters that affected their society's way of functioning.
This form of democratic living was not stumbled upon, instead it was adopted through the sailor's experiences aboard merchant ships. The merchant ships’ ownership structure drove the autocratic organisation, and many captains leading their crews abused this power severely.
Pirates had a very different ownership structure. Instead of absolute ruling, pirates created a system of democratic checks and balances which would hold a captain accountable for the crew. It would also reduce their control over certain aspects of life. Constraining the captains’ ability benefited the crew's expense as it ensured cooperation between members, and more importantly, concreted piratical system and success.
Constitution
The implementation of democracy also called for the use of a constitution. Pirates created "articles of agreement" or codes which would aid the governing of the ship. The constitutions did many things, but in particular they prevented "negative externalities" that could occur by ensuring the cooperation of members, and created a "rule of law" which placed captains, quartermasters and other crew on an equal "legal" level.
Negative externalities is an economic term used to describe the harmful side effects that may result from one's behaviour. By placing everyone on an equal level, crew members were encouraged to maintain a successful and hard-working ship which would ensure mutual gain.
This constitutional democracy seen in 17th and 18th century pirates predated democracy in many countries, including the United States, France, Spain, and "arguably even England".[12]
Signaling
The Jolly Roger flag used to signal other vessels of the terror that was approaching
An economic phenomenon known as "signaling" is evident in pirate way of life. They use this as a method of capitalisation through a flag known as the "Jolly Roger".[13] The flag used a skull-and-bones motif which symbolised their way of life. It was so well-known that others who came across the flag knew what it symbolised, which heightened the success of the flag. It devised a way of letting others know they were victim, and encouraged them to surrender without fighting.
Pirates also believed that the success of their flags "benefited" their victims as it prevented unnecessary bloodshed and loss of life by encouraging them to surrender.
Signaling was seen in other flags besides the Jolly Roger. Many ships used specific flags to identify different crews and what to expect from them.[14] Such reputations maximised their success.
Branding
This idea of economic reputation was furthered through the use of "brand names". Pirates were notorious for torturous methods. Victims were often reluctant to reveal treasure, sometimes it was hidden or destroyed. To prevent this, pirates created reputations and "brands" of barbarity. Victims grew too scared to be uncooperative, and were forced to reveal their booty.
Torture was also used to deter authorities from interfering with their affairs. It was also used as a method of justice in revenge to the merchant ships who abused them.
Conscription
Pirates would fill their ranks by drafting sailors. These sailors were unwilling members of merchant vessels the pirates overtook, or they were men eager to get away from their own tyrannical situations.
Changes to 18th century law made pirating riskier, and in response pirates would pretend to conscript their crews members in an apparent loop hole. They developed their solution to the new laws like businessmen – when rising problems threatened them they used them to their advantage.
Tolerance
In the 17th and 18th century, British authoritative figures including merchants would enslave black people. To counteract this, and to encourage those enslaved to join their crew, pirates integrated bondsmen into their ships as completely free members. However, this was inconsistent among certain pirate societies – some granted equal rights, but some still participated in the slave trade, and some did both.
This progressive notion however, indicated that pirates applied ideas of equality even before those same ideas in the Declaration of Independence were written.
Leeson does note that pirate tolerance was not produced by the ideas of equality and fairness, but instead was produced by the cost-benefit and compensation promises made by their leaders – this includes the charters developed, which included a worker's compensation. It outlined that a lost limb would entitle one to payment from the treasure, on top of their already promised payment equal to every other crew member.
Critical reception
The Invisible Hook was a winner of the 2009 Best International Nonfiction Book and a winner of the 2009 Gold Medal Book of the Year Award in Business and Economics.[15] Leeson's book was also a winner of San Francisco Chronicle's 100 Best Books for 2009 and has been praised by several academics. Claude Berube from the Washington Times says that Lesson has produced a "fresh" perspective on an old topic.[16] Berube also describes how Leeson quells "the pirate myths" through economic theory. The New Yorker's Caleb Crain details the book as "brisk" and "clever".[17] Edward Glaeser from the Economix blog identifies that Leeson's book uses the tools of economics to "make sense" of piracy.[18]
Virgil Henry Storr's[19] review of The Invisible Hook calls Leeson's "fantastic" book a demonstration that even a community of criminals can operate with a government. However, Storr also claims that the book raises the question as to why a government is "a prerequisite for peace". Storr compares Leeson's pirate organisations to Hayek's definition of society and describes that "pirate societies" are created to "provide service and earn profit" (Storr, 2010, pp. 294). Storr also compliments Leeson on his convincing work of explaining why pirate governance was not government, however argues that he did not explain why pirate governance worked.
Per L. Bylund's[20] review of The Invisible Hook describes that Leeson claims piratical enterprise "resembled a Fortune 500 company" and was conducted much like a for-profit business firm. Bylund argues that there is not much evidence to support this view, and the extent of resemblance between a pirate ship and a modern-day corporation is not clear. Bylund declares that the book is more a descriptive historical "case study" using economics to explain certain functions of pirate crews, rather than an "in-depth economic analysis of pirate organisation" (Bylund, 2011, pp. ).
Alan Kirman's[21] review describes Leeson's book as "delightful" and "informative", although the message of the book is "too facile". Kirman also identifies one of the "oldest problems in economics that Leeson faces: arguing that pirates made their arrangements consciously with their collective interest in mind is essentially different from the idea of Adam Smith’s “Invisible Hand", which is the idea that individual self interest, multiplied endlessly, results in an unconsciously created but successful economy.
Marcus Rediker’s book Between the Devil and the Deep Blue Sea [22] explored maritime life of pirates and alike but under a more Marxist-oriented analysis. Rediker implemented court records and “accounts by seamen” (Lydon, 1988, pp. 136) as sources for data in his book. They actively demonstrate the life, labour and conflicts of sea life. Rediker also argues against Leeson’s point that pirates created rules to make harmony in society. He states that rather than it being about human nature, it is just the “specific experience” of sailors and how they want to “imagine a better world”.
Related Research Articles
Piracy is an act of robbery or criminal violence by ship or boat-borne attackers upon another ship or a coastal area, typically with the goal of stealing cargo and other valuable goods. Those who conduct acts of piracy are called pirates, and vessels used for piracy are called pirate ships. The earliest documented instances of piracy were in the 14th century BC, when the Sea Peoples, a group of ocean raiders, attacked the ships of the Aegean and Mediterranean civilisations. Narrow channels which funnel shipping into predictable routes have long created opportunities for piracy, as well as for privateering and commerce raiding.
Jolly Roger is the traditional English name for the ensign flown to identify a pirate ship preceding or during an attack, during the early 18th century. The vast majority of such flags flew the motif of a human skull, or “Death's Head”, often accompanied by other elements, on a black field, sometimes called the “Death's Head flag” or just the “black flag”.
Bartholomew Roberts, born John Roberts, was a Welsh pirate who was, measured by vessels captured, the most successful pirate of the Golden Age of Piracy. During his piratical career, he took over 400 prize ships, although most were mere fishing boats. Roberts raided ships off the Americas and the West African coast between 1719 and 1722; he is also noted for creating his own pirate code, and adopting an early variant of the Skull and Crossbones flag.
John Rackham, commonly known as Calico Jack, was an English pirate captain operating in the Bahamas and in Cuba during the early 18th century. His nickname was derived from the calico clothing that he wore, while Jack is a nickname for "John".
Condent, born in Plymouth in Devon, was an English pirate who was best known for his piracies in the Indian Ocean.
Libertatia was a purported pirate colony founded in the late 17th century in Madagascar under the leadership of Captain James Misson. The main source for Libertatia is Volume 2 of A General History of the Pyrates, a 1724 book which describes Captain Misson and Libertatia. Little to no corroborating evidence for Libertatia beyond this account has been found, however. Whether Libertatia was real but somehow "lost" to history, a pirate legend that the author recorded based on interviews with sailors, or a concocted work of utopian fiction by the author from the start is contested.
William Fly was an English pirate who raided New England shipping fleets for three months in 1726 until he was captured by the crew of a seized ship. He was hanged in Boston, Massachusetts, and his body publicly exhibited in a gibbet as a warning to other pirates. His death is considered by many to mark the end of the Golden Age of Piracy.
The Golden Age of Piracy is a common designation for the period between the 1650s and the 1730s, when maritime piracy was a significant factor in the histories of the North Atlantic and Indian Oceans.
Edward Low was a pirate of English origin during the latter days of the Golden Age of Piracy, in the early 18th century. Low was born into poverty in Westminster, London, and was a thief from an early age. He moved to Boston, Massachusetts, as a young man. His wife died in childbirth in late 1719. Two years later, he became a pirate, operating off the coasts of New England and the Azores, and in the Caribbean.
A pirate code, pirate articles, or articles of agreement were a code of conduct for governing ships of pirates, notably between the 17th and 18th centuries, during the so-called "Golden Age of Piracy". The typical pirate crew was an unorthodox mixture of former sailors, escaped convicts, disillusioned men, and possibly escapee or former slaves, among others, looking for wealth at any cost; once aboard a seafaring vessel, the group would draw-up their own ship- and crew-specific code, which listed and described the crew's policies surrounding pirate behavior and the associated disciplinary action, should a code be violated. Failing to honor the code could get a pirate marooned, whipped, beaten, or even executed. For less serious violations, a pirate may have been temporarily denied equal food rations, or made to clean or maintain parts of the ship for a time. Primarily, these articles were designed to keep order aboard the ship, avoid dissension or mutinies, and ensure the crews' loyalty, all of which was crucial to the group's mutual survival.
Marcus Buford Rediker is an American historian, writer, professor, and social activist. He graduated with a Bachelor of Arts from Virginia Commonwealth University in 1976 and attended the University of Pennsylvania for graduate study, earning an Master of Arts and Ph.D. in history. He taught at Georgetown University from 1982 to 1994 and is currently a Distinguished Professor of Atlantic History of the Department of History at the University of Pittsburgh.
Peter T. Leeson is an American economist and the Duncan Black Professor of Economics and Law at George Mason University. In 2012 Big Think listed him among "Eight of the World's Top Young Economists". He is a Fellow of the Royal Society of Arts.
The distribution of justice was a practice commonly adopted by pirates. Ships operated as limited democracies and imposed their ideas of justice upon the crew of the ship that they captured. After capture, the crew would be questioned as to whether they had suffered cruel or unjust treatment from the commander of the ship. Any commanders "against whom Complaint was made" would be punished or even executed. This punishment was not indiscriminately given to all ships' commanders. An "honest Fellow that never abused any Sailors" would be rewarded, and sometimes freed.
Pirates of the Golden Age of Piracy were organized criminals. As well as having crew members assigned certain duties, pirates found a way to reduce conflict among themselves and maximize profits. They used a democratic system, spelled out by written "articles of agreement", to limit the captain's power and to keep order on board the ship.
The Atlantic World refers to the period between European colonization of the Americas (1492-) and the early nineteenth century. Piracy became prevalent in this era because of the difficulty of policing this vast area, the limited state control over many parts of the coast, and the competition between different European powers. The best known pirates of this era are the Golden Age Pirates who roamed the seas off the coasts of North America, Africa, and the Caribbean.
The Republic of Pirates was the base and stronghold of a loose confederacy run by privateers-turned-pirates in Nassau on New Providence island in the Bahamas during the Golden Age of Piracy for about twelve years from 1706 until 1718. While it was not a republic in a formal sense, it was governed by an informal pirate code, which dictated that the crews of the Republic would vote on the leadership of their ships and treat other pirate crews with civility. The term comes from Colin Woodard's book of the same name.
Hydrarchy, is the organizational structure of a ship, or the ability for individual(s) to gain power over land by ruling through the instrument of water, as defined by English poet Richard Braithwaite (1588–1673), who coined the term.
The Flying Gang was an 18th-century group of pirates who established themselves in Nassau, New Providence in the Bahamas after the destruction of Port Royal in Jamaica. The gang consisted of the most notorious and cunning pirates of the time, and they terrorized and pillaged the Caribbean until the Royal Navy and infighting brought them to justice. They achieved great fame and wealth by raiding salvagers attempting to recover gold from the sunken Spanish treasure fleet. They established their own codes and governed themselves independent from any of the colonial powers of the time. Nassau was deemed the Republic of Pirates as it attracted many former privateers looking for work to its shores. The Governor of Bermuda stated that there were over 1,000 pirates in Nassau at that time and that they outnumbered the mere hundred inhabitants in the town.
Captain Grinnaway was a pirate from Bermuda, best known for being briefly and indirectly involved with Edward Teach.
Matelotage was an agreement amongst pairs of European sailors, in particular buccaneers, in the 17th and early 18th century. As part of this economic partnership, "matelots" would agree to share their incomes, and inherit their partner's property in the case of their death. In addition, they would pledge to protect and fight alongside each other in battle and otherwise act in the other's interest. Not limited to sailors or pirates, matelotage agreements could be made by members of any group, even planters.
↑ Leeson, P. (2012). The Secrets of Pirate Management: From the Invisible Hook: the Hidden Economics of Pirates. The Secrets of Pirate Management. Princeton University Press. https://doi.org/10.2307/j.ctt4zbj7
↑ Leeson, P. T. (2009). The invisible hook: The hidden economics of pirates. Princeton University Press.
↑ Ewen, C. R., Skowronek, R. K. (2016). Pieces of Eight: More Archaeology of Piracy. University Press Scholarship Online. DOI:10.5744/florida/9780813061580.003.0009
↑ Rediker, M. (1987). Between the Devil and the Deep Blue Sea: Merchant Seamen, Pirates and the Anglo-American Maritime World, 1700–1750. Cambridge University Press.
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