The Invisible Hook.

• Author: Young, Andrew
• Position: Invisible Hook: The Hidden Economics of Pirates - Book review

The Invisible Hook

By Peter T. Leeson.

Princeton, NJ: Princeton University Press, 2009. Pp. 271. $24.95.

In The Invisible Hook: The Hidden Economics of Pirates, Peter Leeson provides an economic interpretation of early eighteenth--and, to a lesser extent, late seventeenth--century piracy. He explores the governance of pirate societies and how pirates functioned under such governance towards their primary end: booty! ... net of costs (of course). Relying on primary and secondary historical sources, Leeson distills the facts of pirate life from legend and popular perception, both ours and those of pirates' contemporaries. Pirate ships (and fleets of ships) emerge as profit-maximizing, floating firms. These firms were governed by remarkable constitutions entered into unanimously by pirate crews. From the Jolly Roger to the when's, how's, and to whom's of "keelhauling," The Invisible Hook takes the an-arrgh-chy (Leeson's term) of "shiver my timbers" piracy and renders it an intelligible, purposeful order.

For example, pirate ships were arguably just as orderly in operations as merchant ships but differently organized. Leeson contrasts the corporate structure of pirate ships with that of their lawful counterparts. Merchant ships were owned by groups of landlubber capitalists plagued by obvious agency problems while their capital remained at sail for months on end. Seamen aboard these merchant vessels had incentives to partake of as much leisure as possible and as much of the outgoing and/or incoming cargo as possible. It behooved owners to install captains with interest in the voyages' profits and considerable control over the hired seamen. Alternatively, pirate ships were stolen. There were no absentee owners; the principles were also the agents. So pirate ships were quite democratic. For example, captains could be installed or removed from office by simple majority vote. (Leeson perhaps overstates the situation slightly: "enough to make [James] Madison's heart sing!") (p. 37). The option to remove could be exercised in the case of captains rationing provisions in their own favor, abusing crew members, or appropriating more than their share of booty. As a result, Leeson argues that these forms of predatory behavior were much rarer on pirate vessels than on their merchant counterparts.

Another highlight of the book is the discussion of pirates' preference to avoid violent conflict. Of course, the fact that engaging in violence tends to be a...