Pirates as Businessmen

In the NPR podcast about the Somali pirate attacks in 2009 the Planet Money team talked about how pirates and the "unwilling customers" (the crew on the ships they board, the ship company itself, the government that the boarded ship belongs to etc) have "normal" business transactions when dealing with ransoms. Apparently in one instance after a CEO of a shipping company retrieved control of his boat back from the pirates the crew found a time sheet listing the hours a pirate had worked! I never imagined I would ever have anything in common with pirates when I pretended to be one for Halloween ten years ago, but hey I like getting paid for the work I do too. I'm just not willing to wield guns and abduct people to get some cash.

I found it fascinating that in the podcast the CEO of a Danish shipping company seemed to think of the months spent trying to get his crew and ship back as business as usual. He said the company never expected to not have to pay a ransom, the company even had special insurance for pirate negotiations. In a link provided by the podcast to a Freakonomics page about pirate economics, the author of The Invisible Hook talks about how the traditional brand of pirate as a sadistic, irrational person who likes to brutalize hostages just for the hell of it is quite inaccurate. The business men negotiating the ransom were and, according to the podcast, still are treated with respect and hostages are not tortured indiscriminately, for the most part. While pirates had to cultivate an image of "men on the edge" they didn't want a reputation for wanton brutality. This image was the result of an economic choice of what would best suit the needs of the criminal system.

Recently pirates abducted two US citizens on an oil vessel off the coast of Nigeria. The citizens were the captain and chief engineer of the vessel (higher ranking crew members have more value and thus will fetch a higher sum on the ransom "market", if you can even call it that). The UN reported that Somalia has fallen to a 7 year low, partly because of increased security of ships in that region. Sooo it looks like the piracy market has moved to the West coast of Africa where government restrictions on vessel security are much higher than in Somalia.  The organized crime operation of piracy, like other forms of organized crime such as drug cartels or cat burglar associations, is fluid and moving where there is the most opportunity for economic growth.

One pressing issue facing governments all over the world for the history of civilization is how to deal with illegitimate markets. Prostitution has been around since Biblical times. The United States saw a backlash of gangs and mobs during Prohibition who worked the bootlegging business of ferrying illegal alcohol from moonshine distilleries to city speakeasies in the 1920's. All of the taboo ventures in organized crime have at least three things in common. One they all make awesome movies. And, more importantly, they are all rarely understood as primarily economic ventures and the members of each venture are usually demonized. I'm not saying that piracy is moral or a legitimate way to make a living, especially when it puts others in danger. But for the people involved in the trade, like all other black markets, piracy may be the only way or at least may seem like the best way to make a living in a society that doesn't offer other options.