One example that you point to in demonstrating the efficiency of pirate behavior is that, according to at least one pirate historian, Blackbeard didn't kill a single man.
That's a perfect illustration of what we're talking about here and another actual prediction that comes out of the rational-choice theory to a certain extent. The actual instances that we have of pirate brutality—and there are a number of them—an economist would characterize as out-of-equilibrium play, not the norm. Those cases are recorded precisely because something really nasty happened. And the fact that Blackbeard didn't have to actually kill anybody is an indication of what we would call equilibrium play. The reputation that he'd created was so effective that he didn't have to actually ever carry through on the threat that lay behind that image.
One thing that I thought was interesting is the fact that some of these pirate ships had institutionalized a form of worker's compensation.
They did, and I talk about that in-depth in a different paper I wrote. But that's exactly what they had. And one of the things that's marvelous about the system is, first of all, its earliness. That was not a common thing in the 17th- and 18th-century world. Merchant sailors, for example, didn't have access to something similar through the state until after pirates had already adopted this. But in any event it was a highly detailed scheme, so if you lost your right arm it would be worth x number of pieces of eight, and if you lost your left leg it would be worth y number of pieces of eight in compensation. So it was quite a developed system.
In this paper you focus primarily on the "golden age" of piracy. But what do you make of piracy today, especially with the Somali pirates in the news of late?
Modern-day pirates … are similar to old-school pirates in the sense that they are plundering on the sea and that they are engaged in plunder on the sea where government is weak. Other than that, when it comes to their institutional organization, for example, overwhelmingly they seem to be just not that interesting. Now—and as far as I know this is the only case we have of this—when the French government took a pirate crew earlier this year, they did find an actual pirate's manual that laid out rules about how they would treat prisoners. It points again to the profit-seeking idea—it's not because they're nice people, it's because the prisoners are valuable as hostages.
But it's still nowhere near as elaborate or as interesting. The constitutions that 18th-century pirates had ... created a true system of social governance on the pirate ship. Seventeenth- and 18th-century pirates were pioneers, in a certain way, of constitutional democracy. They had checks and balances aboard their ship, they had an early form of quasi-judicial review, and they were democratic, which was virtually unheard of in the Western world at that time. The reason modern pirates don't have that, I think, is because 18th-century pirates spent lots and lots of time together at sea. It could be months on end. And they lived and worked and operated apart from legitimate society for long periods of time, which meant that the pirate ship was a kind of floating society. And that society, like any other one, required rules in order for it to be functional.
If you look at modern pirates, they tend to spend very little time together on their ships. Modern pirate expeditions tend to be in-and-out operations. And since they aren't really together in the same way that 18th-century pirate crews were, they don't really constitute floating societies. Therefore they don't face the same kinds of social problems, at least to the same extent, that the 18th-century pirates did, and so that's why they don't have elaborate rules. No society, no rules.
They still seem to be turning a pretty nice profit.
Oh, absolutely. They seem to be doing well. I don't think that they're inferior predators. It's just that they're not as interesting predators.