Read The Pirate Organization: Lessons From the Fringes of Capitalism Online

Authors: Rodolphe Durand,Jean-Philippe Vergne

Tags: #Business & Economics, #Economic History, #Free Enterprise, #Strategic Planning, #Economics, #General, #Organizational Behavior

The Pirate Organization: Lessons From the Fringes of Capitalism (8 page)

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Unlike the ancient version of the pirate—a simple bandit who was the enemy of the city-state—the modern pirate organization is constantly repudiated but defends a “public cause.” Such a cause aims at decoding the maneuvers and norms underlying state-sponsored economic exchanges. Such decoding involves disclosing the potential inequities entailed by the sovereign code to
reveal them to the public
. WikiLeaks, in this respect, has become a master of decoding. But the public cause is also about
taking a stance in the name of the public
—a community sometimes too abstract to be able to organize and speak with one voice to the sovereign. Pirate radio became that unified voice that eventually eroded the monopoly of the BBC in the United Kingdom.

By defending a public cause, the pirate organization also publicly denounces the failings of capitalist production, and those entities that operate with the benediction of sovereign states, such as firms and other
organizations of the milieu
—the ecological/economic environment where competition occurs according to the normalized principles of economic exchange in recognized territories.
Milieu
, in modern French, also designates the center or the middle, which contrasts with the periphery where pirates sit still before they attack. By contrast, organizations of the milieu, such as state-approved corporations operating in strategic industries (energy, defense, etc.), regulated monopolies, national technology champions, or sovereign investment funds, operate from the center of capitalism and extend the normalization promoted by states to new territories. Pirate organizations roam on the fringes of normal business; sometimes they turn coat and become corsairs, but more often than not they confront the legitimate organizations of the milieu.

The pirate organization spreads dissonant messages openly. The demands regarding the freedom of the seas, made by pirate organizations in the early seventeenth century, illustrate this idea as much as current claims for more openness on the net formulated by cyberpirates. Recognition that the high seas constitute a public good, a common heritage of mankind, represents a victory for the pirate organization—as would a similar recognition regarding cyberspace or DNA. Pirate organizations bring attention to what most people no longer see as obvious or compulsory. They put forward and defend a set of challenging values that may gather a large amount of public support. For example, the stated goal of WikiLeaks is “to make capitalism more free and ethical.” In December 2010, a poll showed that 54 percent of the French supported WikiLeaks as an organization, a level of popularity that any French politician could only dream of reaching.
9
Beyond the political content of their cause, what counts is their positioning in relation to capitalistic flows and codes. The proposals that pirate organizations make are innovative and are constantly refined in light of contemporary technologies, the net or biogenetics, airwave transmissions or space travel. What matters most is whether the public cause is accepted, and whether legitimate organizations end up endorsing it, which prompts sovereign states to grant legitimacy and legality to what was previously unthinkable.

Chapter Seven

 

WHY PIRACY IS NOT JUST ABOUT ECONOMICS

 

Everything that you are asked to do is a duty.
Everything that you refuse to do is mutiny
.

 

—A sailor in the eighteenth-century merchant marines

 

The peculiar way in which pirates organize has prompted a variety of studies.
1
Historians and sociologists look into the local conditions that fostered a specific manifestation of the pirate organization. For their part, economists attempt to evaluate the costs and benefits of piracy. Their approach is limited because it is based on the idea that the pirate organization can only obey universal economic principles. If this were the case, everything would be rational among pirates, since the empire of economic reason extends over the largest kingdoms as well as the smallest duchies, over the international markets and among the highway robbers. Peter Leeson wrote a series of works that developed the rationalistic and eminently reassuring approach of pirate organizations. Leeson sees piracy—chiefly eighteenth-century sea piracy—as an elaborate form of banditry. Here’s the gist: to maintain their organization, pirates must set up mechanisms to control the crew by preventing theft and conflicts. These mechanisms must also maximize profits. The pirate organization operates on the fringes of the legalized and state-controlled world. Therefore, it must establish tenable principles of behavior, internally, since it cannot appeal to the state and its courts in the event of a conflict.

Economics Alone at the Helm?

 

Most sea pirates came from the hierarchically structured merchant marine. At the top was the captain of the ship, who controlled all aspects of the crew’s lives, including food distribution, chores, salaries, and discipline. Therefore, for the legal transport of goods, ship owners selected the best merchant marine captains who believed in doing their jobs by any means necessary, especially when investors were involved. These backers gave the captain absolute power to get rid of crew members who showed the slightest hint or intention of theft or laziness. The captain imposed order. He was protected by laws that authorized leg irons and corporal punishment. To keep the captain’s power in check and to ensure a safe expedition, investors made the captain a minority shareholder. The captain received a share of the profits along with his fixed salary as a sailor. To ensure social control and profit, investors would often choose captains who were close contacts or whom they had a direct family tie with. If the captain did not arrive safely in port, he would lose his initial investment, the return on his investment, and the respect from his family and peers.

It was not rare for captains to abuse their authority for their own benefit. In fact, when sailors were mistreated by dishonest captains, they would often leave for other jobs. As the quotation in the epigraph of this chapter says, a basic sailor must obey—if not, he is seen as a mutineer. The threat of hardship and poor treatment was constant. The captain was all the more likely to use violence and intimidation if he had not been able to choose his own crew, and vice versa. Loyalty and trust therefore were the exceptions to the rule. Piracy was then an attractive option for mistreated sailors.

For its part, the pirate organization responded differently to economic requirements. First, given that the cost of acquiring or investing in the pirate ship was close to zero (i.e., it was stolen), the pirate organization did not adhere to the separation of economic tasks as the merchant marines did. So, any decisions about food, chores, salaries, and rewards, as well as attack strategies and escape plans, required a different chain of command. The most adopted system involved two levels of control. First, all members of the organization elected the captain, democratically. The same process was used to remove and replace captains. Second, power and authority could be spread among the crew.

Whereas in the merchant marine there were two co-existing populations (officers and sailors) held together by authority, on board a pirate ship, the community was one and united. However, to guarantee everyone’s rights and to maintain the cohesion of the crew, the ship’s command was shared by two complementary positions: the captain and the quartermaster. The captain was essentially in charge of major maritime operations. But in the event of an attack or a joint mission with other allied vessels, the distribution of rations and booty and the management of internal conflicts were the responsibility of the quartermaster. For many, the eighteenth-century sea pirate organization adhered to the democratic separation of powers, long before states did. When a captain was deposed after a majority vote due to, say, a lack of courage, a bad decision, or any other shortcoming, the quartermaster was often elected as the captain’s replacement. This would often give rise to competition between crew members vying for the quartermaster position. Unlike the authoritative merchant marine captain, whose privileges included getting the best cabin and the best food, the pirate ship captain did not receive any preferential treatment. His cabin (if he had one) was not private, and he ate the same food as his comrades. This equality also applied to the quartermaster. In fact, it was stipulated in the charters or articles that set out the rules of living and sharing within most pirate organizations. This type of agreement was called the
custom of the coast
and was based on the practices of the pirates of the Caribbean. The different codes of conduct adopted and amended by pirate communities are very similar. As the code used by Captain Roberts and his crew shows, harmful activities that could potentially lead to conflicts or that could negatively affect the expedition were not tolerated. In particular, alcohol, gambling, and sex were prohibited.
2

EXCERPTS FROM CAPTAIN ROBERTS’S CODE

 

Every man has a vote in the affairs of moment, and equal title to fresh provisions or strong liquors, at any time seized, and may use them at pleasure, unless a scarcity makes it necessary, for the good of all, to vote a retrenchment
.
Every man to be called fairly in turn, by list, on board of prizes … but if they defrauded the company to the value of a dollar in plate, jewels, or money, marooning was their punishment
.
No person to game at cards or dice for money
.
The lights and candles to be put out at eight o’clock at night: if any of the crew, after that hour still remained inclined for drinking, they were to do it on the open deck
.
To keep their piece, pistols, and cutlass clean and fit for service
.
No boy or woman to be allowed amongst them. If any man were to be found seducing any of the latter sex, and carried her to sea, disguised, he was to suffer death
.
To desert the ship or their quarters in battle was punished with death or marooning
.
No striking one another on board, but every man’s quarrels to be ended on shore, at sword and pistol.
3

 

Following a take, the quartermaster had to respect the accounting principles accepted by the entire crew before setting sail. For example, the carpenter and surgeon were paid first because of the indispensable service they provided. Next, the wounded, due to the hardships they suffered, were paid according to a precise code. They received a larger share than their crewmates, thus instituting one of the first forms of social insurance. For example, if a crew member lost his right arm, he received three times the pay of the surgeon, but if he lost an eye, he received half. From what remained of the take, the captain received a double share, each crew member received an equal share, and young boys received half. If a ship was taken, each crew member had to swear—often on the Bible, but also on other texts—that he had not taken anything so that each could then receive an equal portion of the booty. In addition to the equal profit sharing, a bonus system was often used for the bravest pirates in order to reward individual initiative. All in all, the discipline that pirates voted on and imposed on themselves was stricter and more stringent than the rules they imposed on their prisoners.

Pirates’ Norms Travel Fast

 

Advances that took modern governments several centuries to institutionalize were established by the pirates of the Caribbean and Madagascar: democratic elections of leaders, separation of powers, equality between members, and an early form of social insurance. Leeson and others see these institutions as an economic necessity. They were developed on the need for internal coherence. For the pirate organization that faced a lot of uncertainty and could not resort to legal justice, these advances were essential. As Leeson says, “No outside authority centrally designed, directed, or imposed democracy on pirate society. Pirates’ criminal interest led them to adopt this system without external prodding.”
4
The economic handling of the pirate organization and its cruel reality—the violence inflicted on those who did not respect the rules—intensify its abnormal, monstrous, and criminal side.

There is always an economic explanation for everything in the pirate legend. Some economists have used signaling theory to dissect the Jolly Roger, the black pirate flag with the white skull and crossbones. It would seem that the acceptance of emancipated slaves, who were treated as equals, is based on a simple cost-benefit calculation. Looking back, Leeson ascribes purely economic motivations to all pirates’ decisions. His economic approach sees these things as logical consequences that resulted from the costs associated with the running of the organization: its banishing, its capital structure, its riskiness, and so forth.

We are tempted to reverse this logic and see the pirate organization as the consequence of the wide-reaching presence of more democratic, more modern, and more egalitarian principles in society. In a way, the banishment of the pirate organization is not the reason why it establishes different principles for living and distribution. Rather, the reverse is true. The pirate organization is pushed to the fringes because it creates dissonant rules for living and alternative theories of ownership in the gray areas that have yet to be normalized. The poor treatment of merchant marine sailors, the slave trade, inequality in growing revenues, undue appropriation of profits by military force, the weakening of monarchic authority, and the dissemination of Enlightenment ideas—all these could just as easily be the reasons behind the exodus of a band of sailors and the rise of liberalist ideas about property and trade that were held by doctors and captains.

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