Thursday, September 3, 2009

Invisible Pirates and Indian Trade

While reviewing Peter T. Leeson new book “The Invisible Hook” Caleb Crain writes in the New Yorker:

  • In May, 1694, a group of English sailors in a Spanish port grew tired of waiting for overdue wages. They cut their ship’s anchor, and the ringleader, Henry Every, slipped into the captain’s cabin. “I’ll let you into a Secret,” Every said. “I am Captain of this Ship now.” After sending ashore the captain and others unwilling to turn pirate, Every warned the world by letter that “my Men are hungry, Stout, and resolute,” and then sailed for the Indian Ocean. There his crew took two rich prizes—a ship belonging to a wealthy Muslim merchant and another belonging to Aurangzeb, the Grand Moghul of India. The loot amounted to a thousand pounds per pirate, “the equivalent of twenty years’ wages aboard a merchant ship,” Colin Woodard explains in his book “The Republic of Pirates.” The Indians, furious, held England’s East India Company responsible, and imprisoned its officers for almost a year. The success inspired imitators, including William Kidd, whose seizure, in 1698, of a cargo belonging to the Moghul’s secretary of state exasperated the Indians even further; they threatened to flay an English administrator alive. Though England turned a blind eye to the pirates’ activities for a while, it couldn’t afford to imperil trade with India, and so, at the end of the seventeenth century, it sent men-of-war to suppress the Indian Ocean pirates. Still, the dynamics of geography and trade that attracted men like Every to the Horn of Africa remain, and the opening of the Suez Canal has probably made the pickings even richer. Somali pirates prowl the same waters today.

The concluding para:

  • Are pirates socialists or capitalists? Lately, it’s become hard to tell the categories apart. Toward the end of his book, Leeson suggests that pirate self-governance proves that companies can regulate themselves better than governments can, as if he sees the pirate ship as a prototype of the modern corporation, sailing through treacherously liberal waters. Such arguments haven’t aged well over the past year, but even in piracy’s golden age people were aware that an unregulated marketplace invites predators. During the South Sea Bubble of 1720, speculators claiming to be able to make wealth out of debt fleeced British investors and ruined many banks. Pirates who spent that year killing and plundering, Nathaniel Mist grumpily wrote, could salve their guilty consciences, if they had any: “Whatever Robberies they had committed, they might be pretty sure they were not the greatest Villains then living in the World.”

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