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The Economics of Piracy (the Real Kind, With Peglegs and Pieces of Eight)

I just received galleys of what looks like an interesting book: The Pirate’s Dilemma: How Youth Culture Reinvented Capitalism, by Matt Mason. I haven’t cracked it yet, but the Mason book reminded me of another recent book about piracy — the real, old-fashioned kind, with peglegs and pieces of eight — called Empire of Blue Water: Captain Morgan’s Great Pirate Army, the Epic Battle for the Americas, and the Catastrophe That Ended the Outlaws’ Bloody Reign. It’s by Stephan Talty, a writer I know a little and admire a lot. It includes a lot of material that will interest readers of this blog. For instance:

The pirates voted on how many shares of treasure each pirate would get. The captain got five or six shares to the common pirate’s one; the master’s mate got two; the cabin boy one-half. Skilled tradesmen were well compensated: The carpenter who’d be responsible for fixing any breaches of the hull from cannonballs or storm damage was often paid 150 pieces of eight; the surgeon and his “chest of medicaments” got 250. Men of both professions were so sought after that pirates would sometimes attack merchant ships just to steal away their shipwright or doctor, who was then forced into piracy.

And this one:

The most extraordinary clauses in the [ship’s constitution] were the ones addressing the “recompense and reward each one ought to have that is either wounded or maimed in his body, suffering the loss of any limb, by that voyage.” Each eventuality was priced out:

Loss of a right arm: 600 pieces of eight
Left arm: 500
Right leg: 500
Left leg: 400
Eye: 100
Finger: 100

Some articles even awarded damages for the loss of a pegleg. Prostheses were so hard to come by in the West Indies that a good wooden leg was worth as much as a real one.

This list reminded me of a similar workmen’s comp list we included in Freakonomics, although it was a recent one compiled by the State of Connecticut:

Arm (master): 208 weeks pay
Arm (other): 194 weeks
Leg: 155 weeks
Eye: 157 weeks
Finger (index): 36 weeks

So the left arm of a pirate was worth 16 percent less than his right arm, while the left arm of a Connecticut state worker is worth only 7 percent less. But the Connecticut worker’s legs are worth relatively far less than his arms, although there is no discount on the left leg as there is for the pirate. The big gap is for the eyes. In Connecticut, an eye is worth a leg; on a pirate ship, it was worth just 20 percent of the master leg. A pirate’s finger, meanwhile, had the same relative value to his master arm as a Connecticut state employee’s finger does to his master arm: about 16 percent.

Here’s one more interesting passage from Talty’s book:

With his hefty shares, Henry Morgan could (and did) buy large estates and stock them with slaves; other captains or even thrifty buccaneers sailed back to England and bought property. But on his share a common pirate would have to buy a smaller plot in Jamaica, purchase some cheap indentured servants, watch them slowly, whip them when needed, and husband his money. In other words, become a kind of tight-fisted farmer with regular hours and work seven days a week. He might set up shop in town, but these were uneducated men used to a life of drinking and freedom. How could they go and buy a grocer’s stall and nickel-and-dime their way to a living? It went against the whole joy of being a pirate. After years in the life, pirates had become accustomed to long periods of drunken tedium interrupted by binges of extreme violence and spending. If they had been meant to be shopkeepers or yeoman farmers, they would never have ended up on Henry Morgan’s ship in the first place.

For further reading:

The economist Peter Leeson has been writing some really interesting academic papers on piracy, and the economic logic thereof; Jim Surowiecki of the New Yorker recently summarized Leeson’s work nicely.

Jack Hitt wrote a good piece in the New York Times Magazine a while back about modern-day pirates; recently, such incidents seem to be on the decline.