Tuesday, May 12, 2009


In a strange convergence, it turns out that the disgraced financier Bernie Madoff and the young Somali sea bandit Abdul Wali Muse have both been held in the same New York detention center, prompting the question who is the bigger pirate?

Indeed, where once they were celebrated as wizards, the financial whizzkids of Wall Street, or of corrupt behemoths such as Enron, are increasingly being condemned as pirates. "Make Enron Pirates Answer" demanded the LA Times a few years ago, and now we find that Enron has "gone global" as "hedge fund pirates" stalk the world economy. The comparison with the dangerous seas off the Horn of Africa is made explicit again as we're told that "Like Somali Pirates, Wall Street Holds U.S. to Ransom".

None of this, however, should be any great surprise. As Tom Wolfe reports, financiers have long self-consciously struck a "pirate pose", not least the Hedge Fund that unabashedly goes by the name of Pirate Capital, its website featuring a series of images that switch between wooden-masted sailing boats and computer print-outs of financial accounts. As Wolfe describes the firm:
The 41-year-old hedge fund founder Tom Hudson [. . .] struck a Blackbeard pose right out in the open—Blackbeard, the pirate who took what he wanted and was accountable to no one. When Hudson launched his company in Norwalk in 2002, he named it Pirate Capital and called its hedge fund the Jolly Roger. Outside the door to his office he installed a life-size wooden figure of a storybook pirate, in full color, wearing all the pirate’s rig: the patch over one eye, the golden hoop earring through one earlobe, the tricornered hat, Captain Hook’s hook instead of a hand on one arm, the pantaloons, the peg leg, and the cutlass. He handed out baseball caps and T-shirts emblazoned SURRENDER YOUR BOOTY!, which was funny but no joke.
Of course, those who live by the sword also die by the sword: even before the current downturn, Pirate Capital faced mutiny as it tried to make its own staff walk the plank. But you could never suggest that the firm ever hid its piratical intentions. Rather, it gloried in them.

And now comes The Invisible Hook by Peter Leeson, who is apparently "Professor for the Study of Capitalism" at George Mason University. His website too is adorned with pirate imagery, and no wonder: his book is a whole-hearted celebration of piracy as a model for free-market economic practice.

Eighteenth-century pirates, Leeson want to argue, were the very model of rational economic actors whose bloodthirsty ways were merely the outcome of a commendable search for profit. Moreover, in balance pirates in fact did more good than harm, precisely thanks to their clear-eyed desire to maximize their personal earnings. Contrary to reputation, they were peace-loving democrats who merely cultivated a violent image as part of an enormously successful brand-management campaign. If we study Golden Age piracy, Leeson suggests, we learn the universal truth of the adage that "greed is good":
Pirate greed is what motivated pirates to pioneer progressive institutions and practices. For example, this greed is responsible for pirates' system of constitutional democracy [. . .]. Pirate greed is also responsible for some sea rogues' superior treatment of blacks. (179)
Mind you, Leeson also warns us that we should be careful not to learn too much from pirate self-organization: just because they arguably instituted a form of "workers' democracy" doesn't mean that contemporary corporations should feel constrained to follow suit; after all, workers would tend to support "risky decision making," while external financiers rightly reject such risks as they have "to bear the full costs of failure" (183). Oh, just imagine what a pickle we'd be in now if risk-loving workers held sway over the sensible inclinations of finance capitalists!

Ultimately, this is a superficial and even silly book. It's an exercise in market-choice dogma rather than a real investigation into the economics of piracy. Though it claims to overturn the ways in which we think about sea banditry, the version of piracy that it promotes is on the whole as abstract and idealized as the Disney caricatures that apparently first inspired the author's interest. It's just that these are idealized rational economic actors, rather than barbarous if comic exotic rogues. Either way, we get caricature. Pirates are merely the ruse for a not-so-very hidden agenda: here, a sort of duffer's guide to economic dogma.

In some ways, the failures of Leeson's book are predictable. Piracy has long served as a screen on to which all sorts of prejudices or idées fixes can be projected. As Leeson himself notes almost in passing, pirates have been cast as proto-communists as often as they have been presented as neoliberals avant la lettre; they have claimed for gay rights and queer theory as much as they have been condemned for their barbarous machismo; and they have been cast as forming ideal democratic societies as frequently as they have been represented as savages who care for neither morality nor legality.

But rather than repeating his own simplistic morality tale of greed is good, Leeson might have explored the fundamental ambivalence that enables piracy to serve as a Rorscharh Test for so many distinct political and social positions. If, for instance, the joint stock company incarnates what Marx termed the "communism of capital," perhaps these "sea-going stock compan[ies]" (41) have something to tell us about the capitalism of communism, or about a certain indecideability between a line of flight that seeks to escape all constituted authority and a constituent power that creates ever-new constitutions.

Leeson is really no more interested in politics as such than he is in history; the whole point of the book is show the purported superiority of classical economics to explain any aspect of human behavior. But he has to tangle with politics from time to time. Leeson's manifest libertarian impulses, that lead him to disparage the notion of state regulation at almost every turn, also force him to suggest a fine distinction between state government and private governance. If greed is good, then government is generally bad; but governance is praised as a form of privatized, self-regulating government. And this idealized conception of governance comes to sound remarkably like hegemony: it is voluntary, non-coercive, and contractual. For Leeson, pirate ships are not only exemplary instances of economic rationality; they are also (almost) perfectly functional hegemonies. And perhaps it is this, rather than the economic as such, that explains piracy's strange allure: it offers a counterpart to the pseudo-hegemony of the nation state, a romanticized conjunction of liberty and self-organization.

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