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Piracy. A Better Way? The Socioeconomic Structure Which Led to Piracy Exists Today

Pirates pillaged and plundered. They stole from the merchant ships carrying cargo among other places from Spain and Portugal, North Africa, North America and the Caribbean. But there is a reason why they left the class structure of society to form their own socioeconomic order. Sailors of the time worked for merchant ships.1 Merchant ships were most often funded by investors who hired the captain. The captain’s duty was to the investors and the investors defined the captain’s role, responsibilities, and pay. The captain had a great and sole duty to the investors, and virtually no duty to the crew of the ship he captained. Given the structure of incentives of the merchant ship, it is not surprising that sometimes the captain abused the crew to favor himself and the investors in the allocation of profits. This investor-centric system2 had at least two related results: mutiny and piracy. Mutiny because the captain was being a cad; piracy because the pirates
had a better way.3

In creating their social structure pirates had a head start because they stole the ship. This gave them a major means to produce wealth virtually overnight. They already had the “factory,” so to speak, from which to create wealth. Capital for the ship did not need to be saved, raised or borrowed. They only needed themselves, “vittles,” and operating expenses.

We think of the pirates in conflict and at war with the governments of England, Spain, Portugal and other countries. But according Wikipedia, England, the nation, sponsored pirate attacks against Spain and Portugal. So, apparently England condemned piracy on the one hand and sponsored it with another.

No one is condoning the pirates’ conduct with, and treatment of, others. But, within the pirate organization the pirates were surprisingly egalitarian. The pirates chose the captain by election. The captain could be removed at any time by vote of the crew.

The captain, quartermaster, ship’s doctor, the treasure spotter, and the disabled (e.g. by loss of a leg) generally received another half or quarter share, but except for these few key crew members, each pirate received an equal share of the pirates’ booty.

Pirates were surprisingly sophisticated in establishing the rules of self-government. Pirates developed the “Code of the Pirate Brethren,” also known as the “Pirata Codex” or “Pirates Code” and “Articles of Agreement.” As we know from pirate movies, “parlay,” or parley, i.e. the cessation of hostile action pending a meeting of the captains or captains with others, was a useful tool to protect participants and allow negotiation and settlement of disputes that lead to war. The Pirate Code was applied across the “profession.” Preeminent pirates constituted the Brethren Court who devised and adopted the pirate rules. A copy of the Pirate Code provided by the Pirates of the Caribbean Wiki is attached. As you can see the Rules were harsh. But, as stated in my article “Pirates and Partnerships” all of this begins to sound like John Locke’s social contract, where reasonable men draft rules for a just society. However, as discussed by Peter Leeson in his books and articles on piracy, cited in footnote 1, much of the pirates enlightened conduct and harsh penalties may also have been for the reasons stated by Thomas Hobbs, i.e. to maintain order and avoid the self-destruction of “war of all against all.”

Pirates and the Great Society

Regardless whether they came together as reasonable men and women (Locke) or to avoid self-destruction (Hobbes), or perhaps for both reasons, if we focus solely on their treatment of themselves, the pirates’ political and economic systems seem to more truly manifest the principle of self-government “of the people, by the people, and for the people, if for “people” you substitute the word “pirate.”4

However, the pirates’ model as a social theory has some problems. One is the problem of scale. See 1926 essay by the physicist J.B.S. Haldane “On Being the Right Size.” If an ant quadrupled in size, it would collapse from its own weight. Collective societies work best when they are small. A socioeconomic model that works for a ship may not work for a country.

Another problem is the division and stratification of labor. One reason why pirates were paid and treated about the same is that pirates all did about the same thing. And they did so at the same time in close quarters within full view of each other. That does not characterize a full-blown economic system of disparate contributions, across a city, state or country. And their justice system was too harsh for civilized society.5 The most frequent penalty was death. Today we are unlikely to enforce the rules of our great society by having miscreants walk the plank.

Still, in spite of these problems of adaptation, it is interesting to note that the cause of piracy was abuse by those adhering to a shareholders’ (investors’) theory of value, and that the result of piracy was a social system in some ways more fair and more rational than our own. That might be a lesson for our times.

  1. Leeson, Peter J. An-aargh-chy The Law and Economics of Pirate Organization, 115 Journal of Political Economy, 1064-1077 (2007), www An-aargh-chy.pdf (Access 06 March 2020) and Leeson, Peter T., The Invisible Hook, The Hidden Economics of Pirates, Princeton University Press, Woodstock, Oxfordshire (2009). All of my information about pirates comes from these sources.
  2. Comparable to the “shareholder theory of value’ which I criticize in my essay entitled “Capitalism.” Copies of other articles mentioned herein are available at
  3. For more on this topic of piracy please see my article “Pirates and Partnerships” which examines piracy as a form of business organization.
  4. Abraham Lincoln, The Gettysburg Address in Gettysburg Pennsylvania, 1863.
  5. That being said, as a sidenote, at that time virtually every crime, even a misdemeanor like shoplifting, was a felony. And felonies were punishable by death. There was no variation in the characterization of crimes or punishment. Because of this the magistrate would often give the miscreant the choice of death or going to the “new world.” Much of the population of the United States and Australia are the result of this justice system.

All of the information below is from The Pirates of the Caribbean Wiki

Known rules and guidelines of code from the Pirata Codex:

  1. Rule one, befriend others wisely.
  2. The Right of Parlay[1]
  3. Artycle II, Section I, Paragraph VIII (sharing of the spoils)[1]
  4. Artycle II, Section II, Paragraph I (whoever first spotted a treasure-laden ship could choose the best pistol for themselves)[1]
  5. Every crew member is to have an equal share in any treasure found[2]
  6. Any man who falls behind is left behind[2]
  7. An act of war can only be declared by the Pirate King, who would parley with shared adversaries. The King could only be elected by popular vote by all nine Pirate Lords.[6]
  8. Any person who refuses to serve aboard a pirate’s ship must die.[8]
  9. Trading for products fair and square mean the seller can do as they like, including resell at profit.[9]
  10. The Code calls for pirates to respect their fellows on the account. Knowingly targeting and sinking other pirate ships is strictly forbidden.[10]
  11. Killing a surrendered enemy is not allowed.[10]

The Code also contained strict regulations on eyepatch color and peg leg size[11] as well as implying that a pirate never gives another away.[12]

  1. Jump up to:1.0 1.1 1.2 1.3 1.4 Pirates of the Caribbean: The Complete Visual Guide, p10-11: “The Pirata Codex”
  2. Jump up to:2.0 2.1 2.2 2.3 2.4 Pirates of the Caribbean: The Curse of the Black Pearl
  3. Jump up to:3.0 3.1 The Pirates’ Guidelines
  4. Pirates of the Caribbean: At World’s End (junior novelization)
  5. Legends of the Brethren Court: The Caribbean
  6. Jump up to:6.0 6.1 6.2 Pirates of the Caribbean: At World’s End
  7. Pirates of the Caribbean: At World’s End “Inside the Brethren Court” featurette
  8. According to the Pirate Code, Philip must die for refusing to serve Blackbeard. –On Stranger Tides: The Visual Guide pg.33
  9. Tales of the Code: Wedlocked
  10. Jump up to:10.0 10.1 The Price of Freedom Chapter 2: “Lady Esmeralda”
  11. The Buccaneer’s Heart!
  12. Jack Sparrow
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Donald W. Hudspeth
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Attorney Donald W. Hudspeth has more than twenty years’ experience practicing corporate and business law. Before attending law school, Mr. Hudspeth held a stock brokers license at the age of 21 and owned his own business at the age of 23. He was a business law professor at Arizona State University, West Campus, and has conducted classes and seminars for a number of higher institutions and organizations. Mr. Hudspeth has published two books on law and is the founder of the radio programs Law on the Edge and Law Talk.

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Mark S. Hamilton

About Attorney Mark S. Hamilton has experience handling all aspects of civil and commercial litigation in federal, state, and tribal courts at the trial and appellate levels. Practice Areas Business litigation Commercial litigation Education University Of Hawaii Wm. S. Richardson School Of Law, Juris Doctor - 2002 University Of Hawaii, Master Of Arts in Asian…

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