The invisible hook : the hidden economics of pirates /

Given the flurry of piracy off the Somali coast in 2009, this relatively short narrative could not be timelier. The Invisible Hook, a play on Adam Smith's famous "invisible hand," is an engaging, informative look at the economics of piracy and pirates. Leeson (George Mason Univ.) examines the legendary actors and their actions in the golden age of piracy in the context of familiar economic principles, such as negative externalities, public goods, signaling, and principal-agent problems. He finds that these outlaws responded rationally and purposefully to incentives in their quest for booty (that is, "maximizing profits by firms" in today's jargon). In eight chapters the author lays out how pirate ships were organized and governed; describes labor-market aspects, such as crew recruitment and compensation schemes; and explains the efficiencies inherent in flying the famous skull-and-crossbones (Jolly Roger) and acquiring a reputation for torture. The author is not a historian, some of the economics is a stretch, and there are no references--his 40 pages of endnotes are his substitute. But Hook is a well-researched, well-written, fascinating volume that has something for almost everyone. Summing Up: Highly recommended. General readers, undergraduate students of all levels, graduate students, and research faculty. A. R. Sanderson University of Chicago

Economist Leeson leads readers though a surprisingly entertaining crash course in economics in this study of high seas piracy at the turn of the 18th century. Far from being the bloodthirsty fiends portrayed in popular culture, pirates created a harmonious social order; through the application of rational choice theory, the author explains how a common pursuit of individual self-interest led pirates to create self-regulating, democratic societies aboard their ships, complete with checks and balances, more than half a century before the American and French revolutions brought such models to state-level governance. Understanding the profit motive that guided pirates' actions reveals why pirates so cruelly tortured the crews of ships that resisted boarding, yet treated those who surrendered readily with the utmost respect. Both practices worked to minimize costs to the pirate crew by discouraging resistance that could lead to loss of life and limb for pirates and damage to either the pirates' ship or the cargo aboard. Illustrated with salty tales of pirates both famous and infamous, the book rarely bogs down even when explaining intricate economic concepts, making it a great introduction to both pirate history and economic theory. (June) (c) Copyright PWxyz, LLC. All rights reserved