Piracy , Inc . On the Bearing of the Firm Analogy to Pirate Organization

Peter T. Leeson’s The Invisible Hook provides an illuminating economic analysis of how pirates established governance structures regulating their organization. Leeson is successful in showing economic rationales for piratical institutions and adopts the view of the piratical enterprise as a for-profit business firm to further illustrate the point. This essay argues, however, that modern theories of the firm are not fully compatible with the nature of piratical organization. Rather, pirates seem to have suffered from problems much like those in traditional cooperatives, arising from organizing collective action and joint ownership of the means of production. _____________________________ * This essay was prepared for a symposium on Peter T. Leeson’s The Invisible Hook, to be held at the Southern Economic Association meetings in San Antonio on November 23, 2009. The author thanks Peter G. Klein for comments and suggestions, but all errors remain the author’s.