September 30, 2009

The Invisible Hook

The Law and Economics of Pirate Tolerance
  • Peter Leeson

    Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
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Can criminal profit-seeking generate socially desirable outcomes? This article investigates this question by examining the economics of pirate tolerance. At a time when British merchant ships treated black slaves as slaves, some pirate ships integrated black bondsmen into their crews as full-fledged, free members. This tolerance was not the product of enlightened notions of equality. Instead, pirate self-interest seeking in the context of the criminally determined costs and benefits of pirate slavery was responsible for pirates' progressive racial practices. Analogous to Adam Smith's invisible hand, whereby lawful commercial self-interest seeking can generate socially desirable outcomes, among pirates there was an "invisible hook," whereby criminal self-interest seeking produced a socially desirable outcome in the form of racial tolerance.

Read the article on Peter Leeson's website.