Learning Economics From Pirates

" We're not just showing you popular movies -- making a point here what can you learn about business and economics. From those guys. Not tiny gap. And the other guy from the movie shine and but real pirates. 400 years ago blackbeard type stuff we -- out there a lot of lessons about business and economics that may mean. Learn to joining us now from Chicago. Is George Mason patriots university professor and author of the new book the invisible book the hidden economics of pirates Peter Leeson is his name Peter. Negative -- to fans of pirates of thank you very much for coming on the program. My pleasure did you know to do some research on parts I read a book called. Empire the blue ocean and also under a black flag earlier this year. -- the first to have health insurance equal pay major chapters as equal pay for equal pray. What are some of the biggest business lessons we can learn. From pirates."

" I think that one of the most important business lessons that we can take away from early eighteenth century pirates is in fact the benefits of self regulation. You know pirates were of course outlaws and they were the botched outlaws in many ways."

" But despite that they adopted a rather puritanical set of rules the system of self regulation. That included -- this system of social insurance -- you when you. It also included prohibitions on drinking in some cases regulations of gambling and a whole bunch of other things to kind of make the radical workplace more safe."

" I extend this not because they were nice people but rather because it bolstered the bottom line it was profitable and this is true for legitimate businesses as well."

" Peter it's data -- doubt they need to be your first do you do that read this write him a tattoo. On your arm. I do. I have a tattoo supply and demand yet endow an area that see again the pirate in the economist coming -- Bidder would that would that what's interesting about the it has elements of -- at capitalist society but also it has -- it's also egalitarian. Is -- not."

" It's not quite right to characterize it as egalitarian it is true that pirates had a very very flat pay structure."

" And a lot of historians have interpreted this as to suggest that somehow pirates for May be proto socialist."

" But I arguing the book the that's mistaken the reason the pirates had a rather flat pay structure instead with because it was profitable. If you think about it you don't have a system of government to kind of keep order on board a pirate ship -- can't rely on the royal government to do that for you. And one of the most potential divisive forces is you know disagreements about pay."

" Slow way that you can retain crew harmony in the absence of being able to rely on government to create -- harmony. It's actually it's flattened the pay structure so -- stated basically that it would allow the -- overall to make more money not because they were particularly interested in social justice."

" also help them in a way toppled the mark ten sailors when they way attack ships because. The merchant sailors were really not enjoying in the spoils and -- it because they were basically working for the man inside the state. Yet that's exactly right pirates were just basic rational economic actors just like you ride."

" And the reason that merchant sailors often became pirates because of the better paid it was offered on a pirate ship you could have. A share of the spoils so this is also good recruiting tool for. -- And furthermore you're likely to be treated better on a pirate ship because they had a system of constitutional democracy incidentally that -- that adopted in the United States. "

" Too shocking data I've learned about -- reasonable wanted they were true democracy to captain for the happens only at the will the crew. Could could that work in corporate America and who don't have a hierarchy right. But you wonder what would happen if groups of employees got together and said you know once -- a vote on who the boss's. Which is basically or vote out the boss if he or she isn't bringing them. Booty which is exactly what the pirates bit."

" Right what we have something similar this right with corporations we have stockholders you can kind of have a say in management."

" But despite that one of the things and arguing the book is the lesson that can't be taken away from pirates is the idea that the system of of workers democracy should be applied in every legitimate firm case. It worked in pirates particular economic context to maximize profit which is why they adopted that. And that was particular to their criminal context."

" This wouldn't be a profit maximizing firm structure for example for many other private terms and a legitimate context so we shouldn't take the pirate template which works so well for them and try and blanket we apply it with. Disregard for context two other legitimate firms today."

" next time you just have to -- them at all."

" My pleasure to god and the invisible look -- said hey good stuff Peter thank you so much. They."