The Unforgiving MinutePaul Currion struggles to explain himself.

I mentioned in my previous post that James Surowiecki ‘s article on the pirate papers focused on the role of the captain in drawing lessons for modern CEOs (top-down), rather than the role of the pirates themselves in drawing lessons for supporting democracy (bottom-up).

Leeson’s analysis of pirate governance focusses mainly on the way in which this system deterred self-dealing. But the pirate system was also based on an important insight: leaders who are great in a battle or some other crisis are not necessarily great managers, and concentrating power in one pair of hands often leads to bad decision-making.

Apparently there’s more to Surowiecki’s bias in taking the top-down perspective than just the particular audience he was writing for in the New Yorker:

Bottom-up behaviour seems illogical to Western minds – we have a hierarchical bias against self-organisation … [which is displayed in] our common understanding of how human change happens, especially in organisations. Our popular management magazines are filled with stories of the omniscient CEO or leader who can see the opportunities or threats in the environment and leads the people into the light. [However,] self-organisation is critical to achieving [change].

Westley, F., B. Zimmerman and M. Quinn Patton (2006) Getting to Maybe: How the World is Changed, Toronto: Random House.

Peter Leeson has now written a follow-up to his original papers in which he explores more deeply this question of how anarchy leads to order, beating me to the punch and giving some interesting views on how welfare in Somalia is actually better under anarchy than government. That particularly claim clearly needs a little more examination…

(Hat tips to Ben Ramalingam, Harry Lucas, Toussaint Reba, Uncle Tom Longley and all.)

I’m only two months behind the rest of the blogosphere on this topic, but I like to think that’s because I’ve been giving it careful consideration. In fact, it’s because I only got to reading these academic papers this weekend, after I threw my back carrying a water heater down some stairs. Well, I say stairs, they were more like metal rods. One day they’ll be stairs.

Anyway, Peter Leeson at the George Mason University has made a couple of his unpublished papers available on the world of piracy – An-arrgh-chy: the Law and Economics of Pirate Orgnization and PiRational Choice: the Economics of Infamous Pirate Practices. Far from being cash-in papers (think Freakonomics meets Pirates of the Caribbean), there’s some very interesting stuff in them, particularly the first.

Based on first-hand accounts of pirate behaviour, Leeson concludes that pirates created a form of self-governance that anticipated modern democratic forms, such as installing checks and balances on the power of individual captains. This was borne out of the motivation of the average pirate, which could often be identified as dissatisfaction with their treatment on ships run by the navy or merchant marine. Wishing to avoid the same in their new careers, they were careful to create systems that built in protection against captain predation.

Pirates of the Caribbean also immortalised the idea of a Pirate Code, observed more in the breach than the observation – as Captain Barbossa says, “the code is more what you’d call “guidelines” than actual rules”. However there were such codes, governing behaviour on board, allocating division of spoils and allowing the possibility of removal of incompetent or corrupt captains. Most interestingly, the commality of interests amongst pirates meant that these “constitutions” were strongly observed, with William Dampier recording but a single theft aboard his ship between 1683 and 1691.

These papers fired a lot of interest earlier in the year, with even the New Yorker picking them up in an article by James Surowiecki (better known for his book The Wisdom of Crowds, which is also worth reading). Of course Surowiecki focuses on the questions of leadership that the papers raise, rather than the rather more interesting point – that democratic forms can emerge out of rational economic decisions.

Plus, pirates were a lot smarter than we give them credit for. Arrgh!

UPDATE: And don’t forget to download the classic radio sketch,

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, which bizarrely turns out to be quite accurate in the light of this research.