[Continued from yesterday’s Part 1.]
By: David A. Smith
Yesterday I opened a multi-part post on piracy, an example of informal enterprise arising from the same dynamics that produce slums – private entrepreneurial investment outrunning public infrastructure – using as an initial (but not principal) source a Boston Globe (August 24, 2014) interview of historian Marcus Rediker by Rebecca Onion, the course of which explored the novel (and, I think, false) idea of piracy as a political reforming force (multicultural and participatory) when they should have been examining piracy’s business model, as that holds the key to understanding how piracy arises, and how it can be made to subside:
Can we unlock our understanding of pirates?
3. Piracy is transportation-based merchant banking
The business arose as a byproduct exploiting previously established infrastructure.
Piracy doesn’t create value; if anything, it destroys value (that is, the net outputs of piracy are less than the aggregate inputs), because it consists of taking from some, using force, and those costs of force are non-recoverable.
So it was with piracy.
Sources used in this post
Rebecca Onion, Boston Globe (August 24, 2014)
Burying Treasure (January 15, 2010; gray font with blue inset quotes)
Daniel Defoe (attributed), A General History of the Pyrates, 1724; blue italics
The voyages of discovery, and the merchant outpost and way station cities the voyagers created, included elements of merchant banking, capital and asset arbitrage, high risk, large-scale capital investment, and manager autonomy (captains at sea with communication taking months). All these would be adapted, first as part of regional or global war strategy. Letters of marque were government-authorized piracy permissions issued in times of war and against particular declared enemies,
Letter of marque in favor of Stephen Hopkins and the schooner Gamecock, July 14, 1759
The Sea Dog pirate captains –Sir Francis Drake, John Hawkins, Sir Walter Raleigh, Thomas Cavendish, Humphrey Gilbert, and Martin Frobisher – were the equivalent of Elizabethan Blackwater, operating as explorers, naval officers, or ‘conveniently deniable’ mercenaries at the direction of law and circumstance.
Pistols for the queen: Sir Martin Frobisher
What the Spanish did with priests and missions, the English did with freebooters and seaports.
“If England had not used the services of privateers and pirates during its long struggle with Spain, there is some likelihood that people today in North America would be speaking Spanish rather than English.”
― Robert Earl Lee, Blackbeard the Pirate: A Reappraisal of His Life and Times
Sir Francis Drake was both a royally authorized explorer and a royally authorized pirate.
For having taken deniable risks on our behalf, we knight thee
Then would come peace, and the resulting economic downturn:
When an honest Livlyhood is not easily had, they run into one so like their own; so that it may be said, that Privateers in Time of War are a Nursery for Pyrates against a Peace.
– Daniel Defoe (attributed), A General History of the Pyrates, 1724
Meanwhile, before and after the wars, the technology (sailing ships, the Harrison timepiece for the longitude) and its infrastructure (the global network of seaports catering to the sailing ships) offered additional commercial enterprises:
i. The great India and China trading companies,
The Indiaman Farquharson
ii. Whaling.
The whaler James, built in the 1780s
Both these businesses were intimately connected with Boston’s establishment, growth, and economy, and both contributed to Boston’s rise to a global city and its evolution as an academic, financial, and political laboratory.
Compared with one another, the three great ocean-going business of the Age of Sail line up like this:
I’ve aligned the three merchant banking models from least risky (the India trade) to most risky (piracy) because examination of the key differences shows clearly how piracy is a higher-risk endeavor than the other two.
Dutch East India Company ships being ship in Amsterdam
Not only are the operational risks higher (including not just the acquisition phase but during transportation to the sales outlet), even upon arriving at the outlet the absence of a formal market means the sale must be conducted in cash, with the additional counterparty risks of an informal settlement mechanism.
Further, piracy uses the same technology (ships), support infrastructure (seaports), and labor force (sailors) as the other two business modes, so it needs must attract those who are uncompetitive at entering the less-risky but still quite profitable other lines of business.
Thus piracy arose, and arises, when mobility-based technology finds fertile hunting in an ecosystem that is already fecund with trade and commerce; piracy does not invent large-scale commerce, it uses and exploits large-scale commerce, and as we’ll see below, when the costs of piracy rise about the level of a commerce nuisance, then the commercial interests create piracy’s economic antibodies … though this can take a while before it happens.
Age of Sail piracy had a six-decade heyday, roughly 1660 to 1720, which neatly corresponds with the expansion of global English trade, creating the network infrastructure to support pirate vessels (including resale entrepots where goods could be remarketed, few questions asked).
Roberts and his Crew, alone, took 400 Sail, before he was destroy’d.
Meanwhile, of course, the pirate operation must be formed, capitalized, staffed, and governed.
Come with me for treasure, lads
4. A pirate ship or fleet is an equity corporation
So intent on his perspective is Dr. Rediker that he reads modern motives and sensibilities into scanty evidence from centuries ago:
Ideas: One of the arguments you make is that sailors formed a cosmopolitan or multinational working class during the Age of Sail. What did nationhood mean to sailors?
During the great age of pirates (say, 1650 through 1820), ‘nation’ was an emerging concept (and Germany did not become a nation in the modern sense until 1871), and all the major seafaring nations were governed by hereditary rulers, so if anything, they were kingdoms.
Rediker: The creation of the maritime empires required the cooperation of many different kinds of workers from many different parts of the world.
)
Dutch East India Company map of Java and the Sunda Straits
During the great age of pirates, no one had a maritime empire – even the British, by far the most successful and acquisitive of the colonizing European nations and who established trading ports everywhere they could, only built coastal forts and depots to protect harbors that they identified as strategic. They didn’t venture inland (beyond Cape Town, Bombay, Madras, or Calcutta) for decades or more.
The East India Company’s Fort Saint George (Madras), India
It showed up in seafaring first. If you look at the crew manifests for voyages like Columbus and Magellan, you see a motley crew. You see Greek sailors and African sailors and sailors from a remarkable swath of the earth’s surface.
Naturally the mixing of peoples would show up first in trade: markets are places where when the bargain is struck, the two parties have told the truth to each other about the value they place on what they buy (though they may well have lied about the value of what they sell) – and that requires communication, even if rudimentary and utilitarian. But with that communications comes the quest for understanding, if not to befriend, at least to transact with.
What I’m interested in is the way in which the organized cooperation of these groups was absolutely central to the movement of ships and the movement of the commodities of the world.
Aside from elevating pirates to primacy of place (over merchantmen and navies, both of which had clearly defined formal structures backed up by domestic law whose reach became increasingly global, as the Bounty’s crew knew), Dr. Rediker seems bound and determined to place an egalitarian or even Marxist gloss on piracy:
Red Marcus Rediker expounding
It was also a work environment that was dangerous … in terms of the natural environment, but also dangerous in a personal sense, in terms of your relationship with this captain, who had the power to flog you to death—literally.
While some floggings resulted in death, that was bad business.
You had to figure out a way to fight back.
Really? It has always been clear that piracy is capitalism by other means:
G. K. Chesterton, 1909
“Thieves respect property; they merely wish the property to become their property that they may more perfectly respect it.” – G. K. Chesterton, The Man Who Was Thursday
[Continued tomorrow in Part 3.]
