#system #economics


Pirates have a surprisingly systemic existence based on branding and economics. Pirates living out of the "normal" system, and the cost of a revolution being low, the captain needs support from most of the crew to stay in power[2]. It needs more "keys to power". As such, it resembles more to a democratic system than crews of legitimate ships were..


Reason for pirates to create frightening reputation of being vicious and violent is to increase their chance of collecting booty without a fight. Moreover a captain with a good reputation will have less chance of being overthrown.


Pirates exist because if they didn't then other pirates would exist. They have an economic incentive on crew where there is a low chance of big success. As a system with large number of keys, distribution of wealth is flatter than typical legitimate endeavours. Captain has twice a standard reward, master of coin 1.5, and so on. Legitimate ships on the other hand require the captain's loyalty to its commissioner's, and so they are vastly compensated. In addition, revolution has a high cost (prison, sentences) and so the crew is paid little.


[2]: Control in organizations explains the logic


CGP Grey / How to be a pirate Captain edition and Quartermaster edition explains the logic of piracy based massively on[1].

[1]: Peter Leeson / The Invisible Hook: The Hidden Economics of Pirates is the book illustrated by CGP's video.