The Invisible Hook: The Hidden Economics of Pirates (Unabridged) [Audio Download]

What begins as a simple story of Pirates soon turns into an unique journey through Economics and History. Peter Leeson, who is an Economist, uses methodological individualism to analyze the behavior of Pirates as simple profit seekers. This allows Leeson to give a different view of the Pirates then most of us are used to. He also introduces us to many unknown facts about Pirates, who are a common cultural obsession. The secret to his book is the fact that he teaches us both Economics and History without you even realizing it. Books like More Sex is Safer Sex by Steve Landsburg and Freakonomics by Steven Levitt teach you an unconventional way to look at problems, but often not through a classic historical case. This book will do both without you hardly noticing.

The Invisible Hook is not written in a way that is hard for non-Economists to understand. It is written just for that type of audience. This book now ranks top on my list of books to recommend those as an introductory lesson into the economic way of thinking. At the same time, if you do study Economics you will not be bored as the historical mechanism takes over. For example, you may know what signaling is but the economics student likely does not know exactly how the Pirates used the flag, the Jolly Roger, to signal to other ships.

One of the most interesting parts of the book is the very last chapter. Leeson sets up a class in Pirate Management with the professor Blackbeard. Without giving to much away, he goes through and restates points in the book with modern literature. He also provides a very good reading list for those who want to read further into Economics in that chapter. This is the most unique way I have ever seen anyone end a book. It allows Leeson to review the points and restate them in a new light without putting the reader to sleep, as I am famous for skimming through conclusions.

I would highly recommend this book to anyone who wants to learn anything about Pirates or Economics. It is probably likely that most of Leeson's readers will buy the book for the former, but the reader will soon find himself interested in the latter. Dr. Leeson is a rising star in the field of Economics and this is a good way for him to start.

The Invisible Hook takes a rational choice framework and applies it to the golden age of Anglo-American piracy. The resulting ideas are compelling and fun, and Leeson presents them enthusiastically and clearly. He's excited about pirates, at least as much as he is about econ, and he wants to set the record straight. "Pirate fiction portrays seamen as choosing piracy out of romantic, if misled, ideals about freedom, equality, and fraternity," but Leeson knows the reality was less about utopia and more about "piratical means, used to secure cooperation within pirates' criminal organization, rather than piratical ends, as they're often depicted." And just about all pirate actions will come down to this.

Leeson makes no claim to being a historian and makes free use of secondary sources to present the historical record, aiming to interpret that record through the lens of economics. But still, there was plenty for me to learn about the basic history as well: the difference between buccaneers and pirates, for example, or the importance of the quarter-master on a pirate ship. Also the great size of pirate crews in comparison to those of merchantmen, and the truly great potential prize available to pirates in their golden age. And just about everything there is to learn about pirates is interesting. The romantic nature of the subject is really inescapable.

That remains true even when the motives of the outlaws are unwoven. Leeson contends that "only with economics can we make sense of a great deal of otherwise unintelligible individual behavior." It's the only way to understand a group made up seemingly of "libertarians who conscripted nearly all their members, democrats with dictatorial captains, and lawless anarchists who lived by a strict code of rules."

All these seeming contradictions came about because pirates were in unusual circumstances that produced correspondingly unusual incentives. One of the biggest differences between pirate crews and those of legitimate ships, be they merchant or military or even privateer, was the democratic governance of the pirate ship as opposed to the autocratic powers of all other captains. Were pirates just unusually progressive? Probably not; but they lacked an absentee owner and corresponding principal-agent problem. Since pirate ships were stolen, the pirate crews owned them collectively, and they had no need of an autocratic captain to align the interests of the ship's owners with those of its crew--they were already one and the same. In that sense, their very criminality was "the source of pirates' ability to use this system" of "democratic checks and balances."

There are like explanations behind pirates' other surprising habits, all satisfying but not necessarily surprising--especially if you're already given to thinking about such matters from this point of view. But bringing them all together with compelling information about historical events makes for an engaging book.

Economist Peter Leeson has written an excellent new book on the economics of pirates and pirate governance, and it is a must read for anyone interested in the history of pirates.

Leeson wades through original source material as well as pirate histories to draw surprising insights into the pirate life, using economic analysis to explain their tactics as well as the reasoning behind the peculiar structure of pirate articles and codes. Many with deep knowledge of pirates won't find a lot truly new in the book. Rather, it's the way Lesson connects the dots that makes this book stand out. Indeed, with citations to our own Federalist papers, Leeson does an excellent job of showing how the choices pirate communities made about their captains and on-board ship behavior foreshadowed many of the basic principles that underly the U.S. version of Constitutional government and its unique system of checks and balances on power. He also provides an excellent and crisp analysis of the calculated use of terror by pirates to achieve their objectives.

The book is eminently readable compared to most books by economists. No need to worry about math, supply and demand curves, or jargon. Leeson also keeps the pace of the book flowing through solid organization and an admirable ability to avoid straying off theme or subject. But, be forewarned. The Invisible Hook is targeted toward adults. The author is thorough and takes his subject seriously.

Professors and teachers: This would be an excellent supplemental text for courses on political economy, public choice economics, public policy, economic history, or criminal justice.

This review was written by S.R. Staley, author of [...]