The Invisible Hook is a fun read with some serious points to make about economics. Leeson is a George Mason economist who has been a fan of pirate literature and lore most of his life. At some point he realized that he knew enough about the real history of pirates, particularly the ones that have been romanticized in our literature, to say something interesting about how economics drove and shaped them. Of course this also gave him an excuse to spend more time exploring pirate mythology and a way to get academic credit for it.'s
's most interesting finding is that the pirates often had written constitutions and elected their captains and other officers, and could remove them when the crew pleased. He also investigates the feedback mechanisms and social forces that reinforced this system and kept it stable. Some of it has to do with the fact that Piracy was a cooperative enterprise, and that pirates had no recourse to the law to enforce their rules. This leads to a need for agreement among the crew on how they are to operate, and consensus that breaches can be punished. The modern pirates off Somalia or South East Asia have a different set of contingencies, since it's easier for individual pirates to quit without endangering their own lives or those of their mates.
A lot of what signalling, by which they mean actions taken by an agent to convince someone of their likely behavior. The fundamental question about signals is what keeps others from copying the signal in order to fool the signal's target. puts the skull and crossbones and stories about pirate viciousness in this category.talks about falls in the area that economists call
Pirates cultivated an image of being ruthless killers who would never-the-less not physically harm victims who gave up without a fight. Their goal, of course, was to reduce the amount of fighting they had to do. So they did their best to convince honest seafarers that if you fought with pirates they would treat you harshly. The question this raises is why didn't privateers (who had government charters to act like pirates) also fly the jolly roger, and Leeson's answer was that it was too costly for them, since flying the pirate flag led to easy convictions for being pirates, even if you have the government charter. So Pirates competed for a rough reputation, and their competition had to convince their prey to surrender in more costly ways, since their charters proscribed torture and wanton violence.
There's a lot more than this in the book, and just enough asides of "Avast" and "Aargh" to raise an occasional chuckle. If you still retain your youthful enthusiasm for pirates, and are interested in the economic way of analyzing behavior, this is an entertaining approach to the subject that is also educational.