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Source link: http://archive.mises.org/9801/those-pirates/

Those Pirates

April 17, 2009 by

The case of pirates off the coast of Somalia does raise a number of questions, such as: even with the pirates charging fees for passage, is it still cheaper to import goods to Somalia than if, e.g., the U.S. government were running the show? How to pirate fees compare to duties and other costs of bringing goods in the U.S.? This is worth looking into

ryanw430@yahoo.com posted this interesting message to a Mises list:

Given how much press attention these shipping adventures off the coast of Somalia are receiving lately, I was thinking how much more effectively the free market could address these situations.

The U.S. government is sending large ships such as this into the area (as are other national governments):

Notice how this particular ship may require a crew of 270!

And yet, this same ship took 6 hours to respond to a distress call!

The USS Bainbridge is the guided-missile destroyer that was behind the three navy SEAL snipers whom were recently propelled into the media spotlight for doing such a top-notch job, but it is important to note that the SNIPERS were the specific element that accomplished the mission–guided missiles were not involved.

Obviously, if one needed a banana, they would not necessarily need to grow a banana tree.

But shouldn’t this be a complete joke? I mean, talk about using a sledgehammer to do the job of a chisel! U.S. guided missile destroyers are being used to defend PRIVATE (and International, no less) ships?

It would be far more effective to allow private ships to arm themselves with a few M-16s and/or even 50-caliber machine guns/mortars; would it not? Even if it is the U.S. navy’s theoretical job to patrol International waters for private merchants (which it obviously should not be), would it not make far more sense to only allow a few Navy seals to station themselves solely on those private ships registered with U.S. corporations that volunteer to have publicly paid soldiers aboard, and/or, to ensure the private ships in question pay at least half of the public soldiers’ pay for the time they are protecting their private interests?

[Note: U.S. government forbids the ships from arming themselves]

Some of these private ships are cruise ships–I do not see how paying for someone’s cruise is my job as a taxpayer!

It seems like this should be an extremely easy problem to fix, but then again, the U.S. government isn’t exactly in the problem-fixing business.

I only mention it here because I haven’t heard much from any Austrians on this issue and I think it would be hysterical to point this out to all of our federalist friends. Heck, even Jefferson goofed up when it came to dealing with pirates in American history.


JD April 17, 2009 at 8:51 am

Basically it stems from a long standing tradition/mentality of Mercantillism (Treaties, etc.) from the West, and ultimately an over-riding notion that the State can better protect you than yourself. This false premise starts with the military and goes down to your local law enforcement. They want a monopoly on whatever they do, and unfortuanately regarding our military have applied a sacred (untouchable), tag to it. Good propaganda, nonetheless. I’m not anti-military, but you can’t help notice it for the most part has become a bloated burearacracy of pencil pushers, and ultimately a Welfare State of sorts. It you must Fight, Fight, but then go home a be productive.

As far as the use of the destroyer, I figure “Shock & Awe”, once again is the reasoning, but of course like you stated govt’s don’t apply frugality to their operations.

Isn’t MI-6 hiring again??,….. seems like I heard a mention of this on Wall St. Journal Radio this morning. Calling 007.

Silas Barta April 17, 2009 at 9:21 am

If you want to talk about “free market solutions” to this Somali piracy problem, you need to put the question back a step: why are the pirates attacking at all? Because they can? Because they want money? Our friend TokyoTom has done some excellent research piecing together the history of this conflict.

As it turns out, it originated in (note: this does not mean “caused” or “is justified by”) the illegal dumping and trawling by foreign countries along the Somali coasts. They thought they could dump and trawl with impunity, devastating the sea resources. This devastation became apparent after the 2004 Indian Ocean Tsunami, which washed up much of this toxic waste on shore, killing hundreds.

After that, Somali sailors began, in earnest, trying to collect compensation and dissuade foreign ships from fishing or dumping. The piracy only picked up after these boats collectively gave them the finger.

So we can see that as the free market is concerned, this dispute arises from a lack of recognized property rights in the region in question. Anywhere else, this territory would be regarded as the nearest country’s territorial waters.

Now, I do not claim that kidnapping is an appropriate response to aggression against property. But does anyone think that a “recognized” government would do any less if other countries treated its shorelines this way?

Byzantine April 17, 2009 at 10:00 am

The shipping companies can hire Blackwater to reduce the boats to red-tinged oil slicks. Problem solved. Or we can just trade them Tokyo Tom and Silas Barta, whose wide-eyed gibbering and begging for their lives will provide the locals with sufficient amusement to distract them from piracy, at least temporarily.

But Jeffrey is right; government is not in the problem-solving business.

Horst Muhlmann April 17, 2009 at 10:07 am

Of course the cheapest way to keep the pirates at bay is to simply fly a Chinese flag on your ship.

Horst Muhlmann April 17, 2009 at 10:10 am

Of course the cheapest way to keep the pirates at bay is to simply fly a Chinese flag on your ship.

katie April 17, 2009 at 10:12 am
David C April 17, 2009 at 10:18 am

“Note: U.S. government forbids the ships from arming themselves”

That one tiny quote told me everything, right there.

DNA April 17, 2009 at 10:47 am

Byzantine’s suggestion is excellent. In fact, both Blackwater should be hired, and Silas Barthole should be traded.

Briggs April 17, 2009 at 11:02 am

I think I saw a few days ago that Dr. Paul was proposing using a constitutional clause that would allow congress to grant these ships to defend themselves (with arms) under the name of the US gov.

Obviously this is not the ideal libertarian ultimate solution but I think it is an excellent and practical solution given the current problem.

Nice post Ryan!

Miklos Hollender April 17, 2009 at 1:03 pm

Theoretically, the free market could provide better services for defense, but for example Blackwater in Iraq is hardly a shining success story.

It goes like this:

purely private = best
purely governmental in a democracy = second worst
“public – private partnership” i.e. corporatism i.e. Fascism = worst


purely private: consumers regulate it directly

purely governmental in a democracy: consumers regulate it indirectly, by electing politicians whom they think can regulate them well

“public-private partnership”: no regulation by consumers at all. For example: Blackwater. They just charge however much they want, and do whatever they want. EPIC FAIL.

As long as purely private defense services are not an option, I don’t want governments to employ mercenaries.

Government-employed private mercenary is obviously the worst case.

I want the soldiers they use to be their official state soldiers, under democratic scrutiny, because while it’s worse than market scrutiny, it’s still better than nothing.

Joe O. April 17, 2009 at 1:04 pm

I saw the same article Briggs and I agree. Issuing letters of marque as the Constitution states to private ships as Dr. Paul suggested would create a huge problem for the pirates. It would also be easier and more cost effective for the U.S. taxpayer as a large naval force would not be necessary except in extreme circumstances which of course is exactly why the Government will not do it.

Enjoy Every Sandwich April 17, 2009 at 1:10 pm

It’s true that a Burke-class DDG like the Bainbridge is ridiculously overbuilt for a job like fighting pirates. That class of ship, like the vast bulk of the Navy’s vessels, was designed to fight the Soviet Union. It was expected to have to help a carrier battlegroup fight off waves of Soviet bombers carrying anti-ship cruise missiles.

It’s been quite a long while since I was in the Navy but unless things have changed quite a bit, smaller vessels (such as those that would be more suitable for anti-pirate work) have gotten short shrift in the Navy’s shipbuilding budgets. There are always a few small patrol vessels and the like but they’re definitely red-headed stepchildren (heh, in my day the entire surface fleet was a red-headed stepchild to the aviation and submarine communities).

Lester Hunt April 17, 2009 at 1:26 pm

“Note: U.S. government forbids the ships from arming themselves”

Is this true? Do you have a source for this? I have read conflicting statements about the legal status of armed merchant ships. The other night Bill O’Reilly said, in a prepared statement that was probably fact-checked, that by international law merchant ships may be armed as long as the arms are not “displayed” when they come into port.

Nate April 17, 2009 at 1:45 pm

“Note: U.S. government forbids the ships from arming themselves”

It’s all about what definition you use for a “armed ship”. If a private ship were to weld a rocket launcher to their deck, I believe they would become a illegal combatant if not sanctioned by the US government. I am unsure about non-permanent munitions such as a machine gun mount. As for the crew, there are no laws, that I am aware of, that prohibit them from carrying weapons, however most ship owners have a policy banning guns on-board because of liability reasons, plus they have to be declared when in port.

sthomper April 17, 2009 at 2:01 pm

many people that post here seems to often question media reports and information released from the govt.

this pirate story seems to me to be more ‘kuwaiti babies pulled from inbators’ b.s.

a former head of the cia turned president that doenst even check the the identity of someone appearing before some type of senate caucus before repeatedly going on killed infants. and then it turns out that a pr firm created event.
i wouldnt be so ready to believe the pirate story at all.
maybe some here suspect it is staged?
as for arms on large merchant vessels a few scoped rifles and a few hundred high power rounds a .308 maybe could have easily warded of any small vessel in the middile of the indian ocean.

oma5 April 17, 2009 at 2:57 pm

Surprisingly, our Canadian state run media report hints at the true causes of the piracy problem, i.e. western plundering of Somalia’s fish stocks and the wanton dumping of toxic waste off its shores. Having said that, it seems the free market in Somalia is doing a much better job of collecting fees for all this than the western states are of preventing the turning of Somalia into a poverty stricken wasteland. I think piracy there is to protect their country and tell the West to leave Somalia alone. But just like the big powers are forcing smaller nations to change their privacy and tax laws to suit their tax collecting desires, they are also telling smaller nations how to run their countries.

Byzantine April 17, 2009 at 3:02 pm

” I think piracy there is to protect their country and tell the West to leave Somalia alone.”

That’s because your Canadian. And Canadians absolutely wet their pants at the thought that the reason Somalia is Somalia is because it’s run by Somalians.

DNA April 17, 2009 at 3:26 pm

Byzantine, agreed.

I’m having trouble seeing the relevance of these claims here (which I don’t doubt) about Western dumping along Somali shores. So Western (and Asian) ships dumped their garbage along the Somali coast during the war, engendering retaliation. What does that have to do with the problem of piracy, *as it currently stands* (ie, as brigandage), which even Silas Barthole (via Tokyo Tom) acknowledges is now something completely different from the original motivation.

Miklos Hollender April 17, 2009 at 6:03 pm


“That’s because your Canadian. And Canadians absolutely wet their pants at the thought that the reason Somalia is Somalia is because it’s run by Somalians.”

I’m sorry I have to put it this way, but this was rude, impolite, uncivil, ad hominem, and entirely uncalled for.

BTW I too don’t agree with him that piracy is the rightful, well-directed, proportional response to their alleged violation of property rights of coastal waters and the fishes therein, but this can and should be expressed in better ways.

Byzantine April 17, 2009 at 6:31 pm

“I’m sorry I have to put it this way, but this was rude, impolite, uncivil, ad hominem, and entirely uncalled for.”

Oh stop it you brute.

FutbolGuru April 17, 2009 at 6:55 pm

See my solution to the Pirates of the Arabian at


Lets have some fun with this!


DNA April 17, 2009 at 7:13 pm


Fair enough, but sometimes people cling to ideas sufficiently stupid that to disabuse them of these ideas, drastic measures must be taken.

David Spellman April 17, 2009 at 8:44 pm

What is the difference between paying taxes for the government to defend your ship and paying a ransom to the pirates?

In both cases your are coerced. In both cases you are threatened with financial and physical violence if you do not comply. In both cases, the booty collected is lavished upon the collector’s friends and supporters to maintain their popularity and power.

Yaar! Government is piracy! The government is getting involved in fighting Somali pirates because they know a good thing when they see it, and they want to collect the “protection” money themselves.

Byzantine April 17, 2009 at 9:26 pm

David Spellman,

The distinction is the government at least putatively provides a service in exchange as opposed to naked extortion. We can both agree that the government provides unwanted service, or inefficient service, at the behest of the democratic majority but that is a situation that can be rectified thru the democratic process.

I bet you aren’t as sanguine about muggers in your hometown.

George April 18, 2009 at 2:16 am

that is a situation that can be rectified thru the democratic process

How do you expect this situation to be rectified — as each new fad sweeps through rules are changed
in a new direction.

This isn’t the rule of law and there are NO property rights which really hold.

An unlimited democratic process (no limits on what’s voted on, majority rules) makes everyone a slave of the majority.

I bet you aren’t as sanguine about muggers in your hometown.

Either the muggers or “law enforcement” can get you. They are all worrysome. Then there are the the muggers who are *in* law enforcement… (Or congress…)

Libertas est Veritas April 20, 2009 at 6:40 am

Maybe I’m missing something, but based on my limited information of the situation there seems to be an existing solution to all of this even with current legislation.

Why isn’t anyone offering a security escort to the ships? It doesn’t seem impossible to maintain a “depot” ship in international waters with all the armaments and smaller ships that ride along the cargo ships until they hit national waters. This would not only bypass the “you can’t carry arms under flag X” legislation, but would also allow the security escort to head-off the pirates before they get in range to blow a hole in the side of the cargo ship (I suspect that adding security personnel on the cargo ship itself would move pirates to threatening to sink cargo ships at a safe distance if a fee isn’t paid).

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