Are Pirates Bussinessmen?

Until recently, I thought of high seas pirates as a fiction or at least gone the way of the dinosaurs. This week's drama of an American ship's captain taken hostage by so-called pirates off the coast of Somali made the pirate thing quite real. Most interesting to me were experts calling these Somali pirates businesspeople, in it for the money and not for religious or political purposes. Could this be so -- or does such a comparison do injustice to real business concerns?

If these Somali pirates are an analogue to those Barbary Pirates 200 years ago (see this very interesting article by Jeffrey Gettleman), then you can make a case they do operate a business. First, Piratry did have a simple and effective business model. They offered their services to corrupt governments who provided them safe haven in exchange for a percentage of rich ransoms collected (called "tribute" back in the day). Pirates offered sailing ships an offer they couldn't refuse -- safe passage in exchange for a tribute. Pirates did not harm their hostages as long as they complied; a live hostage was an asset. Indeed, some in the current crisis have noted that the modern day Pirates will act in the best interest of their pocketbook. Also, the pirate entities actually had ambassadors representing in places like the U.S. and France. It makes me think of Robin Hood operating in Sherwood Forest, terrorizing rich travelers to guarantee their safe passage.

There are some rich ironies. First, while Robin Hood's band did terrorize otherwise innocent travelers, they did give back to the mostly poorer townspeople, and not the government under Prince John and the sheriff. These pirates raided a ship supplying needy people in order to line the pockets of corrupt government officials. Second, the U.S. ship coming to the rescue of the American captain was the U.S. Bainbridge, named after one William Bainbridge who was captured by Barbary Coast pirates in early 1800s and later was a hero in the War of 1812. A couple of centuries later I guess he finally got a measure of revenge.

All businesses eventually decline. First, will ships avoid the Somali seas? Different routes might become a substitute. If the pirates try to expand their operations then other nations will likely have to become stronger in their resposne (even more than what the U.S. did in rescuing the captain). Competition up to now has been weak, but it will get stronger as the Pirates become more successful (competition always follows success). According to Gettleman's article the Barbary Pirates' own hubris led to their demise. After today, with the re-capture of Captain Phillips by Navy seals, it looks like the Pirate business model has now taken 3 bullet holes.