If you are looking for something a little different to read at the beach, then Peter Leeson’s new book on economics and piracy might fit the bill. In The Invisible Hook, Leeson applies an “economic way of thinking” to the actions of Blackbeard, Captain Kidd and co.
One item that jumps out is the strict system of governance at work on pirate ships, in part a consequence of the ships being owned by their crews. For example a flat pay structure minimized opportunities for abuse, which is in stark contrast to merchant ships where officers took advantage of strict hierarchies.
It seems that today’s CEOs, facing public anger over executive pay, greed and governance failures, might have something to learn from “pirate management”. Those calling for greater employee ownership within struggling firms (as the Financial Times reports in Germany) might find ammunition from this tale of the high seas.
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