140b. Political economy pt. II: The Invisible Hook

In the previous recording, I was speaking about political economy using the example of prison gangs, taken from David Skarbek's book Social Order of the Underworld. In this recording, I give the example of 18th-century Atlantic pirates, as discussed in Peter Leeson's The Invisible Hook. (It's a pun on Adam Smith's "invisible hand of the market".)

We may have an image of pirates as fearsome, but this is at least somewhat deliberately manufactured by the pirates themselves. They wanted to have such a reputation so that their victims wouldn't resist as they looted their ships. There are parts of the pirate lifestyle, such as democracy and voluntarism, that we don't tend to discuss because they were part of life on a pirate ship but not something that they felt the need to advertise widely.

What is most notable is that pirates' way of life seemed to be significantly preferable, and their governance significantly more "progressive", than that on merchant ships, which tended to be highly autocratic and abusive. It also provides a different perspective when we realise that sailors went into piracy at a time of labour market oversupply due to the ending of the War of Spanish Succession, when the British Navy didn't have the funds to keep on so many sailors, and yet this was the career of tens of thousands of young men who now had to find a job elsewhere.

Overall, in these two recordings, I hope to have shown you that thinking about people's motivations and situations from the perspective of political economy makes a lot more sense, and builds a much richer picture, than merely psychological or sociological explanations (such as childhood trauma, psychopathy, or people's fundamental evil or violent nature). With this in mind, I hope that in future we can use more of this thinking when considering education, so that we can understand better how it works and how to improve it.

Enjoy the episode.