The economics of pirates

Peter Leeson, an economist at George Mason Univeristy, just published an extremely well-timed book on the hidden economists of old-school pirates. Tired of the “arrrrrrrrs” and “aye mateys” floating through blog posts on modern-day pirates? Join the club. However, Leeson does make a solid connection at the end of this Freakonomics interview:

What kinds of lessons can we draw from The Invisible Hook in dealing with modern pirates?

We have to recognize that pirates are rational economic actors and that piracy is an occupational choice. If we think of them as irrational, or as pursuing other ends, we’re liable to come up with solutions to the pirate problem that are ineffective. Since we know that pirates respond to costs and benefits, we should think of solutions that alter those costs and benefits to shape the incentives for pirates and to deter them from going into a life of piracy.

Clearly part of the “benefits” side of that equation is building up (or at least not breaking down)  other economic opportunities.