{"id":10211,"date":"2024-01-29T14:00:00","date_gmt":"2024-01-29T12:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/the-invisible-hook-what-pirates-can-teach-us-about-economics\/"},"modified":"2024-01-29T14:00:00","modified_gmt":"2024-01-29T12:00:00","slug":"the-invisible-hook-what-pirates-can-teach-us-about-economics","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/the-invisible-hook-what-pirates-can-teach-us-about-economics\/","title":{"rendered":"The Invisible Hook: what pirates can teach us about economics"},"content":{"rendered":"

American economist Peter Leeson belongs to the cohort of <\/strong>the Austrian School<\/strong> whose professional formation coincided with the global crisis of 2008. The Great Recession exposed the soft spots of the global market and created demand for radical alternatives. Among them were Austrian ideas, which helped, among other things, to give birth to cryptocurrencies.<\/strong><\/p>\n

In <\/strong>The Invisible Hook: The Hidden Economics of Pirates<\/em><\/strong> Leeson sets out his view of the most effective socio-economic arrangements, advancing 18th-century pirate communities as a positive example. ForkLog presents the main arguments of this contentious, at times provocative, yet informative book.<\/strong><\/p>\n

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Image generated by DALL\u00b7E 3. Data: ForkLog.<\/figcaption><\/figure>\n

The Invisible Hook<\/strong><\/h2>\n

In 1759 the Scottish Enlightenment thinker Adam Smith published The Theory of Moral Sentiments. It went through six editions in his lifetime and became one of the most influential freethinking works of its era. Though Smith\u2019s treatise dealt primarily with ethics, one image from the book stuck in political economy:<\/p>\n

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\u201cThe rich only select from the heap what is most precious and agreeable. In reality they consume little more than the poor. [\u2026] Apparently, some <\/em>invisible hand<\/em><\/strong> compels them to share with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life which would have been made, had the earth been divided into equal portions among all its inhabitants.\u201d<\/em><\/p>\n<\/blockquote>\n

Over time this vague metaphor hardened into a more emphatic formulation: \u201cthe invisible hand of the market\u201d. The term remains in use today both among champions of economic liberalism and their critics, who doubt that a free market is an unalloyed good.<\/p>\n

For the anarcho-capitalist Peter Leeson, the \u201cinvisible hand\u201d is unequivocally the best available form of market relations. In describing the economics of piracy he starts from Smith\u2019s metaphor and introduces his own term: the \u201cinvisible hook\u201d. According to Leeson, the two notions differ in two fundamental ways:<\/p>\n

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  1. The theory of the \u201cinvisible hand\u201d suggests that a clear order underlies the apparent \u201canarchy of the market\u201d. The \u201cinvisible hook\u201d, by contrast, describes the real, not metaphorical, anarchy of the pirate community.<\/li>\n
  2. The economy of the \u201cinvisible hook\u201d excludes the public good as a value. Its priority is the needs of a small group. Whereas a participant in a traditional competitive market seeks to improve others\u2019 lives by producing a better good or service, the pirate produces nothing and simply appropriates others\u2019 goods.<\/li>\n<\/ol>\n

    Though the economy of the \u201cinvisible hook\u201d is plainly criminal and sits uneasily with conventional notions of market relations, Leeson points to traits that make it akin to the traditional market:<\/p>\n