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Capitalism Will Defeat the Pirates

Want to know why pirates are hijacking and holding people for ransom? Because it works. The truth is that in places around the world where criminality is a profitable business, piracy is a pretty wise investment with nice returns and little risk. The only thing standing between you and the prize are unarmed crewmembers prepared to combat your guns with axes and hoses.

The pirates are acting entirely out of economic interest. They don’t suicide bomb their targets. They don’t say it’s part of a grand jihad, even if al-Qaeda roots them on and does business with them. They don’t make political demands. They want money — and that means victory will come when piracy becomes an unsuccessful business enterprise.

Capitalism, through providing the economic incentives for ship crews to be armed or to hire private security, will ultimately end piracy as a major industry for the black market charlatans. To this day, companies are reluctant to arm their crews because of a fear of lawsuits resulting from an accident and high insurance costs. Each attack will drive the point home that an unarmed ship is a vulnerable ship, whose very presence provides pirates with the motivation to continue and expand their assaults. Facing steep financial losses, companies owning seaborne vessels traveling in these parts of the world will find it more costly not to arm their crews and, hopefully, insurance companies will be wise enough to realize it is in their best interest to lower rates on protected vessels.

Shipping consultant Barry Parker believes that post-9/11 laws permitting ship captains to increase their security measures as they see fit will be amended to allow arms to be distributed on the captain’s command. This is a no-brainer solution and legislators need to get on it right now. Hiring private security personnel is also an option, as evidenced recently when one such firm thwarted an attempted hijacking of a cruise ship by Somali pirates with zero casualties.

This answer may seem simple and obvious, but there is a surprising amount of resistance to these solutions. Several of these counterarguments were presented in a New York Times article.

Arthur Browning, the chairman of the labor affairs committee of the International Shipping Federation, was quoted as saying, “If we arm our crews with light machine guns, they can probably buy heavy machine guns. And if we can buy light rocket launchers, they can buy heavy ones.” However, such an arms race would also be expensive for the pirates and they’ll need to make a decision: storm the ship and hope to defeat the armed crewmembers inside, or try to sink the ship and its loot, kidnap those that jump into the water, and hold them hostage or bring them to land before outside forces intervene — hardly attractive options.

He feels that we need better policing of the seas, an expensive proposal that doesn’t address the fact that a military presence cannot be everywhere at once, still leaving ships vulnerable to quick acts of kidnapping and looting. This will simply cause pirates to modify their tactics, not end them, and the costs of maintaining a force sufficient enough to secure the seas — if that’s even possible — would be astronomical and far more than simply allowing shipmen to adequately defend themselves.

The New York Times also writes that “some ship owners [are] worried that their crews would be killed instead of held for ransom if the crews tried to defend themselves and failed.” This extreme act of appeasement would make Chamberlain blush. The ransoms will get higher, the hostage-taking will become more frequent, and, ultimately, crews will have to be armed or be accompanied by armed escorts anyway.

Two obstacles do remain. Ports in different countries have different restrictions regarding the presence of arms on shipping vessels. This provides a major headache, but international standards can be made out of economic necessity and simple sanity. The other is a fear that ships with flammable material could be destroyed if a battle erupts or an accident occurs. I’m not an expert on ship security equipment or economics, but I have enough faith in capitalism to think someone can come up with some form of affordable mechanism to meet this challenge, if something hasn’t already. Besides, over the long term, isn’t it more costly to give in to the pirates, provoking further attacks and ransoms, than to risk some albeit major accidental fires defending the crew?

This isn’t to say that we should be complacent as the capitalist process defeats the pirates. There’s plenty that can be done to expedite the process. If the pirates are doing business with terrorists, then they are a legitimate military target. Their safe harbors can be targeted and attacks on innocents should be avenged with force. There needs to be international intelligence sharing, allowing for a map of the pirate networks to be drawn to set the stage for targeted raids.

These actions, when combined with allowing ships to arm their crews or hire private security personnel, will get rid of a business partner of terrorists and very, very quickly make piracy economically counterproductive. Capitalism will defeat piracy, if we let it.