Saturday, September 4, 2010

The Business Of Piracy

A piece posted in today's Vancouver Sun by columnist Fazil Mihlar explored "What business executives can learn from pirates". (Mihlar is also a member of The Sun's editorial board and comes from a business background.) In his piece, Mihlar talked about the relationship between employers and employees, and how criminal groups like modern-day pirates have managed to maximize the potential for profits in this relationship. It's not such a bizarre idea - learning from pirates - and Mihlar mentions Peter Leeson's book, "The Invisible Hook: The Hidden Economics of Pirates", which also focusses on this subject.

I've spoken several times to business groups about this very topic. It wasn't alway the talk they were expecting, but the points I - and others - have raised come from a purely analytical look at things. These observations have nothing to do with supporting criminal activities in any manner. But when it comes to figuring out how to motivate one's staff in the midst of an economic downturn, maritime pirate gangs (in places like Somalia) have managed quite well.

A crucial aspect of doing so is to provide an economic reward when the prevailing sense is that there are no other options available. Hope where there is despair, if you will. By knowing there is a hunger - real and otherwise - out there, one can capitalize on the desire to make ends meets in individuals, harnessing their physical and mental energies to a greater purpose.

Fundamentally, all it takes is someone to say, "Here's a way to make yourself useful and successful." The desire to do so is inherently part of human society in a variety of applications. It's the basis of numerous late night infomercials and self-help seminars. It's someone else showing you a path and putting an end to all the troubles that ail you.

It is also often misguided in terms of the real goals imagined by those who engender such solutions, but it is nevertheless still very attractive to many, many people around the globe. When you have little or nothing to begin with, the risks of embarking on something that may be criminal in nature are of reduced concern. And the workforce available in those situations becomes very malleable. Of course one could always use some of the techniques used by pirate "managers" to motivate employees on a more positive, non-criminal level.

Risk, profit-sharing, group support - all are nothing new. They've been utilized by those calling themselves capitalists, communists, socialists, fascists and ordinary criminals for years. Understanding the base aspects of human motivations when it comes to piracy is important in figuring out how to combat the problem. It's just one of the elements that causes the issue to exist.

On a related point, I'd like to point readers to a piece called "Mutatis Mutandis" written by Alexander Martin on the U.S. Naval Institute blog back in late July. Some may have seen it, but for those who did not, Martin - an exceptionally perceptive writer currently deployed overseas with the USMC - gives an good precis on how Somali pirates came to be what we know them today. I meant to mention it earlier; apologies to Alex. Read it and you'll understand what the title refers to.

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