The Business Model of the Modern Maritime Pirate Organization

NPR’s Planet Money podcast did an excellent piece this week on the operations of Somali pirate organizations.  In light of all the pirate news coverage these days, I thought this was one of the most informative and interesting stories on the topic.  You’ll be surprised at how these organizations run as a business, yes there is an interesting business model behind Somali piracy.  These organizations outsource, use professional negotiators, and use financial models to understand the going market ransom rates.   I highly recommend a listen, the pirate segment starts at about the 9:45 mark.  Related, I came across a paper by a fellow GMU professor Peter Leeson (in the Economics department) about the law and economics that governed pirate organizations of yesteryear and probably still apply today (the title is probably the best I’ve seen for an academic paper!).  His website is a hoot, and he has a book called the Invisible Hook: The Hidden Economics of Pirates that was just released.