ARNOLD KLING
August 14, 2011
The Top Political Contributors
August 11, 2011
Gender and the New Commanding Heights
August 11, 2011
Jamie Galbraith Makes an Assumption
August 11, 2011
Macroeconometrics: The Science of Hubris
August 10, 2011
Real and Nominal Bond Yields
BRYAN CAPLAN
August 14, 2011
The Effect of Thumb Sucking on Income
August 12, 2011
The Voice of Cold, Hard Truth to All Would-Be Educators
August 12, 2011
Ability, Morality, and Prosperity: A Paper and a Report
August 11, 2011
The Theory of Time and Frittering
August 10, 2011
Male Variance and the Remnants of the Gender Gap
DAVID HENDERSON
August 9, 2011
Hayek in "Unbroken", Part Two
August 8, 2011
Hayek in "Unbroken"
August 5, 2011
James Bovard on the Peace Corps
August 4, 2011
Summers Way Off on FDR and 1941
August 3, 2011
The "Amazon" Tax
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Just the opposite. There are a couple of opportunities for exit on a pirate ship. The ships had to come into a safe harbor from time to time. A pirate could jump ship then. Furthermore as noted in the article most pirates volunteered. Since the larger the crew was, generally speaking, the more successful in piracy it was. Unlike a modern corporation which is trying to limit the number of employees it has, a pirate crew was usually looking to expand. This made it easy to leave a ship and find another berth. It is not as easy to join another corporation once you left a first one. Also you have a bunch of heavily armed thieves who could kill the captain and throw the body overboard. In the Royal Navy, Kling's golden scepter in the guise of the law would punish both acts. That's not the case on a pirate ship.
It is the ease of entry and exit including the captain's desire to live that allows for a more benign governance.
As to why the pirate's were able to figure out the division of labor better than the Navies at the time I'm not sure.
My guess would be almost the oposite of AK - because this pirates codes looks like a formalization of the egalitarian arrangements of hunter gatherers.
Precisely because exit is so *easy*, and because any single disaffected individual can cause considerable harm, cooperation must be bought by egalitarian arrangements.
It is also a consequence of a relatively unspecialized society - and it also serves to keep the society unspecialized.
In most firms the voting member are the partners. They are the owners of the firm. The shareholders vote for the CEO and they are the owners of the corporation. That seems pretty consistent.
The question in my mind is what makes employee ownership important in some organizations and not others. My guess has to do with the specificity of the capital.
The capital that law firms use is not at that specific to law - office space, desks, computers, etc. So that capital can be leased by group of workers.
On the other hand an automobile factory is highly specific to making automobiles. That capital must be purchased and it is risky.
This requires investors who are residual claimants and as residual claimants they will typically demand control over the firm.
The captains of the (wind powered) Royal Navy had to rule with an iron fist of discipline, which often involved horrendous lashings for even small offences.
The reason: the captain and few officers were highly outnumbered by the enlisted men. The enlisted men could trivially take over the ship at any time if they lost faith in the captain. The captains kept this faith though a combination of demonstrated skill at captaining as well as severe discipline of the men.
Ships have no immediate course of action to land-based government's monopoly of violence to handle crimes such as mutiny. Thus the monopoly was with the captain.