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The Pirate Economy - Joe Pinsker - The Atlantic

Stashed in: Pirates!, Africa, Economics

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As recently as the early 2000s, piracy on Africa’s eastern coast was a small-time affair. Since then, the pirate economy has gone berserk. Somalia’s dilapidated legal infrastructure, along with the defenselessness of cargo ships, meant easy money for a time: the number of hijackings exploded in the late aughts. Nowadays, some pirates are backed by international investors, and others have their own attorneys to negotiate deals. At their peak, in 2011, Somali pirates are estimated to have collected as much as $156 million in ransoms.

Yet last year, thanks to a host of defensive mechanisms, the number of successful hijackings dropped to zero. Even so, the economic impact of piracy is higher than ever: the amount spent on private security last year alone far exceeded the amount paid out to pirates since 2005.

Which means, they were their own solution; ie. they presented themselves as the problem, and the investors cashed in by funding them while ALSO developing the solution >> Security Firms.  Pirates as a vendor hired by the Security Firms to generate future business.  And when they were in place, shifted their efforts to the "long" (legal) money.

My shrewd theory anyway.

Fear is a great motivator, no?

Fear is one of the best motivators. I believe your theory.

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