"Piracy" led to financial meltdown - academic
2:04pm Wednesday 15th October 2008
An academic claimed today how the global financial meltdown can be traced back to the golden age of pirates and buccaneering on the high seas.
Dr Peter Hayes, a senior lecturer in politics at Sunderland University, said 17th and 18th Century pirate ships were run like ruthless modern corporations.
They hid their profits in tax havens. Pirates who plundered foreign treasure were welcomed by the government of the day and received by high society - as long as they were successful and handed over a share to the state.
Dr Hayes said: ‘‘Pirates elected their captain, voted on major decisions and distributed their booty in roughly equal shares, and there is something in the idea that a pirate ship is the equivalent of a modern corporation.
‘‘In the 17th and 18th century, privateers were backed by financiers, much like modern multi-national PLCs.’’ He said financiers would stump up the cash to kit out a ship, which would sail the seven seas in search of gold.
‘‘It was a global gamble for enormous rewards,’’ the academic claimed.
‘‘These predatory voyages are the roots of modern venture capitalism, with these modern multi-national corporations out to get all they can get.
‘‘That’s the sort of privateering that led to the credit crunch.’’ He said the pirates’ way of running the ships was an early form of democracy - but that came at the expense of their victims.
They were encouraged by the governments of the day, as long as they plundered foreign ships and gave the Crown a cut, he said.
Pirates even set up their own states, such as Madagascar, where they could hide their wealth from governments and also share information - rather similar to offshore bank accounts for modern businesses, Dr Hayes argued.
‘‘Eventually the state stepped in to reward successful pirates, by calling them ’privateers’, giving them knighthoods and making them part of society, so it is more than likely that direct descendants of pirates like Henry Morgan are wandering around the ’deck’ of modern companies today,’’ he said.
His paper is entitled ’Pirates, Privateers and the Contract Theories of Hobbes and Locke’.