Thursday, May 21, 2009
Incentives Count-For Pirates Too?
"OK, not the problem of piracy per se. But the problem of these specific pirates off the coast of Somalia: taken care of. And, if more pirates were shot, there would be fewer pirates. Unlike, say, jihadi terrorists, pirates are in it for the money. Raise the cost of being a pirate--in denominations of pirate blood--and you'll lower the supply of pirates. That's how governments--good and bad--have dealt with piracy for thousands of years. ... For those of us who see the resurrection of Jimmy Carter in Barack Obama, this [killing three pirates] was a nice surprise. People forget how reluctant the Carterites were to use force. ... Looked at from 200 years ago--the last time an American-flagged ship and crew were seized by pirates--we've fallen terribly behind. ... Generations of 'don't blame the victim' talk have made us sympathetic to criminals, particularly Third World Ones. ...And that raises the primary reason this all seemed so complicated. Lawyers. Layers and layers of lawyers. ... Add to this the fact that trial lawyers, bureaucrats and accountants for too long have conspired with corporate honchos to make paying ransoms the least costly option", my emphasis, Jonah Goldberg (JG) at the Houston Chronicle, 15 April 2009.
No American ship should pay any pirate anything. Uncle Sam should bill Maersk for rescuing its ship and sailors. All merchant crews should be armed. If they go to ports that refuse armed sailors, these ports' governments should give the merchantmen naval escorts. JG understands incentives better than most economists. Imagine how much Big 87654 audits would improve if say KPMG's Citigroup partner was publicly beheaded. If PWC's AIG partner was also beheaded, we might not need to repeal 1995's Litigation Reform Act and could shutter the PCAOB!