THE ECONOMICS OF SOMALI PIRACY
OFFICIAL U.S. NAVY PHOTOS, PUBLIC DOMAIN, Suspected Pirates and Merchant Marine Armed Guards
On Sunday the Washington Post Wonk Blog published an interesting analysis and commentary on a recent paper by Timothy Besley, Thiemo Fetzer, and Hans Mueller on the social welfare costs of Somali piracy. We found both the Wonk Blog posting and the linked research paper very interesting. We can only hope that our politically correct and totally inept government doesn't draw the wrong conclusion. We still believe that the lesson of history is that Capt. Woods Rogers had the only really useful approach to piracy. He raised the costs and risks to the pirates. We don't have to hang them from the yard arm but must open fire with deadly force upon attack. Merchant men need to be armed and trained in arms in pirate areas and navies must chase suspects from cheaper smaller platforms so that the economics of suppression don't bankrupt the naval powers, and finally safe havens ashore must not be allowed. No apologies should ever be made for dead pirates. Here are some excerpts from the WONK BLOG and links to the entire posting.
The Economics of Somali Piracy
"Since 2008, Somali pirates operating in the Gulf of Aden have made about $120 million per year in net profits. But they’ve cost the shipping industry far, far more than that — between $900 million and $3.3 billion per year........."
"Among other things, the shipping industry has had to pay for armed security, ransoms, safer ships and even taxes for an increased military presence in the region. All told, these extra costs come to between $900 million and $3.3 billion per year. ......."
".... the numbers here suggest that piracy is an extremely inefficient form of wealth transfer. (Not to mention deadly.) It would be cheaper, though unrealistic, for the shipping industry to just hand over $120 million to the pirates. Editor's note this is exactly the kind of calculus that led Great Britain to pay the Barbary Pirates annual tribute, that plus the Barbary pirate's depredations on other merchant ships helped assure British supremacy in the Mediterranean shipping trades. The United states on the other hand decided on "millions for defense not one cent for tribute" and launched the Barbary Pirates War and propelled Lt. Steven Decatur and Boatswain'smate Ruben James among others into the history books.
"....“The analysis further underlines the difference between organized extraction by the state in the form of taxation and disorganized predation. We estimate that the latter is at least ten times more costly.............”. Editor's note: So we should pay more taxes and let the government pay off the pirates?
TO READ THE ENTIRE WASHINGTON POST WONKBLOG ARTICLE CLICK ON THE LINK BELOW:
WITHIN THE ARTICLE LINKED ABOVE IS A LINK IN THE TEXT TO THE ACTUAL RESEARCH PAPER THE ARTICLE IS BASED ON.
No comments:
Post a Comment