I just finished a fun book that I want to recommend. It’s “The Invisible Hook: The Hidden Economics of Pirates” by Peter T. Leeson. The author explores the Golden Age of Piracy (circa 1720) and shows how pirates overcame collective action problems. While there are many parts that are of interest to lawyers (for example, the pirate use of trademarks — the Jolly Roger — and crude advertising to enhance their brand of terror and encourage capitulation), the issue that I want to focus on is pirate governance.
Leeson points out that pirates needed to create a legitimate authority amongst themselves because the cost of having unhappy crew members was high. Even one disgruntled pirate could desert and expose the ship to the authorities. (And the penalty for piracy was death). So how did pirate gangs handle this?
First, pirate ships wrote up constitutions (pirate codes) that set forth the rules governing the ship, including punishments for certain offenses and the distribution of loot. Moreover, these codes required unanimous approval to go into effect, which ensured that everyone on the crew “bought into” the rules.
Second, pirate crews elected their captains and officers by majority vote. And these officers could be deposed by a “no confidence” vote at any time. This was an effective enforcement mechanism for the rules set forth in the ship constitution.
Third, pirates divided power between the captain (who was in charge of the ship’s navigation and tactics in battle) and the quartermaster (who was in charge of the ship’s internal operations). This was a formal or constitutional separation that was designed to prevent captain abuse, which was a common problem on merchant ships, by creating checks and balances.
There are lots of other nuggets like this in Leeson’s book. You should check it out.