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Thursday, November 20, 2008

Money Piracy in the age of Obama

Posted by Charles Mudede on Thu, Nov 20, 2008 at 9:46 AM

To begin with:

Somalia — Somalia's increasingly brazen pirates are building sprawling stone houses, cruising in luxury cars, marrying beautiful women _ even hiring caterers to prepare Western-style food for their hostages.

In the absence of a state, piracy becomes another way of plugging into the controlled flows of the global economy.

"There are more shops and business is booming because of the piracy," said Sugule Dahir, who runs a clothing shop in Eyl. "Internet cafes and telephone shops have opened, and people are just happier than before."

In Harardhere, residents came out in droves to celebrate as the looming oil ship came into focus this week off the country's lawless coast.

Businessmen gathered cigarettes, food and cold bottles of orange soda, setting up kiosks for the pirates who come to shore to resupply almost daily.

One of the two things that the piracy revels is the impossibility of living outside of the system, the world market.

The pirates use money-counting machines _ the same technology seen at foreign exchange bureaus worldwide _ to ensure the cash is real. All payments are done in cash because Somalia has no functioning banking system.

"Getting this equipment is easy for us, we have business connections with people in Dubai, Nairobi, Djibouti and other areas," Yusuf said. "So we send them money and they send us what we want."

The other revealed thing is this: Without the state (or the international state system), capital is vulnerable. Its flows become truly wild and unstable. Not in the state system (which manages the world market and enforces the rules of a game that produces the same winner every time—the haves), but here where there is no state does Adam Smith's invisible hand finally make an appearance. Capital can go anywhere, become anything, and land in the hands of anyone.

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Hm. I'm not sure of your tone, Charles. It almost sounds like you are advocating a Ron Paul-style free market, where anyone can achieve, without taxes or the state, not just the rich. Extrapolate, please.

Posted by P to the J on November 20, 2008 at 10:01 AM

This has been on my mind a lot in recent days. I keep imagining what a wonderful movie it would make. This should be your next screenplay.

Posted by Clint on November 20, 2008 at 10:05 AM

You don't understand what the invisible hand is.

Posted by Bellevue Ave on November 20, 2008 at 10:08 AM

They hire caterers for their hostages?

This indicates a long term business plan: setting an example which encourages crews (labor) to surrender their employers ship (capital) rather than to fight for their lives.

Posted by Rain Monkey on November 20, 2008 at 10:10 AM

This sort of outright theft may be the only circumstance whereby the rising tide of "trickle down" actually delivers on its promise to lift all boats.

Posted by flamingbanjo on November 20, 2008 at 10:13 AM

That's good news for the Western-style catering industry.

Posted by elenchos on November 20, 2008 at 10:14 AM

when they capture a cruise line ship, will they use the on-board catering? or outsource?

Posted by infrequent on November 20, 2008 at 10:18 AM

it makes sense though. i've already heard that some shipping lines are going around the great country of africa instead of through the canel because of this. but if the pirates are able to demonstrate the crew and the cargo is relatively "safe", it might cost less to pay the pirates than to sail around.

Posted by infrequent on November 20, 2008 at 10:34 AM

the invisible hand of the 5-finger discount

Posted by chicagogaydude on November 20, 2008 at 10:41 AM

@8, so the pirates would be the actual private security force? Instead of hiring Blackwater, the shippers could hire a private Somalian naval force to keep other pirates from pirating? Now THAT'S innovation. The only thing to worry about would be the double cross.

Posted by P to the J on November 20, 2008 at 11:01 AM

@3: It's ok, neither do you.

Posted by dum da dum dum on November 20, 2008 at 11:07 AM

@10 it wouldn't be the first time...

and... did i spell canal canel?

Posted by infrequent on November 20, 2008 at 11:10 AM

Um, good thing the Indian Navy is run by a Communist nation unafraid to sink pirate mother ships ...

Posted by Will in Seattle on November 20, 2008 at 11:15 AM

admit it charles, you admire these guys.

Posted by ellarosa on November 20, 2008 at 11:46 AM

When I was a pirate, all I got was scurvy and this damned peg-leg.

Posted by Urgutha Forka on November 20, 2008 at 12:55 PM

TNB, that's all.

Posted by TNB-pointer-outer on November 20, 2008 at 1:20 PM

@ 14 - NPR had an interview in which the person pointed out that the money mostly goes for pirates' drugs and prostitutes. There's nothing admirable about these ex-fisherman. The amount of the bribes paid so far couldn't do much for the local community anyway. But the oil tanker might get a several million dollar payoff.

Today the UN is talking about sending in a peace keeping force to the Somalia coast.

Posted by Oh that on November 20, 2008 at 4:11 PM

...

The free market doesn't exist in the presence of force or fraud -- that's what makes it "free". There's nothing "Adam Smith" or "Invisible Hand" about professional thieves in boats stealing goods with the threat of force.

And while it might occasionally sound cheerfully Robin Hood-y at first... when it comes down to it, they're really more akin to the Mafia. If they ever cemented their power within Somalia and became a corrupt de-facto government, they wouldn't even blink before turning the Somali people (minus the pirates and their families) into their next victims.

Posted by Chronos on November 20, 2008 at 6:20 PM