Economic Rockstar

Connecting Brilliant Minds in Economics and Finance

074: Peter Leeson on The Invisible Hook: The Hidden Economics of Pirates

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074: Peter Leeson on The Invisible Hook: The Hidden Economics of Pirates

Peter T. Leeson is Duncan Black Professor of Economics and Law at George Mason University.Peter Leeson

He is also a Senior Fellow at the F.A. Hayek Program for the Advanced Study of Philosophy, Politics, and Economics as well as the North American Editor of Public Choice.

Formerly, Peter was Visiting Professor of Economics at the University of Chicago, Visiting Fellow in Political Economy and Government at Harvard University, and F.A. Hayek Fellow at the London School of Economics.

Peter is author of The Invisible Hook: The Hidden Economics of Pirates and Anarchy Unbound: Why Self-Governance Works Better Than You Think.

Peter can be found at PeterLeeson.com.

Economists:

In this episode, Peter mentions and discusses: Ludwig von Miss, F. A. Hayek, Gary Becker, Karl Menger, Steven Levitt, Robin Hanson, Karl Marx, Adam Smith and Peter Boettke.

Economics:

In this episode, Peter mentions and discusses: price theory, human behaviour, Austrian Economics, Chicago School of Economics, economics of self-governance, rational thinking, profit maximisation, incentives, social insurance, externalities, unemployment, governance, self-governance, public goods and rational choice theory.

Pirates were economic actors but they were criminals. Criminal behaviour, as some had suggested, is not very amenable to the economic way of thinking.But Gary Becker pioneered research demonstrating that that wasn’t so.

In this episode you will learn:

  • about the similarities and differences between Austrian Economics and Becker’s thinking in the Chicago School of Economics.
  • why Peter decided to study the economics of pirates.
  • about the scientific approach to economic thinking.
  • how limitations to data restrict analytical research and how historical economic thinking can be used as a form of empirical analysis.
  • how using the economic narrative is just as effective as the mathematical regressions to explain theoretical concepts.
  • the similarities between The Invisible Hand and The Invisible Hook.
  • how pirates were rational thinkers and social revolutionaries.
  • how a hierarchy was established on a pirate ship using the Pirate Code.
  • how the Pirate Code created a social order that was economically beneficial to the crew.
  • about the constitutional democracy that pirates established onboard their ship and the misperceptions we had of an autocratic captain.
  • about some rules, codes of conduct and dispute resolution mechanisms that existed on a pirate ship.
  • how pirates were incentivised to engage in battle with a social fund (moral hazard) that was a predecessor to today’s social insurance policy.
  • how the pirate code minimised or eliminated the impact of a negative externality on a crew member or the whole crew.
  • how Peter’s book dedication, in the form of a marriage proposal, worked out.
  • when did piracy at sea begin and when did the romanticised period of piracy, as we know it, occur.
  • how are the pirates of the early 18th Century, such as Captain Blackbeard, so different to the pirates of today, such as the Somali pirates.
  • how sailors found solace and refuge as buccaneers and pirates after wars, such as the War of the Spanish Succession.
  • why unemployed sailors became buccaneers and pirates.
  • the risk-reward ratio of becoming a pirate.
  • whether pirates actually buried their treasure.
  • how an enterprising society was established at the land bases of pirates.
  • what pirates spent their spoils and treasures on.
  • the signalling effect of the Jolly Roger flag and why pirates used it as they approached a merchant ship.
  • how an ‘honor among thieves’ and collusive agreements between pirate groups allowed them to avoid attacking each other.
  • how coast guards, who were legally allowed to plunder merchant ships, often used the Jolly Roger flag as a signal to deceive their subjects into thinking they were pirates for the purpose of avoiding a bloody battle.
  • why coast guards used the Jolly Roger flag to cash in on the reputation of pirates.
  • if self-governance is effective and more successful that government.
  • whether the free-rider problem would exist in a self-governed economy regarding public goods.

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044: Nancy Folbre on Feminist Economics and the Care Economy

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044: Nancy Folbre on Feminist Economics and the Care Economy

Nancy Folbre is a recently retired Professor of Economics at the University of Massachusetts, Amherst andNancy Folbrecurrently directs a research program of gender and care work at the Political Economy Research Institute.

Professor Folbre’s research focuses on the interface between feminist theory and political economy, with a particular focus on the work of caring for others.

Nancy was elected president of the International Association for Feminist Economics (IAFFE) in 2002, has been an associate editor of the Journal Feminist Economics since 1995, and is also an editorial assistant of the Journal of Women, Politics & Policy.

Nancy is recipient of a MacArthur Fellowship, and she has consulted for the United Nations Human Development Office, the World Bank and other organizations.

Professor Folbre has also written extensively on the social organization of time, namely the time allotted to care for children and the elderly and how family policies and social institutions limit the choices people can make between paid and unpaid work.

She is a contributor to the New York Times Economix blog.

Nancy’s book ‘Saving State U‘ (New Press, 2010) makes a case for strengthening public support for higher education in the United States.

Other recent books include ‘Greed, Lust, and Gender: A History of Economic Ideas’ (Oxford University Press, 2009) and ‘Valuing Children: Rethinking the Economics of the Family’ (Harvard University Press, 2008).

Nancy received a B.A. in philosophy from the University of Texas at Austin in 1971, an M.A. in Latin American studies from UT Austin in 1973, and a Ph.D. in economics from the University of Massachusetts, Amherst in 1979.

In this episode, you will learn:

  • why Nancy Folbre decided to study economics.
  • how the household is very much like the market economy.
  • about feminist household economics.
  • what the underlying principles and foundation to feminist economics.
  • why we should see unpaid work as part of the economy.
  • how the state and the market has reinforced the patriarchal system.
  • why the capitalist system, ironically, has downside effects on women today despite the benefits it provides.
  • why we should adopt the Scandinavian model of paternal responsibility.
  • about the unmeasured ‘Care Economy’ where people perform unpaid work.
  • about the opportunity cost to care work.
  • why Replacement Cost is a better proxy from a National Accounting perspective for measuring the size of the Care Economy.
  • why people are intrinsically motivated to care and that money is not an issue.
  • why Nancy Folbre strongly believes that we should think carefully about how we reward care work.
  • about the ‘Care Penalty’ and why we shouldn’t take advantage of the care workers motivation to work in the care industry.
  • about the societal pressures on a man who decides to stay at home and be the care giver.
  • why we should be providing a better account of the costs and benefits of raising kids.
  • if women have a ‘wage-penalty’ as they are, in most cases, the care-giver.
  • whether we can capture the value spent by parents caring for their children.
  • if intrinsic values of happiness lead to economic benefits for household.
  • if children of developed and less-developed countries are treated differently by their parents in terms of their perception of value.
  • about the rapid decline in fertility rates in India, Asia and Latin America.
  • why self-interest was always described in gender terms and why it was always permissible for men to be self-interested than women.
  • if having more women involved in economics and the economy would lead to better outcomes.

Economists:

In this interview, Nancy mentions and discusses: Gary Becker, Shoshana Grossbard, Friedrich Engels and Adam Smith.

Economics:

In this interview, Nancy mentions and discusses: feminist economics, market choice, economics of the household, altruism, rationality, interdependent utility, collective bargaining, choice, efficiency, inequality, incentives, opportunity cost, replacement cost, free market, Invisible Hand and happiness.

Quotes by Professor Folbre in Episode 044 of the Economic Rockstar Podcast:

Work can be very productive and create value for society even if it’s unpaid – Nancy Folbre

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“Definitions of femininity and masculinity are changing in a positive way” – Nancy Folbre

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“Smith had a lot of confidence in the pursuit of individual self-interest” – Nancy Folbre

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Many people have taken Smith’s praise of the free market as an endorsement of selfish behavior, that it doesn’t matter if you think only of yourself because in a market economy we can be confident that everything will turn out just fine.  What I argue in the Invisible Heart is that’s really incorrect. The market economy really depends to a very great extent on a sense of commitment and obligation to other people of trust and reciprocity and concern for the welfare of others. That affects overall economic organisation and success in some pretty profound ways – Nancy Folbre

“We need to change the way we think about work and about value” – Nancy Folbre

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Leading happy and worthwhile lives is kinda the point of the whole economic enterprise and sometimes we lose sight of that. And there’s certainly a lot of evidence that what makes people happy is good human relationships, having close ties with family and friends and community. If we appreciated that a little bit more fully, we could organise our economic system a lot more successfully – Nancy Folbre

“I think Feminist Economics is a part of the whole heterodox challenge to the mainstream economics, and I fell good about that” – Nancy Folbre

Recommended Books:

Blog:

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