FEATURE THE PIRATE AND THE CAPITALIST: A LOVE STORY? From the East India companies on the high seas to the Prism surveillance program in cyberspace, governments seek control over new territories, but pirates resist, says Jean-Philippe Vergne. I have mixed attitudes towards capitalism, but I love markets. — Julian Assange ulian Assange is the founder and editor-in- What is piracy and who are the pirates? chief of WikiLeaks, an organisation at the International law has no consensual definition heart of the pirate sphere. WikiLeaks has of piracy, except for the specific case of sea ties to The Pirate Bay, the largest file-sharing piracy—and its definition did not become fully J website in the world; the Pirate Party, which recognised and shared by the world’s nations has two elected representatives in the European until the 1982 UN Law of the Sea Convention. Union Parliament; and core members of the Today, when we hear terms such as online piracy, hacker group Anonymous. WikiLeaks has we must keep in mind that piracy does not refer acquired tremendous influence, which it is using to any commonly accepted legal reality. Similarly, to gather international support in favour of during the golden age of sea piracy, circa 1700, whistleblowers Bradley Manning and Edward the concept of (sea) piracy was vague and malleable. Snowden. In July 2013, Assange heralded the Thus, as a general rule, to be a pirate, one merely creation of the Australian WikiLeaks Party, which needs to be called a pirate by a aims to run candidates at the next Senatorial recognised political authority. In elections. The pirate movement has always been other words, the political reality critical of the cosy relationships between states of piracy is created through a and large corporations, so it’s no wonder that the performative statement uttered by recent revelations about the US National Security a legitimate government. Agency’s (NSA) Prism surveillance program, implemented jointly with leading tech firms, has led to pirates once again voicing their concerns. But who are the pirates and what role do they play in the capitalist game? If we look at the history Jean-Philippe Vergne is Assistant Professor of Strategy of the pirate movement and its interactions with at Ivey Business School (Western University, Canada). states and corporations, we have much to learn In 2013, he co-authored the book The Pirate Organization: about capitalism’s inner workings and evolutionary Lessons from the Fringes of Capitalism (Harvard Business dynamics. As it turns out, the implications of Review Press) with Rodolphe Durand. They published a piracy for the global economy, government policy, short animated documentary about piracy and capitalism and geopolitics are huge—yet thus far they have titled What is the Pirate Organization? available on YouTube received little attention. under a Creative Commons licence. They tweet @PirateOrg. POLICY • Vol. 29 No. 3 • Spring 2013 3 THE PIRATE AND THE CAPITALIST: A LOVE STORY? There are multiple reasons to explain why What do pirates stand for? certain social actors would want to call someone Pirates represent a heterogeneous yet influential a pirate. One is legal leverage. In the Roman group of activists who defend a relatively stable Empire, pirates were declared ‘enemies of all set of principles emphasising openness, free access, humanity,’ and piracy later inspired the concept transparency, and the notion of ‘common good.’ of ‘crime against humanity.’ So calling someone Importantly, since the dawn of capitalism, pirates a pirate places that person in a legal category that have exerted their influence across industries and potentially commands huge penalties and sanctions countries, which makes piracy a genuine engine in a court of law. For example, when illegal file- of capitalist renewal, overlooked to a large extent sharing is relabelled ‘piracy’ in the public arena, by economists and political scientists alike. Pirates judges can more easily justify severe sanctions on keep reminding us of the crucial difference that the suspected Internet (mis)users, including huge exists in practice between capitalism and free fines combined with prison sentences.1 markets. To understand this essential distinction, we need to recognise a recurrent pattern in recent The nation-state system often drove the history: Every time capitalism expands into new expansion of capitalism through monopolies; territories, sovereign states rely on monopolistic arrangements to define rules of ownership and meanwhile, pirates advocated free-market exchange, gain control over trade flows, and ideals for the greater good of all people, outcompete rivals. above and beyond national boundaries. Pirates have fought the principle of exclusive sovereign control over certain territories that they Another reason is to reduce competition. In the saw as being common ground for the benefit of modern age, the Portuguese merchants who opened the larger society. And here’s a paradox whose the sea routes to the East Indies claimed ownership implication should not be downplayed: The rights on the high seas, enabling them to call every nation-state system often drove the expansion of non-Portuguese merchant trading in the area a capitalism through monopolies; meanwhile, pirates pirate—including the indigenous merchants who advocated free-market ideals for the greater good of had been trading freely in the region long before all people, above and beyond national boundaries. the Europeans arrived. Thus, any competing merchants considered to be pirates could be Pirates against big business capitalism removed from the trade business by any means, and The interconnected histories of capitalism and the Portuguese crown provided massive military piracy shed new light on the tensions now support to that end. surrounding the regulation of cyberspace, copyright Later, the Dutch and the British took over reform, and the patentability of gene sequences. the Portuguese (and Spaniards) to gain control When the state decides to be big business capitalism’s of Southeast Asian trade networks. Like the best ally, pirates stand up and promote, sometimes Portuguese and Spaniards before, the Dutch and violently, an alternative model of capitalism. the British operated monopolistic companies, Back in 1602, the Dutch Republic granted called the ‘East India companies,’ and considered its East India Company a 21-year monopoly on any outsider to be a pirate. Interestingly, the trade with the regions lying east of the Cape of geographical expansion of European capitalism Good Hope, which led to the quick ruin of well- between the sixteenth and eighteenth centuries established merchants, some of whom reverted to led to the principle of free trade being replaced by piracy—that is, they began the illicit practice of state-supported, monopolistic forms of commerce. trade conducted outside of the established state Looking back at history, we must acknowledge that monopolies. Historian Christopher Hill rightly capitalism and free trade do not always go hand observes that modern sea ‘pirates exterminate those in hand—precisely the point Assange intended in who bought privileges from a State.’2 In fact, the epigraph above. those pirates seemed to defend the right to venture 4 POLICY • Vol. 29 No. 3 • Spring 2013 JEAN-PHILIPPE VERGNE off on their own, to follow their own standards, British sovereignty extended into the airwaves; for and to benefit from the profits. Sea pirates were not these actions, he was considered a pirate. attacking ships out of some high-minded defence Overwhelmed by the pirate phenomenon, the of free markets. Rather, they were independent British government eventually ended the BBC’s merchants suddenly relabelled ‘pirates’ because of monopoly in 1967, thereby freeing both radio the monopolistic endeavours of European states. broadcasting and the airwaves as the common Underlying the pirates’ actions was the belief heritage of humankind. At last, listeners could tune that the high seas should be free and open. In his into the official BBC channels and hear the evil famous treatise, Freedom of the Seas, seventeenth- sound of rock ’n’ roll. As Adrian Johns explained: century legal scholar Hugo Grotius wrote that waters and navigation should be ‘free’ because the As of 1967, the BBC became one sea is a public good—it does not belong to anyone, among many ... The irony is that it then and using the seas for navigation does not prevent found the critical and skeptical voice others from doing the same. Rebuttals came it had been missing ... the virtues of the quickly from Iberic and English sovereigns, who BBC only came to light at the end of claimed that the parts of an ocean that linked their its monopoly.4 territories could be legally appropriated. But, centuries later, it was Grotius’ point of view that won out. Outside of territorial waters, Grotius Overwhelmed by the pirate phenomenon, defended the idea that no nation has the right to the British government eventually ended take possession of the open seas. Eventually, the the BBC’s monopoly in 1967, thereby freeing freedom of the open seas—nowadays, more than both radio broadcasting and the airwaves as 50% of all water surfaces on Earth—was achieved the common heritage of humankind. through a series of treaties, starting with the 1856 Declaration of Paris, which abolished privateering. But as historian Pérotin-Dumon put it, ‘to eliminate As telecommunication technologies improved, piracy on a larger scale, however, trade monopoly corporations with a dominant position in radio had to be given up altogether.’3 broadcasting, such as AT&T, became increasingly In many respects, the international recognition interested in expanding their control into of the freedom of the seas in the mid-nineteenth cyberspace, a nascent territory whose design century framed the heated debate regarding began in the 1960s. Many see in AT&T the first the freedom of airwaves at the beginning of the monopoly in the history of cyberspace.