Somali Pirates Open Up a "Stock Exchange" 666
reginaldo writes to clue us that pirates in Somalia have opened up a cooperative in Haradheere, where investors can pay money or guns to help their favorite pirate crew for a share of the piracy profits. "'Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 "maritime companies" and now we are hosting 72. Ten of them have so far been successful at hijacking,' Mohammed [a wealthy former pirate who took a Reuters reporter to the facility] said. ... Piracy investor Sahra Ibrahim, a 22-year-old divorcee, was lined up with others waiting for her cut of a ransom pay-out after one of the gangs freed a Spanish tuna fishing vessel. 'I am waiting for my share after I contributed a rocket-propelled grenade for the operation,' she said, adding that she got the weapon from her ex-husband in alimony. 'I am really happy and lucky. I have made $75,000 in only 38 days since I joined the "company."'"
regulation (Score:2, Interesting)
Why not? (Score:5, Interesting)
Just a brief read of the article about the Dutch East India Company [wikipedia.org] makes me wonder just how different the two really are.
Legitimacy as a company seems to be determined by how well you succeed and how long you've been around, more than your morals or ethics.
Re:That's funny, expecting her share? (Score:5, Interesting)
I think you miss the point. They're not rogues; it's a lucrative business that is the most profitable job out there.
They've been doing this for a while, and by now there has to be an infrastructure supporting this. The pirates have to have ports, ships, backers.
It's just come out into the open.
Understand Africa; a couple of US$ will buy a Kalashnikov. A $75,000 payday is a fortune that is more than most Somalis will see in a lifetime.
You can bet this will succeed, until something better (more profitable) comes along.
Remember that archelogists pay the going exchange in gold to their workers if they find any artifacts. Same thing; shipping companies will pay this as long as it's cheaper than the alternatives. As long as the Somalis charge 95% of the other routes, it will prosper.
Re:This is a really bad idea (Score:2, Interesting)
That's what brokers are for. People in Europe will give their brokers some money to be "invested in Somalia"
The broker's job will be to get contacts and have them select the most lucrative investments available.
Plausible deniability across the board.
The investor doesn't know exactly who the broker's contacting.
The broker doesn't know what assets the investments are going to. Only that they are going to a "fund" managed by contacts in Somalia.
The fund managers in Somalia operate privately and have strict secrecy and describe investments in only vague terms.
Stock Tip (Score:4, Interesting)
Consider it an investment with the intent to sell short.
Re:Behold, a free market evangelists dream takes f (Score:3, Interesting)
Re:Behold, a free market evangelists dream takes f (Score:3, Interesting)
There's laissez-faire capitalism on the government level, too, I guess, as nobody stands above governments to regulate them. And since there exists bad governments, and since every government oppresses its citizenry on some level, clearly the entire endeavor is a failure and we need god to regulate government, and then something to regulate god.
Re:Paging Bernie Madoff Clients... (Score:3, Interesting)
since "passing ships" have destroyed their livelihood.
Don't the warlords who destroyed their country and turned it into a failed state deserve some (most?) of the blame for that? If they still had a functioning state they would have a Coast Guard and the ability to regulate their waters. Why don't they turn all of those AK-47s and RPGs on the warlords?
Re:Behold, a free market evangelists dream takes f (Score:5, Interesting)
This has always puzzled me about lie-bertarians. To a dispassionate eye, the line appears to be so random and convenient only for the small-medium capitalists who incidentally provide the basis for this ideology to begin with. Why is it government function to protect only property, and human rights (which conveniently exclude the rights to basic food, shelter, job, and health care) ? And why the property is so sacred, of all the things a human being needs, such as "true" freedom (not just freedom to die from hunger), good health, or a family?
Re:Paging Bernie Madoff Clients... (Score:4, Interesting)
do ports allow you to dock if your ship is armed? (im asking because i heard that generally they wont).
Re:Behold, a free market evangelists dream takes f (Score:2, Interesting)
This privateering is a prime example of Merchant capitalism. Only, in this case, it is a ship and its cargo being exchanged for money, rather than, say, a barrel of corn. Since there is no bartering involved in the exhange, this makes it a capitalism.
Now, on the other hand, what most people think of today as capitalism, is actually industrial capitalism, which is the exchange of services for currency, which is then exchanged for goods.
Re:Paging Bernie Madoff Clients... (Score:3, Interesting)
Well, I have an obvious solution then. Each country should open a weapons check platform on the boundary waters of their major ports. Like a coat check-ships stop at the platform, turn in their weapons and get a claims ticket. Deliver the cargo and pick up their weapons on their way back out into international water.
Countries could make some easy money and shipping companies can stop paying these criminal hacks.
Re:Imagine being a young Somalian, and choose (Score:5, Interesting)
Re:just bomb them (Score:4, Interesting)
The shippers aren't there to achieve foreign policy objectives, satisfy Law and Order enthusiasts, or even coddle bleeding hearts. They are there to make money by shipping stuff. The reason that they aren't bothering to do all that much about piracy is that, at least at present, it is cheaper to just suck it up, pay the occasional ransom, and carry on with business than it would be to do anything terribly aggressive.
A plan that involves blowing up entire ships(not cheap to replace) and their cargoes(also not cheap, and you'd better believe that whoever paid the shipper to have that stuff shipped would be pissed if it got lost) would be, from the shippers' perspective, vastly more expensive than just ignoring the problem.
Re:Paging Bernie Madoff Clients... (Score:5, Interesting)
Some insurance companies will not insure ships that have armed personnel aboard. They believe that it gives an incentive to fight, which may increase the damage to the vessel and result in additional (insured) lives being lost, increasing the payouts required if the ship escapes the pirates.
Re:Behold, a free market evangelists dream takes f (Score:4, Interesting)
A Saudi super-tanker was released a little while back for about $2 million. It carried 2 million barrels of oil. The market value at the time was around $100 million. Replacing the cargo and the vessel would have cost a quarter-billion dollars.
Which is more cost effective?
Re:Anarcho-capitalism? (Score:5, Interesting)
I'm not sure that's the main thing stopping them. The cost of arming merchant ships would be far higher than just losing/ransoming a few of them--- piracy rates are extremely low as a percentage of total shipping, so small as to be more or less in the noise on companies' balance sheets. Arming ships has other risks, also; for example, one reason ships are typically kept unarmed is that there's a risk that armed crew would hijack their own ship for random/profit.
Re:Paging Bernie Madoff Clients... (Score:1, Interesting)
New Zealand also houses the US nuclear-powered submarine fleet west of the south island. It's not a secret everyone knows about it because big chunks of the fishing region in the small islands is now top secret.
Re:Why is the world so soft on pirates? (Score:3, Interesting)
Re:Paging Bernie Madoff Clients... (Score:2, Interesting)
Re:Why not? (Score:4, Interesting)
Somalia has no official government, therefore no police, no coast guards, no naval force. What exactly is a "Spanish tuna fishing vessel" doing off Somalian coast ? I'll tell you : it is fishing illegally there. Well, illegally is a theoretic term because there are no functioning law system to prevent them doing so. So what happens ? Some Somalian fishermen gather, put money in common, arm a vessel and try to bring some order.
Illegal fishing is a minor offense. But you have to know that illegal dumping of nuclear waste also occurred in Somalia waters. I must say that I consider it a good news that they form cooperatives instead of lord-vassal structure.
There is also a basic fact I like to remind concerning these "pirates" : they have not killed any hostage yet. The only hostage to die was killed by a (French) military in a recovery mission.
Re:Imagine being a young Somalian, and choose (Score:2, Interesting)
That’s an interesting thought. So the woman gets paid and then the next day is robbed and killed by a roving gang or a warlord’s hunt and terminate party. The other investors complain to the Somalian Stock Exchange that they don’t feel safe investing because their money can’t be guaranteed. Business suffers as a result until the Stock Exchange or some other business springs up and offers protection for that money.
Thats exactly how every modern government in Europe came into existence. The British, the Dutch, and the Portuguese started out as pirates - Drake, the Ostindian Company, Spanish ... it was organized crime supported by the local powers in being (i.e. kings & queens), and it got formalized after a while. The alternative way for people to make a living is go and conquer the neighbourhood, which is what Russia, Germany, and some other countries did in lieu of some decent sea routes to plunder.
I wouldn't ridicule this too much, it is a good development - a stock exchanges *does* need the protection of property and lives, and will lead to people you can negotiate with and that know the value of trust. Those people currently have the choice between starvation and becoming criminal. You can talk to them - try bargaining with some well-fed, middle-class, well-educated jihadist who is convinced the universe owes him more and thats why he's going to blow up himself together with some civilians if they don't stop listening to Popsongs.
Re:Explain to me how that economics works, again? (Score:5, Interesting)
I am an importer in Ireland and my shipping invoices now have a "Gulf of Aden Surcharge" on them, so I pass this on to my customers and so on so the good news is that we ALL pay of the pirates.
Re:Imagine being a young Somalian, and choose (Score:4, Interesting)
Oh, considering that unlike anywhere else along trade routes there is no fine for cleaning the cargo bays and tanks from all the (often poisonous) stuff, yes, they are. So you've been transporting 5000 tons of mazut. Now you've got a contract for half a million ton of high-quality gasoline. Except mazut is sticky and there's about 80 tons of mazut residue on walls of your tanks, that will pollute the fuel. You have a choice to stop for a few days at a port, pay several thousands dollars for cleaning and disposal, or just get your crew to flush the junk to the sea with hi-pressure hoses, while traveling full ahead to where the fuel awaits. No delay, no extra cost (included in salary), no waste disposal fees - and several square miles of sea life getting killed is none of your business.
Re:Paging Bernie Madoff Clients... (Score:4, Interesting)
While you were aware of the current wars in Africa, most of the rest of the students in your class probably weren't and this lady's talk was eyeopening for them. How many African students at the time of WWII knew what was happening in the concentration camps? Most African wars don't make it to Western media; that's no reason to assume the lady didn't care about people in Africa or wouldn't have mentioned the wars if she knew about them. Why are you attacking someone (who had actually lived through) an ethnic slaughter and was trying to raise awareness of it?
I asked her why she hadn't even mentioned the millions of people currently dieing in Africa in similar or worse conditions than her own people.
Millions of Jews died in the Holocaust. Millions of Africans died and are dying in wars and genocides. How can you say one atrocity is worse than the other, as though it negated the "lesser" atrocity? This lady, after surviving an ethnic slaughter, was going around speaking about her experiences (which can't have been easy) to try to raise awareness and warn people living in a comfortable Western society about the dangers of racism. That took a lot of courage and compassion for others.
Re:Paging Bernie Madoff Clients... (Score:3, Interesting)
Re:Behold, a free market evangelists dream takes f (Score:3, Interesting)
By that libertarian logic, there can be no property at all, as in involves the government forcibly stopping anyone else from using it. In fact, in a true libertarian society, no-one owns anything except what they create out of thin air.
Who gave them that land in the first place? Government. Government gave you the land, and if that land bears fruit, they can tell you how it's going to be distributed. Don't like it? Make your own land.
Re:Imagine being a young Somalian, and choose (Score:3, Interesting)
Actually they have another choice. They could turn those AK-47s that are so easy to come by on the assholes that are fucking up their country. Neutralize the warlords and islamist extremists and the rest of the world might be more willing to invest the resources and capital required to help lift that country out of poverty.
It sounds good in theory, but there are two important factors here.
First of all, as in any other "why don't they just revolt?!" case, this requires significant cooperation. If one guy just picks an AK and tries to shoot a local warlord, even if he succeeds, there will be someone else next in line to replace the warlord, and the assassin would be brutally executed in retribution - quite possibly together with his family. To pull this off, every guy who has the urge to pull the trigger needs to know that there are enough people elsewhere in the country willing to do the same; otherwise it's a bet with very high stakes and low chance to win. And people generally value their lives, as crappy as they may be (especially those people who haven't seen better lives, which certainly includes a lot of youths in Somalia).
The second factor is that humans are often enticed by systems which offer a very small chance to get a very high payout. So you have a thousand guys living in abject poverty, or died trying, for each one who managed to pull it (in this case, it = "captured a ship with worthy cargo") off and become rich. The problem is that each of those thousand guys know that, in theory, they also have the same chance, and furthermore, most of them think that they have a significantly-higher-than-average chance if they "train hard" or just because they're awesome. And so they will fight tooth and nail to preserve the system, even as it screws them, because of that illusory chance.
In fact, you should be familiar with this - unrestricted, unregulated free market capitalism is one such system, and there are plenty of confused people who would be much worse off under it (I've noticed that a quite lot of Libertarians tend to be poorer than average), but still advance it because they have high hopes of getting rich, and they don't want "government stealing the hard-earned money" when they do.
Re:Away with the lies (Score:3, Interesting)
So let me get this straight: a group of armed somalis are using force to obtain property from passing ships, and then use the loot to fund public infrastructure and reward investors.
And that's supposed to be shocking? It's just the birth of a state. Replace "ransom" with "tax", "pirates" with "tax collectors", "somali gangs" with "somali government", "investors" with "lobbies" or "activists" or "unions", and you'll see reality a bit more clearly. The same is going on in every country in the world, except that in this case the lies are gone and you get to see a glimpse of reality.
You're absolutely right, but it also goes to show that anarcho-capitalism (or, really anarcho-anything) doesn't work. A power vacuum will be filled, and any resulting structure will become a proto-state.
Of course, one other significant difference is that pirates give only as much money as they want, and to whatever causes they deem fit, with no input from either the local residents (who are supposedly benefiting from this), nor the ship & goods owners being "taxed". In a modern democratic state, those taxed at least have a say in how much the tax is, and where it will go (via representatives they elect).
Re:Anarcho-capitalism? (Score:3, Interesting)
As another person pointed out. It is free market capitalism at work, since the people the pirates are preying upon ARE BY INTERNATIONAL TREATY free to spend a few million on some guns themselves.
It is just not profitable. It's much cheaper to pay the ransoms.