Comments on: The Economics of Piracy http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/ All that flavorful brownness in one savory packet Sat, 30 Nov 2013 11:11:28 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: ke http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-245144 ke Tue, 04 Aug 2009 06:27:47 +0000 http://sepiamutiny.com?p=5882#comment-245144 <p>Sameer:</p> <p>Most of the financiers are based in Nairobi, Kenya where they spend their days in luxury hotels sipping tea and putting these deals together. The role of Kenya in the piracy business is often not discussed. A lot of that pirate money has been diverted into real estate in Nairobi and Mombasa and prices of houses have been pushed up quite considerably. Kenyans like selling to Somali's because they are paying for these houses in cash (literally) - bringing it in bags filled with $100 dollar American bills.</p> <p>I don't see who the international community will stop this piracy. The coastline is too large/long, Somalia is a mess and Kenya is a very corrupt country where money talks. They're over one million Somali refugee's living in Kenya now and as long as they continue to roll in with all that cash and all those guns, they'll be welcome.</p> <p>It's a mini-version of what you had or could have with Afghanistan and Pakistan. They both fed of each other.</p> Sameer:

Most of the financiers are based in Nairobi, Kenya where they spend their days in luxury hotels sipping tea and putting these deals together. The role of Kenya in the piracy business is often not discussed. A lot of that pirate money has been diverted into real estate in Nairobi and Mombasa and prices of houses have been pushed up quite considerably. Kenyans like selling to Somali’s because they are paying for these houses in cash (literally) – bringing it in bags filled with $100 dollar American bills.

I don’t see who the international community will stop this piracy. The coastline is too large/long, Somalia is a mess and Kenya is a very corrupt country where money talks. They’re over one million Somali refugee’s living in Kenya now and as long as they continue to roll in with all that cash and all those guns, they’ll be welcome.

It’s a mini-version of what you had or could have with Afghanistan and Pakistan. They both fed of each other.

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By: protocol http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244850 protocol Thu, 30 Jul 2009 04:23:59 +0000 http://sepiamutiny.com?p=5882#comment-244850 <p><i>The only other option left? Really? Every single ex-fisherman in Somalia <em>had to</em> become a kidnapper and murderer? </i></p> <p>read (try to find where i said "every single ex-fisherman"). try to comprehend. also do some research about what is going on in Somalia, like right now. sheesh....sometimes ignorance is irritating...</p> The only other option left? Really? Every single ex-fisherman in Somalia had to become a kidnapper and murderer?

read (try to find where i said “every single ex-fisherman”). try to comprehend. also do some research about what is going on in Somalia, like right now. sheesh….sometimes ignorance is irritating…

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By: i am therefore i am http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244848 i am therefore i am Thu, 30 Jul 2009 04:07:00 +0000 http://sepiamutiny.com?p=5882#comment-244848 <blockquote>Measures like arming the ships or fining ship owners that pay ransoms might cause some short term pain but, they could alter the long term economics of piracy.</blockquote> <p>There has been opposition to arming ships even among ship captains and crew, because even one or a few poorly trained crew might end up being overpowered by the pirates and hence inadvertently become a source of arms to the criminals, in addition to creating a firefight where there might have earlier been a peaceful takeover. A similar argument to the one that claims that it is not entirely clear if arming oneself (with gun/spray etc.) provides superior protection in a mugging.</p> <p>One solution that will likely work is to run these commercial ships through the dangerous waters in fleets, with a UN or international protection force paid for by some sort of maritime fees. That will ensure that the cargo ships are protected by trained fighters, not just enthusiastic and potentially overmatched amateurs.</p> Measures like arming the ships or fining ship owners that pay ransoms might cause some short term pain but, they could alter the long term economics of piracy.

There has been opposition to arming ships even among ship captains and crew, because even one or a few poorly trained crew might end up being overpowered by the pirates and hence inadvertently become a source of arms to the criminals, in addition to creating a firefight where there might have earlier been a peaceful takeover. A similar argument to the one that claims that it is not entirely clear if arming oneself (with gun/spray etc.) provides superior protection in a mugging.

One solution that will likely work is to run these commercial ships through the dangerous waters in fleets, with a UN or international protection force paid for by some sort of maritime fees. That will ensure that the cargo ships are protected by trained fighters, not just enthusiastic and potentially overmatched amateurs.

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By: i am therefore i am http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244847 i am therefore i am Thu, 30 Jul 2009 03:57:55 +0000 http://sepiamutiny.com?p=5882#comment-244847 <p>Next, on Wired, in exercises in obviousness (aka the Chris Anderson memorial series), "Direction the sun rises in". The answer will surprise you.</p> <p>NAAAT.</p> Next, on Wired, in exercises in obviousness (aka the Chris Anderson memorial series), “Direction the sun rises in”. The answer will surprise you.

NAAAT.

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By: blah http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244846 blah Thu, 30 Jul 2009 03:47:42 +0000 http://sepiamutiny.com?p=5882#comment-244846 <p><i> Piracy is the only other option left </i></p> <p>The <i>only</i> other option left? Really? Every single ex-fisherman in Somalia <em>had to</em> become a kidnapper and murderer?</p> Piracy is the only other option left

The only other option left? Really? Every single ex-fisherman in Somalia had to become a kidnapper and murderer?

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By: Sameer http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244823 Sameer Thu, 30 Jul 2009 00:45:31 +0000 http://sepiamutiny.com?p=5882#comment-244823 <blockquote>The financiers are the most important since they organize and plan the big shot operations and are able to pay running cost[s]. Financiers always need to forge deals with traders, land cruiser owners, translators, business people to keep the supplies flowing during operations and manage the logistics. There is a long supply chain involved in every hijacking.</blockquote> <p>Who are these financiers? Besides the share that the pirates who captured people get, who/which organizations get the money? To what use is the ransom money put?</p> The financiers are the most important since they organize and plan the big shot operations and are able to pay running cost[s]. Financiers always need to forge deals with traders, land cruiser owners, translators, business people to keep the supplies flowing during operations and manage the logistics. There is a long supply chain involved in every hijacking.

Who are these financiers? Besides the share that the pirates who captured people get, who/which organizations get the money? To what use is the ransom money put?

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By: Sameer http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244821 Sameer Thu, 30 Jul 2009 00:37:38 +0000 http://sepiamutiny.com?p=5882#comment-244821 <blockquote>Ships with African or Indian crews are never profitable. We usually release them immediately. If the crew is Western, we've hit the jackpot. But if the ship is from Western country or with valuable cargo like oil, weapons or then its like winning a lottery jackpot.</blockquote> <p>It's not personal. It's business.</p> Ships with African or Indian crews are never profitable. We usually release them immediately. If the crew is Western, we’ve hit the jackpot. But if the ship is from Western country or with valuable cargo like oil, weapons or then its like winning a lottery jackpot.

It’s not personal. It’s business.

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By: GurMando http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244817 GurMando Wed, 29 Jul 2009 23:07:35 +0000 http://sepiamutiny.com?p=5882#comment-244817 <p>Read that multi-page spread in Wired as well - very interesting (using some 8-bit art as well).</p> <p>Have also read that Somalians are seeing more and more foreign, unmarked ships showing up and doing massive toxic dumping off their shores. It is a prime spot since there is no real government or coast guard to stop them. Many suspect they are from Italy which has had major issues with the mafia dumping and burying waste all over their own country, and that this is just the next step for them (the movie Gommora details some of this). There is a sense that some of the pirate activity is a defense against this type of activity.</p> Read that multi-page spread in Wired as well – very interesting (using some 8-bit art as well).

Have also read that Somalians are seeing more and more foreign, unmarked ships showing up and doing massive toxic dumping off their shores. It is a prime spot since there is no real government or coast guard to stop them. Many suspect they are from Italy which has had major issues with the mafia dumping and burying waste all over their own country, and that this is just the next step for them (the movie Gommora details some of this). There is a sense that some of the pirate activity is a defense against this type of activity.

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By: Archana http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244810 Archana Wed, 29 Jul 2009 22:12:45 +0000 http://sepiamutiny.com?p=5882#comment-244810 <p>Protocol, why are you blaming "European trawlers" for overfishing? Those waters are <i>full</i> of fishing ships from Taiwan, China, Korea, etc! Stop the knee-jerk reverse racism all ready! <Gag></p> Protocol, why are you blaming “European trawlers” for overfishing? Those waters are full of fishing ships from Taiwan, China, Korea, etc! Stop the knee-jerk reverse racism all ready!

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By: protocol http://sepiamutiny.com/blog/2009/07/29/the_economics_o_2/comment-page-1/#comment-244794 protocol Wed, 29 Jul 2009 19:19:55 +0000 http://sepiamutiny.com?p=5882#comment-244794 <p><i>Far from fashionable excuses that the pirates are avenging illegal offshore fishing or represent some sort of anti-neo-colonial insurgency, the truth of the matter is a pretty basic risk vs. reward calculation</i></p> <p>Vinod the two parts of your statement are not mutually exclusive. Even if you did want to avenge illegal offshore fishing, you would still have to consider the costs and payoffs to the extent you are not bent on committing suicide (you know emotion and rational calculation are not mutually exclusive, as game theorists realize nowadays).Statistically speaking, the larger the number of people who have a grievance, the larger the probability that a subset would act on it (collective action minimizes individual risk for the same reason that merchants pooled their capital in the olden days). Also you are misrepresenting the other argument a little bit. Its not that pirates are motivated solely by revenge, but that their coasts have been over fished by more advanced European trawlers--which they cannot compete with-- thus depriving them of their livelihood. Piracy therefore is the only other option left. Just making piracy more costly (either by reducing the payoffs or by making the action itself riskier than it already is) then would address only half the problem.</p> Far from fashionable excuses that the pirates are avenging illegal offshore fishing or represent some sort of anti-neo-colonial insurgency, the truth of the matter is a pretty basic risk vs. reward calculation

Vinod the two parts of your statement are not mutually exclusive. Even if you did want to avenge illegal offshore fishing, you would still have to consider the costs and payoffs to the extent you are not bent on committing suicide (you know emotion and rational calculation are not mutually exclusive, as game theorists realize nowadays).Statistically speaking, the larger the number of people who have a grievance, the larger the probability that a subset would act on it (collective action minimizes individual risk for the same reason that merchants pooled their capital in the olden days). Also you are misrepresenting the other argument a little bit. Its not that pirates are motivated solely by revenge, but that their coasts have been over fished by more advanced European trawlers–which they cannot compete with– thus depriving them of their livelihood. Piracy therefore is the only other option left. Just making piracy more costly (either by reducing the payoffs or by making the action itself riskier than it already is) then would address only half the problem.

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