Pirate Economics

In the movies, pirates are all about the gold. We see it all the time, chests full of it, with some necklaces thrown in on top, and maybe a pagan statue or two. Why ships were carrying all this money is rarely, if ever explained. And you won’t get much help from history, because historically this isn't quite the way a pirate economy worked.

In fact, ships of the time were cargo vessels, carrying either raw materials headed for Europe, or European manufactured goods bound for New World markets. Pirates weren't holding out for money. They would take anything of value.

In many ways, a pirate raid on a merchant ship was much like a van full of thieves driving up to rob a convenience store. Unlike modern-day robbers, the pirates don’t have to worry about an alarm going off or the police being called. This is what they do:

First they clean out the cash register, which equates to the ship’s payroll and/or operating fund. Next they may or may not rob the employees and customers, who represent the crew and passengers. Many pirates were dedicated to robbing institutions, not people, and would let individuals keep their own money.

While this is going on, other robbers are spreading out. Some look for things they can re-sell. On the trading ship, this is the cargo. Pirate ships being smaller than the ships they robbed, they would take the most valuable things- watches, silk, china wear, silver plates, pewter kitchen tools, clocks, furniture. Or, alternately, logwood (a fragrant wood used to produce incense) sugar, rum. They’ll fence these items later.

Then for personal use, they clean out the ship’s liquor supply, and take anything they want in the way of food, just like robbers cleaning out the beer cooler, the deli counter, the candy case. And finally, in either case, they grab anything else that looks good.

What did the pirates do with silk and watches?  They fenced them.  The pirates were perfectly willing to sell for pennies on the dollar, and various merchants were willing to buy cheap if they could, to increase their own profit. If questions were asked about the origin of the goods, the official explanation was that “We found a ship in distress, needing to lighten her load to stay afloat, to we took this to save them from throwing it into the sea.”

In modern terminology, it fell off the back of a truck.