Piracy and Property Rights on the Somali Coast

Pete Leeson, whose recent body of work focuses on pirates and piracy, argues that Somali state building isn’t the solution to piracy on the Indian Ocean. Instead, he suggests that the international community should try a game-plan entirely different than the commonplace “law-and-order” or “overwhelming force” approaches. Leeson suggests (and I tend to agree) that a lack of clearly defined property rights are a significant contributing factor to “about 90% of the world’s economic problems,” and that the piracy nuisance is “no exception” to that rule; the tragedy of the commons could be averted if people were allowed to own (and therefore had financial/economic incentive to preserve) these waters.  Unfortunately,

Rather than trying its hand at Somali state building,” Leeson argues, “the international community should try auctioning off Somali’s coastal waters.

Oh, Christ.  See, this is the sort of argument that gives free-market folks a bad name: The Somali state collapsed, and is now unable to protect or otherwise guard the interests of the once thriving Somali fishing industry. Therefore the international community should step in and sell the “rights” to the Somali coastline.

Sell it to whom?

Do the Somali fishermen have the financial wherewithal to outbid the Korean and Japanese commercial fishing industries at auction, for these “rights” — which they had at one point but the world simply stopped recognizing? Should they have to “purchase” these “rights” — which they had at one point, and the world simply stopped recognizing? This is pretty much a prescription for oceanic sharecropping.

Coase didn’t argue that where property rights are absent or poorly defined, they should just be invented willy-nilly.

On the contrary, The Problem of Social Cost argued essentially that there are indeed consequences to the delineation of property rights, and as such, it very much matters how they are established, defined and enforced.  The problem is not a lack of property rights, per se, but rather that the international community at large, simply ignored these rights (European nations, for example, have been dumping nuclear waste along the Somali coastline) as the Somali state collapsed.  Therefore, the solution is not to sell these usurped “rights” to the highest bidder, but to simply begin recognizing them, once again.