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The Return of the Privateers

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Alfred Thayer Mahan is credited as saying: “War is business, to which actual fighting is incidental.”

These words speak to the counter-piracy mission more than all others. Mahan’s modern counterparts agree: Dr. Martin Murphy, a piracy expert, prolific author and fellow at the Atlantic Council, refers to piracy as “trade’s dark double.” By mixing violence with trade, piracy transforms maritime security into a commodity. Now, a burgeoning privateer fleet is offering a competing product: a navy for hire.

A recent announcement by the Convoy Escort Programme, a private navy funded by insurers Jardine Lloyd Thompson and underwriter Ascot, declares that they will commence operating in the Gulf of Aden by the end of this year. While private security companies are nothing new, CEP represents a watershed moment in the struggle to align the benefits of trade with the responsibility for maintaining that trade. So long as pirates ply the seas, society can only choose the method it pays the costs they incur: either directly through ransoms paid to pirates, or indirectly through publicly financed navies or privateers. Standing navies only became common in the past few hundred years. Before that, societies relied on hired ships to secure their trade. CEP also represents a return to this historically dominant means of paying for security.

U.S. Navy Sailors from USS Pinckney (DDG 91) approaches a suspected pirate vessel in 2011 U.S. Navy photo

U.S. Navy Sailors from USS Pinckney (DDG 91) approaches a suspected pirate vessel in 2011 U.S. Navy photo

To date, the world has responded to Somali piracy primarily through a combination of ransoms and naval patrols. According to a report by the One Earth Future Foundation, $160 million in ransoms were paid in 2011 and they estimate the annual cost of the international naval presence in the Gulf of Aden at $1.27 billion. Adding in the cost of increased insurance premiums or the more circuitous and expensive routes ships use to avoid pirate threats, the Foundation estimates the total cost of Somali piracy at $7 billion – enough to give a new iPhone to every person in the state of Pennsylvania. Whatever the figure, maritime security in the Gulf of Aden has value, and at 70 million dollars, CEP’s navy represents a bargain compared to even one ship from the U.S. Navy.

Consumer goods like the iPhone also reveal a problem that privateers may solve. Many products are produced in one place, transported by a ship flagged in one country, owned by a company based in another country, and sold in yet another. That transaction benefits groups in several places. Taking the iPhone as an example, Chinese workers receive a salary for its production, a shipping company with a headquarters in Europe gets a cut for its shipment, a flag state gets registration fees from that ship, and Americans get the benefit of cheaply produced consumer goods. Were pirates to threaten these shipments, who should pay? Who actually does? And how do countries force others to commit their “fair share” of funding to a counter-piracy mission?

Companies like CEP implicitly propose to pass the cost of protecting cheap maritime transport to those who benefit from that transport: consumers. The cost of fueling ships and paying crews already appear in the cost of any product shipped overseas. Using a private navy simply rolls another necessary requirement for transporting goods by sea – security – into that price. This model’s primary advantage is that it answers a vexing question: who exactly benefits from cheap maritime transport in this globalize economy? Put another way, a company like CEP reflects the reality of the modern world: economies have transcended states in many ways while military forces have not. Privateers represent an economically efficient means of matching the costs of maritime security to those who benefit from that security.

But many argue that privateers create as many problems as they solve. To whom are privateers accountable? What rules of engagement will they use? Are those rules morally palatable? What happens if the company acts contrary to a country’s interest? Others emphasize the fact that any sea-based solution neglects the havens, markets, and capital that pirates use. They argue for a permanent solution, which would require a significant commitment on Somali soil. Finally, CEPs arrival certainly does not guarantee the withdrawal of state navies from the Gulf of Aden and may represent a duplication of effort.

Navies may resent the return of privateers to the high seas, but the fact remains that in a global economy, state-based navies inefficiently distribute the costs of securing global trade. If the market supports CEP, it will carry huge implications for those who benefit from maritime trade but have not contributed resources to protect the means of their prosperity.

Kurt Albaugh is an English instructor at the U.S. Naval Academy and a surface warfare officer.