History often reveals itself at the margins. Hegemony becomes tangible at its peripheries, claims to legitimacy are most emphatically articulated where challenged, and rules are best observed in their breach. For this reason, historians have long been drawn to the study of border zones where sovereignty was contested or subverted rather than tacitly accepted. This work by historians is complemented by, although rarely integrated with, research in other disciplines—most notably in anthropology, sociology, economics, and political science.Footnote ¹ Social scientists have been particularly interested in the question of economic organization, of how individuals and groups structure commercial exchanges in conditions of insecure property rights and unreliable recourse to official contract enforcement. Such research is frequently motivated by public policy concerns, especially the complex issue of institution-building in transition economies and so-called crisis states.Footnote ² While generally more circumspect about the prescriptive powers of their discipline, historians will nonetheless recognize that the defining characteristics of a contemporary crisis state—limited authority of a central government, weak institutions, ineffectual bureaucracies, widespread corruption—also apply to most, if not all pre-modern polities. Therefore, the study of actors on the fringes of political and legal regimes holds the potential to produce important theoretical insights into the construction of alternative, private-order institutions that are of significance beyond a particular period, region, or methodology.

Four recent works offer case studies of business enterprises on the fringes of the state. In The Invisible Hook: The Hidden Economics of Pirates, the economist Peter Leeson sets out to describe the piratical equivalent to Adam Smith's “invisible hand,” that is, the economic forces that shaped and ordered the organization of some of history's most notorious outlaws.Footnote ³ Leeson focuses on “pure pirates” (p. 8), by which he means sea rovers who acted entirely independent of state authority. These he identifies in pirates operating in the Caribbean during the final stages of the golden age of piracy between 1716 and 1726. This period and its infamous characters such as Edward Teach (“Blackbeard”), Bartholomew Roberts, or John Rackam (“Calico Jack”) are not only the staples of popular pirate lore but have also been subject to considerable scholarly scrutiny. The prototypical study of pirates, the General History of the … Pyrates, by Charles Johnson (generally regarded as a pseudonym of Daniel Defoe), from 1724, depicts them as alternative commonwealths by describing their “Policies, Discipline and Government.”Footnote ⁴ More recent works have drawn attention to the social context of these marauders by arguing that their activities were “profoundly shaped and textured by the experiences of work, wages, culture, and authority accumulated in the normal, rugged course of maritime life and labor in the early eighteenth century.”Footnote ⁵ Leeson, by contrast, has little time for any “idyllic notions” (11) of the pirate as social bandit: what drove sailors to become pirates, he states, was money, and therefore their exploits are best understood as business enterprises. Starting and ending on the premise that the “rational choice framework … is truly a universal way of understanding human behavior” (194), he reinterprets the historical record through the lens of economic theory. “I'm convinced economics brings us much closer to the ‘correct answers’ than the history does alone, or than the history would if filtered through some non-economic lens” (xiv).

The argument develops from this conviction. It unfolds over six main chapters that examine different aspects of the organization and operation of pirate crews in the early-eighteenth-century Caribbean: their democratic institutions; the codes through which they ordered their cohabitation and cooperation; the use of the Jolly Roger as their symbol; their deliberate cultivation of a violent reputation; conscription; and finally the question of racial equality. The first two produce the most interesting answers. Pirate crews faced the classic paradox of power in that they needed a leader with enough authority to make critical decisions while at the same time wanting to preclude its abuse. Their solutions took the form of democratic institutions, such as the election of captains by the entire crew (with provisions for their impeachment) and a separation of powers between the offices of captain and quartermaster. Leeson argues that different economic rationales account for the distinct organizational forms aboard pirate and merchant vessels. Whereas pirates stood to gain or lose directly from their enterprises (as any profits were shared more or less equitably), contemporary merchant-shipping had at its core a principal-agent problem between salaried sailors and land-based ship owners that could only be mediated by autocratic captains. Private-order institutions like elected officers with clearly defined powers rendered life aboard pirate ships remarkably, and perhaps counter-intuitively, orderly and honest. In the absence of external political or legal authority, pirates created their own mechanisms to “provide and enforce social rules and therefore ultimately create social order” (48). Without such mechanisms, which are identified in written pirate codes, internal conflicts “would cause the pirate ship—the pirate firm, if you will—to collapse” (52). The communitarian and egalitarian aspects of pirate organization that earlier studies have highlighted are therefore seen as expressive of “eminently reasonable economic considerations” rather than any “quasi-socialist ideology” (70).

The Invisible Hook raises some reservations. Its highly selective focus on a small group of pirates flourishing for little more than a decade is hardly representative of piracy as a persistent historical (or, for that matter, economic) phenomenon. Yet even this narrow focus on ostensibly “pure pirates” understates their landward linkages. Like most pirates in history, they were eager to cultivate at least a veneer of legality and political allegiance. Their often-intricate involvement in the political and legal regimes of competing European empires is an essential context that is largely absent here.Footnote ⁶ Pirates also maintained diverse commercial connections to territorial states and their economies. Recent thinking about the historical role of pirates has increasingly challenged the view that they merely “thrived parasitically off others' production” (4). For example, in their study of Mediterranean history, Peregrine Horden and Nicholas Purcell note that “pirates actually flourish only in profound symbiosis” with the world of trade.Footnote ⁷ And even if pirate ships formed “miniature ‘floating societies’” (203), these by no means constituted the full extent of the social experiences and ties of individual pirate-sailors. The absence of such historical contexts beyond the prow of the pirate ship obfuscates the concrete investments of these pirates in the political, economic, and social worlds of the early eighteenth century.

Discussing pirates' need for privately created regulations, Leeson points out that they “couldn't appeal to government … any more than crack dealers can appeal to police to protect them from their distributors” (42). In Gang Leader for a Day: A Rogue Sociologist Takes to the Streets, Sudhir Venkatesh reports on his immersive, decade-long fieldwork among crack dealers from which he emerged with intriguing insights into their strategies to generate their own private order. While results from this fieldwork have previously been reported in two monographs as well as a number of articles, Gang Leader offers a more intimate account of the members of this criminal group and the author's involvement with them.Footnote ⁸ The book is set in the Robert Taylor Homes, an immense housing project (since demolished) on Chicago's South Side, during the late 1980s and early 1990s. The project was notorious for its poverty—a staggering 90 percent of its estimated thirty thousand residents reported welfare as their sole source of support—as well as for its crime rates. Accordingly, Venkatesh regards Robert Taylor as “the epitome of an ‘underclass’ urban neighborhood,” where thousands of mostly African-American families were “living hard and virtually separate lives from the mainstream” (38). This separation is above all observable in its residents' de facto exclusion from public goods such as accessible emergency health care (they repeatedly reported that ambulances would not respond to their calls), social services, and even law enforcement (with police officers deeming the project too dangerous to regularly patrol). Although located within one of the principal cities of one of the world's most powerful states, in any practical sense Robert Taylor was very much on the fringes of public provisions and order.

In this virtual absence of the state emerged a veritable underground economy, the most lucrative sectors of which (extortion, gambling, prostitution, but above all the selling of crack-cocaine) were controlled by highly organized gangs. Venkatesh's study focuses on one such gang, the Black Kings, whose leader, the charismatic J. T., served as his principal interlocutor. J. T.'s preferred term for his gang was “organization” (41), and Venkatesh came to understand that both its hierarchy with its foot soldiers, lieutenants, captains, and citywide “board of directors” (118) as well as its business model “mirrored the structure of just about any other business in America” (35).Footnote ⁹ When at one point the author is invited to become gang leader for a day (although no real control is ever relinquished to him), he experiences at first hand the “hundreds of obligations and judgments” necessary to run “a successful underground economy: enforcing contracts, motivating … members to risk their lives for low wages, dealing with capricious bosses” (143). The bosses constantly exhorted local leaders like J. T. to “minimize the friction of his operation” (118), that is to prevent any behavior by gang members that would attract police attention and thereby cause a temporary drop in the turnover of drugs. For this same reason, the gang not only policed its own members but also the community at large.

Gang Leader reveals the surprising extent to which this self-interested approach, which Leeson's pirates would recognize only too well, was in alignment with the wider interests of the community. The periodic violence of gang warfare was a menace to all residents, and Venkatesh was amazed to observe that in their efforts to establish a truce between rival criminal gangs, “a religious leader and a police officer were not only watching this mediation but were actually facilitating it” (109). The attitude that “pragmatism was more important than moralism” (109) seems to have been shared by all parties and ultimately formed the basis not only for the gang's economic standing in the projects but also its pursuit of political aims. The gang, Venkatesh writes, “acted as the de facto administration of Robert Taylor: J. T. may have been a lawbreaker, but he was a lawmaker as well. He acted as if his organization truly did rule the neighborhood, and sometimes the takeover was complete” (59). The Black Kings policed the buildings more aggressively than the police, deterred intruders and punished transgressors, sponsored community events, and closely cooperated with residents' organizations. In a power vacuum partially created by the gang's own criminal activities, it emerged not only with an almost uncontested monopoly on violence but also a claim to legitimacy. In that sense, within the microcosm of Robert Taylor in the early 1990s, J. T.'s gang was the primary contender to satisfying Max Weber's definition of the state as the successful claimant to a monopoly on legitimate violence.Footnote ¹⁰

Legitimacy, from the gangsters' perspective, lowered protection costs and served the underlying commercial mission: “If law-abiding citizens viewed the gang as a politically productive enterprise, they might be less likely to complain about its drug sales” (83, my emphasis). Yet, as in the case of the Caribbean pirates, economic self-interest is arguably not the only explanation for their pursuit of a “legit” image. The Black Kings were themselves products of Robert Taylor, with most gang members having been born and raised in the projects. In the case of J. T., his mother and extended family lived in the very building on which his drug-selling business was centered. His repeated efforts to use the money and power generated by his criminal enterprise to acquire legitimacy in the eyes of residents and especially community leaders—for example by supporting drives to register voters or by donating money to charities, even those that called for gang members to turn their lives around—seem to reach beyond economic self-interest. In fact, as the economic analysis of gang members' incomes shows, it is difficult to reconcile their acceptance of low monetary rewards (which for most street-level gangsters were little more than minimum-wage) and high risk of imprisonment, injury, or death with the rational choice model without taking into account social considerations.Footnote ¹¹ “More than anything,” Venkatesh came to conclude about his main subject, “J. T. was desperate to be recognized as something other than just a criminal” (83).

The profitability of selling crack-cocaine is, of course, largely a function of its prohibition, which places its distribution in the hands of illicit enterprises and allows its importers to accrue enormous profits. As Alan Karras' ambitious Smuggling: Contraband and Corruption in World History argues, today's crack merchants are akin to nineteenth-century opium addicts or the consumers of alcohol in the 1920s United States in that they evaded prohibitive laws in order to assert “some control over their own economic lives” (75). Karras proposes that smuggling is best understood as “the ultimate form of free trade” (64). From a historical perspective, smugglers are no less contradictory than law-making pirates or politically productive gangsters: smuggling was at once a challenge to and a conduit for the state. By definition, smuggling always takes place in the context of the state by transgressing the boundaries of at least one legal regime. Contraband trade is a highly pervasive historical phenomenon, with virtually every product subject to revenue laws having been smuggled at one time or another. In doing so, smugglers enfeebled the state by depriving it of some of its income. At the same time, smuggling was also a way to avoid a fuller confrontation with the state, for instance on the subject of prohibition. In this view, eradicating smuggling “might actually harm the state—because it would effectively bottle up the economic pressures that contraband actions let flow” (67).

This conceptual entanglement of smuggling and state power also extends to their agents. As the author repeatedly points out, “The same people who regulated smuggling often benefited from it” (1), which further emphasizes that contraband trade must be studied in its relation to the state rather than as external to it. One way in which officials charged with enforcing tariffs profited from contraband trade was simply by accepting bribes for their covert acquiescence. But Karras suggests that there was a more decisive motivation to the official indulgence of smuggling: “One of the principal reasons that contraband commerce and its ancillary activities are tolerated, if not covertly encouraged, has much to do with ensuring the government's legitimacy in the eyes of its population” (109). This claim is rendered most lucid in the context of the eighteenth-century colonial world that is the primary focus of Smuggling. Colonial officials in places like Madras, Cape Town, or Martinique not only had to govern but also do business with their subjects; this task could be rendered all the more difficult by restricting their often far-reaching illegal or extralegal commercial activities. What is more, not only economically important and politically influential merchants could be stirred to rebellion by a stringent enforcement of imperial tariffs and monopoly claims, but also ordinary subjects whose consumption was facilitated by the flow of cheaper contraband goods. As a result, such officials faced a choice not dissimilar to that of police officers and community leaders in the Chicago projects, and they reached a similar conclusion: cooperating with lawbreakers was often less costly and disruptive than challenging them.

Even at the level of the imperial polity Karras identifies a cognizance that commercial restrictions would never be adequately enforced. Their promulgation was often as much based in interstate relations (and in particular the fallacy of mercantilism) as it was in the governance of subject populations and the extraction of resources to the metropole. “This effectively ensured that there was a certain kind of harmonization between various legal regimes, if not of specific laws then of a more generalized recognition of the utility of legislation that regulated goods crossing from one side of a national border to another” (111). While the imposition of these legal norms on colonial subjects across the globe profoundly affected local patterns of trade, their transgression is also testament to the interactive engagement with imperial authority on the fringes.Footnote ¹² Because the regulation of trade was so central to the expansive and competitive European legal regimes that were as much concerned with establishing political legitimacy as they were with ensuring commercial hegemony, smuggling emerges as “an essential part of state building” (2) in the early modern world.

Smuggling, then, was not only an outcome of international efforts to legislate a nascent global commercial order but also an active constituent in these efforts. A closely correlated dynamic is described in Adrian Johns' magisterial Piracy: The Intellectual Property Wars from Gutenberg to Gates. Intellectual piracy, that is the violation of intellectual property claims such as copyrights, patents, or trademarks, is neither an a priori category nor a mere corollary of the development of legal doctrines. Rather, as Johns argues, intellectual piracy “has its own historical continuities and discontinuities, and its own historical consequences” (6), which are essential to understanding its significance as the “definitive transgression of the information age” (5). As in the case of Caribbean pirates, Chicago gangsters, or transnational smugglers, it too recommends a closer examination of the relationship between the state and the market, precepts and practices, public order and private agents.

Piracy traces accusations and concepts of intellectual pilfering from seventeenth-century London to contemporary concerns about biomedical patents, online file-sharing, and Google's Library Project. This history, Johns persuasively argues, is marked by two major transformations. The first saw personal claims on intellectual property and private systems for their enforcement come under challenge from Enlightenment ideals and laissez-faire economics. For reasons both moral and monetary, knowledge came to be increasingly recognized as too important to be circumscribed by private and local interests. This conviction found its fullest expression in the French Revolution with its outright abolition of literary property. In a second transformation during the post-revolutionary decades, nations reclaimed their prerogatives to regulate intellectual property rights, with their subsequent international reconciliation spanning across the nineteenth century. “What was happening, in effect, was a prolonged process of transformation in the relation between literary and manufacturing privileges and political space” (503), a process that continues into the present time as national legislatures grapple with the explosive growth of global commerce and the implications of the extraterritorial space of the Internet.Footnote ¹³

It is instructive to review this sweeping narrative from its point of departure. Johns locates the origins of intellectual piracy in seventeenth-century London. At the same time that marauders like Henry Morgan and William Kidd stalked the high seas, the term piracy came to be applied as well to the misappropriation of intellectual property. The purloining of texts that accompanied the rapid expansion of printing posed the challenge of how to accommodate ready reproduction with exclusive claims to authorship and authority. By the mid-seventeenth century, London's printers and booksellers began to affirm their rights to individual publications by entering their details into a register at Stationers' Hall, the traditional center of the city's book trade.Footnote ¹⁴ Allegations of piracy were adjudicated by the Stationers' court, whose members would investigate the charges and, if found substantial, impose a fine on the offender. This process was kept entirely confidential—in fact, the penalty for disclosing its workings was far more severe than that for the original offence. Johns suggests that this secrecy was motivated by a desire to “preserve the public character of an intrinsically harmonious craft” (26), but arguably it was also designed to forestall external interference that visibly contentious decisions might have prompted.Footnote ¹⁵

The Stationers' register emerged as a private endeavor that was “independent and in defiance of the state itself” (18), in as far as it stood as a challenge to the monarchy's traditional claim to exclusive jurisdiction over both property and culture. This claim had been institutionalized in royal patents, effective monopolies not only on specific books but entire types of texts (such as schoolbooks, for example), as well as episcopal licensing. In the aftermath of the English civil war (1641–1652), this system fell into abeyance, and the Stationers' register stood as the pivotal means of regulating what was becoming “a perpetual sphere of printed argument, in which the rules of knowledge were no longer those of the university, court, or palace” (30). During the reign of Charles II, reactionary factions sought to restore the patent system and with it royal jurisdiction over intellectual property. A vigorous attack on the Stationers' autonomy was launched by Richard Atkyns, “an impoverished old Cavalier” (31) who was heir to an Elizabethan patent on law books. Resorting to no small measure of self-interested casuistry, Atkyns argued that the regulation of the publishing trade was of too great a political significance to be entrusted to a private company, which he saw as acting in the manner of a “Petit-State” (quoted on p. 33). While the self-regulation of other trades might deprive the king of his right to impose certain duties, the Stationers alone could “not onely bereave the King of his Good-Name, but of the very Hearts of His People” (quoted on p. 35).Footnote ¹⁶ What was at stake, then, was the public sphere, and in particular the question of whether one of its primary manifestations—the printed word—should be subjected to absolutist or private-order regulation.

To Atkyns, the choice England faced was that between the patent and the pirate. As in the case of maritime violence, intellectual piracy was seen as a direct challenge to the state not only for its perceived usurpation of its powers but also for its creation of alternative, state-like institutions. Intriguingly, Atkyns concluded his attack by invoking the ancient anecdote of the pirate and the emperor, first recorded by Cicero and later elaborated by Augustine of Hippo. In City of God, Augustine relates an apocryphal encounter between Alexander the Great and a captured pirate. It describes Alexander asking the pirate by what right he dared to molest the seas. In what Augustine deemed “an elegant and true rejoinder,” the pirate replied that “because I do it with a petty ship, I am called a robber; you doing it with a great fleet are called an emperor.”Footnote ¹⁷ Atkyns used this exchange to underline his point that unlike other guilds, the Stationers were not content to act like pirates but in danger of developing political designs.

Amidst his polemic, Atkyns conveniently lost sight of the real implication of this parable, for Augustine asks not only “what are gangs of robbers but little kingdoms” but also “what are kingdoms but great robber bands?”Footnote ¹⁸ Pirates, gangsters, and other outlaw organizations not only confront us with their histories of “Petit-State”-building but also with the question of what distinguishes them from legitimate sovereignty—is this difference, as Augustine's pirate suggests, truly a question of mere scale? “Banditry, piracy, gangland rivalry, policing, and war making all belong to the same continuum,” as Charles Tilly once wrote, a continuum that has the modern nation-state as its most pervasive, but hardly only possible, terminus.Footnote ¹⁹ Rather than regard illicit organizations as the antithesis of the state, these four books recommend further comparative study of their institutional strategies and historical contingencies. Instead of clear blue waters separating them, outlaw enterprises and public commonwealths may be found to navigate the same currents.