The Pirate Organization: Lessons From the Fringes of Capitalism

THE PIRATE ORGANIZATION

Lessons from the Fringes of Capitalism

RODOLPHE DURAND

JEAN-PHILIPPE VERGNE

HARVARD BUSINESS REVIEW PRESS

Boston, Massachusetts

Copyright 2013 Harvard Business School Publishing Corporation

All rights reserved

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

No part of this publication may be reproduced, stored in, or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to
[email protected]
, or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.

The web addresses referenced in this book were live and correct at the time of the book’s publication but may be subject to change.

First published in French as
L’Organisation Pirate: Essai sur l’évolution du capitalisme

Mondes Marchands Collections, directed by Benoît Heilbrunn

© Éditions LE BORD DE L’EAU 2010

www.editionsbdl.com

33310 Lormont, France

ISBN: 978-2-35687-084-1

Library of Congress Cataloging-in-Publication Data

Durand, Rodolphe.

[Organisation pirate. English]

The pirate organization : lessons from the fringes of capitalism /
Rodolphe Durand and Jean-Philippe Vergne.

      p. cm.

“First published in French as L’Organisation Pirate: Essai sur l’évolution du capitalisme.”

ISBN 978-1-4221-8318-2 (alk. paper)

1. Pirates. 2. Computer hackers. 3. Hacktivism. 4. Capitalism—History—21st century. I. Vergne, Jean-Philippe. II. Title.

G535.D8813 2012

364.16’4—dc23

                                                                    2012025303

To our readers

CONTENTS

Preface

Acknowledgments

Notes

Bibliography

About the Authors

PREFACE

The Pirate Organization
is not just a book but a broad interdisciplinary project aimed at connecting the social sciences, contemporary artistic creation, and civil society. This book was first published in French in 2010, accompanied by the release of an original musical composition by the experimental rock band Chevreuil. The production of the music was funded from the authors’ royalties, and the composition was published under a Creative Commons license to allow for a broad diffusion. Tracks for each instrument were and still are available for download separately to facilitate the remixing—or hacking—of the song.

This extended and updated version of the book, published in English for the first time, is accompanied by a short animation movie directed by Daniel Wyatt and titled
What Is the Pirate Organization?
It is also published under a Creative Commons license, and the movie’s soundtrack uses fragments from Chevreuil’s original music as well as excerpts from remixes of the song sent to us by our readers.

This new version of
The Pirate Organization
incorporates many of the suggestions we were lucky enough to receive from colleagues, friends, and readers. We are always happy to discuss and receive feedback to refine or expand our ideas, so e-mails and tweets (
@PirateOrg
) are always welcome. Links to the music and movie can be found at
http://twitter.com/PirateOrg
. Enjoy.

ACKNOWLEDGMENTS

Chevreuil: Tony C. and Julien F.

Eve Chiapello

Annie L. Cot

Thomas Gayno

Benoit Heilbrunn

Thomas Heller

Gregory Jost

Xavier Labatie

PointB Worklodge: Karin and Mark and Margarita (
pointb.org
)

Clara Seidl

Social Sciences and Humanities Research Council of Canada

Society and Organizations
(
www.societyandorganizations.org
)

Tim Sullivan and the whole team at Harvard Business Review Press

Floor van den Born

Jean-Charles Vergne

Jean-Luc Veyssy

Jérôme Vidal

Daniel Wyatt

The authors also want to thank their colleagues at HEC Paris, New York University (Stern), and Western University (Ivey) for their friendly support. Many other people made this book possible; they know who they are.

Chapter One

INTRODUCTION

It would be a tremendous story if the author of the mythical text about the rise of capitalism was also the author of a history of pirates. However, this is not simple coincidence
.

—Toshiya Ueno, “Piracy Now and Then”
¹

Pirates appear at pivotal periods in history. When capitalism began to spread along the trading routes toward the Indies. When radio opened an era of mass communication. When the Internet became part of the global economy. When the biotech revolution began bubbling to the surface. And it’s no coincidence that these four Golden Ages of piracy correspond to major turning points in the history of capitalism. In fact, we argue, piracy could very well be one of the drivers of capitalism’s growth and evolution. Piracy is not random. It is predictable. And it cannot be separated from capitalism.

Many think of piracy as a mere blot on the vast backdrop of history, a subject that deserves only a passing mention in serious studies. In sea tales pirates appear as seafaring heroes, but in our history books they are characters with minor roles.
²
Yet pirates are etched in the collective memory of different places and eras: buccaneers and radio DJs on the sea, cyberpirates on the web and biopirates in the lab, tinkering with DNA, the heart of living organisms.

We use the word
pirate
to describe such a wide range of actors. But there exists a much deeper relationship between these various forms of piracy. We believe that a shared series of traits, roles, and tactics brings together pirates of all stripes into an organized form we call the
pirate organization
.

Our research has revealed a number of essential traits shared by all pirates. First, pirates are not solitary heroes who challenge authority out of fury or despair. Rather, they organize themselves into groups, which in some cases grow to several thousand strong. These groups are built to reach specific goals, forge alliances, negotiate with enemies, and engage in conflict—thus our focus on the pirate organization.

Like piracy, the scope and nature of capitalism are hard to define. Capitalism is the bedrock of our society, yet it seems to contain the seeds of its own destruction. In political discussions, capitalism proves an easy target because it provides a simple cause for some of our most complex problems. What lurks behind global warming? Capitalism. What triggered the stock market crisis? Capitalism. China’s meteoric growth? The price of paintings at the last Sotheby’s auction? The decline of religion and the bland taste of supermarket tomatoes?

It is easy to find loud activists who either hate or love capitalism. Capitalism as a theory has seeped into our public consciousness, but it has become increasingly difficult to agree on the breadth of the term itself and on its dynamics. It is therefore neither by accident nor out of sheer provocation that we wish to explore both piracy
and
capitalism. We believe that capitalism is in part based on the give-and-take relationship between the pirate organization and the sovereign state, which came about at precisely the same period when capitalism was born. By sketching a theory of the pirate organization, we hope this work serves also as a modest essay on the evolution of capitalism, viewed from its fringes.

Many talented historians have developed unquestionable expertise in maritime piracy. In the near future, a new generation of academics will write the history of cyberpiracy and biopiracy. But given the specialization that is required to study such complex topics, it is unlikely that historians will one day develop a cross-disciplined analysis of all types of piracy. Besides, this is not their role. Economists tend to break down capitalism into a group of variables and indicators that must be arranged and adjusted in order for society to reach its full harmonious potential. Needless to say, piracy is not part of the equation—at best it is seen as a discordant ring of negative externalities that must be quelled. And sociologists tend to impose artificial limits on themselves by looking at society through the prism of social class and yet fail to capture the role of the pirate organizations in both market and nonmarket situations.

Societal and economic phenomena cannot be reduced to disciplinary quirks. Therefore, we are taking on this venture as students of organizations in an effort to sway the discussion from individuals and markets. Individuals, despite their intimate desires, cannot reform the structure of economic and social exchanges. Without organizations and coordinated resources, they are powerless. And we have grown tired of newspaper headlines such as “What Do Markets Want from the Fed?” Markets do not want anything. Why? Because markets, as abstract aggregates, are not purposeful, whereas bank X or hedge fund Y is. And those happen to be organizations. And unlike individuals, they have enough power to influence the course of history. Our primary level of analysis, therefore, will be organizations (especially pirate organizations). We have high hopes that this interdisciplinary, organization-level approach will pique interest and spark a debate on contemporary phenomena, including those that go beyond piracy.

In the remainder of the book, the reader will find detailed accounts of how pirates operate to shape the contours of capitalism across history. This book can be seen as a journey across time and space. It can be read as a short history of piracy or alternatively as a short history of capitalism. Each chapter finds its background in a different place at a particular time in history. The journey will begin in
chapter 2
in ancient Rome, where sea banditry came to be known as piracy for the first time. Yet we will later argue in
chapter 3
that the true meaning of piracy only unfolds in the aftermath of Christopher Columbus’s discovery of the Americas, as the notions of territory, sovereign state, and capitalism acquire their modern definition. That’s why in
chapter 4
we will spend some time with the sea pirates of the sixteenth and seventeenth centuries, who for the first time in history explicitly contest the legal tools by which sovereign states impose norms upon conquered territories—in this case, the high seas. Importantly, we will distinguish between pirates and corsairs and explain why this distinction is useful to understand the history of capitalism from an organizational perspective.