As I discuss at length in The Invisible Hook, those pop-culture phenoms, the pirates of old, had a well-developed system of private law and order. Early 18th-century pirates created rules that prohibited violence and theft; regulated gambling, smoking, and drinking; and established procedures for selecting officers of these laws' enforcement. The result was surprisingly orderly and cooperative early 18th-century pirate societies.

However, until recently, these sea dogs' Somali successors showed little discernable social organization. In large part this is because they didn't form societies. There weren't enough Somali pirates, nor did they spend enough time together plying their illicit trade, to constitute a group (or groups) requiring law and order.

But times for the Somali pirates, they are a changing. Over the last year or so Somali piracy has flourished into a full-blown economic activity in some of Somalia's coastal communities. Somalia's modern sea bandits pirate full time; and while they spend little time together on their ships, they spend significant time together in their pirate communities on land. A new, albeit different, pirate society is being born.

Pirates thus face a governance problem they haven't faced since, well, the 18th century. And they're rising to the occasion. Somali sea dogs have a code of conduct that includes rules for dealing with inter-pirate theft, conflict, and theft from their victims.

According to one Somali pirate, for example, "If any one of us shoots and kills another, he will automatically be executed and his body thrown to the sharks." Further, this pirate added, "If a pirate injures another, he is immediately discharged and the network is instructed to isolate him. If one aims a gun at another, he loses five percent of his share of the ransom."

According to another Somali sea dog, "Anybody who is caught engaging in robbery on the ship [the pirates overtake] will be punished and banished for weeks. Anyone shooting a hostage will immediately be shot." "I was once caught taking a wallet from a hostage. I had to give it back and then 25,000 dollars were removed from my share of the ransom."

The Somali pirates' "laws" are enforced by a "mobile tribunal," a kind of traveling pirate court, that oversees relations between the significant number of Somali "pirate cells"— separate but coordinated bands of sea scoundrels that dot Somalia's coastline.

There remain important differences between 18th century- and modern Somali-pirate governance. These differences reflect the different, specific governance needs of each kind of pirate's community. For example, it was important for early 18th-century pirates to regulate smoking because of the significant negative externality one pirate's unrestricted tobacco use could impose on his partners in crime. Early 18th-century pirate ships were made of wood and cloth and carried large quantities of gunpowder. A careless pirate smoker was thus liable to destroy the ship or, worse yet, blow the crew to smithereens.

Modern pirating vessels, in contrast, are metal, and aren't carrying gunpowder. One pirate's smoking behavior poses a much smaller risk to the rest of the crew. And on land, where modern pirates spend the majority of their time together, smoking presents no such risk to others. Somali pirates, then, don't need to create rules governing tobacco use in their society; so they don't.

Similarly, given their unique governance needs, Somali pirates have private institutions of law and order that 18th-century pirates didn't have, such as their traveling court. Since Somali pirate organization involves the cooperation of numerous and geographically separated groups, Somali pirates require a mobile judiciary that can oversee conflicts and enforces pirate law "industry wide."

In contrast, early 18th-century pirate societies were floating ones--those aboard their ships. They operated as independent units rather than as part of a coordinated whole together with all of the other pirates in the Caribbean. Eighteenth-century pirates therefore had no need for a traveling court. Each crew resolved its disputes on board via an officer called the quartermaster whose judicial authority extended only over the members of his crew.

Private pirate law and order is alive and well in allegedly "lawless" Somalia, and highlights two important lessons. First, even outlaws require social order and private governance institutions emerge to create this order when government does not. Second, when they emerge endogenously, as in do pirate societies, these governance institutions develop to reflect the particular needs of the individuals they govern. The resulting effectiveness of such institutions is certainly part of the reason for 18th-century pirates' success. I suspect the private governance institutions that support the Somali pirates' criminal economy deserve considerable credit for these sea dogs' success so far too.