The Economics of Pirate Deterrence

How can we stop pirate attacks? By applying the law of demand. If something becomes more costly, people consume less of it. In this case, making piracy more costly means fewer people will become pirates.

How do this? One cruise ship company has an answer: fire back. Making piracy a riskier, more dangerous proposition — i.e., more expensive — forces pirates to think twice before attacking.

How disheartening, then, that both of the experts quoted in this news report oppose arming ships that pass through pirate-infested waters. They ignore the law of demand at the peril of innocent people.

This is exactly why I mourn economic illiteracy.