31. Peter Leeson on Why Trial-by-Fire Wasn’t Barbaric and Why Pirates Were Democratic

What does it mean to live a rich life?

It means brave first leaps, tearful goodbyes,

and everything in between.

With over 100 years' experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence.

Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it.

Edward Jones, member SIPC.

Your sausage mcmuffin with egg didn't change.

Your receipt did.

The sausage mcmuffin with egg extra value meal includes a hash brown and a small coffee for just five dollars.

Only at McDonald's for a limited time.

Prices and participation may vary.

The topics I study are unusual for an economist.

Things like cheating and sumo wrestling, a link between abortion and crime, the perils of walking drunk.

But on the scale of weirdness, I can't even begin to compete with my guest today, Pete Leeson.

The list of subjects he has studied tilted to pure absurdity.

Everything from the practice of wife-selling in Industrial Revolution-era England to trials in Italy in the 15th to 17th century, in which insects were the defendants, and even what are called ordeals, the medieval practice of determining innocence or guilt by plunging someone's hand into boiling water.

Welcome to People I Mostly Admire with Steve Levitt.

But the amazing thing about Pete Leeson is that he takes these crazy topics and through a brilliant mix of meticulous historical research, data gathering, and creative economic thinking, he shows that these seemingly nonsensical practices actually make a whole lot of sense once you understand them.

I can't think of another economist whose work has so consistently blown my mind.

And I'm pretty confident he will do the same to you.

Way too much time has passed since we last spoke.

Has it been a decade, more?

It's been about 10 years, if you can believe it, Steve.

That's way too long.

And even if we haven't been talking, I've made a point of following your research because I can honestly say there's nobody else like you in the field of economics.

So before we do anything else, I think we need to give people a few examples of your research.

Could you provide a little history lesson?

What were ordeals and when were they used?

Absolutely.

For about 400 years between the 9th century and the early 13th, the most sophisticated legal systems in Europe conducted physical tests in criminal cases to determine the guilt or innocent of accused suspects.

In the classic medieval judicial ordeal, as these things were called, the priest or the cleric who was overseeing the trial boiled a pot of water into which he threw a stone or a ring.

He then asked the criminal defendant to plunge his arm into the boiling water and to pluck the object out.

After that, the priest would wrap the defendant's hand and then they would revisit it.

The whole court would three days later.

If the arm showed evidence of having been burned very badly, that was considered evidence that God was giving to the court that the defendant was in fact guilty of the crime, in which case the defendant would then face the secular punishment, the fine or imprisonment, so to speak, although they didn't typically use prison in the Middle Ages.

If the defendant's arm didn't show evidence of having been burned, that was considered evidence that the defendant was innocent.

God had performed a miracle, and he would be let go.

There was another type of hot ordeal that was popular at the time, which was the hot iron ordeal.

Instead of the defendant being asked to plunge his arm into boiling water, he was asked to carry a burning hot iron, a stipulated number of paces.

The number of paces that he was supposed to walk depended upon the severity of the crime.

From the modern perspective, ordeals seem both barbaric and also so idiotic.

Well, let me tell you a little something about the data.

What if I told you that we had data from an ordeal register, in this case, the ordeal of burning iron that was conducted in Hungary in the early 13th century?

We have about 308 cases in which ordeals were ordered.

So these are real data, Pete, that you and others have collected about actual ordeals.

Yes, about actual ordeals.

We have 308 cases in which criminal defendants were ordered to undergo the ordeal.

And it turns out that in 100 of those cases, the criminal defendant never actually ended up undergoing the ordeal.

He declined, which means he probably either confessed or he settled with his accuser, a sort of medieval version of a plea bargain.

In 208 of those cases, however, the criminal defendant actually ended up carrying the supposedly red-hot burning iron.

But in about two-thirds of those cases, the defendant had his arm unscathed.

So I guess one possibility is that God directly intervened on behalf of the innocents, but I suspect you think that there might be an alternative explanation to that.

Yes, that's one possibility.

But I think a probably stronger possibility is that priests intervened to make sure that the red-hot burning iron wasn't in fact red-hot or that the boiling water, for which we have similar evidence, wasn't in fact boiling.

These are public settings.

Aren't people watching?

How does the cleric rig this?

It turns out that if you look at the instructions that priests were supposed to follow, what you see is ample opportunity for the priest to engage in chicanery.

It's almost like the instructions were directing the priest about how he could engage in ordeal rigging and fraud in a way to trick the potential bystanders.

Prior to the potential observers of the ordeal entering the church, the priest and the defendant were supposed to be alone, praying together ostensibly, inside the church when the ordeal fire was being made.

And if you've ever made a fire before, you know that you can make fires very hot or only moderately hot.

The fact that the priest and the defendant together were inside making the ordeal fire before anybody was there to watch it gave them plenty of opportunity to turn down the dial on the stove, so to speak, in order to make sure that the fire itself wouldn't be so hot.

Another interesting feature of ordeal instructions is that they direct the priest, after the defendant has plunged his arm into the boiling water or carried the burning iron to sprinkle holy water in the name of God over his hand.

In the hands of a manipulative priest, sprinkling could easily become dousing, helping to significantly offset any remaining heat.

This gives a pretty low appraisal of priests.

I mean, these folks are representing God, and yet you're describing them as manipulative, misleading conjurers.

Maybe a little bit, but at the same time that medieval judicial ordeals were being used throughout Europe, there was developing in Christendom, in Catholicism, the doctrine of in personum Christi, which for the Catholics out there is the idea that God works through the priest, that the priest is God's worldly hands through which God is going to interact with the worldly environment around him.

This is partly the doctrine that is responsible for the idea that the priests can transubstantiate, that God working through their hands are able to alter the host and the wine into the body and blood of Christ.

Priests, when conducting ordeals during this period, could have very easily believed that they were simply God's instruments on earth, that God was working through them when they were tampering with the fire or switching the iron and so on.

What we haven't really talked about explicitly is the economics behind this.

And your contention is that this mechanism is an incredibly thoughtful, effective, game-theoretic way of getting to the truth in these really tough cases.

Could you lay that out for people?

I think the key to understanding the economic logic behind medieval judicial ordeals is putting yourself into the shoes of a medieval criminal defendant.

Part of doing that is understanding what the beliefs of medieval citizens were during that period.

According to a popular superstition of the era, which was known as judicium dei, or the judgment of God, God is omniscient and omnipotent, which means that a criminal defendant, while he has what we would call private information about his guilt or innocence, so he knows the truth of the matter, about whether he actually committed the crime, that information isn't private from God, who knows the state of the soul of the criminal defendant.

So conditional on a criminal defendant thinking in this way, he imagines that if he undergoes the ordeal and he's guilty, God will let the boiling water burn his arm, which means that the criminal defendant expects the ordeal to find him guilty and to have his arm boiled to rags to boot.

It's better for him if he simply confesses.

At least he doesn't have to plunge his arm into boiling water.

Now suppose that the criminal defendant is innocent.

Well, he expects that when he plunges his arm into the boiling water, God will perform a miracle to make sure that the water doesn't boil him.

In consequence, he expects to be exonerated.

For him, undergoing the ordeal is not a bad decision at all.

This basic idea suggests a kind of sorting that accused criminal defendants, when confronted with the specter of the ordeal, perform amongst themselves, a kind of self-revealing mechanism.

Put that way, it is a miraculous institution in that it gets people who believe in God and God's power to reveal the truth in a setting that otherwise the courts wouldn't be able to do.

What's so great about that mechanism is that if you believe in God, it number one deters you from doing crimes in the first place.

And number two, when you've done the crime, it encourages you to admit it.

But if you're a conniving modern thinker who doesn't believe in God, but you know that everyone else does, it actually gives you free rein to go out and do crimes and then masquerade as a believer and be in cahoots.

with the conniving cleric.

Although, I suppose it's probably true that the clerics were pretty good at knowing who the pious ones were and who the non-believers were, and they probably did a little burning of the non-believers.

Exactly.

You nailed it, Steve.

My theory predicts that priests are overwhelmingly going to try and exonerate the people who undergo ordeals because they know that those people's willingness to undergo ordeals means that those people are probably innocent.

Skeptics pose a problem for these faith-based institutions, these faith-based incentives, essentially.

If we think about about things from the perspective of a non-believer, what happens?

So, as you suggested, he might try and take advantage of the system by going and committing more crimes, but that means that he's going to wind up being in front of the priest more often, who seeing him repeatedly is likely to figure out that, hey, this guy is not a believer.

The priest then has an incentive to burn the guy.

Your interpretation of ordeals is a great story and it's supported by data.

But I'm always skeptical about everything.

And one thing that I've seen in social science is that lots of times someone has a basic hypothesis and they can find data to support that hypothesis.

But then if you dig deeper and you look for the secondary hypotheses, the other things that should be true, they often fall apart.

Are there secondary hypotheses floating floating around in the background here that you're able to test and that either support or refute your basic story?

Yes, according to my story, people in general reposed strong belief in God being able to determine whether or not they were guilty or innocent.

But there were in medieval Europe a large portion of people who did not have that belief.

Jews.

And so What my reasoning suggests is that medieval judicial ordeals would not have been an effective way for determining the guilt or innocence of Jews.

The implication of that is that legal systems would set aside ordeals only for Christians, only for believers, and not apply them to Jews who had been accused of crimes.

And that's exactly what we see.

There were alternative methods, what superficially seem like more sensible methods, relying on oath swearing, as it was called, or witnesses.

The ordeals only applied to Christians because Christians were the only people who had the faith that was required for them to actually function.

Do you have anything in your data that you can point to that says, here, I've got something I see that I don't think any other reasonable theory could make sense of?

In addition to the hot ordeals, there was the cold ordeal.

In the cold ordeal, a priest blessed a pool of water into which the criminal defendant was then plunged.

Typically, they wrapped him up so that he was bound in some manner.

Sinking was considered evidence of his innocence because the idea was the water was blessed by God.

So only a guiltless or sinless defendant would be accepted by God into his blessed pool.

If guilt or sin resided in the defendant, God's holy pool would reject his body, forcing him to the top of the water.

Women have a much higher percentage of body fat than men.

And as a result, they are much more likely to float when thrown into water than men.

It suggests that priests will not want to send women to cold ordeals because if they did, women would tend to float, which means that they would be convicted, the exact opposite of the outcome that priests are trying to find.

It turns out that overwhelmingly, women were sent to hot ordeals and that men were often sent to cold ordeals, but women basically never were.

That is consistent with my theory and probably not with many alternative hypotheses.

Now, there are some interesting parallels between ordeals and modern lie detector tests, I think.

Do you know much about lie detector tests?

Yeah, they're bullshit.

But people believe that they work.

And isn't it in many ways very much like the mechanism underlying ordeals?

I think it's the very same mechanism.

The reason that most courts do not permit

evidence from a polygraph, from a lie detector test, is that scientifically they're bogus.

There's no way to physiologically measure whether or not someone is lying or telling the truth or to detect whether they're lying or telling the truth.

But it turns out that just like ordeals, as long as people believe that they work, then there can in fact be an important use for them in our criminal justice system, which is why I think that the FBI uses lie detector tests, the military uses lie detector tests, the CIA uses lie detector tests, private companies use lie detector tests sometimes when they're hiring employees.

The important feature of this is that the people taking the tests think that they're legit, even though the tests we know scientifically are not.

That makes the person who's less to hide more willing to take the test than the person who has something to hide or who is likely to lie.

And so there's this self-revealing process that is really exactly the same logic that underlied medieval judicial ordeals.

You're listening to People I Mostly Admire with Steve Levitt and his conversation with economist Peter Leeson.

After this short break, they'll return to talk about Peter's dedication to economics and pirates.

This episode is brought to you by Nordstrom.

When fall is finally here, you're ready for a wardrobe refresh, and Nordstrom has you covered with the best of fall fashion.

Stay ahead of the hottest trends and discover new favorites from top brands like Reformation, Veronica Beard, Favorite Daughter, Free People, Mango, Madewell, and more.

And the best part, free shipping, free returns, and easy in-store pickup.

So get ready to shop in stores on Nordstrom.com or download the Nordstrom app today.

People I Mostly Admire is sponsored by Mint Mobile.

From new shoes to new supplies, the back-to-school season comes with a lot of expenses.

Your wireless bill shouldn't be one of them.

Ditch overpriced wireless and switch to Mint Mobile, where you can get the coverage and speed you're used to but for way less money.

For a limited time, Mint Mobile is offering three months of unlimited premium wireless service for 15 bucks a month.

Because this school year, your budget deserves a break.

Get this new customer offer and your three-month unlimited wireless plan for just 15 bucks a month at mintmobile.com slash admire.

That's mintmobile.com slash admire.

Upfront payment of $45 required, equivalent to $15 a month.

Limited time, new customer offer for first first three months only.

Speeds may slow above 35 gigabytes on unlimited plan.

Taxes and fees extra, see Mint Mobile for details.

Your sausage mcmuffin with egg didn't change.

Your receipt did.

The sausage mcmuffin with egg extra value meal includes a hash brown and a small coffee for just $5.

Only at McDonald's for a limited time.

Prices and participation may vary.

Lowe's knows you've got a job to do and we help get it done.

With the My Lowe's Pro Rewards Program, eligible members save more with volume discounts on qualifying orders through a quote of $2,000 or more.

Join for free today.

Lowe's, we help you save.

Offer can't be combined with any other discount contract and or special pricing.

Exclusions, more terms and restrictions apply.

Details at lowe's.com slash terms.

Subject to change.

Want to look and feel your best this summer?

Don't just think skin deep, think cell deep with Prolon.

Prolon is a plant-based nutrition program featuring soups, snacks, and beverages that nourish the body while keeping it in a fasting state, triggering cellular rejuvenation and renewal.

With proper diet and exercise, Prolon can help target fat loss, support lean muscle, and reset your metabolism.

So you look and feel your best all summer long.

Prolon is science-backed nutrition that can help change your relationship with food in just five days.

Get 15% off plus a $40 bonus gift when you subscribe at ProlonLife.com slash Pandora Promo.

These statements have not been evaluated by the FDA.

These products are not intended to diagnose, treat, cure, or prevent any disease.

See site for details.

So today's listener question comes from John.

And John's question relates to a story I told on the golf episode where having turned 40, I decided as a a completely mediocre golfer that I was going to devote the next 10 years of my life to trying to make the champions tour, the senior tour of PGA golf.

So John writes, Stephen, given that you have dealt with data, statistics, and predictions your entire life, how did you come to the conclusion that you had any chance of making the champions tour?

The odds for something like that must be one in a million, if not higher, for an amateur with zero professional experience to rise to the level of the players on the champions tour especially because the vast majority of them are pga tour professionals with years of experience did you really think you had a chance well john i certainly knew i was fighting an uphill battle when i started my quest i was about a 17 handicap and one of the first things i did was to crunch the data and it turned out that To compete on the Champions Tour, you needed to be about a plus three handicap.

So a really good golfer is a zero, and these champions tour players are about three strokes better than that.

So I needed to cut 20 strokes per round.

I followed this quest for about seven years and over that seven year period I improved about two strokes a year every year.

So by the end of seven years I had gone from a 17 handicap down to a three handicap.

I only had six more strokes of improvement I needed.

I tell the story in the episode about why after seven years I gave up on my quest and it wasn't because I thought it was unreachable.

Now, realistically, those last six strokes were going to be really, really hard and I probably never would have made it.

But it wasn't completely hopeless.

Now, I actually did make one important miscalculation.

When I crunched those numbers in the very beginning, I didn't actually look at the rules about how you make the champions tour.

And it turns out that Nobody really wants to go out and watch a bunch of old guys play golf they've never heard of.

They want to watch the stars of yesteryear play as senior golfers.

I think there were only three spots a year that were allotted for anyone other than PGA tour stars.

The people who were like me, who got those three spots, they were way better than plus three handicaps.

They were more like plus six handicaps.

If I had known that from the beginning, I would have known I never had a chance.

And in many ways, I'm glad I didn't because even though I didn't succeed in making the champions tour, of all the things I ever tried to do and I failed at, seven years of really intense golf was by far the most enjoyable.

Thank you, John, for that excellent question.

I want to hear from you.

Send me your questions.

The email address is pima at freakonomics.com.

That's p-im-a at freakonomics.com.

I read every one of those submissions and hopefully I'll answer yours over the air.

Now, back to my conversation with Pete Leeson.

If you had asked me my opinion of medieval trial by fire before hearing Pete Leeson's arguments, I would have said it was the stupidest, most barbaric thing ever.

And I would have been 100% confident that I was right in that assessment.

Yet, After hearing Pete's take on the problem, my views are completely changed.

I think the idea of trial by fire is brilliant.

Did you find his arguments as convincing as I did?

In the second half of the interview, I'd love to try to understand what it is about Pete that allows him to have this x-ray vision, this ability to cut through superficial absurdities in order to see the logic and sensibility that lies underneath.

That is a skill I usually pride myself on having, but Pete is 10 times better at it than I am.

I'd love to take a step back from these specific cases we've been talking about to delve into your broader worldview, which I think is a pretty optimistic one.

You seem to believe that society is really good at finding efficient solutions, even when the problems are hard and there are many binding constraints.

Is that an actual statement about how you think of the world?

Yeah, in fact, I think you've just summed up my basic approach to thinking about the world better than basically anybody else as before.

And it seems like you almost always think that there's an economic answer that is at the heart of every problem.

Is that a fair assessment as well?

Absolutely.

I think basically that there are only economic answers to social questions.

I have one tattoo on my right biceps that I got when I was a teenager, which is a supply and demand curve with a demand curve shifting to the right.

Modern economics has increasingly turned to behavioral economics as a tool for understanding the world, acknowledging that real-world behavior deviates in all sorts of ways from the simple rational model economists used to subscribe to.

But that's not your thing at all.

You are one of the few hardcore old-style 1970s rational economics Trumps all types.

Isn't that a really lonely intellectual space to be living in?

Oh man.

In some ways it is, but in a way it makes it more fun.

Economics is unusual in that its explanations are grounded in the behavior of individuals, but ultimately it seeks to explain the behavior of groups of individuals.

Because of that,

it's not so important that we figure out the mental processes that individuals go through in making decisions, or even that we identify how any one given individual does in a particular instance make a choice.

The economic way of thinking suggests that it's the interaction of those various individuals at this aggregate level that shapes the choices that individuals make and produce these aggregate outcomes that economics is interested in explaining.

There, I think psychology, essentially, behavioral economics has relatively little to tell us.

Yeah, I think you're right.

But I'll say I used to very much believe in the unfettered power of economics.

And when it came to policy, economists should have the final word.

And as I've gotten older and as I've watched maybe the unintended consequences of economists botching policy, I've really come to have a very different view, which is that I'm really interested in hearing what anthropologists say and what sociologists say and what physicists say.

I think that diversity of views actually is useful to policymakers.

But

you really don't probably subscribe to that, do you?

It's not that I don't think a diversity of views is important.

One of the things that I find enormously important, in fact, I couldn't carry on my own work without it, is history.

I love history.

I think there's room for historians who know a lot about the past to come to a policymaking table to tell us about what has happened in the past.

But their role in that capacity, they are facts, so to speak, that need to then be interpreted and understood through the economic lens.

Economics is a way of thinking.

It's an approach to human behavior.

And why it's had such an important role in policymaking is that we're bringing the analytical lens.

I'm going to get a lot of hate mail.

I'm noting that it's your position and not mine that economics is the lens through which behavior should be interpreted.

Am I wrong in that?

I think so, actually.

Let me give you an example.

So I used to spend some time with an anthropologist called John Komaroff.

And he, like you, studied strange topics.

So we would sit down to lunch and he'd say, well, I'm researching witches in South Africa.

And he would begin to talk.

And every single time, my first reaction would be, well, John has really gone off his rocker this time.

This makes no sense at all.

And by the end of the conversation, I'd say, hey, that actually makes sense.

But no economic talk, nothing even about incentives.

It was all anchored in a cultural perspective, which you might not find convincing, but I actually did.

And more and more, when I talk to smart people, almost regardless of what their training is, I find that they have insights.

I've just learned so much from people who see the world differently, even if at the end of the day, I still think like an economist.

The thing is, my aim is not to be dismissive, but I also don't want to be dishonest to what I think.

There's a lot of self-loathing in economics nowadays.

And maybe it's because people truly don't believe this anymore.

But we're not willing to say, I think that this approach actually

is more compelling.

If you look to, say, evolutionary anthropology, there you'll find work that I think is being done that is basically like economics.

I would call it economic work.

But outside of that, other parts of anthropology, what is the unifying framework that they use?

They don't have one.

They're joined together by their subject matter, culture, by a topic, not by an approach.

Whereas to my mind, economics, what unifies it is an approach, not a topic.

Would you say that all analytical approaches that are available are equally useful?

How my thinking has evolved over time is from thinking of economics as being really dominant and really the right answer to questions to one where I'm open-minded.

And when it comes to some problems, I think economics is great.

And when it comes to other problems, I think economics is a little less great.

I'll give you an example of the problem I think economics really struggles with, is the issue of power.

And economics doesn't really have a place for power, but

in my own interactions with students, I've come to understand more and more how the power that I wield as a professor is really important to our interaction.

And maybe I'm just not clever enough to think about how economics helps me with that, but I just find other disciplines to give me more insight into the issue of power, for instance.

The economic approach, part of its tremendous power to my mind, is how incredibly elastic it is.

It can fit almost anything into it.

That doesn't mean that everything fit into it ends up yielding equally good insights.

But I'm not really convinced that alternative approaches to talking about power or really anything else in the social science arena are adding more than economics does.

Another way in which I'm probably quite different from many other economists is that while economics is a science, I think there's also a huge art to it.

And I think that's true for other social sciences as well.

I think of economics as basically this approach to human behavior kind of defines the rules of what will count as an acceptable explanation for something that we're trying to explain.

And I think of other social science disciplines as offering their own set of rules.

The reality of the matter is that the kind of explanation that a person finds compelling is

idiosyncratic.

I find explanations that are constructed within a very rigid set of rules provided by traditional economics to be extremely compelling.

And I could sit down and write out some of the reasons why I find them compelling, but a lot of it would not be articulable.

It's just, it speaks to me.

My mileage in terms of that falls off very quickly when you move outside of economics.

But I think it's great that other people's mileage varies, right?

They find the economic approach intuitively.

It doesn't seem right to them, and that's okay.

I want to go back to the point you made that economics is really as much art as it is science.

When I was a young professor, just gotten to Chicago, one of my colleagues is and was Austin Goolsby, who went on to be the chairman of the Council of Economic Advisors, as well as a really prominent, important researcher.

But anyway, Austin and I were just kids, and we would have lunch a couple times a week with the Nobel Prize winner Gary Becker and also with Kevin Murphy.

These are two of the greatest economists of our time, some of the most brilliant economic thinkers around.

And in order to maximize the usefulness of these lunches, what Austin and I would do is on the way to lunch, we would take some topic in the news that day and we would do our best to try to explain that phenomenon using economics.

And then we would sit down with Gary and Kevin and say, say, hey, what did you think of this thing that was in the news today?

And what was amazing is that Austin and I were almost always wrong.

Wrong in the sense that we came to a different conclusion than Gary and Kevin did, and that by the end of the lunch, we had been convinced that we had come to the wrong conclusion.

And what became really clear over time is that it wasn't that we didn't have the right tools to get to the answer.

It's that the economic toolkit is varied.

There are a lot of different models we have to apply.

And what Austin and I would do over and over is we'd reach into our economic toolkit and we'd pull out the wrong tool for the problem at hand.

And Gary and Kevin seem to have this magical, artful ability to pull out the right tool.

It was a great lesson to me about the artistry of doing economics.

Steve, I love that story.

That's what made people like Becker and Murphy masters.

They're master artists.

Sometimes you'll hear a graduate student complain about Econ 101 or baby economics, the elementary economic way of thinking.

But to me, actually all of economics is just that over and over and over again.

Learning to

become a master applier of it, except for a few people like Gary and Kevin, takes a lifetime.

I imagine I'll never be there, but I'm going to keep trying every day.

It's damn hard, I think, to do it well in a way that not only you find compelling as the producer of the research, but that other people will find compelling and that you feel like is in fact shedding light on something in the world.

Tell me a little bit about the ideas you've had about pirates.

The one that really jumps out at me is how differently pirate ships were organized than the Royal Navy or the merchant ships that were active in the 1700s.

So, late 17th and early 18th century pirate ships were organized essentially in exactly the opposite way as naval ships and merchant ships from the period, which were the ships from which pirates were coming before they turned to piracy.

On those navy and merchant ships, there was a rigid hierarchy with the captain at the top who wielded autocratic authority over the crew and then everybody else below him.

Pirates flattened that structure completely.

Instead of having autocracy govern their ships, they democratically elected their officers.

They're dividing authority among the people who wield authority at the top on the crew.

The other thing that pirates did was that they had written constitutions.

Pirates, because they were criminals, couldn't rely on government to promote cooperation between them.

And so when a crew was getting together, they needed to actually establish rules that would govern themselves, rules that prohibited things like theft and violence between them.

My thinking about why pirates organized themselves in such a radically different way has to do with the different ownership nature of the ships as a consequence of the economic activities in which those ships were engaged in.

Merchant shipping was just transporting goods across sea, a legitimate trade and an important part of commerce.

These merchant ships were owned and outfitted by wealthy capitalists, by land lovers, who hired sailors who were experts at actually navigating the sea to operate their ships for them.

The captains that were installed on a merchant ship were appointed by these landed capitalists.

Lots of potential for what economists call agency problems with these merchant sailors, which was that because they didn't own the ship, their income didn't depend in a significant way on things like maintaining the ship or improving the value of the ship.

And so the captain that the capitalists appointed, his job was basically to control the sailors to make sure that they didn't do that kind of stuff that would undermine the interests of the capitalists.

Now switch over to pirate ships.

Pirates owned pirate ships.

Piracy was a joint activity that all the members of the crew engaged in collectively.

So they jointly stole the merchant ships and were paid via a share system.

They each received a different share of whatever the crew plundered.

And so they had a direct interest in maximizing the profit of the activity that the crew was engaged in.

Why was that democracy so important, though?

The pirate captain is basically a military figure, and the pirate quartermaster is basically the governor on the pirate ship.

They need to have certain authorities that they can use to command over the crew.

Obviously, a pirate crew couldn't overtake a prize if the crew members had to say vote on whether or not they were going to stab that guy coming up the backside of of the ship with their cutlass every time that happened.

They needed to hand over autocratic authority to the captain, who would wield autocratic authority despite having been democratically elected in those situations of battle.

Democracy was basically what pirates used, in large part, to make sure that these pirate officers didn't wield the authority that the pirate crew gave them against the crew's interests.

James Madison, one of America's founding fathers, famously described the paradox of power.

In order to govern effectively, we need to install some political authorities, but in order to make sure that they don't abuse that authority for their own personal benefit at everyone else's expense, we need to constrain them.

And Madison's constraints was divided power, democracy, and constitutions.

Those are exactly the same solutions that early 18th century Caribbean pirates devised in order to prevent predation by their officers, by their leaders, the captain and the quartermaster.

But just to make clear for people who don't have the timeline in their head, the pirates were doing this many years before the U.S.

government started doing it.

They were innovators in this regard, not copiers.

Pirates developed their system of constitutional democracy, which looks so much like our own.

more than half a century before America's founding fathers put pen to paper.

We talk about people like Locke and the great philosophers as being the basis for our country, but perhaps we should give pirates a little more credit.

I've always wondered: is it possible that America's founders could have cribbed from early 18th century pirates?

I realize that sounds ridiculous and absurd, like most things that I say, but it's actually conceivable.

Pirate system of governance was laid out in a published series of volumes called A General History of the the Pirates in the early 18th century.

This book was like a bestseller in its time.

This wasn't some obscure book.

And so it is totally conceivable that Madison, for example, or Jefferson, both of whom were voracious readers and had enormous libraries, would have had access to these published works.

And imagine if they did, and you found in the marginalia some little scribbling, some note about Blackbeard seems to be onto something here.

It just would be incredible.

I looked looked into the catalogs of what was in, I think it was Madison's library at the time.

And unfortunately,

it's unclear because there was a fire in his library that destroyed a lot of the books.

Now, even if they had it, it would then be this further step to say that influenced them in drafting the founding documents.

So I'm not going there yet, but at least could we connect the dots back to they read and had access to a general history of the pirates?

You know, maybe.

And that was the subject that first introduced us many years ago.

I was the editor at one of the most prestigious economics journals, the journal of political economy, when you submitted a research paper that argued that the actions and customs and organizational structure of pirates in the 1700s were highly efficient and a great example of economic thinking in action.

And I've never told you this before, but I read the first paragraph of your paper and I decided that I would reject it immediately.

I actually went so far, I typed out a brief two-paragraph letter, I've signed it, and I was about to close out your file when, just out of pure curiosity, I decided to read a page or two more because, like you, I'm pretty weird.

And I ended up spending an hour reading your paper from cover to cover like I was reading a great novel.

I ended up tearing up that rejection letter and I sent the paper off to referees and I actually tried to pick the toughest referees I could find.

Historians who I thought would hate what you were doing and saying that you were selectively pulling the information.

But much to my surprise and to my delight, they actually really liked the paper.

We ended up publishing it and I have to say Of the 10 years that I served as an editor, it's one of the three or four papers that I'm most proud of publishing.

I thought no one would give it any sites, but it turns out to be a really heavily cited paper.

I just wanted to say that because I've never told you that story.

When I send stuff out, I know that your initial reaction is the reaction overwhelmingly that I'm going to have.

What I'm always hoping for is there that one weird editor who's willing to read a couple pages more, as I'm sure you know.

It really is responsible in a basic sense for my entire career.

It was your willingness to take a risk in publishing that paper that got my name out there a little bit more so that people knew what I was doing and would actually maybe read something that I was doing.

I've interacted with a lot of graduate students from all over, and I'm always delighted and flattered to hear, oh, I love your paper and our key on pirates.

It made me feel like I could write on what I wanted to write on.

I attribute that wholly to you.

It was, for some people, a permission from a big fish, from Steve Levitt, who was editor of the JPE, to pursue their weirdness and to work on the stuff that they found interesting.

And even in my own case, it gave me the confidence and the ability to be the weird guy.

And so I can't thank you enough.

I'm truly grateful for you having...

torn up that desk reject and given the paper a chance.

So, of course, I was a weird guy 10 years before you were a weird guy, and I was standing on the shoulders of all sorts of weird people who had come before me, who had paved the way to being weird in economics, like the Nobel Prize winner and my good friend and former colleague, Gary Becker.

There's a whole circle of weirdness that supports itself.

Are you weird yourself, or do you just study weird things?

It depends on who you ask.

I would say that most people would describe me as weird myself.

I tend to be insistent about some odd things.

When you write a book, you put a dedication, and most people write things like, to my parents for all they taught me, or to X, who always supports me.

But the dedication you chose to one of your books was, Anya, I love you.

Will you marry me?

What made you think that was the best way to propose?

I thought it would be the most fun way to propose.

And I thought that Anya, my now wife, thankfully, would appreciate it.

I think she was probably less excited about the manner in which the proposal occurred via the book dedication than I was.

The book in which the proposal appears is The Invisible Hook, which is about the economics of Caribbean pirates.

And so, playing on that theme, we went out to this fancy restaurant and I got this elaborate metallic treasure chest.

And then I put the book inside and I had the waiter at the restaurant bring it out to the table at the end of the meal.

And when she first opened the treasure chest, she just saw the cover of the book.

And she thought it was just, I guess, I was celebrating my book in a way that was throwing it in her face.

I don't know what she thought.

I had to prompt her, which is when you've gone wrong with a proposal, I go,

turn to the page with the bookmark.

So she flipped it open to the page with the bookmark, which was the proposal, and she was pretty surprised.

And you're going to try to argue that you're not sure whether you're weird or not.

Fair enough.

Do you have life advice for others who also are weird?

Follow your weirdness wherever it may take you.

Probably within the confines of the law, mostly.

What I enjoy about the world is the weirdness that it has, the peculiar features of all the different peculiar individuals who you encounter.

I loathe boringness.

If you are normal or boring, be yourself.

That's great.

Perhaps go and interact with the other normal, boring people.

But for those in particular who are weird, who I think are oftentimes facing some pressure in one way or another to conform, to be a little bit more normal, to be a little bit more boring.

I would say resist that pressure.

Embrace whatever it is that motivates you, however, unusual it is.

Not only will you be a much happier person, but you'll be a much more productive person.

Because people who

are fully immersed in and fully engaged in whatever weirdness it is that drives them end up being pretty darn good, or at least work very hard at cultivating whatever that weirdness might have to offer the world.

What Pete said reminds me of a story about my good friend Sudhir Venkatesh.

He's my co-author on a paper detailing the financial activities of a drug-selling street gang, and he's also now part of the Freakonomics Radio Network family as host of the podcast, Sudhir Breaks the Internet.

So, long ago, Sudhir was being considered for a faculty position at the sociology department at the University of Chicago, and all signs pointed to Sudhir getting a job offer.

The last step in the process simply involved him talking informally about his latest research projects.

Among many other projects, he mentioned that he and I were working together.

The sociologists were shocked.

He couldn't possibly be a member of their academic tribe if he was writing papers with a University of Chicago economist.

So sitting at lunch with my colleagues a few days later in the faculty club, I told them, outraged, that the sociology department had been skeptical of Sidir just for working with me.

One of my senior colleagues, Sherwin Rosen, was the first to respond, and without even a hint of a smile, he said, well, you know, if you didn't already have tenure, we'd kick you out of the department for working with a sociologist.

Well, luckily for me, I did have tenure, and luckily for Siddhir, he had a job at Columbia.

So in the end, things worked out okay for both of us.

If you liked what you heard from Pete Leeson, he appeared in a Free Economics Radio episode, episode number 174, called What Do King Solomon and David Lee Roth have in Common.

And check out his book, WTF, An Economic Tour of the Weird.

The best description I can think of for that book is like Freakonomics on Steroids.

People I Mostly Admire is part of the Freakonomics Radio Network, which also includes Freakonomics Radio, No Stupid Questions, and Sudier Breaks the Internet.

This show is produced by Freakonomics Radio and Stitcher.

Morgan Levy is our producer, and Dan DeZula is the engineer.

Our staff also includes Allison Kreglow, Greg Ripen, Joel Meyer, Tricia Bovita, Mark McCluskey, Zach Lipinski, Mary DeDuke, Brent Katz, Rebecca Lee Douglas, Emma Terrell, Lyric Bowdich, Jasmine Klinger, and Jacob Clementi.

All of the music you heard on this show was composed by Luis Guerra.

To listen ad-free, subscribe to Stitcher Premium.

We can be reached at pima at freakonomics.com.

That's p-im-a at at freakonomics.com.

Thanks for listening.

I forgot what I was going to say about that.

So I've got you speechless.

You got me speechless.

I mean, I clearly won this debate about power.

The Freakonomics Radio Network.

Stitcher.

At our X Bar, they believe in simple nutrition without the BS.

That's why they said no to artificial ingredients and yes to deliver intentional, transparent nutrition.

Try their original 12-gram protein bar, the Nut Butter and Oat Bar, or minis, RXBar, the proud sponsor of No BS.

Use code rxbar on rxbar.com for 25% off, subject to full terms and conditions and to change, valid until September 30, 2025, and may not be combined with other offers.

See rxbar.com for full details and limitations.