On the dilemma of a Horn

Occupying the Horn of Africa, Somalia presents some pointy problems of piracy and lawlessness that seem to defy all civil community.

The sea piracy has often been newsworthy in the last few years, e.g. these two stories from just the last few days:

Pirates now hold 70 RP sailors

Somali pirates attack two ships, hold North Korea crew hostage

Pirates Holding 11 Ships, 264 Sailors Off Somalia

Somalia: Pirates Attack Oil Tanker

Whilst Somalia does not own the monopoly on this type of piracy (e.g., this and this), and does not always get its way (e.g., this and this), it does seem to have the lion's share of the booty, and in doing so inflicts more than mere money wounds (e.g.).

And, of course, the Somali piracy does not end at water's edge:

Joy as Australian released from brutal Somali kidnapping

Emotional relatives of Somalia kidnap victim Nigel Brennan expressed joy on Thursday at his release from more than a year of brutal captivity, when he was pistol-whipped and spent months in chains.

Sister-in-law Kellie Brennan fought back tears as she recounted the family's nerve-wracking vigil since the photojournalist's capture along with Canadian reporter Amanda Lindhout in August 2008.

Australian media have said Brennan was kept in a dark room away from Lindhout and surrounded by armed men. They said he was suffering severe abdominal pains and passing blood, probably due to being fed contaminated food and water.

Speaking after her release, Lindhout said she spent her captivity "sitting in a corner on the floor 24 hours a day for the last 15 months. There were times that I was beaten, that I was tortured."

"It was extremely oppressive," she told Canadian broadcaster CTV. "I was kept by myself at all times. I had no one to speak to. I was normally kept in a room with a light, no window, I had nothing to write on or with. There was very little food."

She said the kidnappers told her that they beat her because the one million dollar ransom "wasn't coming quickly enough."

Reports also said Brennan and Lindhout had managed in January to escape and take sanctuary in a nearby mosque, only to be recaptured at gunpoint.

One kidnapper, who did not want to be identified, told AFP that a one-million U.S. dollar ransom was paid to free the pair

Notwithstanding the dramatically critiqued and re-written history of the US involvement in trying to "impart" some order in Mogadishu in the 1990's (see this and this, for starters), order, as viewed from beyond Somalia, seems incapable of gaining any traction.

But order is as order does and has done since the dawn of mankind, and the honor and code of conduct amongst thieves lives on inside Somalia in ways that both mimic and, by doing so ridicule, the structures of order elsewhere.

Bandits' ‘bourse' now up to 72 ‘companies'; backers who invest cash, weapons receive shares entitling them to a share of the booty

These scourges of the Gulf of Aden have been attracting dozens of investors over the course of the last four months, according to a Reuters returns. The burgeoning exchange, located in the coastal town of Haradheere, Somalia, started with 15 “companies” and is now up to 72 entities, the news service found.

A wealthy former Somali pirate named Mohammed told Reuters that shares in the exchange are open to all who would like to participate. Investors receive shares in a pirate company by taking part in a raid on a ship. Backers who don't want to go that far can also get shares by providing cash or weapons to the pirates. Investors are paid dividends – a cut of the ransom money.

Business has been booming.

Somali Pirate Haven Is the Ultimate Deregulated Free Market

Yes, the pirates carry weapons, but "the pirates' treatment of the hostages is relatively humane, and their reputation for turning over the ship, cargo, and crew…upon receipt of the demanded ransom has been cited as a reason for their continued success in having their demands met." Bernard Madoff doesn't appear to have shot anyone, but the fallout from his Ponzi scheme hasn't been bloodless, either. And whose word is more reliable? That off Madoff, Alan Stanford, Scott Rothstein, or the pirates?

Yes, the pirates employ coercive tactics to extract large sums of money from victims whose only fault was to be in the wrong place at the wrong time. Their haul, however, is just a fraction of what AIG and Dubai World have extracted in recent days from investors who were caught in the crosshairs of their drive-by debt-for-equity swaps. Those hapless investors—which, in the case of AIG, includes the U.S. government—had little choice but to come to terms or risk unknown global financial and economic consequences.

Somalia is about as open and as deregulated as a market can be. There are no regulations. It is a "lawless Horn of Africa nation," in the words of a gripping dispatch filed by Reuters correspondent Mohamed Ahmed, who convinced the pirates to give him guided access to their home base in the port city of Haradheere. "Somalia's Western-backed government of President Sheikh Sharif Ahmed is pinned down battling hard-line Islamist rebels and controls little more than a few streets of the capital," Ahmed reports. The administration has "no influence" in Haradheere. What market could be freer than that?

If interested, a larger history of Somalia is at these links:

The US Library of Congress Country Report

The Wiki history, starting from earliest known times

An African perspective on Somalia's history by the South African Institute for Security Studies

The UN's perspective

And a smaller history of the current situation:

Somalia al-Shabab Islamists deny causing deadly bomb


AND NOW INFLATION:

Somali pirates' ill-gotten wealth driving up prices for everyone