In recent days, weeks and months, news about pirates have saturated the media. Today, those news are about Somalis in East Africa, attacking ships in the Indian ocean. These pirates, driving speedboats and using assault weapons, are nothing like the swashbuckling buccaneers we think of when we think of pirates. Disney’s theme park ride, and the countless movies about Hook, Peter Pan and Treasure Island create a different picture of pirates. Here is a completely different view:

Pirates were actually democratic. The classic age of piracy in the Americas started around 1660 and lasted through 1820 or so, with the heyday around Jamaica in 1660 through 1680, and much piracy around the Caribbean all the way up to Newfoundland in the 1710 and 1720 time frame.

Pirates elected their leaders and captains. This means that they also unseated unsuitable or unsuccessful ones. The captain had ultimate power in battle, during raids, attacks, chases, and in navigational matters. But when it came to deciding what to plunder, what ships, towns or harbors to attack, the pirates voted, and every member had an equal vote, including the captain. This system of democracy was in place and worked very effectively long before the United States existed, and the various colonies still obeyed the British crown.

When the pirates divided up their loot, they had very clear demarcations, which were defined by their Articles, that everyone signed. The loot was divided up by “shares.” A common pirate had one share. The surgeon, first mate and other officers might have had two shares. The captain eight shares. This defined a clear written and documented system of how the loot was distributed. There was never any haggling or fighting.

To top it off, there was perhaps the world’s first health insurance – speak socialism. Before the loot was divided up, injuries were paid off. The most common currency was the “piece of eight,” a coin, and the predecessor of the peso.

The Articles defined addressed the “recompense and reward each one ought to have that is either wounded or maimed in his body, suffering the loss of any limb, by that voyage.” Each eventuality was priced out:

Loss of a right arm: 600 pieces of eight

Left arm: 500

Right leg: 500

Left leg: 400

Eye: 100

Finger: 100

This comprised generous medical insurance, incentive pay and employee control.

Now I just have to figure out how to reward our employees based on such incentives, learning from the pirates of the 17th century.