A Market Solution To Piracy?

Obama says we need to fight back against piracy. But maybe piracy doesn't require a military solution--it requires a business solution.

Economist Peter Leeson writes at NRO's The Corner that piracy is a result of the "tragedy of the commons"--nobody owns the oceans, so nobody has incentive to police them.

Leeson's solution? Sell the waters, and let the new owners pay for security forces.

Rather than trying its hand at Somali state building, the international community should try auctioning off Somali’s coastal waters. According to some Somali pirates, greedy foreign corporations are exploiting valuable resources in these waters, which is allegedly why they’ve resorted to piracy (the large ransoms earned from pirating are a happy but unexpected byproduct of pursuing social justice, I suppose). If this is right, Somalia’s coastal waters should be able to fetch a handsome price. The international community can use the proceeds of the auction for humanitarian assistance in Somalia, or put it in a trust for Somalia’s future government, if one ever emerges. The “high seas” should be similarly sold. It’s not so important where the proceeds go. The important thing is that the un-owned becomes owned.

One problem: the people who blame "greedy foreign corporations" for Somalia's woes are not likely to be too excited about the idea of auctioning off Somalia's waters to those "greedy corporations."