My friend George, who went to law school in Brooklyn at night, tells the story of his bankruptcy law class. The prof asked if anyone could name an alternative process to bankruptcy, hoping to hear about state court reciverships and assignments for the benefit of creditors. A student in the back of the class stuck up his hand, and, when called on, said: “A fire.”

Of course US-owned ships are mostly not US-flagged ships. This is because the Jones Act mandates uncompetitive terms for US-flag shipowners; thus, US-flag ships operate almost entirely in economically-protected markets: Mainland-Hawaii, mianland-Puerto Rico, etc. The Jones Act should be reformed to make US-flag ships reasonably competitive in world markets. Providng US military protection to US-flag ships means that the US maritime wage would not have to fall to world maritime wage levels; they would be competitive somewhere in between current and world levels. As for foreign-flagged vessels: when they report an attack, give them the phone number for the Liberian Navy, if there is one.

One might think about the opposite state wherein we respond to all forms of extortion with violence which leads to a state of near constant conflict.

Paying danegild offends us morally and we know from history that it is not a sustainable policy but I don’t think the private actors have any choice. The law prevents private actors from attacking the pirates (both directly and by liability) so they really only stand to lose by taking action themselves.

I think the terminal move in this game will come when terrorist camp out in the pirate lands. Somali already has an active Al-Queada presence.