7 ms·

But then when it comes to serious issues, like the Somalian pirates crisis, the ship owners suddenly want all the protection again that the tax dollars they are

by nn3 12y ago

But then when it comes to serious issues, like the Somalian pirates crisis, the ship owners suddenly want all the protection again that the tax dollars they are not paying can buy. All the benefits, none of the responsibility.

ohashi 12y ago
You make it sound like a unique situation. Everyone seems to want everything and not pay for it. This is just a ship example.
akavi 12y ago
Doesn't the protection come from the government of whatever country the ship's crew is citizens of? Ie, they're benefitting from their government's duty to protect their safety (which I think is pretty hard to dispute). Recovering the ship, if it happens, is purely incidental.
- nn3 12y ago
  No, crews from countries with significant military are far too expensive.
- _delirium 12y ago
  Depends. The crew are usually from poor countries that don't contribute much if anything to anti-piracy efforts. The captain or owners are sometimes from powerful countries that will do something about it. In some regions, specific countries or groups of countries have taken it upon themselves to fight piracy in the area. For example in the Somali region, protection and rescue generally comes from a U.S.-led coalition, regardless of the nationality of the ship/ownership/crew: https://en.wikipedia.org/wiki/Combined_Task_Force_151 https://en.wikipedia.org/wiki/Combined_Task_Force_151
yummyfajitas 12y ago
To raise revenue, it might be useful simply to charge all ships a "US Navy" tax if they will be protected from pirates/other threats. Ships desiring this protection can buy it, those wanting to protect themselves can forgoe it. Unlike land-based police protection, I think naval battles are slow enough and ships identifiable enough that the service could be made excludible (and being rivalrous as well, it would then become a private good).
- jonnathanson 12y ago
  I'm not sure why you're being downvoted. Your idea is interesting. Perhaps impractical, though. The ocean is monstrously big, and the US Navy is insufficient to cover it at all times. Especially in its current size and state. Even just the Gulf of Aden is 438,000 square kilometers, which is roughly the size of California. Admittedly you don't need to cover all that area, as the effective range of pirate speedboats is limited, so you're really just covering the coastlines. Even still, that's a lot of space. Satellites, sensor networks, etc., could help virtually shrink that playing field, so to speak. Just-in-time response is still a manpower issue, though. Strong signaling and prevention is more effective than constant response, though I'm not sure how you apply a blanket of prevention selectively to the ships that are paying for it. Flags or color signals, perhaps. [EDIT: Seems you're back in black. Your comment was greying when I first came across it.]
  - _delirium 12y ago
    I agree it's an interesting idea. Two complications are: 1. In many cases the US Navy has its own interests in combating piracy, and isn't interested in providing an opt-out from its police services. Somalia is one area, where one of the goals of the anti-piracy initiative is to cut off the funds flowing to militant groups who use piracy as a source of income. On the other hand, this means the question of freeriding is less important, because the US Navy is providing and paying for the patrols for its own reasons, not (primarily) as a service to shipowners. 2. Some kind of maritime-law reform would be needed. Traditional maritime law has at least some kind of emergency-assistance duty. Launching a heroic rescue with helicopters and special forces is almost certainly not part of it, so that could be withheld. But under current maritime law you couldn't just completely ignore a distress signal and refuse to attempt to help, even when in a position to easily do so.
    - jonnathanson 12y ago
      Yeah, I'd imagine you run into #2 a lot with any sort of selective-policing policy. Not only that, but you create economic incentives for the pirates to focus their attentions on anyone not under US protection, thus selectively making piracy worse for everyone else, which in effect pressures them into buying your insurance program. This feels deviously brilliant, but ethically suspect. It also racks up a protective burden that may grow to outweigh the tax revenues. I suppose another deviously brilliant solution would be to send some CIA fixer types out to the Somali warlords, bribing them to avoid ships with X, Y, Z symbols on them (whoever's paying the Navy Tax). Probably less money spent doing this than building and keeping loads of gunboats in the water at all times. Again, though, this creates its own negative externalities and perverse incentives. Plus, you're now in the business of keeping certain warlords in power, and we all know how well that usually works out for us.
javert 12y ago
Speaking as a US taxpayer, I think that's a great use of my tax money. Ship owners getting taxed less is better for expanding the economy than whatever the government would do with it.
jacquesm 12y ago
But everybody benefits from functioning shipping lanes. After all, if shipping shuts down how will we keep wallmart stocket, no matter whose flag those ships sail under.
- rhizome 12y ago
  If Walmart wants to keep their shelves stocked, they can use shippers who fly a flag that engenders safety. Note that the Maersk "Captain Phillips" Alabama was the first US-flagged ship to be hijacked in almost 200 years, so it does appear that the pirates pay attention.
- kyllo 12y ago
  The piracy only affects Asia-Europe lanes. Wal-Mart's imports are mainly Transpacific and South American imports. And the pirates also almost never hit container ships because their decks are too high and they go too fast. Maersk Alabama was an anomaly, they were actually transporting food aid to East Africa so they traveled much slower and closer to Somalia. The pirates mainly hit tanker/bulker and LNG ships. I worked at a container line at the height of the piracy in 2009-2010 and management was basically not concerned with it. The ships are insured anyway, they just added an Aden Piracy Surcharge to Asia-Europe freight to cover the premium increases.
  - spitfire 12y ago
    Care to talk a bit more about this over email? Details in my profile, or leave an address I could reach you here.
  - seanmcdirmid 12y ago
    There are wal-marts outside of the USA/North America, I'm sure you know.q
    - kyllo 12y ago
      Sure, but the vast, vast majority of their freight is Asia -> US. I work in the shipping/logistics industry and I assure you, Somalian piracy is not a threat to Wal-Mart's supply chain. It's barely a blip on their radar. If one container ship were hit and a few of their containers were on board it would not hurt them financially, they have cargo insurance anyway. Storms at sea are a much bigger risk factor, containers fall off of cargo ships in rough seas surprisingly frequently, and voyages often get delayed by a few days due to weather. Water damage due to holes in the shipping containers is also very common. And delays at the port and rail hubs due to congestion. These factors are all much bigger risks to Wal-Mart (or any major importer) than piracy is. It's kinda like worrying about carjackings when an accidental collision is probably thousands of times more likely to kill you.

by nn3 12y ago

ohashi 12y ago

You make it sound like a unique situation. Everyone seems to want everything and not pay for it. This is just a ship example.

akavi 12y ago

Doesn't the protection come from the government of whatever country the ship's crew is citizens of? Ie, they're benefitting from their government's duty to protect their safety (which I think is pretty hard to dispute). Recovering the ship, if it happens, is purely incidental.

nn3 12y ago
No, crews from countries with significant military are far too expensive.
_delirium 12y ago
Depends. The crew are usually from poor countries that don't contribute much if anything to anti-piracy efforts. The captain or owners are sometimes from powerful countries that will do something about it. In some regions, specific countries or groups of countries have taken it upon themselves to fight piracy in the area. For example in the Somali region, protection and rescue generally comes from a U.S.-led coalition, regardless of the nationality of the ship/ownership/crew: https://en.wikipedia.org/wiki/Combined_Task_Force_151 https://en.wikipedia.org/wiki/Combined_Task_Force_151

yummyfajitas 12y ago

To raise revenue, it might be useful simply to charge all ships a "US Navy" tax if they will be protected from pirates/other threats. Ships desiring this protection can buy it, those wanting to protect themselves can forgoe it. Unlike land-based police protection, I think naval battles are slow enough and ships identifiable enough that the service could be made excludible (and being rivalrous as well, it would then become a private good).

jonnathanson 12y ago
I'm not sure why you're being downvoted. Your idea is interesting. Perhaps impractical, though. The ocean is monstrously big, and the US Navy is insufficient to cover it at all times. Especially in its current size and state. Even just the Gulf of Aden is 438,000 square kilometers, which is roughly the size of California. Admittedly you don't need to cover all that area, as the effective range of pirate speedboats is limited, so you're really just covering the coastlines. Even still, that's a lot of space. Satellites, sensor networks, etc., could help virtually shrink that playing field, so to speak. Just-in-time response is still a manpower issue, though. Strong signaling and prevention is more effective than constant response, though I'm not sure how you apply a blanket of prevention selectively to the ships that are paying for it. Flags or color signals, perhaps. [EDIT: Seems you're back in black. Your comment was greying when I first came across it.]
- _delirium 12y ago
  I agree it's an interesting idea. Two complications are: 1. In many cases the US Navy has its own interests in combating piracy, and isn't interested in providing an opt-out from its police services. Somalia is one area, where one of the goals of the anti-piracy initiative is to cut off the funds flowing to militant groups who use piracy as a source of income. On the other hand, this means the question of freeriding is less important, because the US Navy is providing and paying for the patrols for its own reasons, not (primarily) as a service to shipowners. 2. Some kind of maritime-law reform would be needed. Traditional maritime law has at least some kind of emergency-assistance duty. Launching a heroic rescue with helicopters and special forces is almost certainly not part of it, so that could be withheld. But under current maritime law you couldn't just completely ignore a distress signal and refuse to attempt to help, even when in a position to easily do so.
  - jonnathanson 12y ago
    Yeah, I'd imagine you run into #2 a lot with any sort of selective-policing policy. Not only that, but you create economic incentives for the pirates to focus their attentions on anyone not under US protection, thus selectively making piracy worse for everyone else, which in effect pressures them into buying your insurance program. This feels deviously brilliant, but ethically suspect. It also racks up a protective burden that may grow to outweigh the tax revenues. I suppose another deviously brilliant solution would be to send some CIA fixer types out to the Somali warlords, bribing them to avoid ships with X, Y, Z symbols on them (whoever's paying the Navy Tax). Probably less money spent doing this than building and keeping loads of gunboats in the water at all times. Again, though, this creates its own negative externalities and perverse incentives. Plus, you're now in the business of keeping certain warlords in power, and we all know how well that usually works out for us.

javert 12y ago

Speaking as a US taxpayer, I think that's a great use of my tax money. Ship owners getting taxed less is better for expanding the economy than whatever the government would do with it.

jacquesm 12y ago

But everybody benefits from functioning shipping lanes. After all, if shipping shuts down how will we keep wallmart stocket, no matter whose flag those ships sail under.

rhizome 12y ago
If Walmart wants to keep their shelves stocked, they can use shippers who fly a flag that engenders safety. Note that the Maersk "Captain Phillips" Alabama was the first US-flagged ship to be hijacked in almost 200 years, so it does appear that the pirates pay attention.
kyllo 12y ago
The piracy only affects Asia-Europe lanes. Wal-Mart's imports are mainly Transpacific and South American imports. And the pirates also almost never hit container ships because their decks are too high and they go too fast. Maersk Alabama was an anomaly, they were actually transporting food aid to East Africa so they traveled much slower and closer to Somalia. The pirates mainly hit tanker/bulker and LNG ships. I worked at a container line at the height of the piracy in 2009-2010 and management was basically not concerned with it. The ships are insured anyway, they just added an Aden Piracy Surcharge to Asia-Europe freight to cover the premium increases.
- spitfire 12y ago
  Care to talk a bit more about this over email? Details in my profile, or leave an address I could reach you here.
- seanmcdirmid 12y ago
  There are wal-marts outside of the USA/North America, I'm sure you know.q
  - kyllo 12y ago
    Sure, but the vast, vast majority of their freight is Asia -> US. I work in the shipping/logistics industry and I assure you, Somalian piracy is not a threat to Wal-Mart's supply chain. It's barely a blip on their radar. If one container ship were hit and a few of their containers were on board it would not hurt them financially, they have cargo insurance anyway. Storms at sea are a much bigger risk factor, containers fall off of cargo ships in rough seas surprisingly frequently, and voyages often get delayed by a few days due to weather. Water damage due to holes in the shipping containers is also very common. And delays at the port and rail hubs due to congestion. These factors are all much bigger risks to Wal-Mart (or any major importer) than piracy is. It's kinda like worrying about carjackings when an accidental collision is probably thousands of times more likely to kill you.