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The Misfit Economy

Harnessing the anarchical talent of pirates



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Necessity, they say, is the mother of invention. Therefore it should be a simple thing to look to where needs are greatest to see how people are being innovative. The trouble with this approach is that in today’s world, the gap that lies between big corporations and the truly needy is large and widening, so the opportunity for executives and college graduates to experience or even see real ‘need’ in action is very slight.

There have been notable exceptions to this. Columbia University sociology professor, Sudhir Venkatesh, conducted some extreme ethnographic research, living amongst one of the major crack-dealing gangs of Chicago in the late 1980s, the Black Kings,  to understand their decision-making processes and organizational and control structures. His findings appearing in his 2008 book “Gang Leader for a Day”.

More recently several people have been looking to pirates, the swash-buckling type rather than counterfeit DVD-ers, who constructed organizations that were, internally, relatively flat organizations built on a meritocracy – and with few resources at their disposal had to employ large amounts of ingenuity to create workable solutions for their problems. Jean-Philippe Vergne of the Ivey School of Business in Ontario, has explored this – and so has Kyra Maya Phillips and her co-writer Alexa Clay in their forthcoming book – The Misfit Economy.

The Misfit Economy takes the disruptive view that rather than squander the anarchical talent of pirates, hustlers, conmen and computer hackers we would be better off harnessing their skills to more legitimate and productive ends. They ask:

“How, as a society, do we develop new instincts towards criminals … how do we recognize a black-market innovator who may have all the talent of a Richard Branson or a Jay-Z, but lacks the opportunities for a leg-up in the formal economy? … we first need to recognize the talents of the gangster. A resume from the underground is full of hustle and street skills that aren’t acknowledged by employers. That is to say, given the applied “street smarts” and talent — the art of the hustle, the leadership and prowess of running a drug business — what is it all worth?”

Misfits are the ones pushing the boundaries, the ones who are not happy being constrained by the status quo, it is therefore natural that they will be the ones finding the cracks in the system and exploiting them for ‘a better way’. With gangsters, hackers and pirates, that better way may be societally unacceptable – the benefit only accruing to a small group at the expense of the many (though that could be said for many legal enterprises too) – but it requires an innovative flair and curious mind to achieve.

Phillips and Clay note that Spotify and even iTunes, grew out of the boundary challenging, and ultimately illegal Napster platform; and that much of the advances in video streaming technology was incubated by the porn industry.

Hackers are perhaps the purest of modern-day misfit innovators. As Phillips notes “Hackers are often detail-oriented to the point of obsession, while also being able to see the big picture. To improve something hackers must first understand how it works—and to understand something fully, they take the system apart before putting it back together again.”

Phillips, however, is most attracted to the pirates. Pirates were not governed by any other rules such as Naval regulations and so had to create their own Code of Conduct, which although originating in the early eighteenth century would still look enlightened in many organizations today. Pirate captains were elected and could lose their position for abuse of their authority. The captain enjoyed few privileges: "The Captain or any other Officer is allowed no more [food] than another man, nay, the Captain cannot keep his Cabbin to himself." The Pirate Code of Conduct varied from ship to ship but a typical code might run as follows:

1.    Equal Voting Rights

2.    Fair share of the loot and pirates punishments for those who cheated

3.    Gambling was banned

4.    No lights at night - a pirates sleep should not be disturbed

5.    Each pirate was responsible for the upkeep of their weapons

6.    No Boys or women allowed on board

7.    Penalty for Desertion

8.    No fighting between pirates on board the ship

9.    A Pension according to the severity of wounds

10.    Shares of the loot or booty

11.    Musicians available to play when required! (which carries tones of plenty Silicon Valley offices today)

Sudhir Venkatesh’s video Gang Leader for a Day:


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