On September 14, 1723, the freighter Princess Galley sailed from London via Africa into the Caribbean Sea.
The ship was a heavy burden.
The captain spotted another ship with sails out and rapidly approaching. The other ship hoisted a black flag.
Skulls and bones are just one of many designs used by pirates in the early 18th century. Other flags depicted “bleeding hearts, flaming balls, hourglasses, spears, cutlasses, and whole skeletons.” The purpose of all such flags was the same. It was to “emphasize the message that the pirates expected immediate surrender, or that the consequences would be fatal.”
These details are taken from Under the Black Flag: Romance and the Realities of Life Among Pirates by naval historian David Cordingley. He tells of the sad fate of the Princess Galley, whose escape attempts soon proved futile. The pirates systematically looted the ships for a full 24 hours and seized everything of value, including food and equipment. They tortured the ship’s officers to make sure they didn’t miss anything. As a bonus, they also impose his two crew members with useful skills, a fellow surgeon and a carpenter.
Old-style piracy still exists (Tom Hanks made a movie about it), but a new one that accomplishes the same goal without using tar, lifting decks and risking cutlass scratches. form has emerged.
Consider what is sometimes called “vulture funds.” These are companies that identify vulnerable targets, take large ownership stakes, board them, and often pay their investments by incurring debt on the ships they board. Pirates systematically plunder companies, claiming such large profits as can only be achieved by selling their core assets over time, and empty hulls are taken to the final bunker of bankruptcy court.
But the term “vulture fund” is unfair to vultures that effectively feed on animals that are already dead. A different label, “Vampire Fund,” is more descriptive. But whichever term is used, it represents an ancient form of parasitism.
It is difficult, perhaps impossible, to think of a money-making scheme that has not yet been conceived by someone else. Business practices that seem new today are mostly not as colorful as piracy, but they usually have historical parallels. I have things
The job of advertising recruiters has existed for as long as advertising has existed, but the only recruiters to win lasting fame were fictitious. Wandering around Dublin in 1904, he tried to persuade business owners to place an ad in his newspaper.
Facebook, Google and their competitors, among others, have advertising campaigns. They convince merchants to buy advertising to run alongside the materials they distribute. Much of that material is user-generated. However, some are taken verbatim from the newspaper’s website.
Imagine what a great business it would have been in the days of Leopold Bloom if you could sell newspaper ads and keep the profits for yourself.
According to a recent report from Northwestern University’s Medill School of Journalism, “The United States continues to lose newspapers at a rate of two a week.” Many factors contribute to the ongoing disaster, from demographics to vampires. But it doesn’t help that a significant portion of the advertising revenue generated by newspaper articles never reaches the newspaper itself.
Uber and Lyft are taxi companies that rely on apps instead of inefficient old phone and ride-hailing systems. They avoid capital costs by requiring taxi drivers to buy, maintain and garage their own cabs. Their methods are different. But there’s nothing original about the company’s basic line of business, which goes back at least to the handsome cabs of Victorian-era horse-drawn carriages.
One of the things Uber and Lyft expect from them is a new flow of money from investors that will allow them to run at a loss. And what a loss! Earlier this summer, Uber reported a quarterly — quarterly! — loss of $2.6 billion.
Uber has so much new cash coming in that it can afford to cash out. Unlike our competitors, traditional taxi companies, we do not run a closed system where revenues are expected to cover costs.
The paired terms “competition” and “anti-competitive practices” sound diametrically opposed, but there is no clear line separating the two. The effect of one and the purpose of the other is to push other companies out of the market. American competition law is written at a high level of generality, giving courts considerable leeway in deciding which particular business practices may be condemned as restrictions on trade.
But almost all restrictions on trade are commercial innovations when viewed in another way. And everything old becomes new again.
Joel Jacobsen is a writer who retired in 2015 after 29 years in the legal profession. If you have a topic you’d like us to cover in a future column, let us know at legal.column.tips@gmail.com.
