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The Economics of Piracy

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Re: The Economics of Piracy
Post by Jonathan_S   » Fri May 06, 2016 10:00 pm

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cthia wrote:
Theemile wrote:If you are going to require a 2 billion dollar ship and a billion dollars worth of ammo to pull this one off, wouldn't it be just be easier just to pawn the ship and run off with the 3 billion dollars, before you hired a crew and had to share it with them?

What would pirates care about the cost of a ship and munitions that they didn't purchase, hmm?

Besides, we were considering a ship load of unobtanium, where several billion dollars is a drop in the bucket. *Crying like a bunch of babies over a several billion dollar expenditure that they didn't foot, to acquire a trillion dollar return??? I don't know about ethical, but I do know that pirates aren't chatroom stupid.
I think their bigger point was about risk reward. The reward of an actual cargo of "unobtanioum" is admittedly very high. But if it's defended well enough to require benefactors to hand over a BC to have any hope of capturing it then the risk seems pretty high as well.

The reward from disappearing and selling the expensive ship is vastly lower. But the risk of selling the expensive ship is almost negligible. And it sells for enough to either retire or to pick up a fleet of small ships which will, long term, capture more loot and attract less naval retaliation, and diversify the risk (for the pirate fleet as a whole - still sucks for the ship that's lost, but at least one ship having a dry spell doesn't necessarily mean no loot coming in.




Ultimately, I think if you want pirates running around in BCs in the Honorverse that does happen; though quite rarely.
But when they do is not for economic reasons; or at least the economics don't involve their loot generating adequate return on investment for their benefactors.
When pirates get to run around in BCs it's because systems or trans-stellers are giving them toys to make life hard on other people; but the profit/loss, much less the rate of return on investment, of the piracy per se, isn't a driving concern for the benefactors. They want the secondary effects.
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Re: The Economics of Piracy
Post by Sigs   » Fri May 06, 2016 10:06 pm

Sigs
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cthia wrote:
Theemile wrote:If you are going to require a 2 billion dollar ship and a billion dollars worth of ammo to pull this one off, wouldn't it be just be easier just to pawn the ship and run off with the 3 billion dollars, before you hired a crew and had to share it with them?

What would pirates care about the cost of a ship and munitions that they didn't purchase, hmm?

Besides, we were considering a ship load of unobtanium, where several billion dollars is a drop in the bucket. *Crying like a bunch of babies over a several billion dollar expenditure that they didn't foot, to acquire a trillion dollar return??? I don't know about ethical, but I do know that pirates aren't chatroom stupid.

Reminds me of something my grandfather taught me at a snotty nosed age...
Son, you know why many poor people can't get rich? It is because they are afraid to spend real money. You need to spend real money to make real money.

And if they get rich, somehow they are suddenly broke. Because they need to spend money (investments) to protect their money. And they are afraid to invest, because that is spending. So they are content to watch their nest of eggs implode - taxes, necessities and more taxes.

--cthia's grandfather

* My grandfather taught me that because he, along with my parents, wanted me to invest a quarter of a million dollars of the money I had earned before graduating high school and I was crying like a little baby. Yet, I eventually saw an almost ten times return on that money.

Though I was crying like a little beotch too, I was only a baby pirate then.



Even if we assume that the worth of the cargo is 2.2 trillion, this does not equate to 2.2 trillion for the pirates. If it was money, gold or some other object that could be used as a "universal" form of currency then yes, 2.2 trillion stolen=2.2 trillion benefit but what you are stipulating is that there is 2.2 trillion dollars worth of product which immediately loses value.


It loses value because why would I knowingly buy stolen goods for the same price that I could buy legitimate goods? So you might lose 50% of the value right there. Then you need to pay those merchants who are willing to get rid of your loot if you can even find anyone that is.

You have to do all of this while simultaneously trying to stay away from the navy that will be coming after you with blood in their eyes and all the while you will be dealing with potentially damaged ship and thousands of pirates and other unsavoury characters who would love nothing more than to take your loot away and feed you to the authorities.

Your scenario makes no sense because it has to assume that any and all people involved with setting the convoy on its way are complete and utter idiots.

If pirates had a battlecruiser, they would use it ASAP, which means by the time that convoy sailed they would have been hunted down and destroyed by any number of regional navies.



Your scenario assumes that a pirate is greedy beyond self preservation just so they can fit in your scenario. People who have spend their entire careers hitting the weak and defenceless will willingly face off professional military crew's with modern equipment?

If Helen Zilwicki could trash a force that out massed her 7:1 manned by professional naval officers and crew's that had at least an idea how to fight why would you expect anything less from a naval commander fighting against mere pirates?
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Re: The Economics of Piracy
Post by noblehunter   » Sat May 07, 2016 11:37 am

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I'm reminded of Theisman's line of thought at the tail end of 4th Yeltsin. He knew he was being conned, knew he had the forces to win but he also knew a lot of people were going to be killed. He knew he might be one of those people. So he conned his commissioner and ran from non-existent SDs.

Likewise, a pirate smart enough to use a BC effectively knows there can always be unexpected casualties. Much safer just to steal the BC.
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Re: The Economics of Piracy
Post by Sigs   » Sat May 07, 2016 1:19 pm

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noblehunter wrote:I'm reminded of Theisman's line of thought at the tail end of 4th Yeltsin. He knew he was being conned, knew he had the forces to win but he also knew a lot of people were going to be killed. He knew he might be one of those people. So he conned his commissioner and ran from non-existent SDs.

Likewise, a pirate smart enough to use a BC effectively knows there can always be unexpected casualties. Much safer just to steal the BC.



The point is, for the pirate's needs the BC is useless. Having 20 frigates and a few freighters replenishing their crews periodically you can make more money than that once in a lifetime fantasy that cthia is presenting.

Having a bunch of smaller ships hunting in different area's could bring you more over a year or two than hunting in one particular area with only one ship no matter how large and no matter how juicy the target. If you end up even getting 500 billion out of the prize, it would not be worth the risk when you can get the same reward over a slightly longer period of time with much less risk.

You lose a frigate, that is 5% of your income, you lose a BC that is 100% of your income.
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Re: The Economics of Piracy
Post by Fox2!   » Sat May 07, 2016 3:30 pm

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Location: Huntsville, AL

Bill Woods wrote:
(Deletia from cthia)

By the way, "Preston of the Spaceways" was a hero, not a bad guy.
Presumably inspired by Sergeant Preston of the Yukon.


And his dog, King.
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Re: The Economics of Piracy
Post by serpounce   » Sun May 08, 2016 3:14 am

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Congratulations on your purchase of a slightly used Indefatigable Flight I battlecruiser!

Have you thought about how you'll crew it yet?

Since an Indefatigable and Sultan are in the same tonnage range (850K) and are from a comparable era, let's look up the Sultan's crew requirements:

2195 Total
– 190 Officers
– 1705 Enlisted
– 300 Marines

We can probably do without 200 of the 300 marines as we aren't planning on lots of combat. We can probably trim down 60 officers and a 500ish enlisted as we're pirates and presumably don't care about combat redundancy and some less vital functions. This leaves us a crew of ~1,400 to run a BC, roughly in line with what Honor got away with at Cerberus.


Where are you going to get over 1,000 naval-qualified rank and file pirates and over 100 trustworthy officer types? Presumably if they were competent spacers with average morality they would serve in an actual freighter, SDF, Frontier Fleet, etc. Even if you did find them, how would you go about collecting them? Is there some secret pirate recruiting agency that matches up henchmen with would be Blackbeards?

Then let's talk ship efficiency. Since pretty much every pirate our plucky band of heroes has run across has been scum-of-the-galaxy types in line with Steilman's gang from Wayfarer, how would you even begin to administer discipline aboard your BC? 1,000+ hard cases who got into piracy because they didn't want to do work and you're expecting them to perform basic maintenance and conduct drills? All without killing each other or accidentally blowing up the ship.


And this is before we start getting underway. Then we have even more complicated matters. How do you refuel and re-provision? What do you do when your Alpha nodes start to show signs of wear?


Any pirate smart enough to solve these problems was probably smart enough to just invest in a fleet of FFs assuming they didn't cash out immediately and retire to some resort world. As others have pointed out: Why bother with one big ship when you can have 8 small ships picketing 8 different systems and presumably getting 8x the targets while diffusing the risk that your entire fleet gets wiped out.


As a final note, pirates that have taken the offer of "Here's a free Solarian pirate scholarship/BC/CA/entire fleet!" have been on the whole dumber than a bag of rocks. I'm not just talking about them getting blown up spectacularly by the RMN and/or SLN (even though yes, that was bad). Instead, i'm talking about the fact that they were too stupid to realize that they would not have been alive once they no more utility to their puppet master. A bunch of really stupid pirates in an ex-SLN warship is the biggest loose end you could have lying around.


TL:DR - the only pirates that would desire a BC are the ones too stupid to be able to operate one.
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Re: The Economics of Piracy
Post by darrell   » Sun May 08, 2016 11:35 am

darrell
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Posts: 1390
Joined: Thu Jan 26, 2012 3:57 am

Fox2! wrote:
Bill Woods wrote:
(Deletia from cthia)

By the way, "Preston of the Spaceways" was a hero, not a bad guy.
Presumably inspired by Sergeant Preston of the Yukon.


And his dog, King.


And his treecat :P
<><><><><><><><><><><><>
Logic: an organized way to go wrong, with confidence.
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Re: The Economics of Piracy
Post by cthia   » Sun May 08, 2016 12:49 pm

cthia
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Posts: 14951
Joined: Thu Jan 23, 2014 1:10 pm

cthia wrote:
Theemile wrote:If you are going to require a 2 billion dollar ship and a billion dollars worth of ammo to pull this one off, wouldn't it be just be easier just to pawn the ship and run off with the 3 billion dollars, before you hired a crew and had to share it with them?

What would pirates care about the cost of a ship and munitions that they didn't purchase, hmm?

Besides, we were considering a ship load of unobtanium, where several billion dollars is a drop in the bucket. *Crying like a bunch of babies over a several billion dollar expenditure that they didn't foot, to acquire a trillion dollar return??? I don't know about ethical, but I do know that pirates aren't chatroom stupid.

Jonathan_S wrote:I think their bigger point was about risk reward. The reward of an actual cargo of "unobtanioum" is admittedly very high. But if it's defended well enough to require benefactors to hand over a BC to have any hope of capturing it then the risk seems pretty high as well.

The reward from disappearing and selling the expensive ship is vastly lower. But the risk of selling the expensive ship is almost negligible. And it sells for enough to either retire or to pick up a fleet of small ships which will, long term, capture more loot and attract less naval retaliation, and diversify the risk (for the pirate fleet as a whole - still sucks for the ship that's lost, but at least one ship having a dry spell doesn't necessarily mean no loot coming in.




Ultimately, I think if you want pirates running around in BCs in the Honorverse that does happen; though quite rarely.
But when they do is not for economic reasons; or at least the economics don't involve their loot generating adequate return on investment for their benefactors.
When pirates get to run around in BCs it's because systems or trans-stellers are giving them toys to make life hard on other people; but the profit/loss, much less the rate of return on investment, of the piracy per se, isn't a driving concern for the benefactors. They want the secondary effects.

Your point is well made Jonathan. And I love your tone.

I was wondering when someone would seriously get around to risk assessment.

The risk of piracy is already too high. The balloon payment is death.

What first came to mind is the lesson taught long ago by a quite memorable driver's ed teacher to a bunch of knowitall teenagers...

Ever heard of the saying "dead a little or dead a lot, you are still dead?" Which, when reality carries that one into the legal system, boils down to "why would a man already on death row, care about killing a guard?" The answer is, he wouldn't. There isn't any more risk to himself.

In assessing the risk for pirates, the disconnect is in not being able to think like a pirate - in failing to truly imagine a pirate's entire life - let's call it "pirate reality," shall we?

All of most of everyone's arguments are right on the money - IF we are discussing regular upstanding citizens with normal careers like you and I, who hasn't already decided to risk his life on a foolhardy business. Yet, we aren't. We are talking about a breed of man whose both lifestyle and career has a very short life expectancy. All of you are building your house of cards on what I clearly see as faulty logic, because you haven't had your vision wiped clean by the smell of death and your own mortality rate like pirates, which as I've said before, has a tendency to focus your brain.

Consider this (and this scenario is not necessary because it would apply to most pirates). Pirates have been picked up for the last and final time by Harrington and warned that the next time they are caught they will be airlocked...

"And I assure you, next time I will personally airlock each and every one of you and I will damn well enjoy it!"

These pirates enjoyed a personal visit from the Salamander herself. Her voice was raw liquid helium that day. If it didn't scare them straight, nothing will - but it at least smeltered away all of the bullshit in their risk assessment. The reality is that their ass is on the chopping block on each and every outing, and they'd much rather it be sold out to the butcher for lbs instead of pennies on the dollar. What the flying truck does it matter that one man, one Salamander, one entity, one polity or one entire Star Empire will be hunting them. Only one person of each lot can kill them.

In my scenario, the choice of the pirates is to play russian roulette with 3 bullets in the chamber or play it with six, as in your scenario. The true pirate, not some pansy ass black sheep of a pirate from the Houseman clan, is going to take the bigger risk for the bigger payoff, because the pirate with at least a modicum of common sense realizes that the absolute risk is all the same. The life of piracy has a mortality rate higher than having unprotected sex in Sub-Saharan Africa. He realizes that he's playing russian roulette with none other than himself, every time he pirates. If he gets airlocked - and he is going to be people, if he remains in the business long enough - allow him to go out trying to looty some really big booty, and not for a cargo load of cheap cuban cigars. Because with the BC, he has the opportunity and will either retire alive NOW with a score that will allow him to inject himself into society, or die. With several frigates instead, there's no chance of retirement AND it requires more time in the business. And time is rarer than wet buffalo on the plains AND the unobtanium collectively! - and sooner or later he's going to die in the frigging frigate too!

It's a simple point. A BC supplies a possible end to a means. Yet, several frigates only supplies a means to an end - paycheck to paycheck, score to score. Pirates with a BC attempting one big score or pirates who opted for several frigates both have death in the road up ahead. Only the pirate with the BC has a real chance to have gotten rich and taken the off-ramp to early retirement before he reaches the Salamander's speed bump up ahead.

The chance to retire on one big score is just too priceless to pass on. A pirate has to get out of the ocean praying on little helpless minnow before a killer whale preys on him! Without the "retirement buffalo" there is only the potential of more smaller scores, perhaps a little sex with some passengers as a benefit along the way - but it also means they remain on the prowl, forever rolling the dice and pulling the trigger.

Fast forward to the day of reckoning. Now they've been caught. They've pulled the trigger one time too many in this game of death and they are about to get airlocked for a bounty that wouldn't even have paid off their and their loved ones debts. When they could've had a V8.

Smarter just to sell the BC is it? That sounds like the stupidest decision in the world for a pirate. That's stupider than polishing the balls to alienate a Star nation. Even though some polity isn't after them, the entire trucking crimeworld is. Because there are rats in the buffalo traps, and they can't have rats stealing cheese. So now its even worse. A dirty pirate can easily hide out in the underworlds from the authorities. But a snitching pirate, who only knows the underworld cannot hide in the light of society from the underworld he just betrayed to the enemy. Pirates are honorable men within their code. They have to be. If you can't trust a pirate when you're a pirate yourself - is anarchy. It is the same axiom in prison, which many prisoners have a hard time assimilating. Snitches either get stitches or thrown in ditches. And so, they don't. PLUS, the underworld won't just kill you, but your loved ones as well!

People, the mortality rate of pirates is very high. You cannot expect pirates to forego a BC that may net them one "retirement buffalo" NOW for several frigates that may pay off - modestly at best, comparatively, at some time in the future. That is the disconnect. Pirates don't have the luxury of a future they can plan in that manner. They can't afford to. Time is not on the hands of pirates. A pirate's life expectancy is so short that they don't even have hands on their watches. They tell time by the sun, by the rise of each one of them they get to see. Piracy is a true vaccine against prolong. They don't think in terms of a long term investment. They think in terms of a long term score. There IS no long term investment other than a "retirement buffalo" because there IS no long term future.

Sure, I don't doubt for a minute that a pirate would rather have several frigates in lieu of a BC, under NORMAL circumstances. The chance to catch a rare "retirement buffalo" IS NOT a normal circumstance.

The rule of russian roulette is the only chance to win is not to play. A pirate plays every time he goes out. What's worse, is he plays with himself, pulling the trigger each time.

The opportunity of one big score is manna to pirates!

Some people aren't driven by logic. Some people are driven by necessity and need. Need trumps logic. Again, It is what makes a lone hyena challenge a lioness for food. Pirates are a desperately needy bunch or they wouldn't be in the business.


Sooner or later, pirates are going to get airlocked if they remain on the hunt. Yet they cannot retire unless they get a big score to retire on. Retirement buffalo are rare on the plains of Kansas, boys.

So if I was a pirate, since every time we sail we run the risk of a British armada anyways (in the form of a stealthily armed convoy, a Q-ship, a Pirates' bane, a Grayson ship, an Andermani or that godawful blood thirsty Salamander) then it doesn't seem reasonable to do it for popcorn, when I could have had the popcorn business.

Die a little or die a lot, at least allow me to die worthwhile - instead of risking my life trying to steal in a society where the rules have changed into "get caught - and die." How many times would you put your hands in a cookie jar if each time could kill you?

After the final warning by Harrington, those rules are now your reality. At least let me die as a pirate, a true pirate, a romantic pirate, that sailed like real men and died like real men - that also bore a chance to retire. And not like a little baby with pink underwear.

If the road of piracy is well traveled, and it seems it is with the problem in Silesia. Then there must be retirement buffalo on the dry plains of Kansas. If not, sooner or later a pirate is going to be airlocked. And if all the pirates are being airlocked and there are no rags to riches stories making their way back into bars in the form of sea shanties, then that is the sign of a truly dumb pirate, continuing a life of crime that never pays doing jobs that are always intrinsically the same yet expecting different results.


A pirate playing russian roulette with himself and six bullets in the chamber, might last longer than the pirate putting more on the line for more on the line, with three in the chamber, yet they are both eventually going to get airlocked. Yet the pirate putting it all on the line, at least knows that his death was worth the potential score. Instead of the pirate who may live just two days longer than the pirate with the most risk, for peanuts. And all pirates hope that they will be amongst the select few who retires rich. Either I'm going to die for 2.2 trillion dollars, or 2.2 million cents.

Walk the plank for a bottle of rum
or
Walk the plank for a bottle of dumb

Which is the dumb and which is the rum? Everyone is guaranteed to die once, yet a pirate is not guaranteed to really live once.

Son, your mother says I have to hang you. Personally I don't think this is a capital offense. But if I don't hang you, she's gonna hang me and frankly, I'm not the one in trouble. —cthia's father. Incident in ? Axiom of Common Sense
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Re: The Economics of Piracy
Post by cthia   » Sun May 08, 2016 1:27 pm

cthia
Fleet Admiral

Posts: 14951
Joined: Thu Jan 23, 2014 1:10 pm

serpounce wrote:Congratulations on your purchase of a slightly used Indefatigable Flight I battlecruiser!

Again, the scenario has it handed to them.
Have you thought about how you'll crew it yet?

Since an Indefatigable and Sultan are in the same tonnage range (850K) and are from a comparable era, let's look up the Sultan's crew requirements:

2195 Total
– 190 Officers
– 1705 Enlisted
– 300 Marines

We can probably do without 200 of the 300 marines as we aren't planning on lots of combat. We can probably trim down 60 officers and a 500ish enlisted as we're pirates and presumably don't care about combat redundancy and some less vital functions. This leaves us a crew of ~1,400 to run a BC, roughly in line with what Honor got away with at Cerberus.


Where are you going to get over 1,000 naval-qualified rank and file pirates and over 100 trustworthy officer types? Presumably if they were competent spacers with average morality they would serve in an actual freighter, SDF, Frontier Fleet, etc. Even if you did find them, how would you go about collecting them? Is there some secret pirate recruiting agency that matches up henchmen with would be Blackbeards?

Then let's talk ship efficiency. Since pretty much every pirate our plucky band of heroes has run across has been scum-of-the-galaxy types in line with Steilman's gang from Wayfarer, how would you even begin to administer discipline aboard your BC? 1,000+ hard cases who got into piracy because they didn't want to do work and you're expecting them to perform basic maintenance and conduct drills? All without killing each other or accidentally blowing up the ship.

For the payout, yes.

Again, the benefactor rustled up the crew. I imagine a hidden third party in the crime underworld has access to many pirates. And I imagine that an Honorverse has many qualified applicants born of many reasons - they were unjustly beached, set up, drummed out of the navy, etc., etc. I imagine that there are no shortages of pirates, who on a Venn diagram, intersects with mercenary, ex-navy and pirate.


And this is before we start getting underway. Then we have even more complicated matters. How do you refuel and re-provision? What do you do when your Alpha nodes start to show signs of wear?

This BC has been procured for ONE, I repeat, ONE score. It is a disposable resource. Negligible to the score.

It is the same concept that is a cold slap in the face to the war on drugs here in America. Drug cartels have access to $5M submarines named "Bigfoot" and gunboats. These $5M submarines can transport $100M worth of cocaine. Losing one after even a single run is negligible.

Any pirate smart enough to solve these problems was probably smart enough to just invest in a fleet of FFs assuming they didn't cash out immediately and retire to some resort world. As others have pointed out: Why bother with one big ship when you can have 8 small ships picketing 8 different systems and presumably getting 8x the targets while diffusing the risk that your entire fleet gets wiped out.

A third party supplied the BC. And this third party is after something other than the score. He isn't in the piracy business. What he wants or gets out of the deal is irrelevant to the pirates.


As a final note, pirates that have taken the offer of "Here's a free Solarian pirate scholarship/BC/CA/entire fleet!" have been on the whole dumber than a bag of rocks. I'm not just talking about them getting blown up spectacularly by the RMN and/or SLN (even though yes, that was bad). Instead, i'm talking about the fact that they were too stupid to realize that they would not have been alive once they no more utility to their puppet master. A bunch of really stupid pirates in an ex-SLN warship is the biggest loose end you could have lying around.


TL:DR - the only pirates that would desire a BC are the ones too stupid to be able to operate one.

They are not going to be alive too long anyways in their lifestyle.

Son, your mother says I have to hang you. Personally I don't think this is a capital offense. But if I don't hang you, she's gonna hang me and frankly, I'm not the one in trouble. —cthia's father. Incident in ? Axiom of Common Sense
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Re: The Economics of Piracy
Post by Sigs   » Sun May 08, 2016 3:53 pm

Sigs
Rear Admiral

Posts: 1485
Joined: Mon Mar 16, 2015 6:09 pm

cthia wrote:
As a final note, pirates that have taken the offer of "Here's a free Solarian pirate scholarship/BC/CA/entire fleet!" have been on the whole dumber than a bag of rocks. I'm not just talking about them getting blown up spectacularly by the RMN and/or SLN (even though yes, that was bad). Instead, i'm talking about the fact that they were too stupid to realize that they would not have been alive once they no more utility to their puppet master. A bunch of really stupid pirates in an ex-SLN warship is the biggest loose end you could have lying around.


TL:DR - the only pirates that would desire a BC are the ones too stupid to be able to operate one.

They are not going to be alive too long anyways in their lifestyle.


They will if they were smart.
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