The Economics of Piracy

The New York Times has an interesting discussion of the economics of piracy. Ships wouldn't be getting hijacked off the coast of Somalia unless it was a profitable trade. The interesting question is how the economics wok out in the medium term. Eventually, the shipping trade will have to decide whether it is cheaper to pay protection money to a Somalia warload to stop their vessels getting hit. Or is it cheaper to pay a military force to go and deal with the pirates?