Piracy in the Caribbean came out of the interplay of larger national forces. The Caribbean was a centre of European trade and colonization from the late 15th Century. In the Treaty of Tordesillas the non-European world was divided between the Spanish and the Portuguese along a north-south line 270 leagues west of the Cape Verde Islands. This gave Spain control of the Americas, a position they reinforced with a papal bull. The land around the Caribbean was called the Spanish Main, the key early settlements were Cartagena, Panama, Santiago, and Santo Domingo. Economically, the Spanish were mining staggering amounts of silver bullion from New Spain and Peru. Other trade was largely hides - the Spanish preferred herds to plantations. The huge silver shipments attracted pirates and privateers both in the Caribbean and across the Atlantic, all the way to Seville. To combat this, from the 1560s the Spanish adopted a convoy system - a flota (fleet) would sail annually from Seville, carrying passengers, troops, and European goods to the colonies of the new world. This cargo was effectively make-weight as the purpose was to transport a year's worth of silver and specie to Europe, that bullion arriving in a major port on the Silver Train. This made the returning fleet a tempting target. Although, pirates were more likely to shadow the fleet to attack stragglers than try and seize the main vessels. The classic route in the Caribbean was through the Lesser Antilles to the ports along the Spanish Main, then northwards into the Yucatan Channel to catch the westerlies back to Europe.
The Netherlands and England were defiantly anti-Spanish for much of the time from the 1560s, while the French government was seeking to expand its colonial holdings (the French had the first non-Spanish hold in the Caribbean at St. Augustine, although it was short-lived). Aided by their governments English, French and Dutch traders and colonists ignored the treaty to 'invade' Spanish territory - "No peace beyond the line". The Spanish could not afford a sufficient military presence to control the area or enforce their trading laws. This led to constant smuggling and colonization in peacetime and if a war was declare there was widespread piracy and privateering throughout the Caribbean.
The Spanish Caribbean empire was in decline from the 1600s. The silver had been a double-edged sword, its arrival in Europe providing only a temporary and self-destructive boost to Spain. While in The Caribbean the arrival of European diseases had more than decimated the local populations - the native population of New Spain had fallen by 96% between 1500 and 1600. The Spanish presence in the Caribbean was based on a 'masters and slaves' model, so while their expansion suffered along with the decline in peons the newly 'empty' lands were attractive to the more dynamic European nations like the Dutch United Provinces and England. Also the restrictive Spanish trading regulations came to be more openly flouted, Trinidad became a significant port for all nations.
In the 1620s and following the outbreak of the Thirty Years' War in 1618 the Spanish presence in the Caribbean began to decline at a faster rate, becoming more dependent on African slave labour and with a reduced military presence. While other nations began to become more established - Barbados, the first truly successful English colony was established as was a colony on Providence Island, which soon became a haven for pirates.
The end of widespread conflict in Europe left most of the nations in a dreadful state, especially Spain which had bankrupted the state. This was reflected in the Caribbean with both a constant influx of European refugees and the shrinking of Spanish power. While the major cities of the region were still Spanish the peripheries were being over-run by other nations more aggressive expansion. The English had expanded beyond Barbados, with successful colonies on St. Kitts and Nevis, Antigua, Montserrat, and Bermuda. The French were well established on Guadeloupe, Hispaniola and Martinique and they nominally held Tortuga, a noted pirate base from the 1640s. The Dutch had remained an almost baseless trading presence in the area but following the Spanish decline they became established at Curacao and St. Eustatius.
The Caribbean continued to reflect European policy shifts. As England, France and Holland became stronger they moved from fighting the Spanish over religion to fighting each other over economics. The English began economic sanctions against the Dutch in the 1650s and the two nations were at war three times in the next two decades. Louis XIV was pursuing a aggressive expansionist policy in France. In the 1660s the Spanish Empire had a brief revival with boosted silver output. Basically everyone was fighting all the other nations present in the Caribbean on-and-off. These vagaries were apparent in the Caribbean - St. Eustatius changes hands ten times between 1664 and 1674 and many other settlements were damaged by repeated conquest and reconquest. While the warring European nations provided almost no military support for the colonies, a bonanza for privateers and pirates. Port Royale in Jamaica joined the piracy bases, following the islands capture by the English in 1655.
While European warfare continued towards the end of the 17th century affairs in the Caribbean became more settled. The colonies were more important and the adverse economic effects of piracy were more apparent. The English were becoming a much more significant presence and stationed a naval squadron at Port Royale from the 1680s. Privateering was becoming rarer and naval pirate-hunting more common, although the Spanish established a Costa Guarda of privateers.
Privateers
In the Caribbean the use of privateers was especially popular. The cost of maintaining a fleet to defend the colonies was beyond national governments of the 16th and 17th Centuries. Private vessels would be commissioned into a 'navy' with a Letter of marque, paid with a substantial share of whatever they could capture from enemy ships and settlements, the rest going to the crown. These ships would operate independently or as a fleet and if successful the rewards could be great - when Francis Drake's captured the Spanish Silver Train at Nombre de Dios (Panama's Caribbean port at the time) in 1573 his crews were rich for life. This substantial profit made privateering something of a business, wealthy businessmen or nobles would be quite willing to finance this legitimized piracy in return for a share. The sale of captured goods was a boost to colonial economies as well.
Buccaneers
Specific to the Caribbean were pirates termed buccaneers. Roughly speaking they arrived in the 1630s and remained until the effective end of piracy in the 1730s. The original buccaneers were escapees from the colonies, forced to survive with little support they had to be skilled at boat construction and sailing and hunting. The word "buccaneer" is actually from the French boucaner, meaning smoked meat, from the hunters of wild oxen curing meat over an open fire. They transferred the skills which kept them alive into piracy. They operated with the partial support of the non-Spanish colonies and until the 1700s their activities were legal, or partially legal and there were irregular amnesties from all nations.
Traditionally buccaneers had a number of peculiarities. They were a democracy - the captain was elected by the crew and they could vote to replace him, the captain had to be a leader and a fighter - in combat he was expected to be fighting with his men not directing operations from a distance. Spoils were evenly divided into shares, while the officers had a greater number of shares it was because they took greater risks or had special skills. Often the crews would sail without wages, "on account" - the spoils would be built up over a course of months before being divided. There was a strong corps spirit among pirates. This allowed them to win sea battles: They typically outmanned trade vessels by big ratio. There was for some time a social insurance system, guaranteeing money or gold for battle wounds at a worked out scale. One undemocratic aspect is the fact that sometimes the pirates would force specialists like carpenters to sail with them for some time, though they were released when not needed any longer, had they not volunteered by that time. Note also, that a typical poor man did not have much of a fun carreer opportunity at the time other than joining the pirates, and it may be difficult to refute the notion that pirates just stole from thieves. They were egalitarian and liberated slaves when taking over slave ships. Their island communities however did not sustain this model of society in the long run.
In combat they were considered ferocious and were reputed to be experts with flintlock weapons (invented in 1615), but these were so unreliable that they were not in widespread military use before the 1670s.
The end of the classic age of Piracy
The decline of piracy in the Caribbean mirrored the decline of mercenaries and the rise of national armies in Europe. Following the end of the Thirty Years War nation power expanded - armies were codified and brought under Royal control and privateering was largely ended, the navies were expanded and their mission was stretched to cover combating piracy. The elimination of piracy from European waters expanded to the Caribbean in the 1700s, West Africa and North America by the 1710s and by the 1720s even the Indian Ocean was a tough place to pirate in. The famous pirates of the early 18th century were a completely illegal remnant of a more buccaneering age, they could expect no more than eventual capture while Henry Morgan got a knighthood and became governor of Jamaica.