Lots of great discussion here! One other thing that I might want to mention related is the fact that the Confederacy has claimed control of the Ruby Sea "Since Antiquity." In essence, they're more of a fact of life to the locals than any sort of invading force or unexpected group of pirates. They supposedly have a history lasting centuries. Indeed, they're practically considered a sovereign nation by the locals, even if the Encyclopedia Eorzea II mentions in passing a few failed attempts to drive them out centuries ago. They also have rather codified rules and the like, and I think that there are some intentional similarities to the past of Limsa Lominsa. If they got a strong leader like Merlwyb they could realistically organize in a similar manner.They also have clear relations to outside groups, such as helping out the villagers of Isari and other coastal towns, or trading directly with outsiders and the Kojin. The fact that Doma sought to include them in their Defensive Alliance speaks a lot to their status and influence. The idea of Hien or others electing to simply legitimize them as a Sovereign nation would not be out of course honestly, and would be interesting to see even if the game is probably more or less 'done' with Doman politics for the moment.
The Confederacy even has *Heaven on High Spoilers* relations to the Okinishu (apologies on the name, away from my Lorebook) a secretive but highly important group of scholars and crafters in the Far East. They are far more than 'mere' pirates, and the fact that the Garleans treat them as such is shown to be a sign of their arrogance and ignorance.
As to how they made money, Hingashi may be largely cut off from the outside world, but there is still (used to be) a fairly large amount of trade in the region. The trade funnel between the Far East and Eorzea/other regions is referenced in many places, including being named as a great source of wealth for Dalmasca, Hingashi/Kugane, and Doma. The paper created in Doma, for example, is mentioned as a famous export for the region, and beloved in farther off places such as Radz-at-Han and even parts of Eorzea. The presence of large Eorzean companies like the East Aldenard Trading Company and the like is further evidence of this trade. However, this trade has been disrupted in recent years by Garlean intervention, something that has ruined many a fortune. The idea of the Garlean Empire ruining traditional ways of life and livelihood is a consistent theme throughout Stormblood. The destroyed economies and disruption of Doma's trade, Ala Ghanna's stonecutting, and Ala Ghiri's industry serve as fine examples. It sort of makes things clear that despite their advanced technology, their industrialization does little to raise the general standard of living, and only really helps themselves. In the Lorebook they specifically talk about how while the sections of Ala Migho given over to Garlean Colonizers benefited from their advanced technology, they kept it away from the locals. It creates a purposeful irony and hypocrisy for an Empire supposedly dedicated to 'progress.' By spurning the Confederacy and aiding groups like the Red Kojin, the Empire's rule ironically made the Ruby Sea more dangerous than it used to be. Thus, 'siding' with the Confederacy isn't really as bad of an idea as it sounds!
I hope that some of what I've written helps!
EDIT: Cleaned up some writing. That's what I get for writing it in scattered fashion at work.


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