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British naval dominance during the age of sail

(www.lesswrong.com)
98 points surprisetalk | 2 comments | 16 May 25 13:14 UTC | HN request time: 0.408s | source
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lurk2 ◴[16 May 25 17:36 UTC] No.44007988[source]▶
> Compensation: In addition to huge prizes—capturing a merchant vessel could make a captain wealthy for life—there was a wage system where officers were oversupplied and naval officers that weren’t at sea were kept at half pay. The unemployment pool that resulted from this efficiency wage made it easier to discipline officers by moving them back to the captains list. (Allen argues that a fixed-wage system would have led to adverse selection since captains on half pay weren’t permanently employees of the navy but would reject commissions that weren’t remunerative.)

I reread this three times and I can’t make heads or tails of what it’s supposed to mean. There is an oversupply of officers. They are kept at half pay. This affords opportunities to discipline officers. This is presumably because there are others willing to take his place, but all that is referenced is a captain’s list. Is this the list of officers on half-pay?

I genuinely can’t even understand the argument being made in brackets.

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unholyguy001 ◴[16 May 25 17:58 UTC] No.44008192[source]▶
There was an oversupply of officers. At any particular point in time many of the officers were “on the bench” at half pay.

This made it easy to replace underperforming officers with those on the bench

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1. anigbrowl ◴[16 May 25 20:36 UTC] No.44009592[source]▶
Now do the part in brackets that appears to contradict it.
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2. qzw ◴[17 May 25 05:06 UTC] No.44012164[source]▶
Ok I actually went and read the article by Allen, and I think LessWrong's paraphrasing is a bit sloppy. Allen's actual argument is that because all Royal Navy captains (not just those on half pay) are not permanent employees, they have the right to refuse any commission offered to them. They could then reject any commands that seem too dangerous or unprofitable. This would lead to adverse selection if there were no prize money (for capturing or sinking enemy ships, etc.) and they only received fixed wages. There would be little incentive for captains to take the unfavorable commissions. But the RN did have a very generous prize money system, and the prize money was often much greater than the regular wages. This means that even if a commission looked pretty bad, there was still the possibility of getting rich. Whereas there's no such opportunity at all if one's sitting on the shore. So captains rarely rejected commissions. It's basically akin to how startups usually offer more stock options and the chance to get rich in order to offset the higher risk and worse work/life balance compared to the BigCos.