British naval dominance during the age of sail

> 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.

As is customary, I read only what you quoted before the article.

The way I understood it is that main incentive was to capture ships, that's on top of the pay; So, like a bonus structure in modern day and age. If you weren't assigned to a ship, you'd still get paid but half of what you'd get on a ship. Since there were eventually more officers than ships, this created a pool of officers eager for assignments and thus "if you won't, there's someone that will" management style.

Now, a bit more complicated what Allen argued about, also from what I understood, is if captains were on fixed wage they'd turn down assignments (which they could since they weren't permanently employed) since reward isn't following the risk and you'd probably get only the worst or desperate captains to accept the job instead of competent which have all the reasons to refuse.

I don't know, maybe I read it wrong, but it makes sense like that at least.