The Provision of Naval Defense in the Early American Republic a Comparison of the U.S

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The Provision of Naval Defense in the Early American Republic a Comparison of the U.S SUBSCRIBE NOW AND RECEIVE CRISIS AND LEVIATHAN* FREE! “The Independent Review does not accept “The Independent Review is pronouncements of government officials nor the excellent.” conventional wisdom at face value.” —GARY BECKER, Noble Laureate —JOHN R. MACARTHUR, Publisher, Harper’s in Economic Sciences Subscribe to The Independent Review and receive a free book of your choice* such as the 25th Anniversary Edition of Crisis and Leviathan: Critical Episodes in the Growth of American Government, by Founding Editor Robert Higgs. This quarterly journal, guided by co-editors Christopher J. Coyne, and Michael C. Munger, and Robert M. Whaples offers leading-edge insights on today’s most critical issues in economics, healthcare, education, law, history, political science, philosophy, and sociology. Thought-provoking and educational, The Independent Review is blazing the way toward informed debate! Student? Educator? Journalist? Business or civic leader? Engaged citizen? This journal is for YOU! *Order today for more FREE book options Perfect for students or anyone on the go! The Independent Review is available on mobile devices or tablets: iOS devices, Amazon Kindle Fire, or Android through Magzter. INDEPENDENT INSTITUTE, 100 SWAN WAY, OAKLAND, CA 94621 • 800-927-8733 • [email protected] PROMO CODE IRA1703 The Provision of Naval Defense in the Early American Republic A Comparison of the U.S. Navy and Privateers, 1789–1815 F NICHOLAS J. ROSS he War of 1812 began badly for British ocean-going commerce. Although the United States had a pitifully small navy, it did have a large merchant T marine fleet keen to make a profit. Shortly after the outbreak of the war, the London Times lamented, “American merchant seamen were almost to a man con- verted into privateersmen and the whole of our West India trade either has or will in consequence sustain proportionate loss” (Letters from New York State 1812). Although the wars of the late eighteenth and early nineteenth centuries typically evoke images of large public armies and navies created to wage warfare for the state’s political goals, privateers also played an important role. By licensing ships of the merchant marine to legally plunder from other nations’ ships, governments could reduce their enemies’ trade at very little direct cost to themselves and have a viable alternative to the public provision of naval defense. In providing naval defense during the early republic, the U.S. government faced a trade-off between a relatively versatile navy at high direct cost and privateers at little direct cost. Given the incentives facing merchants in the shipping industry, however, Nicholas J. Ross is a graduate student at George Mason University. The Independent Review, v. 16, n. 3, Winter 2012, ISSN 1086–1653, Copyright © 2011, pp. 417–433. 417 418 F NICHOLAS J. ROSS privateers were relatively inflexible. In this article, I analyze the three major naval conflicts during the early republic and answer the question: Why did the United States rely heavily on public provision of naval defense during the Barbary Pirate Wars and the Quasi-War with France but rely more heavily on private provision of naval defense during the War of 1812? Analytical Framework Historian Wade Dudley succinctly summarizes the role of sea power as “protect[ing] a nation’s assets and extend[ing] national policy” (2003, 23). Naval forces could serve specifically by weakening the enemy’s economy by interrupting its seaborne com- merce and by transporting land forces to invade the enemy’s territories. Naval forces could also serve to counter the enemy’s attempts to do the same. Table 1 summarizes the four major missions in naval warfare and the ability of public and private navies to execute these missions. The Royal Navy, generally considered the world’s best for much of the eigh- teenth and nineteenth centuries and a benchmark against which other navies can be evaluated, abounds with examples of a public navy that executed all four missions. Public navies could facilitate invasion by transporting armies or by escorting invasion armies. The Royal Navy’s transportation of land forces to raid the Chesapeake Bay area, to assault New Orleans in 1814, and to support the war against Napoleon on the Iberian Peninsula are examples of naval forces facilitating invasions. Public navies also had the capability to reduce coastal fortifications to allow for the invasion of cities. The Royal Navy’s assault on Copenhagen in 1801 to destroy the Danish fleet provides a successful example of this type of mission. The Royal Navy also succeeded in preventing invasion of Great Britain by engaging the French and its allies in battles to destroy their navies, such as Trafalgar in 1805, and by maintaining a fleet in the English Channel to deter invasions. The Royal Navy attempted to weaken its enemies’ commerce through naval blockades and capture of enemy merchant vessels. It could also protect Great Britain’s commerce by escorting merchant vessels in a system of convoys. Table 1 Capabilities of Public and Private Navies Capability Public Navy Private Navy Facilitate invasion of enemy X Defend against invasion X Protect own nation’s commerce X Weaken enemy’s commerce X X THE INDEPENDENT REVIEW THE PROVISION OF NAVAL DEFENSE IN EARLY U.S. HISTORY F 419 Privateers, in contrast, focused almost exclusively on raiding an enemy’s com- merce. They supported their own country’s commerce by bringing in captured goods for sale. However, privateers generally did not engage in ship-to-ship combat to gain control of the seas or to invade enemy territory. To understand why they were much more limited in their operations than were public navies, one needs to examine how the history of privateering influenced their incentives. Privateering had its origins at least as far back as the Middle Ages and appears to have begun with the merchants of Italian city-states. In the absence of an interna- tional governing body, merchants could seek a “letter of marque and reprisal” from their government that allowed them to steal from another party for failure to pay debt, for theft of property, or for similar grievances (Garitee 1977, 3–4; Starkey 1990, 20–21). The tradition of the government’s paying merchant ships for service as naval vessels during the Middle Ages and early-modern period may be another origin of the activity. However, the practice of hiring merchant ships to serve as warships had died out in the 1660s as “purpose-built warships” made the use of merchant ships in these duties impracticable (Starkey 1990, 21). Aside from a few exceptions, such as the British government’s payment of bounties for the capture of enemy warships (Starkey 1990, 253) or merchants’ payment for a ship to cruise the waters in the vicinity of its port to guard against enemy privateers (Swanson 1991, 51), privateers in the eigh- teenth and early nineteenth centuries received no direct financial support from the government. These historical examples of private warships in noncommerce raiding roles provoke a counterfactual question: Why did the federal government not provide financial support to privateers to engage in the first three missions of naval defense listed in table 1? Indeed, during the War of 1812, the U.S. Congress provided bounties for prisoners captured by privateers engaged in commerce raiding (Garitee 1977, 168). Perhaps the federal government could have reallocated resources from the U.S. Navy to fund an extensive system of bounties to give privateers an incentive to engage in missions other than commerce raiding. Economist Alexander Tabarrok provides an answer to this question by identifying privateering as a type of piece-rate system and arguing that navies, like many business firms, can capture benefits by employing bureaucratic production instead of piece- rate production when output is difficult to measure (2007, 574–75). Although for commerce-raiding missions in the late eighteenth and early nineteenth centuries output could be readily measured in terms of captured ships and men, the complexity of the other three missions in table 1 made it very difficult to establish the bounty needed to give privateers an incentive to accomplish the state’s objectives. Tabarrok contends that public navies had an advantage over privateers in this regard because “governments could order navy personnel to do what they wanted them to do without having to change piece rates on the fly” (575). For the specific case of the U.S. Navy during the early republic, multiple historical examples of inefficiencies do exist. Nevertheless, the ultimate success of the U.S. Navy in accomplishing a variety of difficult tasks in the VOLUME 16, NUMBER 3, WINTER 2012 420 F NICHOLAS J. ROSS Barbary Pirate Wars and the Quasi-War with France as well as decisive victories on Lake Erie and Lake Champlain during the War of 1812, tend to support Tabarrok’s view that bureaucratic production of naval defense was indeed a viable alternative to giving privateers an incentive through government piece-rate bounties. The lack of direct financial support meant that privateers depended on capturing enemy vessels in order to gain revenue. Therefore, privateers provided naval defense only in the form of commerce raiding because this mission was the only form of naval defense from which they could obtain revenue. To understand the extent to which merchants would invest in privateering, one needs to examine their legal environment and the major factors that influenced the profitability of privateering. By the time of the early republic, privateering relied on a developed legal system provided by the federal government. American merchants who wished to engage in privateering needed to obtain a letter of marque and reprisal from the federal govern- ment and to post bonds that the privateer’s owners would forfeit if the privateer broke the law (Petrie 1999, 9–10; Tabarrok 2007, 570).
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