Bannerman, Gordon

LSE Research Online

Business	of	war:	contractors	acted	as	the	hiddenwiring	of	the	British	army	in	the	1700sToday	we	are	accustomed	to	hearing	of	defence	contractors	playing	a	vital	non-combatant	role	in	warfare.	Whileresidual	suspicions	of	fraud	and	corruption	are	often	raised	in	areas	where	public	service	sits	uneasily	alongsideprivate	business	interests,	we	now	like	to	think	that	stricter	regulation	ensures	greater	transparency,	accountability,and	economy.	It	was	not	always	thus.	In	the	eighteenth	century,	contractors	had	a	bad	reputation	for	rapaciousnessand	profiteering.	In	fact,	this	association	was	far	older.	In	Shakespeare’s	Henry	V,	Pistol	boasts	“For	I	shall	sutler[trader]	be,	Unto	the	camp,	and	profits	will	accrue”.While	the	business	ethics	of	military	contracting	is	not	my	main	focus,	this	type	of	critique	has	featured	prominently	indiscussions	of	contractors.	The	great	historian	of	eighteenth-century	politics,	Sir	Lewis	Namier,	placed	greatemphasis	on	patronage,	clientage,	and	cronyism	in	awarding	contracts	and	appointing	officials.	Indeed,	until	recentlywe	might	have	been	forgiven	for	not	understanding	what	contractors	actually	did—most	pertinently	what	they	did	inthe	economic	life	of	the	country,	for	contractors	were	the	greatest	‘middlemen’	of	the	eighteenth	century,	and	as	suchoccupied	a	central	position	supplying	the	largest	organisations	of	that	century:	military	forces.	In	a	recent	article,	Ifound	contracting	to	be	an	extensive,	diverse,	and	complex	activity.In	contrast	to	European	armies,	the	British	army	laboured	under	constitutional	and	institutional	limitations,	oftenmaking	its	procedures	and	operations	laborious,	makeshift,	irregular,	and	informal.	Parliamentary	control	of	armyfinance	after	1688	and	the	absence	of	a	permanent	supply	organisation	were	problematic	when	the	Britishgovernment	sought	to	raise	a	large	army	to	combat	larger	European	standing	armies.	The	government	supplyapparatus	was	sparse,	with	great	reliance	placed	on	various	traditional	haphazard	methods	such	as	localrequisitioning	and	foraging.To	fill	the	gap	in	the	supply	system,	a	cohort	of	private	contractors	emerged	between	1739	and	1770,	who	quicklyassumed	a	vital	role	in	supply	matters.	Recent	work	on	naval	contractors	has	usefully	coined	the	term	‘the	ContractorState’,	an	overdue	recognition	of	contractors’	importance	to	a	highly-effective	public-private	partnership.	The	successof	contracting	was	based	on	market	knowledge	and	accessibility,	resource	procurement	and	allocation,	andorganisational	and	administrative	capacity	which	bureaucrats	would	have	found	difficult	to	organise.	Moreover,government	could	use	mercantile	expertise	without	having	to	capitalise	its	structures	and	operations,	as	would	haveoccurred	if	a	supply	corps	had	existed.LSE Business Review: Business of war: contractors acted as the hidden wiring of the British army in the 1700s Page 1 of 3		Date originally posted: 2018-02-07Permalink: http://blogs.lse.ac.uk/businessreview/2018/02/07/business-of-war-contractors-acted-as-the-hidden-wiring-of-the-british-army-in-the-1700s/Blog homepage: http://blogs.lse.ac.uk/businessreview/There	were	other	excellent,	rational	economic	reasons	for	using	contractors.	Adaptability	and	flexibility	were	vital,particularly	given	the	transition	from	peace	to	war	and	vice	versa.	In	Britain,	peace-time	establishments	were	low	butin	an	era	of	large	standing	armies,	mobilisation	to	a	wartime	establishment,	was	all	the	greater.	As	governmentneeded	to	move	rapidly,	contractors	provided	them	with	an	efficient	mechanism	for	achieving	this	transition	smoothly.Contractors	assumed	the	risk	of	over-stocking	goods,	which	might	need	to	be	sold	in	a	glutted,	post-war	market,	andthe	tasks	of	assembling	an	infrastructure	of	agents,	negotiating	transport,	and	dealing	with	supply	chains.	All	theserisk-laden	operations	were	detailed	within	contracts,	most	often	on	highly	advantageous,	risk-averse	terms	forgovernment.For	contractors,	the	prospect	of	profitability	was	inevitably	attractive,	and	essential	compensation,	if	men	were	to	riskcapital	and	reputation.	Trust	was	crucial	not	only	for	government	in	awarding	contracts	where	creditworthiness,ability,	and	respectability	were	key	elements,	but	also	permeated	different	sets	of	relationships	between	partners,suppliers,	and	agents.	Contractors	used	product	knowledge,	access	to	capital	and	credit,	market	intelligence,personal	and	professional	networks,	and	an	impressively	high	degree	of	connectivity	across	sectors,	to	overcomeproblems	of	risk,	scale,	and	cost.	To	achieve	these	objectives,	it	is	unsurprising	to	find	partnerships	were	common,and	especially	suitable	for	merchants	trading	to	specific	parts	of	the	world,	or	for	particular	ethnic	and	nationalgroups,	such	as	Scots	and	Sephardic	Jews,	who	were	influential	groups	throughout	the	eighteenth	century.The	range	of	people	and	occupations	involved	in	contracting	encompassed	craftsmen,	provision	merchants,	farmers,farriers,	coopers,	millers,	and	bakers,	to	name	only	a	few—a	range	clearly	indicative	of	a	complex,	stratified,	andinter-related	economy.	Horse-dealers	are	a	case	in	point.	Contracts	for	horses	were	made	with	a	distinct	communityof	London	horse-dealers;	for	those	outside	the	trade,	procurement	could	be	problematic.	Among	horse-dealers,partnerships	and	sub-contracting	was	often	necessary	to	meet	heightened	demands.	Several	worked	in	multiplecapacities	in	horse-racing,	horse-breeding,	inn-keeping,	running	mail-coaches,	and	additionally	supplyingencampments	with	wagons,	forage,	and	bread.Sub-contracting	was	integral	to	all	contracts,	and	acknowledgment	of	this	often-shadowy	world	indicates	thatcontracting	encompassed	a	huge	range	of	services.	Unfortunately	for	historians,	it	seems	likely	many	agreementswere	verbal,	informal,	or	unorthodox,	and	therefore	unrecorded,	but	sufficient	evidence	exists	to	illustrate	thecomplexity	of	contracting,	for	behind	simple	agreements	between	government	and	named	individuals	there	existed	ahost	of	agents,	assistants,	suppliers,	and	labourers.Out-sourcing	supply	always	raised	the	risk	of	fraud	and	corruption,	and	there	was	a	long	tradition	of	hostility	to	the‘monied	interest’	as	‘tax-eaters’	and	rapacious	beneficiaries	of	a	bloated	state	apparatus.	Combined	with	absurd	pre-Weberian	bureaucratic	practices	and	the	survival	of	antiquated	medieval	offices	as	a	vehicle	for	patronage,	it	waseasy	to	view	contractors	as	part	of	a	parasitic	political	system	of	‘Old	Corruption’	based	on	self-interest	and	personalgain.	Yet	in	assuming	risk,	using	market	intelligence	and	expertise,	and	organizing	supply	on	a	vast	scale,contractors	acted	as	quintessential	eighteenth-century	capitalists.	This	much	is	clear	from	extensive	sub-contractingwhich	was	very	much	the	‘hidden	wiring’	in	contract	performance.Ultimately,	the	endurance	and	strength	of	the	‘contractor	state’	rested	on	its	responsiveness	to	the	unpredictabilityand	unforeseen	demands	of	wartime.	The	expertise	the	British	state	harnessed	was	indicative	of	a	vibrant	highly-productive	agricultural	sector	and	a	labour-intensive	proto-industrial	sector.	Modest	improvements	in	production	andtechnological	progress	facilitated	efficient	supply	methods.	Yet,	human	agency	was	perhaps	most	vital	of	all,	for	onlyexpertise	in	coordination,	planning	and	distribution,	could	make	the	different	elements	work	together.The	named	contractor	was	coordinator,	facilitator,	and	middleman,	but	the	largely	hidden	world	of	sub-contractingreveals	that	behind	every	contract	were	a	myriad	of	people,	trades,	processes,	and	techniques.	While	contracts	wereoften	lucrative	and	a	means	of	advancement,	they	were	not	sinecures,	but	specialized	work	based	on	knowledge	andexperience.	From	the	vantage-point	of	the	twenty-first	century,	the	eighteenth-century	supply	system	wascharacterised	by	an	intelligent	use	of	available	resources,	and	was	innovative	in	its	rigorous	and	rational	approach	toresource	allocation	and	distribution.♣♣♣Notes:This	blog	post	is	based	on	the	authors’	paper	The	impact	of	war:	New	business	networks	and	small-scaleLSE Business Review: Business of war: contractors acted as the hidden wiring of the British army in the 1700s Page 2 of 3		Date originally posted: 2018-02-07Permalink: http://blogs.lse.ac.uk/businessreview/2018/02/07/business-of-war-contractors-acted-as-the-hidden-wiring-of-the-british-army-in-the-1700s/Blog homepage: http://blogs.lse.ac.uk/businessreview/contractors	in	Britain,	1739–1770,	in	Business	History,	Volume	60,	2018	–	Issue	1:	Business	of	WarThe	post	gives	the	views	of	its	authors,	not	the	position	of	LSE	Business	Review	or	the	London	School	ofEconomics.Featured	image	credit:	The	death	of	Major	Peirson,	by	John	Singleton	Copley,	Public	Domain,	The	YorckProject:	10.000	Meisterwerke	der	Malerei.	Distributed	by	DIRECTMEDIA	Publishing	GmbH.When	you	leave	a	comment,	you’re	agreeing	to	our	Comment	Policy.Gordon	Bannerman	teaches	business	history	in	the	Business	Department	at	the	University	ofGuelph-Humber,	Ontario.	He	previously	worked	as	a	Research	Assistant	at	LSE,	a	Select	Committeereporter	at	the	UK	Parliament,	and	Research	Officer	for	The	Letters	of	Richard	Cobden	project	at	theUniversity	of	East	Anglia.	In	the	latter	role,	he	is	a	named	contributor	to	the	four	published	volumesarising	from	the	project.	His	particular	areas	of	expertise	are	Early	Modern	and	Modern	British	social,economic	and	political	history,	and	the	history	of	business,	warfare,	and	commercial	policy.	Dr.Bannerman		received	his	Ph.D.	from	King’s	College	London	(KCL)	in	2005,	having	previously	studiedmedieval	and	modern	history	at	LSE	and	Kings	College	London.	He	was	admitted	as	a	Fellow	of	the	Royal	HistoricalSociety	in	2015	for	his	contribution	to	historical	scholarship.LSE Business Review: Business of war: contractors acted as the hidden wiring of the British army in the 1700s Page 3 of 3		Date originally posted: 2018-02-07Permalink: http://blogs.lse.ac.uk/businessreview/2018/02/07/business-of-war-contractors-acted-as-the-hidden-wiring-of-the-british-army-in-the-1700s/Blog homepage: http://blogs.lse.ac.uk/businessreview/

Business of war: contractors acted as the hidden wiring of the British army in the 1700s

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Business of war: contractors acted as the hidden wiring of the British army in the 1700s

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