In 1787, the British government (having lost their American…
In 1787, the British government (having lost their American colonies) started shipping convicts to Australia. They hired sea captains to transport the convicts by sailing ship. Captains were paid upfront for the number of convicts they would be transporting. Conditions on board the ships were monstrous. On one voyage, more than one-third of the men died and the rest arrived beaten, starved and sick. Yet there was food available for the captain to sell in Australia. People were outraged. Newspapers editorialized in favor of better conditions, clergy appealed to the captains’ sense of humanity, and legislators passed regulations requiring better and more food and water, light and air, and proper medical care. Yet the death rate remained shockingly high. Nothing appeared to be working. The prime minister has turned to you, a renowned economist, to tackle the problem of ensuring better treatment for the convicts. Using the Economic Way of Thinking, propose a new compensation structure for captains and explain why you expect this new structure to accomplish the intended purpose of ensuring better treatment for the convicts.
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