Duty and Conscience
Captain Vere's dilemma—whether to convict Billy and hang him in spite of his sense that the young sailor is innocent—arises from Vere's very nature. Captain Vere is characterized throughout Billy Budd as a man who heeds his duty. Even before Captain Vere appears, a description of the captain by minor character Captain Graveling of the Rights-of-Man anticipates the more central captain's problem: "His duty he always faithfully did; but duty is sometimes a dry obligation." The "dryness" of duty is in its disconnection from feeling or intuition: duty is intellectual rather than emotional. And Captain Vere is described as possessing "a marked leaning toward everything intellectual," and "never tolerating an infraction of discipline." He adheres to the law and expects his men to do so as well.

Captain Vere's nickname, "Starry Vere," comes from a poem by Andrew Marvell, in which allusion is made to the "discipline severe" of a figure called "starry Vere," actually an ancestor of the captain. These early references to Captain Vere's rigidness concerning law and duty create a character who later in the novel must face a moral dilemma and choose between his duty and his conscience. When Claggart comes to Vere with his accusation against Billy, Vere is wary of the strange officer's manner and doubts that Billy Budd could be involved in such a plot as Claggart implies. Yet Vere knows he must question Billy; this is the proper way to handle such an allegation. When Billy strikes Claggart, killing him, Vere reacts in "an excited manner [such as the surgeon] had never before observed in the Bellipotent's captain." In this situation, Vere's duty is made unclear by his emotional response to "so strange and extraordinary a tragedy." Yet he immediately calls the drumhead court, leaving the surgeon to think that the captain has perhaps come "unhinged."

The members of the drumhead court, believing in Billy's innocence, are pulled by their conscience to vote to "convict and yet mitigate the penalty," but Captain Vere stands fast by his duty and reminds the court that they should not "Let warm hearts betray heads that should be cool." Billy's execution goes forward because of Captain Vere's intense focus on duty. As naval officers, he tells the court, "in receiving our commissions we in the most important regards ceased to be natural free agents." He goes on to ask them to "tell me whether or not, occupying the position we do, private conscience should not yield to that imperial one formulated in the code under which alone we officially proceed?" Essentially, the captain and his officers face a problem of whether to ignore their consciences, which speak strongly to them of Billy's innocence, or to follow their duty as officers in the King's navy and order Billy's death. The accusation of mutiny aside, the simple fact is that Billy, a foretopman, has struck and killed his superior, the master-at-arms. This fact, viewed objectively and according to the law, must result in execution of the sailor, regardless of his innocent nature. Captain Vere, at his own death, appears still to be haunted by his decision in favor of duty: his last words are "Billy Budd, Billy Budd."

Innocence
Billy Budd's innocence—"his blinder," according to the narrator—is his tragic flaw. His innocence is what makes him the Handsome Sailor—it radiates from his laughing "welkin eyes" and makes him a peacemaker and a friend to all, drawing others to him. Yet aboard the Bellipotent, one of the men who is drawn to him is motivated by envy and malice: Claggart. Here, in his encounters with the scheming master-at-arms, is where Billy's innocence is his weakness. He cannot comprehend the evil in Claggart, nor can he grasp that it is directed at him.

A foundling with no knowledge of his parents, Billy is illiterate and has had little experience with the world, having spent much of his life on board ship. Billy is "little more than an upright barbarian, much such perhaps as Adam might have been were the urbane Serpent wriggled himself into his company." Adamic innocence is the purest kind of innocence, and a comparison with Adam before the Fall implies a closeness to nature and an innocence that is untouched by even a suggestion of evil.

When Billy takes great care to keep his possessions in order and perform his duties correctly, he is puzzled when he finds "something amiss." When he consults the wise Dansker, Billy is even more perplexed when the latter implies that Claggart has had something to do with Billy's troubles. The Dansker's insistence that "Jemmy Legs is down on you" proves "incomprehensible to a novice, [and] disturbed Billy almost as much as the mystery for which he had sought explanation." Billy is fundamentally incapable of comprehending how or why someone could be out to get him. Not only is he young and inexperienced; Billy "had none of that intuitive knowledge of the bad," which others with less innocent natures may possess, enabling them to understand evil without having to experience it.

Law and Nature
Captain Vere defines the theme of law vs. nature when he admonishes the drumhead court to follow their duty to the King rather than listening to their hearts. He asks the members of the court how they can sentence to death "a fellow creature innocent before God, and whom we feel to be so?" When the court appears sympathetic to his question, he goes on,

I too feel that, the full force of that. It is Nature. But do these buttons that we wear attest that our allegiance is to Nature? No, to the King. Though the ocean, which is inviolate Nature primeval, though this be the element where we move and have our being as sailors, yet as the King's officers lies our duty in a sphere correspondingly natural? So little is that true, that in receiving our commissions we in the most important regards ceased to be natural free agents.

Captain Vere's statement to the court highlights an opposition in the novel between human-made law and nature. Billy represents nature. The narrator calls him "a barbarian"; he "stands nearer to unadulterated Nature" than the other characters by virtue of his innocence. The manner in which Billy's case is handled represents the force of law upon nature: men who feel that Billy is innocent know that they must follow the King's laws against their better judgment. This problem is at the heart of the novel.

Evil
John Claggart personifies evil in Billy Budd. The narrator, who admits to his own tendencies toward innocence, claims not to be able to grasp Claggart's character in full: "His portrait I essay, but shall never hit it." Claggart is portrayed as mysterious and foreign. Little is known about him or his past. His complexion hints at "something defective or abnormal in the constitution or blood," and although he seems to have had an education, "Nothing is known of his former life." Claggart's characterization as dark and unknowable establishes a feeling of dread about him. Regarding the source of Claggart's evil, the narrator touches upon the question of whether one is born evil or learns to be so. In Claggart, he says, "the mania of an evil nature [was] not engendered by vicious training or corrupting books...but born with him and innate, in short 'a depravity according to nature.'" Linked with such a nature is "an uncommon prudence...for it has everything to hide." Claggart behaves courteously toward Billy, covering up his hatred and envy of the young sailor, his "monomania...[was] covered over by his self-contained and rational demeanor." If Billy Budd is Adam before the Fall, Claggart represents the serpent who introduces the innocent man to pure evil.