Tolkien does address this in the Myth's Transformed texts. He states:Athrabeth wrote:But then there`s Grishnákh and Gorbag and Shagrat. Let`s face it, these three exhibit clearly defined independent thought and purpose. Tolkien presents them with the ability to think mutinously towards the Dark Lord and to act in their own self-interest. They just don`t fit any of the rationales for the fundamental nature of Orcs that I`ve ever come across, including Tolkien`s own.
As the case of Aulë and the Dwarves shows, only Eru could make creatures with independent wills, and with reasoning powers. But Orcs seem to have both: they can try to cheat Morgoth/Sauron, rebel agaisnt him, or criticize him.
But later in the same text, he provides the following response:
The Orcs were beasts of humanized shape (to mock Men and Elves) deliberately perverted/converted into a more close resemblance to Men. Their 'talking' was really reeling off 'records' set in them by Melkor. Even their rebellious critical words -- he knew about them.
Later in the same essay, however, Tolkien reiterates the belief that the origin of the Orcs was from corrupted Elves. Christopher points out that this seems to contradict the statement that the Orcs were mere beasts. However, the two statements are consistent within the context of my theory. They started out as sentient beings, but they became mere beasts.
In fact, that is exactly what Tolkien DID do (as I pointed out earlier), but he then replaced that original story was the story of the Orcs being corrupted Elves and/or Men. And I think he was right to do so. I think creating beings that so closely mirrored the Children of Eru (even without being free-willed, sentient beings) was beyond Melkor's abilities by the time the Orcs came into being. I think that he had already spent so much of his original capacities in hatred and spite and domination of other spirits and the very substance of Arda itself that his creative abilities were far below that of Aulë. The concept of him corrupting beings made by Eru to such extent that they no longer had the same fundamental nature as the original beings, having become mere hröar with no fëar of their own, strikes me as much more consistent with the Morgoth that Melkor had already become.I`ve never really understood why Tolkien didn`t just have Melkor create the Orcs in exactly the same manner as Aulë created the Dwarves. It`s such a perfect set-up. Eru lifted the Dwarves into the higher ranks of free-willed, sentient beings because of Aulë`s truly good (if misguided) intentions, his love and compassion for the beings he had created, and his remorse at overstepping his mandate as one of the Valar. Of course none of those criteria would apply to Melkor, so the mindless, soulless creatures known as Orcs could exist without the moral and logical conundrum.