The Economics of Conscription
The new issue of Economics Journal Watch is up, and it includes a particularly interesting article by David Henderson on the role of economists in ending the draft. (These links are not to .pdf files but the article, alas, is in that format.)
The article provides a timely reminder that the draft is extraordinarily expensive, far more costly (not to mention less professional) than an all-volunteer force. The costs are just hidden:
One of the first empirical studies of the economics of the draft and of ending the draft was done by Walter Oi (1967a, 1967b), an economics professor then at the University of Washington and later at the University of Rochester's Graduate School of Management. In his study published in the Sol Tax volume (Oi 1967b), Oi distinguished clearly between the budgetary cost of military manpower and the economic cost. Oi granted the obvious, that a military of given size could be obtained with a lower budgetary cost if the government used the threat of force to get people to join--that is, used the draft. But, he noted, the hidden cost of this was the loss of well-being among draftees and draft-induced volunteers. Using some empirical methods that were sophisticated for their day, Oi estimated the loss to draftees and draft-induced volunteers and found it quite high--between $826 million and $1.134 billion. While this number might seem low today, Oi's data were in mid-1960s dollars. Inflation-adjusted to 2005, the losses would be $4.8 billion to $6.6 billion.
Another passage serves as a nice reminder that the current secretary of defense is especially unlikely to change Pentagon policy and offers a compelling argument against the attack on volunteers as "mercenaries."
In December 1966, various prominent and less-prominent academics, politicians, and activists were invited to a four-day conference at the University of Chicago. Papers were commissioned and the people who wrote them gave summaries, after which the discussion was open to all. Fortunately, the discussion was transcribed. The papers and discussions appear in the Sol Tax volume referenced earlier, which came out the following year. The invitees included two young anti-draft Congressmen, Robert Kastenmeier (D-Wisconsin) and Donald Rumsfeld (R-Illinois), and one pro-draft Senator, Edward Kennedy (D-Massachusetts). Also attending were pro-draft anthropologist Margaret Mead and anti-draft economists Milton Friedman and Walter Oi. Friedman gave the general economic and philosophical case for a voluntary military in his presentation, "Why Not a Voluntary Army?" Reading through the whole Sol Tax volume, with all the papers and transcripts of the discussion, I had the sense that there was a coalescing of views over the four-day conference, as people from various parts of the ideological spectrum found that they shared a strong antipathy to the draft and that the economists had a surprisingly strong economic case against it. Friedman's speech and his various comments at the conference still make compelling reading. One of his best rhetorical flourishes was his criticism of the charge that those who advocate ending the draft are advocating a "mercenary" army. Friedman said:
Now, when anybody starts talking about this [an allvolunteer force] he immediately shifts language. My army is "volunteer," your army is "professional," and the enemy's army is "mercenary." All these three words mean exactly the same thing. I am a volunteer professor, I am a mercenary professor, and I am a professional professor. And all you people around here are mercenary professional people. And I trust you realize that. It's always a puzzle to me why people should think that the term "mercenary" somehow has a negative connotation. I remind you of that wonderful quotation of Adam Smith when he said, "You do not owe your daily bread to the benevolence of the baker, but to his proper regard for his own interest." And this is much more broadly based. In fact, I think mercenary motives are among the least unattractive that we have.
Click here to download the file.