In 1849, Thomas Carlyle called economics ‘the Dismal Science.” The name stuck, but most people using the term have forgotten why Carlyle gave us that name.
Carlyle was an influential essayist, eminent in literature. He was also an antisemite and a supporter of slavery. He believed in a natural aristocracy among races and that slavery was necessary for the moral improvement of those enslaved. He contrasted the ‘gay’ sciences of art and literature, which recognised racial hierarchies, with the dismal science of political economy, which denied it.
He blamed the coalition of Christian moralists centred at Exeter Hall, and political economists like John Stuart Mill, for slavery’s abolition. In light of that, economists should be proud to be dismal.
A little over a century later, economists followed in the same proud tradition when they helped end America’s system of military conscription. Other countries followed.
Last week, the Initiative’s Executive Director Oliver Hartwich discussed the decline in European military readiness since the end of conscription, in the context of an increasing threat from Russia. He noted that a “wholesale return to mass conscription seems unlikely” because of political, economic, and social barriers, and emphasised the need to improve readiness.
Like Oliver, I find the likelihood of Russia extending its war on Ukraine to other European nations alarmingly high.
But a wholesale return to conscription ought to remain off the table, at least in peacetime, for reasons well-canvased by economists in the mid-20th century.
It’s worth looking back at the debates and the economic arguments against conscription. I think economists should be proud of that bit of our intellectual history.
We can perhaps start in the middle of those debates, before looking back to their origins.
Thomas Gates, Jr, Secretary of Defence under President Eisenhower, was chosen to chair President Nixon’s Commission examining the case for and ways of transitioning to all-volunteer armed forces.
President Nixon, who favoured abolishing conscription, told Gates that Gate’s opposition “to the whole idea of a volunteer force” was why he was chosen: “If you change your mind and think we should end the draft, then I’ll know it is a good idea.”
University of Chicago economist Professor Milton Friedman served on the Gates Commission. He later recounted an exchange with General Westmoreland:
One person who testified was General Westmoreland. He was then, I believe, chief of staff of the army, and he was testifying in that capacity. Like almost all military men who testified, he testified against a volunteer armed force. In the course of his testimony, he made the statement that he did not want to command an army of mercenaries. I stopped him and said, “General, would you rather command an army of slaves?” He drew himself back and said, “I don’t like to hear our patriotic draftees referred to as slaves.” I replied, “General, I don’t like to hear our patriotic volunteers referred to as mercenaries.” But I went on to say, “If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by a mercenary physician, we use a mercenary lawyer, and we get our meat from a mercenary butcher.”
Friedman’s opposition to conscription was longstanding. His 1962 work Capitalism and Freedom included peacetime conscription in a list of government activities that he found fundamentally unjustifiable in a liberal society.
He wrote,
The appropriate free market arrangement is volunteer military forces; which is to say, hiring men to serve. There is no justification for not paying whatever price is necessary to attract the required number of men. Present arrangements are inequitable and arbitrary, seriously interfere with the freedom of young men to shape their lives, and probably are even more costly than the market alternative. (Universal military training to provide a reserve for war time is a different problem and may be justified on liberal grounds.)
He reiterated the call in Newsweek in December 1966, when 385,000 American troops, many conscripted, served in Vietnam.
Friedman’s call did not come out of nowhere. It came from sound application of microeconomic principles taught at the University of Chicago, and from his commitment to liberalism.
Gary Becker completed his doctorate at the University of Chicago in 1955. Friedman served on his dissertation committee and had taught him microeconomics. In 1957, Becker wrote what is arguably the first formal economic analysis of conscription during a summer at the RAND Corporation.
Becker’s paper was not published and was lost for decades; it has since partially been published.
While Friedman would not have seen the paper when forming his own views on conscription, Becker’s method of analysis was entirely the kind of microeconomics Becker learned at Chicago from Friedman. Walter Oi, who undertook many of the studies relied on by the Commission, was a graduate student at Chicago when Becker was on faculty. Becker later set conscription economics questions in his exams while teaching at Columbia.
The Chicago-style economics approach recognised that conscription does not reduce the cost to the country of running a military. It just shifts a large portion of the burden of running the military onto young men subject to conscription.
Young men typically form the bulk of an armed service. When servicemen are volunteers, the burden of paying them falls on taxpayers generally. When they are conscripts, a more substantial part of the burden of funding the military falls directly on those coerced into service.
And there is no good reason in tax theory for setting that extra part of the burden on draftees, short of large-scale war.
An all-volunteer army would require paying high enough wages to attract and retain the desired number of troops. The burden of any resulting cost increase would fall on taxpayers. But a military required to pay enough to attract soldiers might well decide to hire fewer soldiers and provide each soldier with more and better equipment instead.
In other words, access to forced labour encourages militaries to use too much of it.
Further, volunteers may be looking toward a military career, and the prospect for advancement encourages diligence. Conscripts who do not want to be in service would be expected only to do the minimum necessary to avoid being punished.
Becker also highlighted conscription’s misallocation of resources. Under an all-volunteer force, the military hires for the skills it needs. Under conscription, it gets a distribution of skills roughly comparable to those of the conscripted population at large: far too many of some skills, and far too few of others.
The Gates Commission revisited these kinds of arguments, augmented by empirical work by Walter Oi and by Friedman’s formidable persuasive skills.
The Gates Commission recommended ending the draft by a vote of 14 to zero, with one abstention due to illness, in 1970. The draft was abandoned in June 1973.
Friedman had always set a caveat that, in times of major wars in which a very high proportion of eligible men might serve in the military, conscription could be least bad. I doubt he would have objected to Ukraine using conscription in its defence, and neither do I.
But outside of Ukraine, Europe is not at war. Countries have a lot of options short of coercion. They can increase pay to attract people into military training and reserves. They can procure more equipment to have at the ready. And they can provide more extensive support to Ukraine.
Conscription really should not be under consideration. Barring imminent major war, there is little economic case for reinstating this more minor form of slavery.
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE
He blamed the coalition of Christian moralists centred at Exeter Hall, and political economists like John Stuart Mill, for slavery’s abolition. In light of that, economists should be proud to be dismal.
A little over a century later, economists followed in the same proud tradition when they helped end America’s system of military conscription. Other countries followed.
Last week, the Initiative’s Executive Director Oliver Hartwich discussed the decline in European military readiness since the end of conscription, in the context of an increasing threat from Russia. He noted that a “wholesale return to mass conscription seems unlikely” because of political, economic, and social barriers, and emphasised the need to improve readiness.
Like Oliver, I find the likelihood of Russia extending its war on Ukraine to other European nations alarmingly high.
But a wholesale return to conscription ought to remain off the table, at least in peacetime, for reasons well-canvased by economists in the mid-20th century.
It’s worth looking back at the debates and the economic arguments against conscription. I think economists should be proud of that bit of our intellectual history.
We can perhaps start in the middle of those debates, before looking back to their origins.
Thomas Gates, Jr, Secretary of Defence under President Eisenhower, was chosen to chair President Nixon’s Commission examining the case for and ways of transitioning to all-volunteer armed forces.
President Nixon, who favoured abolishing conscription, told Gates that Gate’s opposition “to the whole idea of a volunteer force” was why he was chosen: “If you change your mind and think we should end the draft, then I’ll know it is a good idea.”
University of Chicago economist Professor Milton Friedman served on the Gates Commission. He later recounted an exchange with General Westmoreland:
One person who testified was General Westmoreland. He was then, I believe, chief of staff of the army, and he was testifying in that capacity. Like almost all military men who testified, he testified against a volunteer armed force. In the course of his testimony, he made the statement that he did not want to command an army of mercenaries. I stopped him and said, “General, would you rather command an army of slaves?” He drew himself back and said, “I don’t like to hear our patriotic draftees referred to as slaves.” I replied, “General, I don’t like to hear our patriotic volunteers referred to as mercenaries.” But I went on to say, “If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by a mercenary physician, we use a mercenary lawyer, and we get our meat from a mercenary butcher.”
Friedman’s opposition to conscription was longstanding. His 1962 work Capitalism and Freedom included peacetime conscription in a list of government activities that he found fundamentally unjustifiable in a liberal society.
He wrote,
The appropriate free market arrangement is volunteer military forces; which is to say, hiring men to serve. There is no justification for not paying whatever price is necessary to attract the required number of men. Present arrangements are inequitable and arbitrary, seriously interfere with the freedom of young men to shape their lives, and probably are even more costly than the market alternative. (Universal military training to provide a reserve for war time is a different problem and may be justified on liberal grounds.)
He reiterated the call in Newsweek in December 1966, when 385,000 American troops, many conscripted, served in Vietnam.
Friedman’s call did not come out of nowhere. It came from sound application of microeconomic principles taught at the University of Chicago, and from his commitment to liberalism.
Gary Becker completed his doctorate at the University of Chicago in 1955. Friedman served on his dissertation committee and had taught him microeconomics. In 1957, Becker wrote what is arguably the first formal economic analysis of conscription during a summer at the RAND Corporation.
Becker’s paper was not published and was lost for decades; it has since partially been published.
While Friedman would not have seen the paper when forming his own views on conscription, Becker’s method of analysis was entirely the kind of microeconomics Becker learned at Chicago from Friedman. Walter Oi, who undertook many of the studies relied on by the Commission, was a graduate student at Chicago when Becker was on faculty. Becker later set conscription economics questions in his exams while teaching at Columbia.
The Chicago-style economics approach recognised that conscription does not reduce the cost to the country of running a military. It just shifts a large portion of the burden of running the military onto young men subject to conscription.
Young men typically form the bulk of an armed service. When servicemen are volunteers, the burden of paying them falls on taxpayers generally. When they are conscripts, a more substantial part of the burden of funding the military falls directly on those coerced into service.
And there is no good reason in tax theory for setting that extra part of the burden on draftees, short of large-scale war.
An all-volunteer army would require paying high enough wages to attract and retain the desired number of troops. The burden of any resulting cost increase would fall on taxpayers. But a military required to pay enough to attract soldiers might well decide to hire fewer soldiers and provide each soldier with more and better equipment instead.
In other words, access to forced labour encourages militaries to use too much of it.
Further, volunteers may be looking toward a military career, and the prospect for advancement encourages diligence. Conscripts who do not want to be in service would be expected only to do the minimum necessary to avoid being punished.
Becker also highlighted conscription’s misallocation of resources. Under an all-volunteer force, the military hires for the skills it needs. Under conscription, it gets a distribution of skills roughly comparable to those of the conscripted population at large: far too many of some skills, and far too few of others.
The Gates Commission revisited these kinds of arguments, augmented by empirical work by Walter Oi and by Friedman’s formidable persuasive skills.
The Gates Commission recommended ending the draft by a vote of 14 to zero, with one abstention due to illness, in 1970. The draft was abandoned in June 1973.
Friedman had always set a caveat that, in times of major wars in which a very high proportion of eligible men might serve in the military, conscription could be least bad. I doubt he would have objected to Ukraine using conscription in its defence, and neither do I.
But outside of Ukraine, Europe is not at war. Countries have a lot of options short of coercion. They can increase pay to attract people into military training and reserves. They can procure more equipment to have at the ready. And they can provide more extensive support to Ukraine.
Conscription really should not be under consideration. Barring imminent major war, there is little economic case for reinstating this more minor form of slavery.
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE
2 comments:
This obviously explains why Singapore is such an economic basket case, having suffered the drain of conscription since 1967.
I would much rather be defended by an elite professional well-equipped army with their hearts in it than by a bunch of kids who'd rather be elsewhere and dive for cover (or run for it) every time there is incoming fire.
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