If all the economists in the world were laid end to end, they still wouldn’t reach a conclusion. So goes the joke.
Most of that reputation for wishy-washiness comes from economists trying to predict things like next year’s interest rate. You might as well toss a coin.
Yet it was a consensus reached by economists that helped end the military draft and launch the all-volunteer armed services 30 years ago this month.
Back in 1962, in Capitalism and Freedom, Milton Friedman argued for abolishing the draft, at least during peacetime, and replacing it with a volunteer army: “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.”
In the decade that followed, Friedman and others—Walter Oi, William Meckling, Martin Anderson and Alan Greenspan among them—carried the intellectual day by showing how the draft was “more costly than the market alternative.”
Seems like a difficult case to make. You’d think forcing someone to serve and then paying an artificially low salary would be a lot cheaper than having to pay a high enough wage to get soldiers to step forward voluntarily.
It is cheaper—from the perspective of taxpayers. But the savings to taxpayers is mirrored by a financial loss to the soldier. So the true cost of an army of conscripts is hidden and paid, by those unfortunate enough to be drafted, in the form of artificially lower pay. The economists made the case that a volunteer army is more fair than a draft. Draftees risk death. Why make them suffer financially as well? Better for taxpayers who enjoy the benefits of defense to also bear the financial burden.
Besides, the real cost to society of an army isn’t the budgetary cost of paying the soldiers. It’s the pleasure and production lost because people are pulled out of the civilian sector and put into the army. There’s no virtue in doing it randomly. That leads to the costs of disruption that Friedman mentioned. And that’s why an army of conscripts can actually be more costly in a real sense than an army of volunteers. Volunteers can at least plan their future.
The economists who favored abolishing the draft had to answer the charge that there was something unseemly about paying soldiers enough to step forward. During the hearings on abolishing the draft, Gen. William Westmoreland challenged Friedman and asked him how he felt about being defended by an army of mercenaries. Friedman’s answer was that he preferred mercenaries to slaves.
Besides losing the rhetorical debate, Westmoreland misunderstood the role of pay in motivating workers. Doctors earn a nice living in America but that doesn’t rule out compassion and care as part of the motivation for going to medical school. Paying people to serve in the military doesn’t rule out people stepping forward who love their country and want to serve.
Thirty years ago, the volunteer army was a great experiment. Today, even the military has embraced it. The quality of recruits is higher than it was, and morale is strong. And the American people seem to like it, too. In a poll last year for ABC News and the Washington Post, 97 percent of the American people said they were either very proud or somewhat proud of the armed forces. Pretty good for mercenaries.