In his recent blog entry, Steven Levitt, author of Freakonomics, says that the draft is a bad idea. He refers to Milton Friedman who opposed the draft and in my obituary of that great man, that's one of the things i disagreed with him. A draft is not much more than paying taxes as a human activity. Measured as an economic man, this is silly for him to do, but as a citizen of a state, this is one of the activities that one has to do. That's the compact a citizen makes with the state and that, I am afraid, does not square with economics.
What do you think?
All this to be taken with a grain of piquant salt!!!
Restore the Draft? What a Bad Idea
By Steven D. Levitt
A long report in Time magazine a few weeks back carries the headline: “Restoring the Draft: No Panacea.”
Milton Friedman must be turning over his grave at the mere suggestion of a draft. If the problem is that not enough young people are volunteering to fight in Iraq, there are two reasonable solutions: 1) take the troops out of Iraq; or 2) compensate soldiers well enough that they are willing to enlist.
The idea that a draft presents a reasonable solution is completely backwards. First, it puts the “wrong” people in the military — people who are either uninterested in a military life, not well equipped for one, or who put a very high value on doing something else. From an economic perspective, those are all decent reasons for not wanting to be in the military. (I understand that there are other perspectives — for example, a sense of debt or duty to one’s country — but if a person feels that way, it will be factored into his or her interest in military life.)
One thing markets are good at is allocating people to tasks. They accomplish this through wages. As such, we should pay U.S. soldiers a fair wage to compensate them for the risks they take! A draft is essentially a large, very concentrated tax on those who are drafted. Economic theory tells us that is an extremely inefficient way to accomplish our goal.
Critics might argue that sending less economically-advantaged kids to die in Iraq is inherently unfair. While I wouldn’t disagree that it’s unfair that some people are born rich and others poor, given that income disparity exists in this country, you’d have to possess a low opinion of the decision-making ability of military enlistees to say that a draft makes more sense than a volunteer army. Given the options they face, the men and women joining the military are choosing that option over the others available to them. A draft may make sense as an attempt to reduce inequality; but in a world filled with inequality, letting people choose their own paths is better than dictating one for them. As a perfect example of this, the Army is currently offering $20,000 “quick ship” bonuses to those who are willing to ship out to basic training within 30 days of signing up. (This bonus likely has something to do with the fact that the Army just hit its monthly recruiting goal for the first time in a while.)
It would be even better if the government was required to pay fair wages to soldiers during war time — i.e., if combat pay was market-determined and soldiers could opt to leave whenever they wanted, like most jobs. If that were the case, the cost to the government would skyrocket and more accurately reflect the true costs of war, leading to a truer assessment of whether the benefits of military action outweigh the costs.
Critics also argue that, if more affluent Caucasians were in the military, we wouldn’t be in Iraq. That is probably true, but it doesn’t automatically mean that a draft is a good idea. A draft would make fighting wars much less efficient, which should mean fewer wars. But it may be the case that, if you can fight a war efficiently, it is worth fighting — even if it’s not worth fighting inefficiently. Just to be clear, I am not saying this particular war is necessarily worth fighting — just that, in theory, this could be true.
As a side point, the current system of relying on reservists doesn’t seem like a good one, either. Essentially, it involves the government overpaying reservists when they aren’t needed, and underpaying them when they are needed. This setup shifts all the risk from the government to the reservists. From an economic perspective, such a result doesn’t make any sense, because individuals shouldn’t/don’t like risk. Ideally, you would want a system in which the payment to reservists is extremely low in peace time, and high enough in war time that they would be indifferent to being called up or not.
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