MESSAGE TO DEBATERS from NCPA President John C. Goodman
This year’s debate topic will revolve around a key economic idea: opportunity cost.
In most cases the goals of national service programs will be conceded. But is conscription (or quasi- conscription) the best way of achieving those goals? And, what are the real costs of conscription? They are much higher than most people realize.
However, before we get to the concept of opportunity costs, what is this year’s topic about anyway?
About the Topic. This year debaters will probably spend a lot of time arguing about what the resolution really means. That is because this year’s resolution is one of the most poorly worded in recent memory.
What is national service? There is a sense in which everybody in the labor market is engaged in national service. If you are not providing a service, then why are you getting paid? And even if the service you provide is local, the collection of people providing similar services nationwide is national.
But the ordinary working of the labor market is the status quo. So to challenge the status quo, national service should mean something other than work for pay. Right?
The original resolution solved this problem neatly. It required the affirmation to propose mandatory national service. Mandatory means you are forced to do something you would otherwise not do.
This year’s resolution should have been about a military draft. At a time when the United States is increasingly becoming the world’s policeman, some are proposing a return to the draft. That would have been a good topic.
An alternative resolution would require 2 or 3 years of compulsory national service — serving in the military or serving in some other capacity, again for wages not high enough to induce voluntary labor.
Under pressure from some debate coaches and students, however, the mandatory provision was dropped. So now we have a topic that calls for expansion of services without necessarily requiring forced labor. That means affirmative teams can argue for an expansion of military service by simply increasing military pay. I would argue that such a proposal is insufficiently different from the status quo to be interesting.
So the first problem with the topic is that it appears to allow voluntary labor as opposed to forced labor. The second problem is that it is insufficiently clear about whether the debate is to be about outputs or inputs. Think of all the things the military might do: keep peace in Somalia, prevent illegal immigration at our nation’s borders, curtail the drug trade, stop the proliferation of nuclear weapons, etc. Is the topic to be debated about how to get the manpower for these operations (the inputs) or about the uses of military power (the outputs)?
If affirmative teams are allowed to argue for expanded military operations by increasing pay and benefits, then the debate will tend to revolve around whether the expense is worth it. Which is to say, debates will tend to focus or whether we should try to keep peace in Somalia, the Middle East, etc., try to stop illegal immigration or illegal drug trafficking, or try to stop WMD proliferation, etc.
Any debate resolution that allows such wide-ranging topics is a bad resolution. What else is there to say?
Philosophy of Debate. My own bias is this: affirmative teams have an obligation not just to the negative team, but to everyone else who happens to attend the event. If someone is going to spend an hour or more of his or her time listening to a debate, they should not be disappointed by an affirmative team that uses a trick case or a surprise interpretation of the resolution to engage in a conversation about something completely different from the topic everyone expected to hear debated. Similarly, affirmative teams that argue for minute or trivial changes in the status quo, are also failing in their responsibility to provide listeners with a vigorous, robust debate about what otherwise promised to be an interesting topic.
I haven’t been asked to judge a debate in a while, but were I to be a judge, I would mark down affirmative teams who fail to argue for the change that people would expect to hear debated, given an ordinary, commonsense reading of the topic.
With that in mind, the remainder of this letter concerns coerced labor. Or if not outright coercion, at least implicit coercion — e.g., requiring people to give two years of labor, say, in return for receiving such other benefits from government as free public education, college scholarship loans, any of numerous entitlement benefits (Social Security, Medicare, e.g.,), etc.
History of the Military Draft
Measured in terms of the resistance it has generated, perhaps no government policy has had a greater history of controversy than the military draft.
During the War of 1812, Massachusetts and Connecticut came close to seceding from the Union over the draft issue. When a draft measure nearly became law in 1814, the two state legislatures committed their full resources to protecting their citizens from conscription by the federal government.
When the first national draft was finally initiated during the Civil War, it touched off violence and bloodshed. Antidraft mobs fought pitched battles with police and the militia and controlled the streets of New York for three days in 1863 vividly portrayed in the movie, The Gangs of New York. As many as twelve hundred people are believed to have died. To cope with this massive resistance, President Lincoln ordered suspension of the writ of habeas corpus. Over the objections of a powerless Supreme Court, more than thirteen thousand people were arrested, tried by military tribunals and imprisoned — all without right of appeal. Many of them were executed by firing squads. Ironically, only 2 percent of the Union Army during this period were draftees.
Considering this background, resistance to the draft during the Vietnam war seems as American as apple pie. Tens of thousands protested in the streets, went abroad or went to jail. As American involvement in the war ended, Congress heaved a collective sigh of relief and ended the draft. Since then the draft has become a dead issue, fading from public attention. Yet with United States military expansion abroad, the idea is being proposed yet again.
Why is the military draft, opposed by some so passionately and so long, so persistently attractive to others?
The Economic Cost of Drafted Labor
The issue of cost is central to the debate over drafted labor versus volunteer labor. To an economist, the cost of doing anything is measured in terms of the value of other opportunities that must be foregone in order to do that thing. The cost of buying a steak for dinner is measured in terms of passing up the opportunity to spend the same money on chicken, fish, a movie or a haircut. The cost of studying for an economics exam is the loss of the opportunity to spend the time sleeping or studying chemistry. Similarly, but on a larger scale, the cost of maintaining an army is properly measured by the foregone opportunities to put the same labor and capital to work producing other valuable goods and services. Economists refer to costs expressed in terms of foregone opportunities as opportunity costs.
A simple diagram will help make the concept of opportunity cost more vivid. In Figure I, the level of military preparedness is measured along the horizontal axis, and the quantity of all other goods and services produced by the economy is shown on the vertical axis. Between the two axes we have drawn a curve showing the possible packages of military preparedness and other goods among which we may choose. This curve is called a production-possibility frontier. As a nation we can move back and forth along the frontier, opting for a little more of this at the cost of a little less of that. With the limited resources available, however, we cannot move outside the frontier. In a world of scarcity the frontier represents the hard fact that a limit exists beyond which we cannot have more of one thing without giving up the opportunity to have something else.
Suppose that in the past we have chosen the combination of military preparedness and other goods represented by point A in Figure 1. We now decide to increase our military preparedness by shifting one person from civilian production to a job in the army. This moves us down and to the right along the production-possibility frontier to, say, point B. The distance we have moved to the right measures our gain in military preparedness, while the distance we have moved down measures the opportunity cost of this gain in terms of sacrifice of other goods and services.
So far we have not put any numbers on the axes. How can we place a dollar value on the cost of moving one person from a civilian to a military job? As a starting point, we could use that person’s civilian wage or salary, which, let’s say, is $20,000 a year. In a market economy, workers in the private sector are usually paid according to what they produce. No employer can make a profit by paying a worker $20,000 a year unless the worker adds at least that much to the firm’s output. At the same time, competition among employers assures that such a worker will not have to settle for a job that pays much less than a $20,000. So $20,000 a year would be an adequate guess at the opportunity cost of moving $20,000-a-year worker from a civilian to a military job.
To get a more refined estimate of opportunity cost, other factors would have to be considered. First, the civilian job might give the worker a little more (or a little less) valuable on-the-job training than does the military job. In addition, life in the army might be a little more (or a little less) hazardous, boring or unpleasant than civilian life. Since the category “other goods and services” includes such intangibles as on-the-job training, security and peace of mind, we must adjust the original figure of $20,000 to take these into account.
All things considered, most economists would say that the best estimate of the opportunity cost of shifting a person from a civilian to a military job is the minimum amount that person would have to be paid to take the military job voluntarily. If it would take a $25,000 inducement to shift our $20,000 civilian worker to the military voluntarily, then the opportunity cost of making the shift is that $25,000.
It is important to understand that the same opportunity cost must be borne regardless of whether people are shifted from civilian to military life by the draft or by a payment large enough to induce them to volunteer. The primary effect of using draftees rather than volunteers is not to reduce the cost of military preparedness, but simply to shift the cost. If our subject were offered $25,000 a year, and enlisted voluntarily, he would end up no worse off than in civilian life. In this case, the entire burden of the increase in military preparedness falls on the general taxpayer. If the same person is drafted and paid only $15,000 a year, the burden on the general taxpayer is reduced, but the draftee bears an implicit annual tax of $10,000. This implicit tax is equal to the difference between the pay of a draftee and the pay of a volunteer. The total burden is the same in both cases; the draft simply shifts that burden.
What we have said is at least true as a first approximation. Further examination of the matter suggests that the draft may actually increase the burden of military preparedness at the same time it shifts it. Why the increase?
• Draftees tend to reenlist less often than volunteers; this in turn tends to lower productivity and raise training costs.
• Morale tends to be lower in an army of draftees.
• Military commanders, thinking of draftees as “cheap” manpower, may use them wastefully, disregarding their personal skills or the possibility of substituting hardware for personnel.
• Finally, a draft induces many civilians to undertake costly draft-avoidance measures, such as choosing a draft-exempt but otherwise unattractive career, retaining expensive legal counsel or even spending years in jail or exile.
Many of these costs are intangible and hard to measure. Nonetheless, there has been at least one attempt to estimate them. A presidential commission established near the end of the Vietnam War concluded that for each $1.00 of implicit tax collected from draftees, a burden of approximately $2.50 was placed on the general public. That suggests that the implicit tax of the draft is far more expensive to levy than the explicit taxes used to finance a volunteer army.
Evaluating the Draft
This analysis of the economic effects of conscription gives us a basis on which to evaluate proposals to abandon the volunteer army and reestablish a draft. Some critics condemn the volunteer army as unfair and excessively costly. How do their arguments stand up? We will evaluate the draft according to three values many people hold: (1) efficiency, (2) fairness to the least well off and (3) liberty.
Efficiency. Let’s begin with efficiency. Generally, achieving a goal efficiently means achieving it at minimum cost. This means minimizing the sacrifice required to achieve the goal. It is true that the budgetary cost of a drafted army is lower than the budgetary cost of a volunteer army: With a drafted army the government pays less. But the budgetary cost is not the only cost: When all of the costs are considered, evidence strongly suggests that the volunteer approach is the less costly one.
This idea can be illustrated by returning again to Figure 1. If the higher level of military preparedness is achieved efficiently (the volunteer approach), we will be at point B. On the other hand, if a draft is used, we will end up at a point like point C. Note that point C is inside the production-possibility frontier; this reflects the fact that a draft requires more sacrifice of other goods and services than necessary.
Some think the current volunteer army is inefficient because the quality or productivity of volunteers is lower than it ought to be. The quality of military recruits, however, can be directly related to military pay.
Fairness to the Least Well Off. Let’s turn now to another standard of evaluation. How should we judge the draft as compared with a volunteer army in terms of how each affects the most disadvantaged members of the community? This standard of evaluation has figured prominently in the debate and deserves careful attention.
Curiously enough, both the draft (during the Vietnam era) and the volunteer army (at present) have been attacked as being unfair to the poor — and to poor minorities in particular. Youths from poverty-level backgrounds, including many minority youths, have been heavily overrepresented in the lowest military ranks under both systems. This has been among the factors leading Senator Edward Kennedy and others to favor a truly universal national service that would draw forces proportionately from all segments of the community because no one would be exempt.
Before accepting this solution to the problem, however, we need to understand more clearly the nature of the problem itself. The overrepresentation of poor and minority youth in the military actually has very different implications under a volunteer system than under a draft.
Under the draft each conscript bears the burden of a large implicit tax; having shouldered this burden the draftee then performs defense services for all citizens. If most draftees are drawn from lower-income groups, then the draft acts as a mechanism for transferring income and wealth from the poor to everyone else, including the middle class and the rich.
Under a volunteer army things are quite different. Volunteers are fully compensated for defense services they render. If a person feels that the compensation is inadequate, he or she simply need not volunteer. We can expect that some volunteers will be paid the bare minimum necessary to compensate them for giving up civilian life. But for a person whose civilian opportunities are meager, joining the army might lead to a significant boost in income. The lower the volunteer’s civilian income, the greater the net benefit of joining the army. If the poor are overrepresented in a volunteer army, the volunteer army is probably working to transfer income and wealth from the general taxpayer to the poor.
Liberty. How do the draft and volunteer army rate in terms of protecting the rights and liberties of individual citizens? Answers to this question vary according to one’s conception of just what rights and liberties are important to protect. Let’s consider three possibilities.
First, there is a strongly ingrained American tradition that freedom of conscience and religion are among the most important of all individual rights. A draft that did not respect religious belief would be opposed even by many who favored a draft on other grounds. By treating conscientious objectors according to special rules, our Selective Service System has at least partially recognized the force of this argument.
Second, some oppose the draft on much broader grounds than simple freedom of conscience: Many Americans honor a tradition of self-defense under which each person has a right to defend his own person and property and has no right to impose that responsibility on others. In Revolutionary War times, self-defense meant keeping a rifle beside your plough; in modern times, it means either volunteering for military service yourself or accepting the responsibility of paying someone else to provide defense services for you. A tax-supported volunteer army is thus reasonably consistent with the self-defense tradition; the draft is not.
Finally, we ought to take note of an almost opposite tradition that imposes a duty on young men to defend their community and that grants a right to all others so to be defended. This tradition is much older than the self-defense tradition — older, in fact, than Western civilization itself. Even in the 20th century, there have been those who believe it to be not simply expedient but just and proper that young men bear a disproportionate share of the defense burden through the draft. President Dwight D. Eisenhower, for example, favored universal national service as much on moral grounds as he did for the value of services it produced. “If the program accomplished nothing more,” he wrote, “than to produce cleanliness and decent grooming, it might be worth the price tag.”
The Political Economy of the Draft
Let’s take a moment to summarize. The draft does not cut the cost of military preparedness. If anything, it increases the cost and discourages efficient resource use. As it has worked in the past, the draft has transferred income from the poor to the rich, while our present volunteer army transfers income from the rich to the poor. And many people consider the draft offensive to individual rights and liberties. Why, then, is the idea of a draft always being revived?
To answer this question we turn to economics of public choice, a branch of economics that tries to explain why individuals acting within the framework of our political institutions collectively choose one policy rather than another. In the present case, the theory of public choice suggests not just one, but several possible explanations of the political popularity of the draft.
The first possible explanation is best understood in terms of a hypothetically perfect direct democracy. Suppose that, instead of our complex system of representation and delegation of authority, all political questions were put directly to the voters, to be decided by simple majority. A theorem of public choice economics holds that, in such a system, policies that provide benefits equally to all voters while concentrating their costs disproportionately on a minority of voters can be approved, even if their total costs outweigh their total benefits. Why? Because voters do not weigh the total costs against the total benefits; they weigh only their personal share of the costs against their personal share of the benefits. Individual benefits may at least slightly outweigh individual costs for a majority, even though for a minority costs overwhelmingly outweigh benefits.
It is clear how this theorem applies to the draft. Draftees are a minority. In fact, until the voting age was lowered they were a disenfranchised minority. How convenient for everyone else to ask them to foot a disproportionate part of the bill for military preparedness!
Of course, our political system is not a perfect direct democracy. In a representative system, special-interest groups often wield political power that is out of proportion to the numerical voting strength of those groups. In particular, groups that are compact, that regularly communicate with each other through their daily activities, and that share easily identified common interests tend to be proportionately more politically powerful than groups that are large, scattered and diffuse. Potential draftees normally have not constituted an effective pressure group — although when the draft began to threaten college students during the Vietnam War, they at least briefly became one. On the other side, certain prodraft groups have long enjoyed significant political influence. Among these are:
• Professional military officers. Although the draft does not cut the opportunity cost of military preparedness, it does significantly cut the labor supply budgetary cost. That leaves more dollars in the budget for sophisticated hardware, weapons research and military retirement benefits.
• Defense industries. When people are drafted during a conflict, civilian labor supply is reduced and wages increase. If defense jobs carry draft exemptions (as has often been the case), however, defense industries are insulated from this upward pressure on costs, resulting in more profits for arms makers.
• The agricultural establishment. Like defense jobs, farm jobs have always carried deferments. By enhancing the supply of farm workers, the draft subsidizes farm labor costs. Until the draft was discontinued in 1971, the law even contained a provision that farm deferments would continue even when there were agricultural surpluses.
So far, our discussion of the public-choice economics of the draft has assumed that voters and pressure-group members are rational and well-informed — but information and rational thought have opportunity costs of their own. Recognizing this suggests another possible explanation of the political popularity of the draft: When voters balance the individual costs and benefits of some policy measure, they pay more attention to explicit taxes than they do to implicit taxes. Compared with a volunteer army, the draft involves a shift from explicit to implicit taxes. Some voters apparently misperceive this shift as an actual reduction in the opportunity cost of military preparedness, and they then support the draft as an apparently economical way of raising an army.
For the time being, the political balance favors a volunteer army. Nonetheless, the national debate on the issues continues. If proposals for universal national service were ever to win out, conscription might be instituted on a wider scale than ever before. We can only hope that before any sweeping programs are instituted they are subjected to careful and informed consideration.
Questions for Thought and Discussion
1. During the Civil War, people who were drafted could hire a substitute to take their place. Some thought this provision of the law was horribly unfair; others contended that it only made visible the inequities inherent in any system of conscription. What do you think?
2. Compare, on the one hand, a system that drafted limited numbers of young people — mostly poor or black — with a system that drafted everyone. Which system do you think would place the greater burden on minorities and on the poor?
3. During the Vietnam War, some people thought it was not enough just to permit conscientious objection to military service. These people also wanted to legalize conscientious objection to the payment of war-supporting taxes.
4. We have suggested as a theorem of public-choice economics that in a perfect direct democracy, policies that provide benefits equally to all voters while concentrating their costs disproportionately on a minority can be approved — even if their total costs outweigh their total benefits. A corollary of this theorem is that in such a system, proposals that impose tax costs equally on all citizens, but that exclude a minority from the enjoyment of resulting benefits, can also be approved, even if total costs outweigh total benefits. Can you think of an example that fits this corollary? Can you think of other corollaries?
5. Aside from military service, almost the only other example of conscription in the United States is compulsory jury duty. Sketch possible cases for and against compulsory jury duty and compare them with the cases for and against the draft as they were outlined in this chapter. Alternatively, consider conscription of firefighters, police officers, bricklayers or aircraft designers. (Some countries have experimented with all of these.)
6. Suppose, in order to improve the quality and broaden the socioeconomic background of recruits, we doubled military pay. At that pay level, more people might volunteer than the military could take. How would you choose who got to serve? By education? I.Q. tests? Racial quotas? To get the kind of middle class, racially balanced army many people want, many low income volunteers would have to be turned down. How would such a policy rate in terms of equality? In terms of efficiency?