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Joshua C. Hall

The Worldwide Decline in Conscription: A Victory for Economics?

Joshua C. Hall*

Introduction
 
"People's opportunity costs of producing various goods and services, including military services, differ. Conscription ignores the fact that some individuals have a comparative advantage in food production or engineering or teaching and, instead, forces everyone drafted into a military occupation less directly in line with their abilities."
Conscription is the compulsory enlistment of individuals into government service. Historically, however, conscription has referred primarily to the military. While governments since antiquity have conscripted people into their militaries, the conscription of a large segment of a country's citizens to meet military goals is a fairly recent phenomenon.1 Prior to the French Revolution, conscription occurred but was fairly rare.2

Beginning in 1793, however, Napoleon took conscription to an entirely new level. The recently expanded French administrative state with its armies of bureaucrats and its extensive information about citizens lowered the cost to Napoleon of implementing a draft.3 Mass conscription allowed Napoleon to raise an army of over 750,000 men by 1794.4 Napoleon then instituted a draft in regions under French control, such as the Italian Republic and the Kingdoms of Naples and Westphalia. France's subsequent success on the battlefield led other countries to see conscription as the source of Napoleon's military prowess, and they were quick to imitate—leading to mass conscription throughout Europe.5

Over time, the forced enlistment of citizens into military service became both widespread and systematized, with conscription becoming the primary method of military recruitment worldwide during and after World War II. The U.S. government, for example, instituted a military draft in 1940 in response to the outbreak of the war in Europe and, for the next thirty-three years, with the exception of an eleven-month period spanning 1947 and 1948, the government used conscription to staff a portion of its military.

President Nixon's 1973 decision to end the draft and move to an all-volunteer army was an important step towards the worldwide elimination of conscription. Nixon's decision reflected, in part, underlying changes in citizens' attitudes towards the draft arising from the Vietnam War. But it also resulted from a better understanding of the costs and benefits of conscription relative to an all-volunteer army, thanks to the efforts of economists such as Milton Friedman and Walter Oi.6 In addition, a segment of the population that bears most of the cost of the military draft—18- to 20-year-olds—received the right to vote in 1971. Because an increasing number of countries are eliminating or considering eliminating military conscription, it is worthwhile to revisit the economic arguments against the draft and the role of economic analysis in its decline.

Conscription and Economic Freedom

As a co-author of the Economic Freedom of the World (EFW) annual report, my interest in conscription centers on the fact that it is a violation of economic freedom.7 Conscription forces people into a specific job and even imposes strict limits on their use of leisure time. That means they are not free to decide how to use their time. Conscription is, therefore, clearly an infringement upon their economic freedom. As Gwartney, Lawson and Block argue in Economic Freedom of the World: 1975-1995, "Singling out a specific group (for example, young men or young women) to pay for something that benefits all is a clear "taking" and a discriminatory form of taxation."8 For that reason, conscription has been one component of our economic freedom index since the beginning.

Measuring Conscription

The EFW index ranks 141 countries on the extent to which their policies and institutions are consistent with personal choice, voluntary exchange, secure property rights, and the freedom to enter and compete in markets. Countries are rated on a zero-to-ten scale using forty-two different data points, one of which is military conscription.9

Using information from third-party sources, we created our conscription variable.10 Countries without conscription receive a score of ten, while countries with conscription receive a score less than ten. The longer the period for which people are conscripted, the lower is the country's rating. So, countries in which the length of conscription is less than six months receive a rating of five, while countries with conscription lengths between six and twelve months earn a three. When the term of conscription is between twelve and eighteen months, a country earns a one, and countries with conscription periods greater than eighteen months receive a zero.

Table 1 presents summary data showing the average conscription rating for all ranked countries from 1970 to 2009. The table demonstrates that the use of conscription for military purposes has declined over this period. In 1970, for example, the average country in our sample received a score of 3.0, a score consistent with a conscription period of between six and twelve months. For the most recent year available, the average score for a country in our sample is 6.3, which is somewhere between a conscription length of less than six months and no conscription at all.

Table 1: Declining Conscription Use, 1970-2009
Year Average Conscription Rating for All Ranked Countries,
1970-2009
1970 3.0
1975 5.4
1980 5.5
1985 4.8
1990 4.8
1995 5.3
2000 5.8
2005 5.8
2009 6.3
Source: Gwartney et al. (2011) and author calculations

To put the size of this shift into perspective, consider that in 1970, only 20 percent of the countries for which we have data did not use conscription. In 2009, that figure was nearly 55 percent! The United States' move from a conscripted military to a volunteer military over this period, while relatively early, is not an anomaly. It is what happened in many countries, including Argentina, Australia, Bulgaria, Hungary, Italy, the Netherlands, and Peru. Most significantly, the government of France, the country in which modern conscription first began, ended conscription in 2001.

Economic Arguments Against Conscription

The basic economic argument in favor of a volunteer army and against conscription rests on the fundamental economic principles of comparative advantage and specialization. People's opportunity costs of producing various goods and services, including military services, differ. Conscription ignores the fact that some individuals have a comparative advantage in food production or engineering or teaching and, instead, forces everyone drafted into a military occupation less directly in line with their abilities. Indeed, that thought is behind the title of an anti-draft book written in the late 1960s: The Wrong Man in Uniform.11 By ignoring comparative advantage, conscription reduces the productive capacity of society.

In addition, conscripted armies cannot take full advantage of specialization, which yields efficiency gains over time as individuals become more productive at repeated tasks.12 By its very nature, conscription creates an environment in which many soldiers are "short-timers," and, thus, a wide variety of productivity gains related to specialization are foregone in a conscripted army. A 1988 Government Accounting Office report finds that under most assumptions regarding the replacement of career military people with first-time conscripted soldiers, the budget for an equally effective military would be higher with a draft than under a volunteer military.13

An argument often made in favor of conscription is that because a volunteer army is more expensive, conscription saves the country money in the long run. The problem with this argument is that it looks only at budget outlays and ignores economic costs. Forced service in the military at a non-negotiated wage might lower budget outlays, but it does not lower the opportunity costs of those conscripted. The difference between these two is substantial, with one study putting the social cost of the draft at twice its budget outlay.14

 

From Milton and Rose Friedman's Two Lucky People:

In the course of his [General Westmoreland's] testimony, he made the statement that he did not want to command an army of mercenaries. I [Milton Friedman] stopped him and said, "General, would you rather command an army of slaves?" He drew himself up and said, "I don't like to hear our patriotic draftees referred to as slaves." I replied, "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 mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher."

In 1970, a U.S. Presidential Commission—on which three of the 15 members were economists (Milton Friedman, W. Allen Wallis, and Alan Greenspan) and whose staff was composed largely of economists—drafted a report on the all-volunteer army. It is not surprising that the third chapter of the report is titled "Conscription is a Tax."15 The amount of the tax, from the viewpoint of the conscript, is the difference between the minimum amount of pay he would have insisted on to join voluntarily and the actual amount he is paid. In 1968, Mark Pauly and Thomas D. Willett estimated this tax to be 42.5 percent to 72.5 percent. Note that this is not a marginal tax rate but an average tax rate.16 Like all taxes, conscription has distortionary effects that create deadweight losses. During the Vietnam War, for example, draft dodging and college enrollment motivated by draft avoidance created deadweight losses.17 More recently, World Bank economists Michael Loshkin and Ruslin Yemtsov estimated that 90 percent of eligible men are able to avoid Russia's draft through a variety of means.18

In his 1967 article making the case for a volunteer army, Milton Friedman argued that a volunteer army would lead the military to use more and better equipment. 19 One consequence of an artificially low cost of military labor is that it discourages the military from substituting away from labor and towards capital.20 This point was perhaps best made by German economist Johann Heinrich von Thunen, in his nineteenth-century book, Isolated State:

The reluctance to view a man as capital is especially ruinous of mankind in wartime; here capital is protected, but not man, and in time of war we have no hesitation in sacrificing one hundred men in the bloom of their years to save one cannon.

In a hundred men at least twenty times as much capital is lost as is lost in one cannon. But the production of the cannon is the cause of an expenditure of the state treasury, while human beings are again available for nothing by means of a simple conscription order....

When the statement was made to Napoleon, the founder of the conscription system, that a planned operation would cost too many men, he replied: "That is nothing. The women produce more of them than I can use."21

 

For more on the draft, see Volunteers of America: Lessons from the New Contract Army, by Fred S. McChesney. July 4, 2005, Library of Economics and Liberty.

These basic but important arguments are why the economics literature almost unanimously concludes that conscription is inefficient compared to an all-volunteer army. In their excellent survey article on the political economy of conscription, Poutvaara and Wagener conclude that the "normative case for conscription is weak" and that the "inefficiency of conscription results to a great extent from ignoring comparative advantage and specialization, thereby resulting in higher social costs than a voluntary army."22

In the United States, these ideas played a large role in helping to sway the opinions of policymakers and thought leaders during the early 1970s and again in the late 1970s and early 1980s when talk of reinstating the draft was occurring. As documented by David R. Henderson, the anti-draft arguments of economists such as Milton Friedman, Walter Oi, William Meckling, James C. Miller, Mark Pauly, Robert Tollison, Cotton Lindsay, W. Allen Wallis and many others were extremely important in changing the intellectual climate surrounding the topic. Through clear, level-headed analysis, they pointed out how many arguments for conscription over a voluntary army were incorrect. In doing so, they helped to make change more likely.

Ideas and Social Change

Certainly, many factors have contributed to the decline in conscription since 1970. The ending of the Cold War, for example, has played a large role in leading towards the decline in conscription, especially in Europe. That, of course, is not the whole story because one of the two major participants in the Cold War, the U.S. government, ended the draft when the Cold War was still very much alive. Fortunately, economists' arguments against the draft in the United States have stood the test of time. More important, however, is that economists have continued to point out the inefficiencies of conscription. While arguments against conscription on efficiency or economic freedom grounds are unlikely to end conscription in totalitarian states such as North Korea (with three to ten years of compulsory military service), in a democracy they have an important role in creating a climate of opinion in which the relative merits of conscription can be debated.


Footnotes
1.

See, for example, Panu Poutvaara and Andreas Wagener, "The Political Economy of Conscription," in Chris Coyne and Rachel Mathers, eds., The Handbook on the Political Economy of War. Northampton, MA: Edward Elgar, 2011.

2.

For a thorough account of the use of conscription pre-French Revolution, see John Keegan, A History of Warfare, New York, NY: Alfred Knopf, 1993.

3.

For more on the role of the French administrative state in lowering the costs of conscription, see Casey Mulligan and Andrei Shleifer, "Conscription as Regulation," American Law and Economics Review vol. 7, no. 1 (2005): 85-111.

4.

Frederick Schneid, "Conscription in France During the Era of Napoleon," in Donald Stoker and Harold Blanton, eds., Conscription in the Napoleonic Era: A Revolution in Military Affairs? New York: Routledge, 2009.

5.

Alexander Grab, "Army State and Society: Conscription and Desertion in Napoleonic Italy (1802-1814)" Journal of Modern History vol. 67, no. 1 (1995): 25-54.

6.

For Friedman's view on conscription and his role in ending it in the United States, see Milton Friedman and Rose Friedman, Two Lucky People, Chicago, IL: University of Chicago Press, 1998. For Walter Oi's views, see Walter Oi, "The Economic Cost of the Draft," American Economic Review vol. 27, no. 2 (1967): 39-62. For an overview of economists' role in helping to end conscription in the United States, see David R. Henderson, "The Role of Economists in Ending the Draft," Econ Journal Watch vol. 2, no. 2 (2005): 362-376. Online at http://www.econjournalwatch.org/main/index.php?issues_id=6.

7.

The most recent report is James Gwartney, Robert Lawson and Joshua Hall, Economic Freedom of the World: 2011 Annual Report, Vancouver: Fraser Institute, 2011. The report and data are available for download for free at http://www.freetheworld.com.

8.

James Gwartney, Robert Lawson and Walter Block, Economic Freedom of the World: 1975-1995, Vancouver: Fraser Institute, 2001, p. 31.

9.

Our focus in the Economic Freedom of the World Report is on military conscription. This should not be taken to suggest that other forms of conscription such as jury duty are not important. Rather it reflects the availability of cross-country data.

10.

Our sources are: International Institute for Strategic Studies, The Military Balance, New York, NY: Routlege, (various years); and War Resisters International, World Survey of Conscription and Conscientious Objection to Military Service, http://www.wri-irg.org/programmes/world_survey.

11.

Bruce Chapman, The Wrong Man In Uniform: Our Unfair and Obsolete Draft and How We Can Replace It, New York: Trident Press, 1967.

12.

Adam Smith makes an argument in favor of professional armies versus conscripted militias in the Wealth of Nations on these grounds: "The soldiers are every day exercised in the use of their arms, and, being constantly under the command of their officers, are habituated to the same prompt obedience which takes place in standing armies." Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Edwin Cannan, ed. 1904. Library of Economics and Liberty. Retrieved September 8, 2011 from the World Wide Web: http://www.econlib.org/library/Smith/smWN20.html. In particular, the discussion in Book V that can be found here: http://www.econlib.org/library/Smith/smWN20.html#V.1.28.

13.

U.S. Government Accounting Office, Military Draft: Potential Impacts and Other Issues. Washington, D.C.: Government Accounting Office, 1988. Online at: http://archive.gao.gov/d34t11/135266.pdf. Pdf file.

14.

K. Kerstens and E. Meyermans, "The Draft versus an All-Volunteer Force: Issues of Efficiency and Equity in the Belgian Draft," Defence Economics vol. 4 (1993): 271-284.

15.

Noted in Henderson, "The Role of Economists in Ending the Draft" at http://www.econjournalwatch.org/main/index.php?issues_id=6. The title of the report is The Report of the President's Commission on an All-Volunteer Armed Force.

16.

See Mark V. Pauly and Thomas D. Willett, "Who Bears the Burden of National Defense?" in James C. Miller III, editor, Why the Draft: The Case for a Volunteer Army, Baltimore: Penguin Books, 1968.

17.

Economists David Card and Thomas Lemieux estimate that draft avoidance during the Vietnam War raised college enrollment among males by four to six percentage points. David Card and Thomas Lemieux, "Going to College to Avoid the Draft: The Unintended Legacy of the Vietnam War," American Economic Review vol. 91, no. 2 (2001): 97-102.

18.

Cited in Poutvaara and Wagener, "The Political Economy of Conscription." Original paper is Michael Loshkin and Ruslan Yemtsov, "Who Bears the Costs of Russia's Military Draft?" Economics of Transition vol. 16, no. 3 (2008): 359-387.

19.

Milton Friedman, "Why Not a Volunteer Army?" New Individualist Review, Vol. 4 (Spring 1967), pp. 3-9.

20.

For a good discussion of this point applied to Operation Desert Storm, see Donald Boudreaux, "A Life-Saving Lesson from Operation Desert Storm," The Freeman vol. 43, no. 10 (1993): 391-393.

21.

Quoted in Christopher Jehn, "Conscription," in David R. Henderson, Concise Encyclopedia of Economics. Indianapolis, IN: Liberty Fund, 2008. Online at http://econlib.org/library/Enc/Conscription.html.

22.

Poutvaara and Wagener, "The Political Economy of Conscription," p. 169.


*Joshua C. Hall is an assistant professor of economics at Beloit College in Beloit, Wisconsin (halljc at beloit.edu). He is co-author, with Robert Lawson and James Gwartney, of the Economic Freedom of the World annual report.
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