NCPA - National Center for Policy Analysis


August 9, 2005

On January 27, 1973, conscription of men into the U.S. military ended, and the draft law expired in June 1973. David R. Henderson documents economists' role in ending U.S. military conscription (the draft) and promoting an all-volunteer military in the latest issue of Econ Journal Watch.

Conscription allows the government to pay military personnel less than the market value of their labor. In fact, the conscription of labor is an "in-kind" tax, the incidence of which falls wholly on the conscriptee.

In a study published in 1967, economist Walter Oi calculated the economic cost of the draft (as did others). The draft saved the federal government money because it allowed enlisted men to be paid less than what they could have earned in the marketplace:

  • Oi estimated the loss to draftees and draft-induced volunteers was between $826 million and $1.134 billion, in mid-1960s dollars.
  • Inflation-adjusted to 2005, the losses would be $4.8 billion to $6.6 billion.

A four-day policy conference at the University of Chicago in 1966 was particularly influential, says Henderson: It began with two-thirds of the participants supporting conscription and ended with two-thirds opposed. Participants included a young anti-draft congressman, Donald Rumsfeld (R-Ill.), and a pro-draft senator, Edward Kennedy (D-Mass.), as well as the pro-draft anthropologist Margaret Mead and anti-draft economist Milton Friedman.

At the conference, Friedman -- who was later a member of President Nixon's Gates Commission, which recommended an all-volunteer military -- pointed out that the terms "volunteer," "professional" and "mercenary" apply to professors as well as soldiers.

And when the late 1970s inflation so eroded wages that the military had difficulty recruiting, and Sen. Sam Nunn (D-Ga.) held hearings on resuming the draft, economist Martin Anderson, who had written Nixon's 1968 anti-draft speech, organized another influential conference at the Hoover Institution in 1979.

Source: David R. Henderson (Navel Post Graduate School, Hoover Institution), "The Role of Economists in Ending the Draft," Econ Journal Watch, August 2005.


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