A Nation of Mercenaries?

Is conscription becoming less common?

In a celebrated exchange, General William Westmoreland testified in favor of the draft, stating that he did not want to command an army of mercenaries. Milton Friedman challenged him: did he prefer rather an army of slaves? He was a mercenary professor; he used a mercenary dentist; he employed a mercenary accountant, and so on.

Around the world conscription—mandatory military service—has been in decline. When Napoleon Bonaparte imposed the draft in1793 and then went on to conquer most of Europe, the other European powers quickly followed suit, raising large armies that could be commanded by a professional officer corps. Before that time, conscription was fairly rare.

But by the late 20th century many countries began to look at the economic costs and benefits of a draft. In 1970 80% of the world used military conscription; by 2009 that number had fallen to 45%..

Much of the reason is economic: mandatory military service ignores the fact that some people are better at farming or teaching or entrepreneurship, and thus reduces a country’s economic potential. Also, it harms the productivity of the military, as high personnel turnover requires significant training, and gains from specialization are lost.

Finally, abundant, cheap labor distorts the incentives of military managers. When Napoleon was told that a planned attack would cost too many men, he replied that that was nothing—that he had more than he could use. Such a statement ignores the cost to society of that loss. An honest assessment of true costs encourages managers to use better equipment, improving efficiency.

In a free society some will choose military careers, and for that we should all be grateful. But let’s also thank the economists and policymakers who showed how inefficient the draft is. Our military is stronger as a result.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2017-07-17T12:34:59+00:00 November 29th, 2011|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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