The visible hand in economics

Fair pay for the military?

Posted on: August 15, 2007

This blog is all about the times that the market should give way to government intervention; however, I liked Stephen Levitt’s comment on military conscription too much not to post it up. It’s a great example of a case where an area traditionally managed by the government might be improved if we let the market have greater freedom. It’s also a classic Levitt-ism: where he applies economic reasoning to fields not usually studied by economists.

His idea is that, if military service was a job like any other, then soldiers would be paid commensurate to the dangers and hardships they endure. They would also be free to quit at anytime if they felt that they were not being paid a sufficient sum to compensate them for the risks they faced. This, in turn, would force the government to bear the true cost of waging a war: in war-time the troops wages would skyrocket along with the dangers they faced. In economic terms this must be considered far more efficient than the current situation.

The existence of mercenary troops and private security forces in Iraq is testimony to the fact that people are willing to work in that sort of environment if the wage is high enough. Of course, Levitt isn’t suggesting a privatised army, simply an army who can truly be called volunteers in wartime as well as in peacetime. Is that really as traitorous as the comments on his blog suggest?

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2 Responses to "Fair pay for the military?"

Commenter “Jim Walsh” is the shizzle:

“Sometimes, society cannot pay a market rate, and government must intervene.”
Usually it’s that society cannot pay a market rate BECAUSE the government has intervened (minimum wages)

“What is the true value of a cardiac surgeon? If we really compensated them according to supply and demand, they would have ALL of the money.”
Insightful analysis

“…only vets should be able to vote because they are the only ones who are qualified and know the true cost.”
Fair enough. May as well make it a constitutional requirement that the President holds a rank of General or higher.

It’s been said before and I’ll repeat it here: Arguing on the internet is just like the special olympics. Win, lose, or draw, you’re still a retard.

Great post James Z. It is an interesting idea, and sits well with civil liberties.

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