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War’s Costs

In today’s Washington Post, Princeton’s Uwe Reinhardt insinuates that the volunteer military allows affluent taxpayers to enjoy the benefits of war without suffering war’s costs.  After summarizing (part of) the economic case against conscription, Reinhardt says:

Small wonder, then, that even college students who ardently supported the invasion of Iraq and just as ardently favor “staying the course” in Iraq argue smugly that, instead of serving their country in uniform, they can serve it so much better in law school or by trading bonds for Goldman Sachs. I personally have heard this argument many times from hawkish undergraduates at Princeton University who would never dream of fighting in uniform for the nation they profess to love.

Reinhardt’s observation called to mind one of Adam Smith’s observations on war:

In great empires the people who live in the capital, and in the provinces remote from the scene of action, feel, many of them, scarce any inconveniency from the war; but enjoy, at their ease, the amusement of reading in the newspapers the exploits of their own fleets and armies. To them this amusement compensates the small difference between the taxes which they pay on account of the war, and those which they had been accustomed to pay in time of peace. They are commonly dissatisfied with the return of peace, which puts an end to their amusement, and to a thousand visionary hopes of conquest and national glory from a longer continuance of the war.

[This quotation is from Book V, Chapter 3, of An Inquiry Into the Nature and Causes of the Wealth of Nations.]

Here’s a letter that I sent today to the Washington Post in response:

Dear Editor:

Uwe Reinhardt seems to suggest that, because soldiers in the voluntary military come mostly from working-class backgrounds, wealthier Americans escape the costs of war (“Kerry Trips Over an Economic Truth,” November 4). Not so.  Soldiers today must be paid market wages for their services. These wages are paid by taxpayers, who are overwhelmingly in middle- and upper-income groups.  A taxpayer with no children in the military no more escapes the costs of war than does a taxpayer with no children on the police force escape the costs of local policing.

Now if it’s argued that taxpayers don’t feel these costs sufficiently sharply to cause them to question the merits of a war – an argument for which I have much sympathy – then the problem is not the voluntary army.  The problem is dangerously dysfunctional government.

Donald J. Boudreaux

Suppose that Smith and Reinhardt are correct — namely, that even if the full costs of war are ultimately paid by taxpayers when the military doesn’t resort to forced servitude, the “felt” costs are much higher on those persons who are actually in the military, as well as on their families.  Citizens back home, even though paying taxes — paying these taxes either currently or in the form of a growing public-debt burden — don’t “feel” sufficiently the costs of the war.

One implication of this fact (if it is indeed a fact) has been pointed out by Rep. Charles Rangel, NYT columnist Bob Herbert, and others: government will too likely wage war unnecessarily.

But carry the analysis further.  If taxpayers don’t “feel” the costs of the war — and/or if they get baseless thrills from reading about the exploits of their troops and fleets abroad — surely the same sort of problem infects other government activities beyond war.  Do taxpayers “feel” the costs of farm subsidies, even as many enjoy the amusement of imagining the exploits of their bureaucrats saving family farms all across the land?  Do taxpayers feel the costs of the “war on drugs” as they thrill to the exploits of police officers and soldiers destroying dope dealers across the globe?  Do taxpayers feel the costs of the Small Business Administration?  The Food and Drug Administration?  The Federal Communications Commission?  The Department of Energy?

If taxpayers don’t sufficiently feel the costs of what their government is doing, then not only wars, but very many other — all? — government programs are likely unnecessary or, at least, excessive.


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