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Freeman Essay #5: “A Life-Saving Lesson from Operation Desert Storm”

In this October 1993 Freeman essay I summarize the economic insight that reveals that military conscription is hazardous to soldiers’ health.  It’s below the fold.

Operation Desert Storm is considered to be one of the American military’s greatest victories. The goal given by the United Nations was to drive Saddam Hussein’s troops out of Kuwait. Regardless of one’s opinion of the scope of this goal or of the propriety of United States military involvement in foreign nations, the fact is that American armed forces accomplished their task. They did so completely, unambiguously, quickly, and with very little loss of life. Americans should be especially grateful for this last fact.

Only 378—or .075 percent—of the 500,000 Americans serving in the Persian Gulf war lost their lives. This means that not even one in every one thousand Americans fighting in Operation Desert Storm was killed. Operation Desert Storm stands in sharp contrast to the war in Vietnam. The U.S. military in that Southeast Asian war did not achieve its goal of keeping the Communist totalitarians of North Vietnam from conquering South Vietnam. And, sadly, this military loss claimed the lives of more than 58,000 of the nearly 8.75 million Americans who fought in the jungles of Vietnam and Laos. The casualty rate in the Vietnam War was just under 0.7 percent—a rate nearly ten times greater than the Gulf War. If U.S. servicemen had died in Vietnam at the rate at which they died in the Persian Gulf, we would have suffered only about 6,000 casualties. Can it be that 52,000 Americans lost their lives unnecessarily in Vietnam?[1] Alternatively, if Americans had perished in the Persian Gulf at the same rate at which they perished in Vietnam, more than 3,000 Americans would have been killed in Operation Desert Storm. The homecoming parades of 1991 would surely have been less joyous, and America’s sense of accomplishment more tempered.

Conscription Is Hazardous to a Soldier’s Health

There are, no doubt, many potential explanations for this great difference in U.S. military performance in the two wars. One crucial part of any valid explanation is that the U.S. military in Operation Desert Storm was an all-volunteer force. In Vietnam (and Korea), U.S. armed forces were composed largely of conscripts. This single fact plausibly explains much, perhaps most, of the success enjoyed by American troops serving in Operation Desert Storm.

To see why this is so, it is useful to recall the great policy debate of the 1960s which focused on the military draft. In addition to showing that an all-volunteer military would actually be less costly to society than a conscripted military, economists Milton Friedman, Walter Oi, and others argued that conscription reduces the efficiency of military operations. Friedman nicely summarized this part of the argument against conscription:

A volunteer army would be manned by people who had chosen a military career rather than, at least partly, by reluctant conscripts anxious only to serve out their term. Aside from the effect on fighting spirit, this would produce a lower turnover in the armed services, saving precious man-hours that are now wasted in training or being trained. Also it would permit intensive training and a higher average level of skill for the men in service; and it would encourage the use of more and better equipment. A smaller, but more highly skilled, technically competent, and better armed force could provide the same or greater military strength.[2]

It is easy enough to see why a military manned by people freely choosing to join the armed forces enjoys lower turnover and, hence, greater average levels of experience and esprit de corps when compared with a conscripted force. But why does an all-volunteer force “encourage the use of more and better equipment”? The reason is simple. Conscription gives military decision-makers the power to acquire labor at wage rates below those that the military would have to pay in the absence of conscription. That is, decision-makers for a conscripted military get labor on the cheap. Because labor and capital (for example, tanks, better guns and ammunition, more high-tech airplanes) are substitutes for one another, when the price of labor is kept artificially low, military decision-makers use too much labor and too little capital to produce the desired amount of military power.

Consider a simple example. Suppose the top brass of the military agree that there are two ways of ensuring victory in a particular battle. One way is to have 200,000 troops, each armed with a rifle, storm an enemy’s stronghold. Another way is to have five troops use five highly sophisticated fighter planes with smart bombs to attack the enemy’s stronghold. It is not implausible to suggest that the method chosen is the one that will be least costly to military decision-makers (who do, after all, face a finite budget from Congress). Let’s say that each fully equipped fighter plane costs $1 billion, and that each pilot costs $100,000 to employ. Thus, the total cost of achieving victory by use of fighter planes is $5,000,500,000. This method will be selected only if it costs military decision-makers less than the cost of achieving victory with the massive-manpower method.

The cost to military decision-makers of the massive-manpower method depends on whether or not conscription is used. Suppose that with conscription the military pays each soldier $5,000 annually, and that rifles and uniforms cost a total of $200 per soldier. At this wage rate, it will cost the military $1,040,000,000 in wages and equipment to achieve victory with the massive-manpower method.[3] Military decision-makers are likely to use the massive-manpower method in battle because it is significantly less expensive to them than using the fighter planes.

But suppose, in the alternative, that conscription is prohibited. Without conscription the military must pay market wages to its soldiers, and market wages will be higher than the wages of conscripts. Suppose that market wages are $30,000 per soldier. The total bill of achieving victory using the massive-manpower method in the absence of conscription would then be $6,040,000,000—approximately $1 billion more than the cost of achieving victory by use of the five fighter planes. Clearly, when military leaders are forced to pay market wages they have a strong incentive to economize on the use of labor by using greater amounts of capital equipment in producing military outcomes.

We can now see why “the use of more and better equipment” is encouraged by an all-volunteer force. Conscription artificially suppresses the price of labor relative to capital and, therefore, military decision-makers will use too little equipment and too many men. The all-volunteer force reverses this unfortunate effect by giving military decision-makers the incentive to “use more and better equipment” along with fewer men and women.

Because conscription causes a greater number of military personnel to be used on the battlefield, and because too many of these people are not sufficiently dedicated to their tasks, conscription results in unnecessary battlefield casualties. It is important to emphasize that these unnecessary deaths and injuries result both from the military’s use of excessive amounts of labor and from the fact that a conscripted military is less experienced and less dedicated than is an all-volunteer force.

Conscription Never Again

Operation Desert Storm showed just how efficient, effective, and relatively safe an all-volunteer military can be. Instead of sending large numbers of American men and women directly into harm’s way, U.S. military leaders relied mainly on high-tech machines to do battle with enemy forces. In addition to the effectiveness of this military hardware, a successful enemy hit against one of these machines—unlike a successful enemy hit against a flesh-and-blood soldier—does not cause tears of grief back home from a parent, a child, or other loved ones. Better a machine be destroyed than the life of a young man or woman.

Whatever the merits of Operation Desert Storm on the diplomatic and political fronts, its merit on the economic front is clear: Operation Desert Storm is powerful evidence that the all-volunteer military is far superior—and far less dangerous to its soldiers—than is a conscripted force. Let us hope that this is a lesson we never forget.

  1.   The figures for the Korean conflict are even more gruesome. Of the nearly 5.8 million Americans who fought in Korea, more than 54,000 lost their lives. This is a casualty rate of just over .9 percent. If Americans had died in Korea at the same rate at which they died in the Persian Gulf, only about 4,000 Americans would have been killed in Korea; 50,000 who actually lost their lives would have lived.

  2.   Milton Friedman, “Why Not a Volunteer Army?” New Individualist Review, Vol. 4 (Spring 1967), pp. 3-9; this quotation is found on page 4. See also Walter Y. Oi, “The Real Costs of a Volunteer Military,” New Individualist Review, Voi. 4 (Spring 1967, pp. 13-16); and “The Economic Cost of the Draft,” American Economic Review, Vol. 57 (May 1967), pp. 39-62.

  3.   This figure is calculated by multiplying 200,000 by $5,200