Beyond his lambasting the unpleasantness of military service - "State slavery/full-time Physical Education" - he mentions briefly the existence of textbook arguments against the draft as economically inefficient. Now, that's potentially a rational argument, more substantial than the usual griping I was used to during my time in the same "hell on earth". He links an August 2005 paper by David Henderson titled "The Role of Economists in ending the Draft".
The Henderson paper gives a rather longwinded account of the historical events leading up to the abolishment of the US draft system in the early 1970s. What I found most interesting were the nuggets of economic arguments buried in the history-noise. For instance, one of the first empirical studies of the economics of the draft and of ending the draft was apparently produced by Walter Oi, an econ don then at the Uni of Washington and later at the University of Rochester's Graduate School of Management. Oi argues as follows:
Oi distinguished clearly between the budgetary cost of military manpower and the economic cost. Oi granted the obvious, that a military of given size could be obtained with a lower budgetary cost if the government used the threat of force to get people to join—that is, used the draft. But, he noted, the hidden cost of this was the loss of well-being among draftees and draft-induced volunteers. Using some empirical methods that were sophisticated for their day, Oi estimated the loss to draftees and draft-induced volunteers and found it quite high— between $826 million and $1.134 billion. While this number might seem low today, Oi’s data were in mid-1960s dollars. Inflation-adjusted to 2005, the losses would be $4.8 billion to $6.6 billion.Other economists who contributed to the literature at the time were Stuart Altman (1969), the late David Bradford (1968), Alan Fechter (Altman and Fechter 1967), Anthony C. Fisher (1969), and W. Lee Hansen, and Burton Weisbrod (1967). Their articles appeared in such prestigious economics journals as the American Economic Review and the Quarterly Journal of Economics. The main idea was that "Conscription is a Tax", elegantly described by William H. Meckling, an economist who was head of the Gates Commission and dean of the University of Rochester's Grad Sch of Management, below. In essence, he argues that the opportunity-cost of military conscription on the general population is a non-equitable tax that exacts a greater toll on the poor than the rich. The actual paragraphs are reproduced below:
Any government has essentially two ways of accomplishing an objective whether it be building an interstate highway system or raising an army. It can expropriate the required tools and compel construction men and others to work until the job is finished or it can purchase the goods and manpower necessary to complete the job.
Under the first alternative, only the persons who own the property seized or who render compulsory services are required to bear the expense of building the highway or housing project. They pay a tax to finance the project, albeit a tax-in-kind. Under the second alternative, the cost of the necessary goods and services is borne by the general public through taxes raised to finance the project.
Conscription is like the first alternative—a tax-in-kind. A mixed force of volunteers and conscripts contains first-term servicemen of three types—(1) draftees, (2) draft-induced volunteers, and (3) true volunteers. Draftees and draft-induced volunteers in such a force are coerced into serving at levels of compensation below what would be required to induce them to volunteer. They are, in short, underpaid. This underpayment is a form of taxation. Over 200 years ago, Benjamin Franklin, in commenting on a judicial opinion concerning the legality of impressments of American merchant seamen, recognized the heart of the issue, and even estimated the hidden tax. He wrote: “But if, as I suppose is often case, the sailor who is pressed and obliged to serve for the defence of this trade at the rate of 25s. a month, could have ₤3.15s, in the merchant’s service, you take from him 50s. a month; and if you have 100,000 in your service, you rob that honest part of society and their poor families of ₤250,000. per month, or three millions a year, and at the same time oblige them to hazard their lives in fighting for the defence of your trade; to the defence of which all ought indeed to contribute, (and sailors among the rest) in proportion to their profits by it; but this three millions is more than their share, if they did not pay with their persons; and when you force that, methinks you should excuse the other.
“But it may be said, to give the king’s seamen merchant’s wages would cost the nation too much, and call for more taxes. The question then will amount to this; whether it be just in a community, that the richer part should compel the poorer to fight for them and their properties for such wages as they think fit to allow, and punish them if they refuse? Our author tells us it is legal. I have not law enough to dispute his authority, but I cannot persuade myself it is.
It seems likely though, there are several key assumptions underlying the argument:
(1) a large enough population exists for there to be sufficient numbers of people won over by the monetary incentives to volunteer for the military yet not disable other sectors of the economy.
(2) the supply of people is elastic - the population will respond to incentives to join the military. This is untenable if the population has severe cultural biases against joining the military, like in a population with a majority of Seventh Day Adventists for instance.
Right now, I still can't persuade myself that Singapore's population is big enough for probability to allow a big enough army. Would sufficient incentives (a substantially higher pay, greater prestige) bring in enough people to compensate for the drain from the loss of the draft?
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