Thursday, November 11, 2004

Draft coming, students told

If (when?) the draft begins, there will be boatloads of I-told-you-sos from the left, and properly so. But an aspect of this that had not occurred to me before is the way in which a draft is a repudiation of the free market the Republicans claim to hold so dear.

The reason we are talking about a draft is, of course, the fact that we simply don't have enough troops to occupy Iraq and do the other things the Adminstration wants to do. In other words, we have a shortage.

The economics of shortages are well understood -- the stuff of Econ 101 classes. An economist understands a shortage as an imbalance between the supply of a good and the demand for it. In a free market, these kinds of problems are supposed to self-correct, because when demand exceeds supply, the price rises, and the higher price stimulates increased supply, bringing things back into balance.

Applied here, the obvious solution to the shortage of troops is to offer more for their services -- increase pay and/or benefits. Any economist will tell you that there is a price at which we can have exactly the number of troops needed. Judging by the huge risk premiums being paid to our private army (the folks with Halliburton on their business cards), that price is high and rising. But our Capitol Hill capitalists are likely to show that they are summer soldiers in the war for free enterprise. The draft is a form of price control -- Big Government at its most interventionist. It uses the threat of jail to artificially increase supply -- anathema to those who benefit from restricted supply, like big pharma, for example. But the right only objects to interventions that gore their own oxen. Imagine the uproar if the Bush Administration claimed that it needed to conscript, say, oil wells into the war effort. It is pretty simple folks -- if you damn labor unions as a distortion of the market, you can't be in favor of the draft.

Free market for me, but not for thee.


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