Monthly Archives: January 2014

Pro-slavery Progressives

I would like to think that our modern democracy has moved beyond the ignorant beliefs of bigoted, uneducated times of a bygone era. Instead, essays such as this one by Princeton economist Uwe Reinhardt confirm a sad fact that people forget first principles all too conveniently.

Reinhardt makes a carefully-reasoned argument that the voluntary nature of military service in the U.S. is dangerous and altogether bad because it (1) allows risk-avoiding, war-mongering elites to send the lower classes into combat, and (2) allows college students to cheer on war without having to face the consequences, and just for spite (3) attracts the dregs of society into uniform. That third point is bracing in its offensiveness, but Reinhardt can get away with it because his own son is a Marine, wounded after multiple combat tours. Well, I’m still offended, almost as much by Reinhardt’s bad economic logic as by his contempt for my service in uniform, my dad’s service, and the freedom all veterans have defended.

In his own words:

[W]ith a hypothetical supply-of-soldiers curve such as the solid, upward-sloping line in the chart below … under an all-voluntary armed force, only individuals on line segment AB would join the armed forces, sparing the individuals located on segment BC the duty to fight and sacrifice for their country.

… I know from personal experience that, before the invasion of Iraq and thereafter, this welfare-economic analysis of the military draft was music to the ears of the many undergraduates who enthusiastically cheered on that invasion and the subsequent dangerous occupation of Iraq, leaving the fighting, the bleeding and the dying to someone else, …

… Clearly this is a classic case of moral hazard. It raises the probability of a nation going to war, especially if huge profits can be made off a war by those bearing little personal risk in that war but with powerful sway over government. (emphasis added)

All of these claims are wrong.  His subsequent moralizing is just as bad.

First, the supply curve analysis Reinhardt attempts is too simple. He must know this, yet he keeps making this argument that people with higher opportunity costs (“individuals located on segment BC”) would never join the military. This is belied by his own son, Mark Reinhardt, Princeton class of 2001 and proud but lonely member of the ROTC unit there. If Uwe Reinhardt had any sincerity, he’d do some real research on the topic instead of make this stuff up. What he would find is that low-skill youth (the roughly bottom 20 percent of Americans who score in the lowest “Category 5” group on aptitude tests), are not welcome in the military today. They cannot volunteer even if they want to. My own research into the demographics of modern military enlistment found that volunteers disproportionately come from higher-income neighborhoods. But don’t let facts ruin a good story, Uwe!

Second, the professor says that the freedom to enlist or not was “music to the ears” of his undergraduates, but only those who cheered on the war. What a rude assertion. His whole chickenhawk critique, thick with insinuations of class divisions, is silly. Any polling to back this up?  No, of course not.

Third, he claims the all-volunteer force creates a moral hazard that raises the probability (not possibility, mind you) of going to war. Really?  Here are the U.S. wars fought under conscription: Civil, WW1, WW2, Korea, Vietnam (to name a few) which were in the 1860s, 1910s, 1940s, 1950s, 1960-70s. You call that rare? Then conscription ended in 1973 (more on that later), and the number of wars dropped dramatically. Better logic reveals that wars fought with volunteers are less deadly. Seriously, do the math, and the empirics back this up big time. Volunteer troops are more valuable: there’s an economic principle for you. (Or see this BBC report “Wars less frequent, less deadly“).

I find it bemusing how modern progressives tend to have a self-image as protectors of the downtrodden. You often hear them mock conservatives as racists, fascists, or other reprehensible things. Oddly though, the modern political party that is more conservative, the Republican party, was born expressly to oppose slavery. Likewise, people forget that Nazi, the movement of uber-fascist Adolf Hitler, was a shorthand for the National Socialist party. The Nazis, like the modern Democratic Party, stood quite firmly for bigger government. And nothing is bigger in principle than a government that can enslave its own people.

So why is Uwe Reinhardt in favor of that?

Naturally, Reinhardt and others say that what they favor is being mis-characterized. What they favor is “national service” a euphemistic, poll-tested, re-branding of what real liberals opposed in the 1960s when it was known as conscription, a.k.a. the draft. Coercing young people to fight in the Army was the norm in the U.S. until (surprise) Richard Nixon campaigned against the draft in 1968 and (avert your self-image, modern progressives) actually ended it  in 1973, despite howls of protest from many in the Pentagon and many Senators as well (here’s to you, Ted Kennedy).

I truly wish Reinhardt would open his heart and realize that slavery is wrong in all of its forms, private and public. He can call it national service all he wants, but coercing work from others against their will is wrong. It’s counter to my value system as a veteran of our military, and it is counter to the values of almost every teenager I know. So why is the idea of conscripting young men so popular with older men? I suspect it wouldn’t be such a hot idea if pressing people into service was limited to Ivy League professors – no that just wouldn’t do. But who has more brainpower that could be harnessed for the public good? What harm could two or three years of involuntary service do to those tenured geniuses?

Here’s a counterpoint. If the voluntary nature of labor markets creates moral hazard, does that mean you are more likely to abuse maids and trash collectors? Are we more likely to overuse services which we don’t have to provide? Are we likely to be inconsiderate to people in those jobs? Reinhardt logic says yes. It also says that a job lottery to fill dangerous jobs would be a Pareto improvement over a free country. Want to take a low-paying job working in a park? Too bad, you’ve been tapped to fight crime with the Chicago police. Want to design new medicines to fight cancer? Too bad, go dig a tunnel (it’s a public good you know).

Again, if Uwe Reinhardt was serious in his critique of the moral hazard of a voluntary military, he would do some actual research on the matter. He might even ask the troops who volunteer. Do the men and women who enlist today prefer to serve with conscripted soldiers? I know the answer because I’ve asked these questions. It turns out that nearly 90 percent of the officers I surveyed oppose efforts to reintroduce the draft. In my book Bleeding Talent I show that what’s really wrong with the military is that it hasn’t gone far enough in stomping out the remnants of coercion in how soldiers are treated. What America needs is a Total Volunteer Force that will add flexibility to the ranks and improve the way service members are treated. The troops know this, but Reinhardt and modern progressive elites are lost.

Unemployment versus Labor Force

Here’s an update from my last post, this time contrasting Labor Force Participation with Unemployment. Both have U.S. population as a denominator.  Make sure to check out National Journal’s Major Garrett on the topic:

But is this a harbinger of a new, gruesome economic normal of laid-off workers who can’t find work, young Americans clinging to college and post-graduate work—adrift in a jobless future, piling up debt? Or is it a statistic that looks alarming but is really benign—a statistical brew of trends in aging, schooling, retraining, and life choices that’s frothy and mysterious but no more distasteful than Guinness served too cold?



The U.S. Labor Market Is Abnormally Broken

As the U.S. economy completes another year of non-recovery, I have become increasingly convinced the policy environment is harmful to the labor market. Congress enacted a sharp increase in the minimum wage at the beginning of the recession (41%) and also made unprecedented increases in the duration of jobless benefits, essentially quadrupling them. These distortions to work incentives are just two easily identifiable changes. The myriad pressures from new laws and regulations, notably ACA, are also negative but will be difficult for economists to quantify.  The resulting distortions are easy to see, however.

First, recent movements in the unemployment rate are now well-known to be false signals of recovery.  The U-3 rate does not count discouraged workers and others who have dropped out of the labor force. In the charts below, I show a snapshot of the relationship between the U-3 unemployment rate and the demographically neutral Employment-population ratio. I’ll save further commentary until after the charts.  Notice that the relationship, shown in a 2-axis scatter, varies as demography shifts from the 1950s to the 1970s (first chart). However, in later decades, the relationship is remarkably stable, until the 2009 “recovery” shown in the final chart.

EvU charts_16620_image003

image001 image005 image007 image013

The scatter points in the last chart do move along the traditional line that was steady for 25 years. And then in late 2009, the scatter points get stuck in a cluster for a year or more with unemployment at 9.5 to 10, alongside the E-pop ratio at 58.5. After mid-2010, the old normal melts down, as unemployment begins to decline while E-pop holds firm. I find it amazing.  And the meltdown is ongoing.

Every month in which the unemployment declines while the E-pop ratio stagnates indicates a further breakdown in normal work patterns. I have to wonder if what these pictures reveal is an erosion of culture, for lack of a better term.