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January 28, 2007
David Warsh, Proprietor


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Unintended Consequences

Monday evening, most Public Broadcasting System stations in the United States will broadcast The Power of Choice, a well-made 90-minute documentary on the life, times and ideas of Milton Friedman. The good news is that Friedman got to see the show last year, along with a glittering audience of a thousand friends, before his death, at 94, in November. The sad news is that he didn’t live long enough to bask in the glow following its broadcast. It may provide some solace to his widow and collaborator, Rose Director Friedman. Their up-from-scratch life together is a classic American success story of the twentieth century.

What’s left to say about Milton Friedman? Perhaps that it’s impossible for anyone to embody anything like the whole truth of things. As good as he was at making the libertarian argument, there were some important aspects of economic policy about which he had nothing to say, others about which he was simply mistaken.

For example, I’ve always thought it remarkable that, in the 660 pages of Two Lucky People, the 1998 memoir that Friedman compiled with Rose, he mentioned the Marshall Plan just once, to remark that it had financed a pleasant three-month family sojourn in Paris in 1950. He didn’t goof off.  He had lunch with Maurice Allais and recommended floating the German mark. The memo eventually became his famous paper, “The Case for Floating Exchange Rates.”

Still, the Marshall Plan initiative, for the rapid post-World War II economic reconstruction of Europe as a bulwark against Soviet expansion, is generally considered to have been, not just a considerable practical success, but a dominating triumph of economic policy as well. (Economist Tyler Cowen has asserted that this conventional interpretation is a myth.) The significance of government-sponsored education, research and development to US economic growth during the Cold War was mostly terra incognita to Friedman, as well.

More important, it seems clear today that Friedman’s enthusiasm for an all-volunteer armed forces overlooked a serious flaw in the way the proposal has worked in practice.

It was in the late 1950s that Friedman had first advocated the abolition of the draft, in the course of his summer lectures at Wabash College ­ the ones that, in 1962, became his best-selling book, Capitalism and Freedom. Nothing more serious than Elvis Presley’s conscription and assignment to Germany excited public indignation in those days. It wasn’t until December 1966, with the Vietnam War heating up, that the proposal to replace the draft with a paid all-volunteer army actually took flight. That was when University of Chicago anthropologist Sol Tax and his colleagues organized a four-day conference in Hyde Park to examine the theory and practice of the Selective Service System, as the conscription bureaucracy was known.

The 74 experts invited to Chicago then included virtually everyone who, to that point, had taken sides on that issue. The star of the conference turned out to be Walter Oi, a Friedman student and 1961 University of Chicago Ph.D. who had been gradually blinded by a degenerative eye disease. Oi had become a passionate libertarian. In Chicago, he argued that conscription was ethically offensive and politically risky.

Friedman recalled, “Here was a blind man, enormously impressive for his capacity to prepare and deliver a cogent, closely-argued and fully documented, paper. He conveyed a clear sense of moral outrage on an issue about which he had no conceivable personal ax to grind.”  The impact on the conference-goers, in those early days of the anti-war movement, was profound. A straw poll indicated that two-thirds of the participants had favored the draft when the meetings began; two-thirds opposed it when they ended.

Friedman and Oi had caught a wave. Within a year, Republican presidential candidate Richard Nixon, long a proponent of the draft, was campaigning on the issue. Three months after he was elected, in the midst of a hugely unpopular war, Nixon named a fifteen-member “Advisory Commission on an All-Volunteer Armed Force.” Among its members were Friedman and his old friend Allen Wallis, president of the University of Rochester. (A history of their collaboration is here.) Five members were avowed supporters of the draft, five advocated an all-volunteer force, and five were said to be uncommitted. Former Secretary of Defense Thomas Gates was the chair.

Hired to direct the commission staff was University of Rochester Business School dean William Meckling, a political scientist.  His star performer (and a recent recruit to Rochester from the University of Washington) was Oi. Among the experts offering favorable testimony on the proposal was John Kenneth Galbraith, Friedman’s old nemesis in so many other matters.  But the high point of the proceedings came when General William Westmoreland appeared before the commission to testify.

Like most military leaders, Westmoreland opposed the idea of an all-volunteer force. By then, he was serving as US Army chief of staff (having commanded American forces in Vietnam for several frustrating years.) At one point, Westmoreland declared that he wouldn’t wish to command “a band of mercenaries.”

In his memoirs, Friedman recalled, “I stopped him and said, ‘General, would you rather command an army of slaves?’ He drew himself up and said, ‘I don’t like to hear our patriotic draftees referred to as slaves.’ But I went on to say, ‘If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher.’ That was the last we heard from the general about mercenaries.”

And so the Gates Commission went forward, recommending unanimously (except for NAACP executive director Roy Wilkins, who abstained for having been ill much of the time) in February1970, just a few weeks before the Cambodian invasion, that the draft be abolished.  “We unanimously believe that the nation’s interests will be better served by an all-volunteer force, supported by an effective standby draft, than by a mixed force of volunteers and conscripts…. We have satisfied ourselves that a volunteer force will not jeopardize national security,” the commission averred, “and we believe it will have a beneficial effect on the military as well as the rest of society.”

Thus it was that, once pay scales and benefit packages had been adjusted sufficiently to insure a steady supply of volunteers, conscription was ended in the United States in January 1973. Mandatory registration with the Selective Service System, which had been created on the eve of American entry into World War One, was suspended in April 1975, the same month as the fall of Saigon. And though President Jimmy Carter reinstated mandatory registration in 1980, after the Soviet Union invaded Afghanistan, it has been all but unenforced. (Those receiving federal grants, loans and other forms of aid are required to certify they have complied, of course.)

Fast forward, thirty years.  By almost all accounts, the all-volunteer armed forces have performed remarkably well in combat ­ first in skirmishes in Grenada and Panama, then in “Operation Desert Storm” against Iraqi forces occupying Kuwait in 1990-91, and in peace-keeping operations in Kosovo. Increasingly high-tech weaponry made US forces all but invincible in main-force engagements.  Sensible, well-administered policies made the military a model of higher levels of color-blind integration. In the late 1990s, the army even produced a leading presidential candidate, until Gen. Colin Powell took himself out of the race to spare his family the added stress.

So what’s the problem?

The war in Iraq has supplied the answer.  An all-volunteer army is much too easy to deploy.

Nobody has been better in parsing the present situation than Andrew Bacevich, a retired West Point-educated colonel (and Princeton history PhD), now teaching at Boston University. He is he author of three prescient books on the trend: The New American Militarism: How Americans Are Seduced By War (2005); The Imperial Tense: Prospects and Problems of American Empire(2003); and American Empire: The Realities and Consequences of US Diplomacy (2002).  In an op-ed article last week in The Boston Globe, Bacevich wrote:

“For the vast majority of Americans, Desert Storm affirmed the wisdom of contracting out our national security. Cheering the troops on did not imply any interest in joining them. Especially among the affluent and well-educated, the notion took hold that national defense was something ‘they’ did, just as ‘they’ bused tables, collected trash, and mowed lawns.

“The stalemated war in Iraq has revealed two serious problems with this arrangement.

“The first is that ‘we’ have forfeited any say in where ‘they’ get sent to fight. When it came to invading Iraq, President Bush paid little attention to what voters of the First District of Massachusetts or the Fiftieth District of California thought. The people had long-since forfeited the ownership of the army.

“Even though a clear majority of Americans want the Iraq war shut down, their opposition counts for next to nothing: the will of the commander-in-chief prevails.

“The second problem stems from the first. If ‘they’ ­ the soldiers we contract to defend us ­ get in trouble, ‘we’ feel little or no obligation to bail them out. All Americans support the troops, yet support does not imply sacrifice. Yellow- ribbon decals displayed on the back of gas-guzzlers will suffice, thank you.

“Stipulate for the sake of argument that President Bush is correct in saying that failure in Iraq is not an option.  Then why limit the ‘surge’ to a measly 21,500 additional troops? Why not 50,000? With the population of the United States now having surpassed 300 million, why not send 100,000 reinforcements to Iraq?

“The question answers itself.  There are not an additional 100,000 Americans willing to commit their lives to the cause.  Even offering up 21,500 finds the Pentagon scraping the bottom of the barrel, extending the tours of soldiers already in the combat zone while accelerating the deployment of those heading back for a second or third tour of duty.”

What about simply raising prices, then?  Suppose President Bush last week had proposed doubling soldiers’ wages, and forming another couple dozen divisions?  It doesn’t take long to understand why, in the present circumstances, such a call to arms is an unlikely alternative to “failure in Iraq.” Market mechanisms might have worked in wartime to some degree 150 years ago, during the American Civil War (along with powerful appeals to patriotism). But it is beyond credulity to imagine that they could work now ­ which is why no one has seriously proposed them ­ at least for the armed forces themselves. Off-balance-sheet paramilitary forces, such as Blackwater USA gunmen that the administration is using extensively in Iraq, provide a little more flexibility, but not much. They are the Pinkertons of the present day, though their use in a foreign war is unprecedented.

In the end, Milton Friedman himself recognized that something had gone wrong, at least with American foreign policy. Last summer he told Wall Street Journal editorialist Tunku Varadarajan in an interview, “What’s really killed the Republican Party isn’t spending. It’s Iraq.  As it happens, I was opposed to going into Iraq from the beginning. I think it was a mistake for the simple reason that I do not believe the United States of America ought to be involved in aggression.”

(When his wife demurred, Friedman chimed in, “But, having said that, once we went to Iraq, it seems to me very important that we make a success of it.”  Too bad Varadarajan didn’t ask the follow-up question: What would that be worth to him?)

Bacevich’s vision makes much more sense to me. For the United States to remain a great military power, he says, will require “a genuine reconciliation of the military and American society.”  That would mean “reviving the tradition of the citizen soldier, so that all share in the burden of national defense.”  It would mean too, that it would be much more difficult to go to war, since citizens of all classes and walks of life would be involved in the decision. And, in the first instance, it would mean no more economists giving citizenship lessons to generals, no matter how bright they might be.

Sea-changes like this don’t happen overnight. But they happen.

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