THE AVF:AN ECONOMICS PERSPECTIVE 2000
Posted on 30. Mar, 2009 by Shera Crossan in Business & Finance, Economy, Education, Events, Feedback, Politics, Shera Crossan, War Coverage
Unlike the UK, economists in the USA contributed to the relative merits of the draft versus an AVF.
Analysis of the draft involved the application of standard micro-economic theory comparing marketprice systems with the draft system (cf. capitalist and central planning systems).
Abolition of the draft changed the relative costs of military personnel, making personnel relatively more expensive. Economic theory predicts that as a result there will be incentives to substitute relatively cheaper for more expensive inputs. An AVF will make military personnel more expensive, so leading to
substitutions between equipment (capital or weapons) and labour, as well as between military
personnel and cheaper labour inputs, such as civilians and less skilled labour. If defence ‘output’
remains unchanged, defence spending will increase. Other results of an AVF include lower labour
turnover costs (eg. training costs); improved motivation resulting in higher productivity; the end of
draft-induced uncertainty which distorted the patterns of investments in human capital and family
planning; and the end of efforts to avoid or defer the draft. More AVF> > >(pdf)
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