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Conscription is a complex and multifaceted issue, influencing not only a nation's defence capabilities but also its economy and political landscape. With countries as diverse as Denmark, to the DRC, from Taiwan to Tajikistan, and even Austria to Armenia, having all adopted conscription. However, as different as each of these nations are, each of them is now facing unique challenges, constraints, impacts and benefits from the practice. So what are the true economic advantages and drawbacks of conscription, should countries like the US, the UK and Germany be looking at its reimplementation, and can it serve as an effective deterrent in modern conflicts? We ask our panel of experts.
LISTEN TO THE PROGRAM HERE
EPISODE SUMMARY:
PART I: Enemies and Economics - (05:51)
with Paul O'Neill
- Snr Research Fellow at Royal United Services Institute.
- Specialist in national security strategy and NATO.
- Former Snr Royal Air Force officer.
Conscription as a Tool for Defense Against Larger Threats: In countries facing overwhelming external threats, such as Sweden, Finland, and Taiwan, conscription becomes a viable method to generate large numbers of personnel quickly to counterbalance a more powerful adversary. For nations unable to sustain large volunteer forces due to economic constraints, conscription can help create mass without diverting too much of the population from civilian employment. However, this approach may limit GDP growth and overall economic potential in higher-income nations, where advanced military technology and professional volunteer forces are more effective.
Technological Sophistication vs. Mass Mobilization: High-income countries, particularly NATO members, have generally avoided conscription in favor of professional, technologically advanced forces. The technological superiority of Western militaries allows them to focus on precision warfare rather than mass mobilization. Countries like Russia, which rely on mass conscription to compensate for their technological deficiencies, illustrate the trade-off between human resources and technological investment. A conscript army lacks the training and capability required for modern, sophisticated warfare, making it less efficient despite its size.
Economic Impact of Conscription in Different Countries: The economic ramifications of conscription vary by country. In lower-income nations, conscription may provide employment opportunities, reduce unemployment, and contribute to economic stability. However, in high-income nations, conscription can suppress economic growth by diverting young people from the labor market and decreasing productivity. This economic trade-off raises questions about the long-term viability of conscription in wealthier countries, where the private sector can often outcompete the military for skilled labor.
Cost of Reintroducing Conscription: Reintroducing conscription after transitioning to an all-volunteer force is expensive due to the infrastructure, logistics, and personnel training required. Western countries like the UK have optimized their armed forces for smaller, professional units, selling off military housing and reducing personnel. Scaling up through conscription would require significant reinvestment in training facilities, accommodations, and logistical support, diverting funds from research, procurement, and technological advancements, which are critical to maintaining military effectiveness.
Conscription as a Deterrent and Societal Cohesion Tool: In countries like South Korea, Finland, and Taiwan, conscription serves as a deterrent by signaling to potential adversaries that the nation can quickly mobilize a large defense force. However, in high-tech warfare, conscription may not provide the level of military effectiveness required, and professional forces combined with advanced technology offer a more credible defense. Additionally, conscription can be seen as a tool for societal cohesion, fostering loyalty and shared national identity, but this benefit may be achieved through non-military public service models without the economic downsides associated with military conscription.
PART II: A Forced Force - (28:47)
with Pvt. Gona
- A Private recently conscripted into the Finnish military - Speaking under a pseudonym
Conscription's Economic Efficiency in Finland: Finland maintains a conscription system where conscripts are paid significantly less than the average Finnish wage, with compensation amounting to about 4% of the national average. This is economically viable for the government, allowing them to sustain a large reserve force without significantly impacting the national budget. However, the low wages are partially offset by government subsidies, such as rent support, to ensure that conscripts can meet basic living costs while serving, making the system financially feasible without excessively burdening the Finnish economy.
Military Structure and Readiness Through a Conscription-Based System: Finland's conscription system allows for the rapid mobilization of up to 280,000 soldiers, combining professionals, reservists, and conscripts. Despite having a relatively small professional force of around 8,000 soldiers, the country can significantly scale its military presence in times of need, utilizing conscripts to fill vital roles. This system provides Finland with a robust defense capability without the high costs associated with maintaining a large standing professional army, but training conscripts primarily for defensive purposes may limit their operational flexibility.
Logistical and Economic Challenges of Training Conscripts: Training conscripts presents logistical challenges, as advanced military systems are too costly and complex for short-term conscripts to fully utilize. Finnish conscripts primarily focus on basic combat and defensive tactics, with limited exposure to high-end technology. This reduces the overall effectiveness of conscript training compared to all-volunteer forces in countries like the US or UK, which can invest more in developing highly skilled, technologically proficient soldiers. The cost-saving strategy of using conscripts comes at the expense of advanced tactical capability.
Economic Trade-Off of Conscription vs. Volunteer Force: Conscription allows Finland to maintain a large pool of military personnel at a lower cost compared to an all-volunteer force, but the economic trade-off is clear. While it provides employment and basic skills, conscription does not generate the same economic value as professional employment in higher-paying sectors. Nations like Finland balance this by offering minimal wages to conscripts, maintaining a focus on defensive readiness without overburdening the economy, unlike countries like South Korea, where raising conscript wages to the minimum wage would severely strain the military budget.
Public Support for Conscription Driven by National Security: Finland enjoys widespread public support for conscription, with around 81% approval, particularly in light of growing regional threats, such as the Russian invasion of Ukraine. This societal acceptance stems from conscription being a cultural norm and a perceived necessity for national security, rather than a purely military or economic decision. However, any move to abolish conscription could face backlash, particularly from those who have already completed their service, reflecting a strong connection between military service and national identity in Finland.
PART III: Distortions and Detachments - (43:13)
with Eric Crampton
- Chief Economist at New Zealand Initiative. - Senior Fellow at University of Canterbury. - Expert in national economic policy.
Conscription as a Military Necessity in Threatened Nations: In countries facing constant threats, such as South Korea, conscription can be seen as a necessary tool to maintain a substantial defense force ready for immediate mobilization. This rationale is less compelling in countries like the US, where large-scale mobilization appears unlikely. The military benefits of conscription, therefore, depend heavily on the geopolitical context and the proximity of credible threats, making it a stronger case for nations in high-risk regions.
Economic Implications of Conscription as a 'Tax': Conscription can be viewed as an "optimal tax" where eligible individuals pay with time instead of money. Governments face a choice between broadening the tax base to fund an all-volunteer force or imposing the cost of service directly on young citizens through conscription. The economic trade-offs between these approaches depend on the scale of mobilization and the societal willingness to either bear the financial burden of a professional military or accept conscription as a civic duty.
Market Distortions from Conscription: Conscription introduces distortions into labor markets, especially in male-dominated systems, by removing young men from the workforce for extended periods. This can disincentivize employers from hiring them or create wage inflation in other industries. Additionally, sectors reliant on skilled labor, like South Korea’s economy, may see critical shortages if conscripts are pulled from economically productive roles. This distortion is even more pronounced in countries like Uzbekistan, where conscripts have been used for non-military purposes, such as agricultural labor, causing ripple effects across other industries by artificially lowering costs in some sectors while raising labor costs in others.
Economic Efficiency vs. Conscription-Based Labor: Countries with conscripted labor often face inefficiencies, as conscripts are typically paid much less and have little motivation to excel. This can lead to missed opportunities for technological advancement and automation, as industries may rely on cheap, compelled labor instead of investing in more efficient, long-term solutions like machinery. In extreme cases, such as military dictatorships, conscription can be manipulated to benefit regime-aligned industries, providing these businesses with access to nearly free labor, which distorts competition and economic development.
Compelled Labor’s Negative Incentives and Long-Term Risks: While conscription can provide governments with a pool of cheap labor, the lack of voluntary motivation creates inefficiencies and poor alignment of incentives. Conscripts, with no desire to rise through ranks or perform well, may simply aim to survive their service period, contributing little beyond fulfilling the basic requirements. This misalignment of incentives can hamper industries that rely on conscripted labor, leading to poor productivity, stunted technological advancement, and long-term economic disadvantages compared to economies with fully voluntary, market-driven labor forces.
The Economics of Conscription
(Released Sep 17th)
THE RED LINE'S EPISODE 125 READING LIST:
I: Defence Logistics: Enabling and Sustaining Successful Military Operations
- By Jeremy Smith
II: Militarizing Men: Gender, Conscription, and War in Post-Soviet Russia
- By Maya Eichler
III: Economic War: Ukraine and the Global Conflict between Russia and the West
- By Maximilian Hess
This episode is dedicated to our Patreon members: Tacitacial, Nyx, Michael Johnson, Melissa Miller, David Gebel and a special thanks Anousheh Fard
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