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The wretched refuse of your teeming shore

March 19, 2010

I wanted to post this before Sunday, when the fate of health care reform will be a fait accompli.

The eternal social question, it seems to me, is what to do with your “surplus” population?

In the 17th century, the Dutch put the surplus population of all of Northern Europe to profitable use as sailors in the Dutch East India Company:

Over half of the million or so men who embarked from Holland’s wharves for the East never returned. In the words of economic historian Jan De Vries, ‘It is hardly an exaggeration to say that the Company swept the city streets of beggars and the unemployed.'” – William J Bernstein, A Splendid Exchange

The East India Company, the precursor of the modern corporation, was in many respects a military organization. It hastened the deaths of half of Europe’s beggars, and left the other half with small fortunes. Not bad, from the perspective of the state.

According to Brian Gifford of RAND Corporation in Why No Trade-off between ‘Guns and Butter’? Armed Forces and Social Spending in the Advanced Industrial Democracies, 1960 – 1993 (American Journal of Sociology 112:2), modern countries aren’t that different from the Dutch. Gifford produces two findings:

1) The larger the ratio of active military personnel to the civilian population, the less generous is the state with welfare spending

2) But if a state uses conscription, then the larger the armed forces, the more generous is the state with welfare spending

I think these findings make a lot of sense. Imagine how much easier the health care debate would be if veterans didn’t have health care, and at each rally Obama was flanked by uniformed veterans who couldn’t get insurance because PTSD is considered a pre-existing condition. But when you have enough service members and veterans so that they’re visible in every community, it is easier for voters to look at the unemployed and say, “If they want the state to take care of them, they should join the Army.” For many people, the accessibility of the armed forces makes that line between the deserving and undeserving poor all the more salient.

Gifford wants us to re-conceptualize the armed forces as a branch of the welfare state and as a Keynesian policy tool to reduce unemployment during economic downturns. He is right, in the same sense as we can see the penal system as fulfilling these roles. But that certainly doesn’t mean that expanding the Army is an economically efficient or socially desirable way to manage the unemployed and uninsured.

If as a country we seriously prefer making the unemployed join a government-run work program in exchange for benefits, then why not bring back the Civilian Conservation Corps? I imagine there is more than enough environmental cleanup to keep a new CCC busy for decades.

But I like Gifford’s piece, because it serves as a reminder that the military (like the penal system) is a massive intervention into the labor market. Without the military (and without the massive increases in incarceration), how much higher would unemployment be? Would real wages have been decreasing over the last few decades, instead of stagnating? It’s one more reminder that we don’t (and never have) lived in a world of laissez-faire.


Update: I forgot to mention that Gifford controls for budget size and spending on the military (as distinct the number of personnel). This is why his findings are more interesting than the truism, “The more you spend on the military, the less you have to spend on social welfare.”


From → Capitalism

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