Walter Oi passed away on 24 December. Many readers would never have heard of him but he made a contribution that would have impacted on many people. He was the economist who calculated the economic costs of conscription showing that conscription was a expensive option for providing military personnel. His work played a major role in the US abandoning conscription in the early 1970s.
David Henderson comments here.
One of the first empirical studies of the economics of the draft and of ending the draft was done by Walter Oi (1967a, 1967b), an economics professor then at the University of Washington and later at the University of Rochester’s Graduate School of Management. In his study published in the Sol Tax volume (Oi 1967b), Oi distinguished clearly between the budgetary cost of military manpower and the economic cost. Oi granted the obvious, that a military of given size could be obtained with a lower budgetary cost if the government used the threat of force to get people to join–that is, used the draft. But, he noted, the hidden cost of this was the loss of well-being among draftees and draft-induced volunteers. Using some empirical methods that were sophisticated for their day, Oi estimated the loss to draftees and draft-induced volunteers and found it quite high– between $826 million and $1.134 billion. While this number might seem low today, Oi’s data were in mid-1960s dollars. Inflation-adjusted to 2005, the losses would be $4.8 billion to $6.6 billion.
Steve Landsberg here.