Professor Oi's Disneyland Dilemma, or, more precisely, anomalies at the amusement park gate, have interested me ever since I discovered that some amusement parks have more fascinating and complicated pricing schemes than they have roller coasters. Perhaps, in retirement, I will have time to engage this problem without having to deal with administrivia or grading and work out a satisfactory resolution.
Professor Landsburg, however, notes that Professor Oi took his greatest pride in helping to end the military draft, which is a canonical illustration of allocative inefficiency.
In 1967, people were still making the ridiculous claim that an army of underpaid draftees is cheaper than an all-volunteer force — based, apparently, on the ridiculous assumption that the cost of a soldier is well measured by his paycheck. But of course this isn’t true. The social cost of putting, say, a carpenter in the army is that we have one less carpenter doing civilian work. That’s true whether you pay him one dollar a year or a million.It is useful to keep that argument in mind, as well as a related argument by Milton Friedman that a military of volunteers is a military more careful with soldiers' lives. Allocative efficiency, however, is not the only goal, and it will be up to the newest cohorts of economists to continue the debate.