Trends

ENDING THE DRAFT?

In a surprisingly fast action last fall, Congress revived the military draft, which had been in limbo all summer, thanks to an anti-war filibuster. The Nixon Administration had pushed hard for restoration of the draft, despite Nixon's campaign pledge in 1968 to end the draft. In a minor concession, the Administration had thrown in a military pay raise, only to have Congress increase the amount by $1.5 billion, to within $300 million of the amount recommended by the Gates Commission as the level needed to attract an all-volunteer force (under nonwartime conditions).

Suspicions that the Administration has no intention of ending the draft by the next expiration date (June 1973) were heightened by a statement by the general in charge of planning for a volunteer military. Said Lt. Gen. George I. Forsythe in September, "Although we are going to try to do our level best, we are not going to make it, I do not believe, in the time that has been prescribed for us to do this." These suspicions were confirmed by the revelation shortly thereafter that the Army is actually turning down volunteers. Army recruiters have been told that the reenlistment rate was high enough so that discharged veterans who want to re-enlist are not needed (!).

Soon after these developments were made public, the New York-based Association for a Volunteer Army (which had backed Nixon in 1968) unanimously repudiated Nixon and called for his ouster in 1972.

Meanwhile, despite official attempts to resist the moral and practical arguments in favor of a volunteer military, the case continues to be made more forcefully. In a recent 107-page restudy of the issue, Rand Corporation researchers found that the costs of an all-volunteer force had been over-estimated in past studies. An all-volunteer force with a combat effectiveness equivalent to a 2.65-million man drafted force would cost only $2.1 to 2.5 billion more annually, including longevity and retirement costs. The one-time phasing-in costs are put at only $0.75 billion—a fraction of earlier estimates.

SOURCES:
• BOSTON HERALD TRAVELER, 21 September 1971 and BOSTON SUNDAY GLOBE, 26 September 1971, both quoted in Walter Hauck's "Newswatch" column in ERGO.
• "The Budget Cost of a Volunteer Military," S.L. Canby and B.P. Klotz, RM-6184—PR, August 1970. Available for $4 from Rand Corporation, Communications Department, 1700 Main Street, Santa Monica, CA 90406.

DEREGULATION—AN IDEA WHOSE TIME HAS COME

"Federal regulation of transportation is a failure—a creaky anachronism no more suited to a modern America than an oxcart to an expressway. It costs the public billions of dollars a year in inefficiencies and misallocations of resources. And in spite of its extravagant price, regulation contributes little to either good service for travelers and shippers or the financial well-being of most transportation companies."

So says the opening paragraph of a major article in a recent issue of FORTUNE. Like many other recent studies, it documents the inevitable takeover of regulatory agencies by "experts" from the ranks of the regulated industry. But unlike some of the criticisms, it goes all the way to draw the conclusion that the basic "common carrier" principle of regulation is faulty and that a truly free market would be a far better arrangement.

On the ICC, the article quotes Professor George Hilton of the University of California at Los Angeles, one of the most articulate spokesmen for deregulation: "The disadvantages of the present system are intrinsic to the Commission's existence and can be rectified only by its abolition."

The FORTUNE article is only one of the best in a whole series of articles in major publications pointing up what radical and libertarian economists have been saying for years. A recent BUSINESS WEEK editorial pointed out the benefits to shippers and consumers of Canada's four year old experiment in transportation deregulation and urged the United States to do the same.

Finally, last November, the Transportation Department released its timid plan for partial deregulation. It would reduce some of the entry barriers, especially in trucking; permit freight rates to fluctuate within certain limits without ICC approval; and dilute carriers' antitrust immunity at price-fixing meetings. The proposal has been considerably watered down from its early in-house versions, thanks to heavy opposition from such lobbyists as the American Trucking Association's William Bresnahan, former Senator George Smathers of the railroad industry's ASTRO lobby, Al Chesser of the United Transportation Union, and Leo Seybold of the Air Transport Association. These and other "champions of free enterprise" are described by the FORTUNE article as "the most important reason why deregulation of transportation has never made significant headway in Congress." The fact that any deregulation plan has been proposed is a major breakthrough, but with these powerful groups fighting to preserve the status quo, the battle for free competition has only just begun.

SOURCES:
• "It's Time to Unload the Regulators," Dan Cordtz and Ann Tyler, FORTUNE, July 1971, p.64.
• "How Canada's Railroads Handle Freedom," BUSINESS WEEK, 10 July 1971, p.54.
• "Let the Carriers Compete" (editorial), ibid., p.88.
• "'Deregulation' Is Off to a Halting Start," BUSINESS WEEK, 13 November 1971, p.46.

NUDITY REARS ITS HEAD IN LA (AGAIN)

Los Angeles, home of nude dancers and waitresses, may add another distinction to its list of American trend initiations. The Recreation and Parks Committee of the Los Angeles City Council has recommended removing the City's ban on exposing the female breast in parks and on beaches. Although the Parks and Recreation Commission (a permanent City bureaucracy) turned down the recommendation on the grounds that it might "encourage public nudity" (SHOCK!), the subject was later scheduled for debate by the full City Council.