It would appear without exception that economists believe that a voluntary military is preferable to conscription.' It is my purpose to demonstrate that this institutional preference is questionable on purely a priori grounds. A potentially important welfare cost may arise under voluntarism from the monopsonistic behavior of the defense establishment2 as a purchaser of enlisted personnel. To analyze this possibility it will be necessary to develop a terse and simple model of choice in the market for enlisted personnel and to apply it to the institutions of conscription and voluntarism. Assume that the process of political exchange is efficient to a degree that the military's demand function for enlisted nmen is a close approximation to the social marginal value schedule of this input. Further, the supply curve of this resource is taken to be an approximation of the value of its social alternatives. Given the usual assumptions for a specified level of employment, a measure of net social benefit can be derived by measuring the area lying between these

Gould and Segall argued that the introduction of a third, composite good vitiates the Alchian and Allen (A-A) theorem that a common charge on two substitute goods leads, real income held constant, to a relative increase in the consumption of the higher to lower quality commodity. Using Hicks's third law, however, it is demonstrated that the direct substitution effect tends to dominate the interaction effect with the third good, if the two substitutes are close. Absolute changes are also investigated and some operational propositions offered with casual supporting observations. A-A's proposition is shown to be a useful price-theoretic construction, though not a direct implication of the law of demand.

Gould and Segall argued that the introduction of a third, composite good vitiates the Alchian and Allen (A-A) theorem that a common charge on two substitute goods leads, real income held constant, to a relative increase in the consumption of the higher to lower quality commodity. Using Hicks's third law, however, it is demonstrated that the direct substitution effect tends to dominate the interaction effect with the third good, if the two substitutes are close. Absolute changes are also investigated and some operational propositions offered with casual supporting observations. A-A's proposition is shown to be a useful price-theoretic construction, though not a direct implication of the law of demand.

Lowell R. Bassett, Thomas E. Borcherding; The Relationship Between Firm Size and Factor Price, The Quarterly Journal of Economics, Volume 84, Issue 3, 1 Au

The empirical literature relating crosssectional variations of per capita public spending to various economic, political and demographic factors is both lengthy and varied.' Differences in expenditures over political units are explained by differences in per capita incomes, urbanization, area, population density, taxable capacity, tax rates, absolute population size, grantsin-aid from higher levels of government, and school-aged population rates. With few exceptions,2 the models employed in these studies are ad hoc constructions with little basis in the theory of choice.3 Our aims are to posit a model of public spending derived from the received theory of collective decision making4 and to test the significance of certain variables assumed by this simple theory to be important determinants of the levels of state and local government expenditures.