Recognize the need for selective service in maintaining a military.

United States soldiers who have chosen to serve and protect their country. ("Recon Baghdad," Wikipedia, 2006)

In lesson 8, you will learn about “public goods.” A public good is something that, once provided for one person, is available to all people. An example of a public good is a lighthouse. Once it is provided for one ship, it is available to all ships in the area. The fundamental economic problem with public goods like this is deciding who pays for them. If a shipping company pays for a lighthouse to protect its own ships, it will at the same time provide protection for all other ships who pass by the lighthouse at no cost.

Because of the unique character of public goods, they tend to be underprovided in a free market economy. The cost to any individual or company generally exceeds the benefit that will be derived from it. However, the benefit to society (all individuals, groups, and companies) is often far greater than the expense. Exploring the lighthouse example further will make this more clear: It might cost several millions of dollars to build a lighthouse, but any particular company that built one would probably only derive a few hundred thousand dollars of benefit from it. However, when we take into consideration all ships protected by the lighthouse, the total benefit might exceed hundreds of millions of dollars. It is in the interest of the group — all of the companies together — to build a lighthouse. It is therefore a public good.

When large groups of people determine that they have a collective need that is too expensive for any individual to pay for, they will often choose to pool their resources to meet the need. One of the most fundamental needs political societies have come together to meet is military protection from hostile neighbors. National defense is a classic example of a public good — once it is provided for one individual in a country, it is provided to every individual in that country at no additional charge. If monetary support of the military was voluntary, the natural inclination of most individuals would be to enjoy the benefits of a national defense while letting other people pay for it. To solve this problem, national defense forces are funded by “public money” raised through taxes so that everyone who pays taxes contributes to the support of the military.

After providing the necessary funding to buy weapons and pay soldiers, one problem remains — finding enough people willing to join the military and protect the nation. Just as people are naturally unwilling to pay for something that is already paid for, people are also naturally unwilling to pitch in and help do work that they’re already benefiting from. Economists call this the “free rider” problem. A “free rider” usually thinks in this way: “If other people work hard, I don’t have to do anything and I can benefit from their hard work. If other people don’t work hard, why should I do the work and let them benefit from it?”