Broadsheet

I often think of labor economics as a role model for the field: a subfield in which theory is disciplined by evidence and (most) researchers are willing to listen to that evidence even when it challenges their preconceptions. And hardly anyone does modern labor economics as well as UMass Amherst’s Arindrajit Dube, who has an excellent new book out. I talked with him about that book and the state of labor more generally.

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TRANSCRIPT:
Paul Krugman in Conversation with Arindrajit Dube

(recorded 6/18/26)

Paul Krugman: One of the most satisfying parts of economics, which doesn’t get as much attention as it should, is labor economics. It’s obviously important. Most of us work for a living, or at least pretend to work for a living. But also it is a field, a subfield you might say; more scientific than almost anything else in economics, really evidence-based. You’ve had multiple revelations where the data have actually changed the way people, myself included, have thought about stuff. And among the most effective, prominent practitioners of modern labor economics is Arin Dube, who has a new book called The Wage Standard. And I thought we’d take a break from all the other stuff going on and talk about Arin’s work. So hi, Arin.

Arindrajit Dube: Hi Paul, nice to see you.

Krugman: Yeah, welcome to my virtual studio. Why don’t you talk just a little bit about The Wage Standard and what you’re trying to do, and then we can get into the broader labor economics issues?

Dube: Yeah. So, I wrote a book. Here it is.

Krugman: By the way, we mostly don’t do that in economics; we write 5,000-word articles.

Dube: Exactly. Paul, of course, you’ve written many amazing books. But economists don’t usually write books. We publish articles.

Krugman: That’s right.

Dube: And so it was actually a big deal for me to sort of think about, did I want to write a book? And I kind of went for a number of years and I said, like, “Oh, well, I’m not writing this book for other economists as a main audience,” though of course, I’m very happy for other economists to read it, but I wanted to try to have a broader conversation, and I needed to be clear that I wanted to know what I was going to say in that conversation.

And so here’s basically the main point of the book. The main argument is that Americans deserve a raise, that most American workers actually could get paid more and should get paid more. And there are really good reasons to think that. You know, the market has not delivered what could be a sustainable but higher wage for those in the bottom and lower part of the income distribution. So that’s basically the core idea. And I try to bring in what we know about the research that I think has really blossomed in the last decade or two decades on a bunch of topics when it comes to understanding the labor market.

I was writing this book at the beginning of the pandemic and especially 2021. And it was really interesting because this was one of the more remarkable episodes in the labor market that really highlighted a lot of things that I was actually talking about in the book. Of course, it did it in a very messy way, because there were lots of things happening during that time. But it made for a very interesting process where I felt like I was writing the book and the world was writing itself outside, which was both exciting and challenging.

Krugman: Okay. I said that labor economics has been revelatory. When I was not young, but younger, I think most economists circa 1990 would have thought of the labor market as just being a market of supply and demand. And where they crossed determines wages, and there’s nothing much you can do about it. And if you try to change it, you do so at your peril; bad things will happen. And as you say in the book, and in many of your writings that I’ve been following on all this stuff, that’s something that really, really changed. You want to talk about what happened?

Dube: Yeah. So, one really interesting thing is to think about how wages are set. And we could start with the basic supply and demand story, which basically is that there’s demand for workers of different skills and then there’s supply. And depending on the supply and demand conditions, you’re going to have different wages, a different skill price. And let me be clear, I think there’s a lot of important aspects of that that actually matter, but it’s also incomplete. Because here’s the thing: if the market really worked like the textbook supply and demand story, basically workers of a particular type would just get paid the same—that’s the skill price. But in reality, it turns out companies have a substantial degree of discretion in setting pay. And you can start to see this by just looking across companies hiring similar workers, but choosing to pay someone different.

One simple example to start with is FedEx and UPS. Workers may be driving very similar routes delivering similar packages, but it turns out FedEx pays lower than UPS. UPS has maybe 37% of the workers; a few years back, they were paying less than $20 an hour. For FedEx, it was more like 60%. And so, of course, that’s just one example, but you have others. Like, look at Walmart versus Target. It turns out that Walmart tends to be paying somewhat lower than many of its other similar, large retail competitors. And the list goes on. But this is not a new observation. Labor economists who were studying this in the mid-20th century had gone and collected surveys and understood that, you know, factories in the same labor market could be paying different wages.

But here’s what was not fully convincing: how do we know that it’s not maybe somewhat of a different skill mix? Maybe these companies are similar, but they’re hiring somewhat different types of workers the pay difference reflects that. So that argument held sway for decades until we had better data. And this is where what you say about labor economics, I think, really is right. And part of that has been our ability to really get much more granular and high-quality data, including administrative data linking pay for virtually most people in the labor market. And you can track them as they go from company to company. So you could say, “Hey, actually, what happens if the same person moves from Walmart to Target? Do you see they’re getting a higher pay?” Because you’re holding their skill set constant there. And so this kind of data and this sort of research design helped establish that actually, no, it turns out there is a substantial amount of variation in pay that comes from companies choosing different types of pay policies. And that’s a big part of the argument in my book, more broadly, that there are choices we have made.

You know, if we wanted to go back and look to see what’s happened to productivity and what’s happened to wages since 1980, productivity has grown much more strongly than wages—maybe not as strong as it did in the postwar era, but nonetheless, it grew a lot more than the pay for the typical worker, certainly pay for those at the bottom. And one of the arguments that I make is that this reflects choices made in a variety of places, and that starts from choices at a corporate level, different companies choosing different pay policies, all the way to policies that are being made by state and federal government. But the core part of it is like, why does that make any sense? It doesn’t make much sense to talk about companies choosing pay policies if the market is just your supply and demand. There’s no role for saying, “Are you doing the high-wage strategy or a low-wage strategy?” That’s a nonsensical question in a perfectly competitive market. But it’s an absolutely sensible question to ask when companies have some degree of wage-setting power.

You know, economists have a funny word for this, right? Monopsony. It’s a funny word. But the basic idea is really straightforward. You know, companies are making a choice there. You could go for a higher wage strategy or you could go for a lower wage strategy. Now, if you’re paying lower wages, you are going to have some more people quit and you’re going to have a somewhat harder time recruiting new workers. But the key thing is, it doesn’t mean that if you pay below a hypothetical market wage, everyone bolts, right? So you actually face a meaningful tradeoff of exactly how much more to pay or how much less to pay, and different companies end up choosing different amounts.

And this is also where—and this is even more recent, really in the last, you know, 5 to 7 years—we have seen a really big increase in research on the topic of monopsony, so we can really better understand exactly how much wage-setting power companies have. And it just sort of turns out that if a company’s choosing to pay, let’s say, a 10% lower wage, they’re going to have higher quits. Maybe about 14% higher quits. I just finished doing a review for the Journal of Economic Literature, and that’s basically where it sort of lands, and the quit rate is just not super sensitive to wage. So this gives employers a degree of discretion. And they’re going to do a couple of things that are important. First, different companies may choose different strategies. That is what creates these differences across companies. And the way companies have made those choices has really been different in the arc of history.

Krugman: Okay. So that’s where actually I came in on this topic, which was a classic paper by Claudia Goldin and Bob Margo. You know, I grew up in a world very different from the world where you grew up, with much more equal wages than we have now. But it turns out that wasn’t something that gradually evolved. It happened in a few years, basically during the New Deal and World War II: the Great Compression.

Dube: Absolutely. Yeah. And so that’s a story that has been told. But I also tell it with sort of a labor market focus. And a key part of that was actually creating a set of collective bargaining institutions, starting with the National Labor Relations Act; we had an upsurge in union organizing. And I highlight some more recent work that has been really careful to try to actually understand the causal effect of that unionization, for example, on the wage structure—work by Henry Farber and coauthors that really documents this very carefully. And it’s not just in the National Labor Relations Act. It’s also during the war. The Roosevelt administration actually helped encourage an increase in unionization. And that had a lasting impact on pay setting.

So this is basically where, after the end of the war, we had what is called the Treaty of Detroit, which was the landmark agreement, as coined by Fortune magazine, between United Auto Workers and the big three automakers, which spills over into the nonunion sector and other parts of the economy through this pattern bargaining process. But all of that created something very different than we had in the early 20th century. It basically created a set of mechanisms that helped ensure wages stayed relatively well tethered to overall productivity. And wages, both at the bottom and the middle, stayed tethered to the top. There were lots of issues. I don’t want to romanticize the 1950s or early 60s. But when it came to how wages were determined, it just meant you had broader based prosperity.

Krugman: So in the wage structure there are social institutions that set norms and so that’s part of it; the thing is much more sort of a surface on which you can move back and forth based on institutions. That was one of the lessons I took from the Great Compression. And now you’re saying that there’s much more of that. And also that you can get away with it. I would say that if somebody now proposed something like what happened during the New Deal and the war, The Wall Street Journal would be running nonstop, fire-breathing editorials about how this will destroy the economy and lead to mass unemployment. And your point is that it doesn’t, because of the range of discretion that companies have in setting wages.

Dube: Exactly. And those range of discussions in some cases evolved and were forged in the fire of union organizing and militancy in the ‘30s and ‘40s, and other times. There are ones that come up in an era where it’s largely nonunion workplaces that are expanding—for example, Walmart in the 1980s—and in an era when there’s very different ideologies about how businesses should behave.

So the entire shareholder primacy revolution that sort of happens in the ‘70s and ‘80s, turns out had a real impact on how wages were set. I talk about this in the book. Research by Daron Acemoglu from M.I.T. and coauthors find a really interesting fact. So it turns out that actually, most businesses are not run by people with a business school degree. I actually didn’t know that. Even today, that’s actually the case. But the share that actually have a CEO with a business school degree has been rising quite, quite steadily. So what happened, for example, in the ‘80s or the ‘90s, when a company moved for the first time to a CEO with a MBA? Sometimes it’s because maybe someone retired or even died, you know? It sounds kind of grim, but actually it makes for a good natural experiment where, almost like by random, you introduce a CEO with a MBA for the first time. And what’s really interesting is that it leads to a very clear reduction in pay: about a 6% reduction in pay for workers overall, and about a 9% reduction for blue-collar workers. So the labor share falls by about five percentage points. That’s the amount of money going to workers versus owners. And of course, CEO pay rises. Now you may say, well, maybe that happens, and that’s just like the cost of running the business better, right? MBAs probably raise productivity. Wrong. It has no effect on productivity compared to comparable businesses. So it’s purely a rent transfer, as we say. Meaning, you’re taking money from one group and giving it to the other. In this case, the money is going towards owners of capital and high-income managers, and away from the workers, especially blue-collar workers.

Krugman: Wow. I always thought that the Harvard Business School was evil, but I didn’t realize it was quite that evil. So that’s pretty impressive. That’s really a significant impact on sort of the nature of our society that comes from almost an academic doctrine.

Dube: Absolutely. This is sort of like ideology. It’s ideology, not skills that is explaining this important change here. And, in fact, this turns out to have played a non-trivial role in the fall in the labor share in the United States, for example.

Krugman: That’s a really funny thing for me. Economists are supposed to be hard-headed, but in fact, if you really look at the data, and really do economic science, it says that ideology matters a lot.

Dube: That’s right. And that’s one of the most important things. The late economist Alan Krueger once actually told me—well, he told us on Twitter in a conversation with me—that the idea that core theory is falsifiable and testable is a really big idea. And that is exactly right. Because if you start with saying, “Well, I’m pretty sure the labor market works this way,” and then I come and tell you, “Oh, actually, you know, it turns out this MBA CEO comes in and pay falls,” so you’d say, “Well, there’s got to be a really good explanation for that that is consistent with my model.” But it’s certainly not because the model is false, because it can’t be. And that basically highlights, in some ways, the conversations we had about the role of the minimum wage, which is something we could talk about as well.

Krugman: I want to come back to wage structure for a second. When I say that labor economics is especially good or virtuous, or in some way special, it’s because there’s really this use of natural experiments where something happens and just looking at it—at least on a couple of major occasions—it has contradicted what most economists believed. And I do want to come back to wage structure, but minimum wage is the classic. It’s an extraordinary story. You could probably tell it better than I can. To some extent it’s where you came in, but it’s definitely where Alan Krueger and David Card came in. So let’s talk about that.

Dube: Yeah. So maybe one thing just as a background for listeners: the United States, of course, introduced a minimum wage as part of the Fair Labor Standards Act in the 1930s, and during the ‘40s, ‘50s, ‘60s, and even ‘70s, the minimum wage was updated fairly regularly. You could have a Republican president or a Democratic president, or Congress, but it was generally updated and kept up with sort of like the typical or the median wage and even overall productivity and so on. That all changed in 1980, when Ronald Reagan came into power and he didn’t increase the minimum wage; he refused to, because he thought this was a bad idea. And this was also a time in the early ‘80s when, of course, we had real, still high inflation. So the combination of the fact that the nominal minimum wage just stayed put and there was inflation meant the actual real value of the minimum wage fell a lot. And so that had a really important impact on wage inequality at the bottom. It reduced pay for roughly the bottom 30 to 40% of the workforce. And so we went for basically a decade almost at this time without raising the minimum wage.

And we have now had several of these long stretches. The most recent one is particularly long: it’s 17 years since we have actually raised the minimum wage. And so that’s a very dysfunctional way to set policy. But here’s the silver lining. The silver lining of dysfunctional policies is that you have natural experiments. So what happened starting in the ‘80s is that states started to come in and raise their own minimum wage. And so you started to create all of these little natural experiments. And this is really what began this literature—it’s called the new minimum wage literature—which started to look to see, ‘hey, New Jersey raised its minimum wage in 1992, but look, neighboring Pennsylvania did not. Eastern Pennsylvania and New Jersey are not super different; they’re right next to each other. There’s a lot of similarities, maybe sharing similar types of economic shocks and so forth. Why don’t we compare to see what happened?’ And this is exactly what Alan Krueger and David Card did. They went and surveyed fast-food restaurants on both sides of the state border, and then went back a year later and said, “Well, let’s take a look. What happened? Didn’t we actually see a lower number of jobs in New Jersey?” And what they found really shocked the profession. It turns out, not so much. In fact, not really anything we can see. And, you know, this was really kind of an earth-shattering discovery, because it challenged the core model of the labor market: the labor market is supply and demand, that’s it, there’s not much more to it, just like any other market. And this was really hard to square with it. And I think this led to kind of an emergence of a whole literature.

And there are also things written that are very critical and, you know, not very polite about Card and Krueger. But, you know, it led to a lot of debate and also follow-up work, which is the way science progresses, if it’s doing the results that they’re replicated—

Krugman: Yeah, the results have been replicated now many times, and you’ve done a fair bit of that. Because there are so many states and so much asynchronous minimum wage increases that you get results. And people might say, “Oh, it’s just fast-food workers in New Jersey.” But it turns out that we have now lots and lots of evidence that says, hey, these minimum wage hikes do not actually seem to cost jobs, or at least not significantly. Right?

Dube: Yeah. So I think that my sort of contribution to the literature in our 2010 paper could be probably summarized by the word “many.” We see many of these and for many years, not just one short impact. And what we found was very much along the lines of what Card and Krueger had found. And even more recently, we updated that with more data, and we’re continuing to find very similar effects. In fact, just a couple weeks ago, I put out a Substack post that really sort of leverages, in some ways, an important fact related to what I said—that we’ve not raised the federal minimum wage for 17 years, and that means 20 states have today a $7.25 an hour minimum wage, which economically is sort of equivalent to not having any minimum wage. It’s so low that it barely affects anyone. So we’re running this basically just more than a generation-long experiment where you have about half the country—a little less than half the country—with essentially no minimum wage, while the other half raised it sometimes quite substantially, or comparable to some of our European peer countries. And that creates this very sharp divide.

But it also creates a divide that makes it very easy to see what is going on, because you don’t have to do a lot of fancy, you know, econometric statistics to really tell. Just plot, for example, as I do: what’s the restaurant wage in these two groups of states? Well, it turns out there’s a big gap that’s opened up, like maybe an 8 or 9% average earnings gap for restaurant workers. What happened to restaurant employment? It looks pretty much like a flat line. They’ve been growing very similarly. Per capita, restaurant employment has been very similar. And that just makes it very hard to look at that very simple fact and say, “No, I’m pretty sure it’s killing a lot of jobs,” because where is (the data that proves) it?

I do a bunch of other things, but this sort of highlights how, for a very long, long stretch of time, we’ve split the country in some ways in half. And by the way, some of these states that have raised the minimum wage have also been more Republican-leaning. A lot of times when the minimum wage is on the ballot, it’s in red and purple states. In fact, this week in Oklahoma for a variety of reasons it didn’t pass, but it has passed in Nebraska, Florida, Arizona, and so on and so forth. So I think this sort of highlights, in some ways, one of the partial successes because we have been able to raise the minimum wage in about half the country. And as we have learned more, I think it has led to policymakers actually experimenting with potentially higher minimum wages. And that has, I think, helped create and raise wages at the bottom, partly offsetting the growth in inequality that had occurred over decades after 1980.

Krugman: So I read the Substack post and I noticed that you had some, I would say discreetly acerbic comments for some of the people who refused to believe it. Or maybe it was a later comment of yours. But there have always been some economists who keep on insisting that this cannot be right, either because they believe in Econ 101 and that demand curves slope down, or at least implicitly, a little bit of a political critique because obviously a pro-minimum wage argument or something that seems to say that raising the minimum wage is okay has a kind of political side. But what’s actually striking is how little of that there is—that labor economics makes economics look good in the sense that if you have kind of overwhelming empirical evidence that contradicts people’s preconceptions and maybe even their political slant, people actually mostly go with the evidence. Am I being too idealistic?

Dube: I think that’s generally right. I think in general, people have certainly updated their views. It’s not that there’s only a single answer to what does the minimum wage do, regardless of how high it is or something like that; it’s going to differ. And so, there are disagreements like, “Well, where is the turning point?” But that’s part of good science. But to be clear, there will be studies that claim that no, actually the minimum wage always causes job losses. And even just this week, there was one that sort of argued that if you don’t control for population differences, if you just look at the number of jobs, well, the number of jobs in California has grown less than Texas. Most economists, of course, look at what share of people are actually working—that’s the employment rate. But if you simply look at the number of jobs, that actually might suggest that it’s falling.

Now, here’s the thing: it has been falling in these minimum-wage-raised states compared to the 20 states that haven’t raised it for four and a half decades. That’s largely driven by college-educated workers, because, of course, we have more college-educated workers moving to the Sunbelt. So, I think this is sort of a silly argument, but it is an argument that has been made. But it goes to show that there will always be studies. But if you look at the body of evidence overall, it suggests that the typical study finds very small employment effects, and especially in studies published in the last ten years, it’s basically around zero. And I think that has had an impact.

And I think economists have sort of updated—I would say probably especially younger scholars. Sometimes, you know, as we get older, maybe it becomes harder for some of us to revise our priors, but younger scholars are therefore really important.

Krugman: Yeah. I occasionally find people digging up some old quote of mine where I said minimum wages reduce employment, and it’s a 30 or 35-year-old quote, and I get to use the line, “When I see new evidence, I change my mind. What do you do, exactly?” There was a flurry of stuff showing up in my inbox claiming that California raised the minimum wage and it’s a disaster, and the evidence is in. But I guess the evidence actually goes the other way now, right? So what happened in California?

Dube: Yeah. So here’s the interesting thing. California established a sector-wide minimum wage for the fast-food workers, higher than the overall minimum wage. So this is a case where this is applying for larger chains with 60 or more locations across the country to have a $20 minimum wage. And at that time, I think the minimum wage was $16 overall in California. So what’s interesting is this is much higher. And it’s also partial coverage, meaning, you know, only part of the low-wage workforce is covered. So you could actually imagine there’d be more theoretical reasons to expect a more negative employment effect, because you can switch—maybe you can relabel workers who are delivery workers as, like, outsourced and so forth, and not covered. So anyway, well, you’ve now had about five studies that have looked at it, including one that I did. And, you know, there are some differences across the studies, but really, it turns out a big part of that is what kind of data is used, in a really surprising way.

So there are two kinds of administrative data sources that are really government data accounting based on actual payroll records: the QCEW and the QWI. And I know this is going into the weeds a bit, but it just turns out that one better captures the number of jobs at a point in time, and then the other looks at how many people are in a particular pay period. Now, this increase in wages also raises turnover because these are much better jobs now, so you have less people cycling through the same number of positions. And so there’s one data set that looks at a whole pay period; it seems to find a small reduction in employment. The other looks at a point in time and finds no change. And it turns out this is driven by the fact that these jobs begin so much better: people are not quitting so there’s just a lot lower turnover. But generally speaking, the overall range suggests that the employment effects were quite small—small positive in some cases, small negative depending on exactly how you do it—very large wage effects, and a very sharp reduction in turnover. So even in this very specific and very sharp and high minimum wage increase that serves as an experiment, if you will, it doesn’t show any clear predictions and projections about job losses so far.

Krugman: Okay. I want to cycle back just for a couple of minutes to the wage structure issue, where, again, there’s this kind of historical story which says that the United States became relatively egalitarian because of New Deal era and 1940s policies, and then became a lot less equal. It’s funny. I always blame what happened after 1980 on Ronald Reagan, but you’re saying it’s partly the Harvard Business School, but there’s also cross-national comparisons. Talk to me about Sweden and then maybe I’ll weigh in.

Dube: Well, I think we’ve both been writing about Europe and both visiting there. And so I was in Sweden for a while and partly talking about this book and also doing some of my research. What’s really interesting is that Sweden, of course, has been historically held up as sort of an egalitarian country, but it’s also gone through quite a bit of reforms in the ‘90s and 2000s, including scaling back partly some of the welfare state. And so I was really curious, like, where are they in terms of inequality? And it turns out that, yeah, if you look at their tax and transfer, they actually redistribute less than they used to. But the starting point, which is how much inequality do you have to begin with from the pay structure, that is still much lower than most other high-income countries. And the United States, of course, is the other extreme.

So, just one example: the gap between someone at the 90th percentile and the 10th percentile—that kind of is a good measure of wage inequality—between like the early ‘90s and today, it went maybe from 1.8 in Sweden to 2.2, a little bit of an increase. In the US, starting off much higher to begin with, it went from like 3.7 to 4.8. And it actually increases even more if you look at a broader time horizon. So it’s just a really important thing to understand: like, why is that? And we can go back to, well, is it because the Swedes are just a lot more similarly skilled between each other? Because that would have to be the reason. Or is there something else? It turns out it’s mostly something else, and that has to do with collective bargaining. And this is also a really important aspect of where people don’t fully also appreciate one really interesting and important fact, which is that in the United States, when we ask, “Is your job covered by union contract?” that question is almost the same as asking, “Are you a union member?” And of course, union membership in the US, maybe in the private sector, having something like, you know, 35% back in the ‘50s, is today like 6%. And so barely anyone overall is covered in the private sector by a union contract.

But here’s the interesting thing: if you went to France and asked what share of the workforce are union members overall, it’s like 10%. But 98% of jobs are covered by a union contract, right? Because what you have is sectoral bargaining. And this is a key thing which I talk about in the book. Sectoral bargaining was something that the US never really had. We basically had organizing and negotiating between the union and the employer at a company-by-company, sometimes store-by-store or factory-by-factory level, versus in a lot of our peer economies, what happens is workers and their representatives bargain with the employer and their representative at a sectoral level and at a national setting.

Krugman: Basically, sectoral level means that instead of getting a wage agreement with XYZ contractors, you got a wage agreement with the whole construction industry. And so even workers who are not members of unions, even workers who work at companies that have hardly any union members get the benefit of the negotiation. And so, Sweden’s an interesting case where they actually have high union membership.

Dube: Yeah. And Nordic countries generally, partly because of the way unions help provide some additional benefits, including unemployment benefits—that makes it more rewarding to actually join a union. But their coverage rate is even higher. And in countries like France or Austria, the coverage rates are substantially higher. So as a result, we have seen wage inequality not rise as much in a lot of other countries. And in Sweden, it’s actually been particularly low, and they’ve actually been able to retain it. And so that is a really important contrast.

So one of the things that I talk about in the book is that we can’t get to sectoral bargaining at the national level without a substantial change in labor law. And look, the reality is that past attempts at changing and reforming labor law have not fared well. But the good news is that we can actually get to pay standards at the industry or sector level state-by-state. And what’s even more interesting is we actually have started to see some of this already, and this really leans on a model that actually now comes from a different continent: Australia. Australia has basically a national-level setting of wage floors by industries and, within industries, by different types of jobs. And that’s done not through collective bargaining—they have collective bargaining on top of that—but this is basically a sector-wide floor that’s set. And again, Australia has lower wage inequality, substantially lower than the United States.

So, I talk about what the U.S. might look like if we had states do something similar. And like I said, I started to write this book in 2021. I actually had put out a survey proposal back in 2019. But in the last five years, we have a number of states that have started to implement some of this. For example, Minnesota has a sector-wide board that has representatives from workers and employers and the government to set pay in the nursing home sector. We have California that has a healthcare-wide minimum wage. Even more recently in the state of Washington we have a childcare sector board that just in the coming months will be issuing a set of wage floors in that sector. So we’re starting to see experimentation like this. And that’s important because if we’re trying to rebuild wages, not just at the very bottom that the minimum wage can really hit, but also those towards the middle, especially in the childcare or healthcare sectors, these kinds of jobs, you can actually raise pay there through these sectoral initiatives.

And I’m very excited to see more being done along these lines, especially because, you know, I don’t know what can be done in Washington, DC right now. But we don’t have to necessarily wait around for a better day to come in DC. We can actually start doing some of this now, more or less.

Krugman: So, it’s like the minimum wage is where half the states can do a lot on this broader issue of a more equal and better wage structure, even if things are totally stymied in Washington.

Dube: That’s right. And that’s one of the nice things about federalism in the U.S., that we do actually experiment at the state level. And in the best cases, some of the better experiments actually get adopted. It could also be that some not-so-great experiments are done and get adopted. But that’s the nature of democracy.

Krugman: Yeah. One of the areas where you really did a lot of the research and it was revelatory, but also, in a weird way, something where I found a lot of my sort of lefty friends not willing to believe it, was about wages post-COVID. So, let’s talk about that for a second. What happened?

Dube: So, around 2021 and 2022, of course I looked at wages like any labor economist. I started to look around and find something that was puzzling because, as we’ve known for a long time, wages have been rising faster at the top than the middle and the bottom. And this is the growing wage inequality story. But it was looking like wages right after COVID, when we were reopening, a lot of people didn’t have jobs, especially in the hospitality sector—we’d sort of shut down part of the economy.

So if in January 2020 someone said, “We are going to shut down some parts of the economy for a while, especially with low-wage workers, and then we’re going to reopen,” it’s like—here’s your quiz. If I could have given my class this question, like, “What do you think? What’s your prediction about what will happen to wages for low-wage workers?” I would have said wages would probably fall due to lower demand. And instead, it looked like wages were rising more at the bottom. And so this is what David Autor—my coauthor on this along with Annie McGrew—and I called The Unexpected Compression, meaning the compression of wages, reducing inequality—which is exactly what happened in the aftermath of the reopening after COVID, and led to a surprising amount of wage growth at the bottom. And it reduced maybe a quarter to a third of the increase in wage inequality that had occurred between 1980 and 2019.

And so this was really very, very striking. And we asked, well, why? And the reason is because we had a very tight labor market. There were a lot of job openings chasing workers and, as a result, it increased workers’ leverage. And it’s not just that there was more demand for workers—that’s true—but we also saw people leaving jobs. So we had quits from particularly low-paid jobs. This goes back to the issue of different companies with different pay policies: well, companies that were actually going for a low-wage strategy found it harder to hold on to those workers, and wages actually then rose more there. And this is the increasing of intensification of competition in the labor market that actually really helped boost wages.

In many ways, this was like: if we want the market to actually work well for workers, you need the market to be relatively tight. And in writing the book, what I’ve found was that, it just turns out between 1980 and 2019—up to just before the pandemic—there were about seven years of a tight labor market. We used to spend a lot more time with tight labor markets in the postwar era before 1980 than we did since. And this turns out to be another important part of that equation of: what did it take to have broad-based wage growth? Those seven years—if I just, like, snap my fingers and just erase those like some evil genius villain, what would happen? Well, if I went to the top of the pay distribution, it would make very little impact; the average wage growth would fall from 1.1 to 1%. Not much change. At the bottom, it would go from already a small 0.3% average real wage growth to zero. So the entirety of the wage growth at the bottom between 1980 and 2019 happened in a handful of years that was basically close to full employment: the late 1990s and the late 2010s. Under Trump I, those years also saw significant compression.

And this is why the post-pandemic period was a really important one. But it’s also very messy because, as we know, this was also a time of a large increase in inflation, a chunk of which was, by the way, global in nature. But nonetheless, people were very reasonably unhappy about it. So it makes for a difficult thing to extract the signal from noise. And this is why in the book, I really highlight also why even these other periods in US history were so important in actually raising wages, highlighting really the critical pillar that full employment plays if we are trying to rebuild the wage standard.

Krugman: Okay. What do you see happening now? My comment sections are full of, “Oh, it’s a K-shaped economy —the top is rising, the bottom is falling.” And people really refuse to admit that the compression ever happened. But also there are all these fears about AI. Everybody wants to know what AI is going to do, and nobody can honestly say that they know. But do you have any views on where we’re going right now?

Dube: Yeah. So the easiest part of that to answer is just to start with wages. The good news is that much of the compression that we saw has remained. The bad news is that the last year and a half has seen some take-back. Basically we have seen lower wage growth at the very bottom. The particularly bad news is, of course, from this year, when higher inflation has erased, as of now, pretty much the entirety of the real wage growth since Donald Trump took office. And so, that’s really bad. That’s not just at the bottom, but just generally. And so I think wages are not doing great right now and that part is largely just an unforced error of where we are today with having raised inflation, literally having caused a supply shock—inflation purely out of discretion, right?

But yeah, the other part—and this is the longer part and harder to say—is what we see not within pay, not wage inequality. Wage inequality has been an important part of inequality overall in the last 50 years. But wealth and the division between capital and labor. And looking into the future, that’s where my worries lie: where are we going? And I guess, the worrisome part of me thinks that, broadly, there are two possible ways that the current AI structure can go. My modal view is probably that I think it’s going to lead to moderate productivity gains. And how well that translates into wage growth partly depends on what we do in our other policy and institutional choices. But I think it can potentially be a source of possible wage growth.

The other—and these are two very polar cases—well, this is going to be the singularity. I tend to be skeptical of that view of an artificial general intelligence that really just dramatically transforms the world as we know it. It’s possible—anything is possible—but the other possibility is that actually there’s a bubble and then it bursts, and that leads to a downturn. And that downturn could be harmful. So, there are all of these possibilities and I, of course, don’t know which it might be. But there are risks on both ends where what I do know—and this is what I sort of talk a little bit about in the book—is that, again, it goes back to the word “choices.” I don’t think we need to think about what AI does as something that just happens to us. We can choose to have institutions and a governance structure that can regulate that.

You know what’s interesting, going back to Sweden, I was talking to folks in the labor movement there, and they, of course, have contractual language that requires negotiations over technology, and that includes AI. Where that goes is unclear at this time—it’s still early days—but that’s the kind of thing that we need to think about. So imagine having sectoral boards in the health care sector that, among other things, also sort of has regulatory language around how AI is used and how it can affect the workforce. So we need to think creatively, of course at the national level, but even more locally if necessary, about what that governance looks like, and understanding that this is part of the choice that we can make and not simply, you know, take the technology as just a force of nature that we just have to live with.

Krugman: Okay. So, choices. We can actually shape our future. Probably won’t, but can. Anyway, thanks so much for talking to me. And I’m sure we’ll want to come back in a couple of years and see how all of this played out.

Dube: Sounds great.

This is the second half of the second part (I, IIa, IIb) of our honestly-who-knows-how-many part series laying out some general guidelines for how pre-modern armies are recruited, raised, equipped and paid. While I hope this will be of great interest to the history nerds out there, I’ve opted to structure this specifically as a service for the worldbuilders out there, making useful rules of thumb for imagining fantastical societies.

We’re picking up right where we left off discussing various methods for actually mobilizing an army, which is to say recruiting the troops, getting them armed and getting them in the ranks. We’ve covered ‘self-recruitment,’ systems where a lot of the burden of that process is handled by the troops themselves (almost invariably entitlement principle citizen militia), allowing for a fairly limited administrative apparatus, though I should note, not no administrative apparatus. The need to keep records of who is liable to serve tends to mean these ‘self-recruitment’ systems are most often used by urban societies with a literate upper-class.

We also looked at the over low-overhead alternative: having mobilization handled by local Big Men. The big caveat here is this functionally ensures the fragmentation of power (and thus a non-state society, since centralization of military force defines states) which means that a society which turns its local aristocracy into petty warlords in order to raise its armies has to then cope with having a whole bunch of petty warlords who have their own small armies they can use to push for power and position.

And I want to reiterate here societies do not choose these systems from first principles, instead these systems develop organically, over generations (it’s quite rare that someone plans such a system from scratch, although it does – rarely – happen) and are constrained by existing social structures. A non-state society is basically compelled to adopt Big Man Mobilization because, lacking state structures, they have no other options. By contrast, a long-established state cannot adopt Big Man Mobilization effectively, because they don’t have the petty warlords it relies on and creating those warlords would mean disestablishing the state to a substantial degree by fragmenting its power.

So for the most part, we ought not think of these systems as choices but as consequences of social structure.

This week, we’re going to move forward and discuss some of the more involved solutions, which might give the state a bit more control over the process, at the cost of greater overhead (although not always greater overhead for the state necessarily, as we’ll see).

But first, as always, recruiting and maintaining large pre-modern armies is expensive! Much like many of those pre-modern armies, this project is supported by devolving the costs of my ruinous book-buying habit on to ~~recruits~~ readers. You can help by spreading the word to new readers and by supporting this project over at Patreon. If you want updates whenever a new post appears or want to hear my more bite-sized musings on history, security affairs and current events, you can follow me on Bluesky (@bretdevereaux.bsky.social). I am also active on Threads (bretdevereaux) and maintain a de minimis presence on Twitter (@bretdevereaux).

Households and Officials

Now we’ve seen how compact state societies with a broad ‘middling well-to-do’ class which can political preserve their interests and have some political entitlements to fight for can recruit. But what if your state society doesn’t have that well-to-do peasant or burgher class? At least, not enough of them?

That is the case for most pre-modern state societies: it is substantially more common for the peasantry to be pushed down basically all the way to subsistence. After all, it is in the domestic economic interests of the king, the temple and the local aristocracy to extract as much as they can from the peasantry and most do so – the conditions whereby that peasantry can politically defend themselves from that sort of extraction are rare (and it’s often not the whole peasantry). But now you have a problem: that aristocracy is not big enough to be the society’s whole army on its own, but your peasants are too poor to afford their equipment and have no political entitlement for which to fight.

Actually, to take an aside for a moment, there’s some complexity here in what is happening. Fundamentally, pre-modern societies are all about agriculture and subsistence and so what the society needs is for these small farmers to generate enough surplus to support two kinds of non-farmers: producers making military equipment and soldiers who aren’t farming because they’re fighting. Entitlement-systems do this by both allowing farmers to keep more of their surplus but then also tying the act of dedicating that surplus to warfare (acquiring weapons and serving) to their social status so those small farmers are willing to push out to the edge of their labor to keep their status. But poor peasants have no status to defend and little surplus labor to employ. Fundamentally the interactions here are about the food economy.

So for these societies with stronger aristocracies and weaker peasantries, the problem is two-fold: first the peasants have no reason to serve and second they have no wealth with which to afford the weapons they need to serve. However, the state may well still want to raise all these peasants they have rather than reaching for some other source of manpower (as below). The solution to the first problem is some form of compulsion (you force the peasants to serve or to enable service) and the solution to the second is what I am going to call brigading. ‘To brigade’ simply means to group something together (a military brigade was a combination of different units, often with different integrated combat arms), from which it acquires a lot of specialized meanings. What we’re interested in doing is brigading households: one peasant household, crushed down by extraction, cannot support a soldier – but four or five or ten might.

Now the mechanism of compulsion here varies and with it the mechanism of brigading.

The simplest system is brigading under a principle of universal male military service and we see this at play with systems like the Anglo-Saxon fyrd, the Carolingian select-levy. If the community was under direct threat – your town or village was being attacked – the king (or his local representative) could call up the ‘general levy’ of all adult males. But for regular warfare (including offensive warfare) one obviously couldn’t call up everyone (someone needs to be farming) but a better equipped steady-state infantry force was required to supplement the aristocrats. This was the ‘select levy’ and the fyrd system and the Carolingian system end up settling on a similar solution: bolt several peasant households together and require that, collectively, they furnish one soldier for the king’s army.

Under Charlemagne (r. 768-814), each peasant household was assessed based on its production in units of value called mansi, and for every four mansi they were required to produce one soldier for the select-levy. Now of course most peasant farms were a lot smaller than four mansi – the regulations make provisions for holders as small as half a single mansus – so smaller households were brigaded together until a unit of four mansi was created. That combined unit of several households then was expected to pick someone from among its military-aged men and then collectively pool their resources to equip him – a shield, a spear, a sword, a helmet and some very basic armor (probably textile) – to serve in the select-levy, presumably on a relatively long-term basis.

The Anglo-Saxon system of Alfred the Great (r. 871-899) worked similarly. Farming households were assessed in units called hides (by 1066, this unit is really big, around 120 acres, but my understanding is we generally think it was a lot smaller before then). As with the mansi, households could be brigaded together to make up a single hide, though the hide itself was, notionally, a ‘standard small farm’ (the same way the mansus was). Each individual hide was required to provide one man for local military service (garrison duty, etc.; basic, part-time sort of work that wouldn’t require much kit) and every five hides together to also provide one man – similarly fairly well equipped – for service in the royal army that represented the kingdom’s main field force.

Now that’s the most direct way to brigade the households together, but not the only way. Mass conscription in the Warring States and early Han Dynasty, as I understand it (this is very much not my area of expertise) worked on a rolling, age-based basis where recruits would spend just 2-3 years in the army before being discharged back to their farms as part of the reserve. That too is going to have the effect of distributing the burden of service across a bunch of households, though I am not clear who handles the cost of equipment in that system. Over time, the Han Dynasty converts over to a fully professional system, discussed a little bit below.

The other option for brigading households, at least economically, is military settlers. We see this system at work in the Hellenistic kingdoms that form after Alexander’s death. Instead of brigading a bunch of households together and making them pick one of their members, we (the state) pick for them, by imposing a soldier’s household on top of them. It’s not hard to see why this tends to be a feature of conquest states: the state seizes the land of the peasantry and redistributes it to the families of soldiers, such that the rent from that land is sufficient to maintain a heavy infantryman’s family in relative comfort. The peasantry doesn’t go anywhere, but now they have to pay a portion of their production in rent to the soldier’s family (in addition to taxes – this is an exploitative, unpopular sort of system!) who generally doesn’t do any farming himself and so the soldier (or his sons) are both wealthy enough to afford their equipment and available for conscription, since military service is the flipside of the deal by which they get to live as tiny little petty aristocrats.

Now you can see that each of these systems relies – at least for the peasants – on compulsion. The peasants do not get anything for their service – they aren’t paid, they don’t get increased social status nor can they expect some sort of personal relationship as a client with a noble patron – so you must force them. Which means you need bureaucracy.

Where an entitlement-based system can function often on self-reported wealth or volunteer militias – because military service is a positive honor – a compulsion based system needs bureaucrats. Someone needs to go to each farm and measure its production, assign it to a hide or mansus or to a military settler’s estate or decide which household is due to send a recruit this year and then enforce that decision. That means a small army of literature bureaucrats – royal officials – operating at a very granular level, in the villages (though once set up, the military settlers can perform this role themselves to a degree in a military settler system – they are the local enforcement and rent extraction). Those officials need to be paid, which means heavier taxes and so fundamentally they represent a kind of deadweight on the system: resources that have to be spent on military mobilization but which do not (directly) produce any soldiers. Military settlers functioning as rentier elites (distinct from the frontier-farmer-soldiers below) aren’t much of an improvement here, because they’re capturing a whole lot of value beyond their nominal ‘cost’ as soldiers, making them very expensive as a source of heavy infantry.

Consequently, brigaded-household-systems tend to produce less military power per unit population than entitlement self-recruitment or even fragmented Big Man recruitment. However their advantage is that they scale much more easily over large populations and land areas, so you can end up with more soldiers overall if you have a very big state.¹ These sorts of systems thus tend to be creatures of large, relatively well-centralized, bureaucratic states.

Nevertheless, for the worldbuilders out here: this is the first sort of system where you are likely to find some sort of official actually operating at the village level where they might actually interact with the peasants.

Of course you may note that this system requires quite a lot of administration – you need to have local officials keeping track of local landholdings and conscription liability on a granular level, in a context where you cannot trust anyone to self-report their liability. Those bureaucrats need to be paid and likely so do these soldiers once they’re under arms (you can compel them before you give them weapons, but after they have weapons, you have to pay them, because they have weapons) and all of this demands just quite a lot of state capacity. And I want to stress that demand of state capacity: large, effective bureaucracies composed of literate bureaucrats are really hard for pre-modern states to build and so even ostensibly ‘wealthy’ (that is, high state revenue) states often are not able or at least are not willing to build them.

What if you wanted to shift that administrative burden somewhere else? Maybe you could just pay someone to handle all of that hassle for you…

Contractors and Colonels

The solution here is to outsource the task of administrative organization to some kind of private contractor.

The clearest example of this are the armies of early modern Europe, particularly during the 16th and 17th centuries, raised via a system of private military contractors in what is sometimes termed ‘private enterprise war’ (albeit that term also covers the seaborne commercial-imperial ventures of European powers in the same period, which we’re not going to get into here). The origins of this system stretch earlier – it emerges organically out of systems of mercenary and ‘feudal’ recruitment in the late Middle Ages. And this system is also often present to provide auxiliary units for armies largely recruited another way.

The basic schema goes thusly: the state (typically, but not always, a king) decides they need a unit of soldiers (a ‘regiment,’ generally), but they don’t have to handle all of that administrative hassle directly, so instead they contract someone – typically a military aristocrat (because that’s who has the experience and connections to handle this) – to raise a regiment, promising them payment. Sometimes the contractor is handed the money for this in advance (ancient mercenary recruiters are often sent off with a bunch of silver to hire guys with) but it obviously serves the king better to use the contractor as basically a source of financing: promise him money in the future for a regiment recruited today. So the contractor is not an employee, but rather a creditor who the king owes money.

The contractor then takes on both the financial and logistical burden of raising the regiment, but of course a regiment might be several thousand men which is still too big of a task, so the initial contractor might subcontract parts of this task to other, more junior military aristocrats in his orbit. The initial contractor is a colonel, his unit is a regiment; his subcontractors are captains, their units are companies. Yes, this is the origin of the modern, broadly used, international system of units and ranks.

The colonel and those captains would then employ recruiting-sergeants to enroll the actual men to form the companies. Recruiting scenes in period artwork often feature men being enrolled (and sometimes paid signing bonuses) at impromptu recruiting ‘stations’ consisting of little more than a table or sometimes an upturned drum, with the recruiting-sergeant writing their name down (enrolling in a literal sense) in the company’s rolls. The question of equipment was a problem for the colonel, rather than the king: this was, fundamentally, the colonel’s regiment.

Via Wikipedia, Plate 2 (‘Enrolling the Troops’) from *Les Grandes Misères de la Guerre*, a series of etchings by Jacques Callot (1592-1635), showing the muster and enrollment of a regiment. On the far left, common soldiers are being enrolled (with the muster roll being written out on a drumhead!) and then handed weapons. On the far right, pay is being doled out based on the regimental records. I read the image in some ways (especially given the text below) as something of a process from left to right: on the far left you have the town they’re recruiting at and the soldier is enrolled by the recruiting sergeant, then in the center they are under arms with the regiment marching and finally on the right, the soldiers get paid their wages, a sort of vision of what the soldier *imagines* should happen when he signs up. The rest of the series is less sanguine about the realities of soldiering.

The usual expectation is that such units might recruit from anywhere, but they tend to be fairly geographically focused. After all, the colonel doing the recruiting was able to get the contract because he has some connections or experience and that tended to be geographically localized. Lucian Staiano-Daniels notes (op. cit.), for instance, of the Saxon army and also the Mansfield Regiment during the Thirty Years War, while there certainly were men drawn from very far afield, the bulk of the soldiers came from a fairly tight geographic area around Saxony. Likewise, these sorts of ‘contractor’ units are often how ancient mercenaries show up in our sources and the fact that the fight in distinctive ethnic styles and are marked with ethnic signifiers certainly suggests that the bulk of the men were recruited from a fairly specific geographic and cultural milieu, although we should be aware that just as with those Thirty Years War regiments, there’s no reason you might not have a meaningful number of ‘international’ mercenaries from all over bolted on. These units, if they stay in being, also often recruit as they move, picking up whoever is willing to sign on from wherever they go.

Now we’re not dealing here with navies (which can press sailors by force because after that the boat sails away which reduces desertion risk), but by and large these sorts of armies raised by contractors are reliant on volunteers, which means they need to pay these fellows. From an economic perspective, they’re often skimming excess labor manpower off of local labor markets, which explains the somewhat counterintuitive fact Staiano-Daniels (op. cit. again) notes that the largest chunk of the recruits came from towns and cities – because of course that is where men without a stable niche in society tend to gather, looking for employment, opportunity or adventure. But in most cases these contractors do not have the legal power to compel service (and also quite limited ability to stem desertion of things go badly).

We’ll come back to finance in the next part, but it is worth noting here how heavily financed (that is to say, debt-based) this system is. The king essentially goes into debt with the contractor to get the regiment formed up and the contractor-colonel then raises the regiment. But the main expense there is the wages of the soldiers themselves, but most of their pay is ‘on the books’ (rather than in hard currency) to be paid out in full when the soldiers are dismissed or the regiment disbanded; we often see the officers of the regiment (who are vocational-type junior military aristocrats) lending soldiers hard-currency ‘advances’ on their pay out-of-pocket when the regiment itself was short on hard cash.

Now of course if a meaningful part of pay here is back-pay when a regiment is mustered out, the expectation is that the regiment is going to get mustered out and thus these are not standing units. They can be used to create standing armies (raising new regiments to replace old ones, etc.), but there is often going to be ‘churn’ in this system. That said, when mustering out an old regiment and raising a new one, the soldiers of the old regiment are the obvious first place to start for recruitment: they’re freshly unemployed, trained and experienced soldiers and they are available. As a result, you may get ‘professional’ soldiers in this system, even though it is not a long-service professional system.

That may seem like a terrible system and it could go very badly wrong (and frequently did) if the money to settle the debts didn’t emerge. But from the king’s perspective (and the contractor-colonel’s) it was a great system: it enabled them to finance the whole operation at a relatively low cost, allowing rulers to push their military capacity well beyond what they could afford in hard cash. Financing could even be added on top of this: the Mansfield Regiment’s operating costs were supposed to be covered by another loan (which seems to have ended up diverted to other regiments in the event), so the soldiers are owed their pay from the contractor-colonel and the regiment who in turn is owed this money from the king or the king’s representatives who in turn are trying to arrange their own financing to cover the funds.

The other advantage of this system, of course, is that it imposes minimal administrative burden on the king. The administrative hassle of finding men, recruiting them, keeping track of them, paying them, getting them equipment, uniforms, food and so on all falls to the contractor-colonel (who in many cases is really an absentee proprietor and has deputized someone else to actually run all of this for him; this fellow gets called a lieutenant colonel, he is ‘holding (‘tenant’) in lieu of the colonel’) who has to make those arrangements.

The disadvantages, of course, are numerous. These contractor-colonels basically own their regiments and so expect some leeway in terms of equipment, uniforms and command; not infinite leeway, mind you, they still consider themselves vassals or servants of the king, but it is very hard to enforce standardization on these armies. There’s also just an enormous amount of latitude for graft and indeed in many cases graft – pocketing the wages of dead soldiers, for instance – is how the captains and colonels get paid. And everyone in this system expects to get paid for their service at some point, so while financing can put off the day that the bill comes due, there will be a bill in money, so the state needs revenues to meet it.

Spain famously manages, despite acquiring a running river of silver and gold from the New World, to go bankrupt overextending itself with these sorts of armies in 1557. And then again in 1560. And again in 1575. And then once more in 1596. And then again in 1607. And again in 1627. And then bankrupt again in 1647. And one last time in 1653. This has, you may imagine, a deleterious impact on military discipline off of the battlefield and generally these armies tend to be, we might say, ‘rowdy.’ Again, I invite readers to check out L. Staiano-Daniels’ The War People: A Social History of Common Soldiers during the Era of the Thirty Years War (2024) to get a sense of the short of things these men get up to and the kind of society that forms in these regiments. One certainly gets the impression that Hellenistic military men were not much more restrained (the arrogant, braggart mercenary soldier was a stock character of Greek New Comedy, for instance, memorably captured in Roman Comedy (which derives from Greek New Comedy) in the Miles Gloriousus (‘The Braggart Soldier’)).

In terms of the kinds of societies that use these methods, contractors tends to be a response for states that are reaching for military power beyond what their core state apparatus can support – it tends to be a response to limited state capacity. It merges a vocational principle military aristocracy (the officers/contractors) with an employment principle common soldier and so requires a society that is monetized enough and economically specialized enough to support that framework – which is to say a society with quite a bit of commercial activity going on (often more commercial activity than the state can fully control or supervise – certainly true for both early modern Europe and the Hellenistic Mediterranean) and with enough daily business done in hard currency (rather than ‘non-monetized’ debt-or-bullion-based systems) that the soldiers can actually spend their pay.²

For many fictional fantasy settings, I think the ‘contractor’ method of raising troops is remarkably underrepresented. While Tolkien’s Middle Earth in the Third Age is a relentlessly early medieval setting outside of The Shire, most modern high fantasy settings – simply because modern readers and writers are moderns ourselves – tend to be quite late medieval or early modern in character, almost by accident. In that context, emerging states struggling with administration relying on contractors to set up their armies would make a great deal of sense.

Professionals and Prisoners

Finally, we come to the solution that is, I suspect, the first that most modern folks think of but one of the less common solutions for pre-modern states: direct recruitment by the state. State officials (be they military officers or civilian officials) directly handle recruitment and equipment, with the state absorbing the full administrative and financial burden for military activity.

That phrasing, ‘the state absorbing the full administrative and financial burden’ may explain why this is such a rare option. Direct state mobilization is the preserve of strong, centralized states with relatively well-developed bureaucracies and that is certainly not the most common kind of pre-modern polity.

Generally speaking, if the state – not a contractor, not a Big Man aristocract, not local households, not the citizenry itself, but the state – is going through the effort of handling recruitment, training and equipment, it is generally going to want to only do that once and so one thing that direct state recruitment tends to have in common is that these tend to be long-service regimes.

Longtime blog readers will perhaps have noticed that often where folks would casually use the phrase ‘professional soldiers,’ I tend to default to the longer, ‘long-service professional soldiers’ and here we get to why. The soldiers in the previous section, for instance, recruited by contractors, are often effectively professionals: they have a professional set of skills that they’ve acquired, along with an expected code of conduct (however alien it is to civilian society) and they often move from one contractor’s regiment to the next, staying in the business over multiple campaigns as one regiment is mustered out and another formed. But they’re not long-service – they are not serving a single state continuously in one stretch of employment.

But when the state takes on the fully burden of recruitment, that is often just what they expect. The long-service professional army created by Augustus at the start of the Roman Empire eventually settled on a twenty-year term of service (with another five years in the reserve), which would mean a stretch from 17 (at the earliest) to 42 (at the earliest), which is basically the full stretch of years the Romans might define as military-aged. The Song Dynasty (960-1279) military system likewise expected to discharge “old soldiers” between the ages of fifty and seventy, effectively at the point when they could no longer do any useful soldiering; unlike the Roman system which settled or paid out soldiers on discharge, the Song system made few provisions for the retirement of soldiers, discarding them more than discharging them. Mamluks – military slaves, most often of Turkish extraction common in the Islamic world from the 800s onward – also served for life.

Direct recruitment for long-service regimes can work on a variety of principles and thus with a range of methods.

The most immediately understandable to us is a volunteer, employment-principle system: the state simply hires men with specific terms of service and then pays them (though once hired, they cannot voluntarily leave). That’s the Roman system from the imperial period. Even here, recruitment is not wholly centralized: legions and auxiliary cohorts tended over time to do most of their recruitment locally and so increasingly were made up of men from where they were stationed. The legions had to recruit from the citizenry, but the regular discharge of veterans (who settled and started families generally near their posts – they’ve been away from ‘home’ for 20 years, so ‘home’ is where the legionary fort is) created an available pool, which might be supplemented by citizen recruits from other parts of the empire.

Roman military pay had to be relatively generous by the standards of the time to attract troops and it largely was: 225 denarii per year, from which necessities were subtracted but it seems clear that the food deduction was well below the value of the food actually offered. At discharge (20 years in) they got a discharge bonus (the praemia) around 3,000 denarii (assuming they’d never gotten above base pay), so the per-year average is actually 375 denarii per year, simply back-loaded. The result is a base pay rate that exceeded the daily income of an unskilled laborer (famously a denarius a day), except that it was steady, whereas other forms of wage labor were irregular. So the Romans pay a premium to get men to enlist, which simplifies the process a bit, since you can then largely rely on men seeking out recruitment rather than the other way around, which probably explains why legions were able to recruit mostly locally. The recruits (mostly) came to them.

In stark contrast, you have something like the Mamluk system, which is a vocational military slave system reliant on compulsion in which the state (in the form of a king or Caliph) buys enslaved military men in bulk for military service; we have discussed this system before. Typically these were external populations being purchased (very often warriors from the Steppe), rather than internal sources – we’ll leave aside the Ottoman devshirme and its complexities for today. Now it is important to remember: once you arm these fellows, their relationship with you fundamentally changes. The notional status of Mamluks was low – they were enslaved warriors – but practically as well-armed, vocational-status warriors in the service of the state, some came to wield meaningful power and wealth.

For our purposes here, though, the ‘recruitment method’ for Mamluks is commercial: they’re purchased. The states that employed large Mamluk armies were not usually the polity initially enslaving them – instead, warfare on and around the Steppe generated significant numbers of enslaved warriors which Steppe societies could not absorb and wealthy Arab states soaked up that supply (and of course their demand stimulated more supply, which is to say, more warfare for the purpose of enslavement). Naturally doing this requires a lot of revenues (to purchase large numbers of valuable enslaved warriors) but also a significant administrative machine which could feed, house, clothe, equip, organize and manage these fellows once purchased. At least initially, the machine relied upon was the remnants of the Sassanid and Eastern Roman Imperial administrative systems which had existed before the conquests of the Rashidun Caliphate and had been taken over, in modified form, by subsequent Caliphs.

On the ground, that system is going to look like private slavers traveling to the ‘source’ regions for this manpower, purchasing captured warriors and then trafficking them to the markets of the great state powers where they know royal officials will be eager to buy them.

The other kind of compulsion system are prisoners-turned-soldiers and here the Song military system is a good example as it was substantially reliant on this method. I should note that certainly other professional or contractor-based recruitment systems will also lean on the expedient of turning out the prisons into the muster field as well (and indeed, under ‘brigaded household’ systems, we find a lot of indications that village leaders use recruitment as a way to get rid of troublemakers). Prisoners were not the only source of Song recruits, but their presence speaks to the level of compulsion in this system.

The Song system emerged out of a period of consolidating warfare where generals could – in the context of high intensity warfare – impress large numbers of civilians into the army and where surrendering armies had their soldiers absorbed. So this is an army comfortable with compulsion during a period of high conflict which then – consolidation having been completed – has to transition to a steady-state system where it couldn’t be relying on simply impressing wide sweeps. Instead, it relied on leveraging compulsion against groups who were socially unprotected in society, as Alyagon (op. cit.) lists them off, “soldiers’ families, the poor and the idle, local militias, non-Han groups, convicts and refugees.” In short, Song officials grabbed who they could with the least hassle from powerful constituencies (like local landholders or other officials).

The baseline of the system were local militias, which functioned on a brigaded-household model (run by local officials, of which the Song had no shortage); when the standing professional army required new recruits, men on the militia lists might be forced into the army, tattoo’d with their new unit to discourage desertion (since a man caught with a military tattoo out of service could be assumed to be a deserter and punished) and essentially never sent home. But, unsurprisingly, this produced a lot of resistance to the militia system – “understaffed units, out-of-date registers, abandoned fields” (Alyagon, op. cit., 66) etc. So the Song also pressed non-Han ethnic groups around its frontiers into service and also implemented military service as a punishment for law-breaking. The military thus likewise swiftly became a dumping ground for anyone that local officials might want to get rid of. Finally, the families of soldiers, because they lived in the military camps, could easily be compelled to serve: when the state already has possession of your father, mother and sisters, if they tell you to enlist, there’s going to be a lot of pressure to do so.

New recruits, however they were acquired, were checked for physical fitness (swiftly reduced to a mostly bureaucratic height standard), enrolled in the army, had their faces tattoo’d, were handed their uniform (equipment was at the unit level) and payment and escorted to their unit in a process referred to as “conscripting, tattooing, and giving tips.”³

What all of these systems share in common is that they are fully bureaucratized: there is a royal or imperial official who has to oversee the acquisition of soldiers (either voluntary or compelled), their enrollment, the issue of their equipment, their continued pay and maintenance and eventually their discharge. That may seem normal to us, but it was not normal for pre-modern states.

The main advantage for this kind of direct recruitment was that it enabled states to keep a standing army in peacetime with relatively minimal disruption to civilian affairs. Long-service professionals could also be highly disciplined and well-trained, but I think the performance of the Song Army warns us that it is not always so – unsurprisingly the poor terms of service, low status and high degree of compulsion involves in Song military service seems to have produced relatively poor military performance as time went on. It is not always the case that professionals are better.

The main disadvantage, of course, is the expense of it. By directly assuming the full cost of military activity, the state is shouldering a tremendous administrative and economic burden. We’ll talk in the next part about how that burden might be met, but it is no surprise that most pre-modern polities were willing to give up a lot of political control – either to citizens (for entitlement-self-recruitment) or vassal Big Men (for retinue recruitment) or to colonels (for contractor recruitment) – simply to lessen the tremendous direct administrative and financial cost to the state. The army of the high Roman Empire was professional, disciplined, and very impressive, but it is also worth noting that it was only about a third bigger (~300,000 compared to ~185,000) than the peak deployment capability of the Roman Republic, despite the empire it served being ten times larger in population (c. 50m compared to c. 5m, very roughly).

Next time, we’ll turn to the question, now that we’ve raised our army, of how different sorts of polities pay for it.