Economist article: "Defence spending in a time of austerity"

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Yet another noteworthy article, this time a recent one:

"Defence spending in a time of austerity

The chronic problem of exorbitantly expensive weapons is becoming acute"

The Economist

(The F-35 may still appear to stay below the trend,

but we'll see how that turns out in the next years.)

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On defensive power

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People seek security in an uncertain, not exactly safe world. The consequences can be self-defeating.

One such example is an arms race. One state is a bit superior to his neighbour - the neighbour can't stand it and strives for superiority as well. Thus they spiral into an arms race, in worst case till they go beyond the sustainable strength. Inevitably one power realises that its strength isn't sustainable - but probably doesn't dare to accept inferiority. The result may be a war - the attempt to exploit a fleeting moment of unsustainable superiority that promises a better end than inferiority.

The situation in 1912-1914 and especially after the first mobilizations in 1914 was similar.

A theoretical way out is to build up military strength that's not of use in strategic offence. This way one power could be at strength "200" if defending itself and "100" if it's an aggressor - with a similar neighbour. Neither power would need to fear inferiority in war and no arms race would be necessary to feel safe.

Fortifications used to provide exactly this; military utility in strategic defence that's not directly useful for strategic offence. Permanent fortifications have lost their strategic utility, though. Even the fortifications along the Korean border don't come close.

Medieval fortresses are popular among tourists and generally capture the attention and imagination of people. These visitors don't reall understand how bad it really was when fortifications lost their strategic relevance.

Burg Hochosterwitz, photo: Johann Jaritz

There's a general problem on the tactical level that makes it difficult to buy exclusively "defensive" weapons (even anti-tank missiles have offensive uses!) for modern ground warfare: Operational defence neccessitates offensive actions on the tactical level. In fact, even stationary defensive concepts don't work without tactical counter-attacks.

Battlefield air defences are probably the only exclusively defensive combat component of ground forces and even they are of greater use during mobile (potentially offensive) operations than during static phases (= never offensive).

A competent operational defence with mobile forces is usually offensive on the tactical level, too: It's mostly about giving some ground in exchange for a good opportunity to counter-attack.

The power of mobile combined arms operations disqualifies the concept of "slow" (and therefore not much "offensive") ground forces such as infantry-centric forces. A total defence concept is not worth its budget if it cannot withstand a smaller and balanced offensive concept.

Finally, strategic defence is rarely exclusively defensive and successful at once. Successful examples that came close to total defence depended very much on geographic obstacles.

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For clarification; defence is supposed to be the superior form of combat on the tactical level, but only with an at least similar degree of combat readiness. Real warfare tends to be tricky in this regard.

Defence is strong, but it's not decisive. History knows many example of two forces of about equal total strength clashing and the defensive one lost. This tragedy has hit many army commanders on the field of battle and modern European warfare had also several extremely impressive examples.

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The only realm where a total defence concept seems to have the potential of success is the political level. The invention of defensive alliances (where members are not supposed to support an aggression of an ally) was ground-breaking.

The Cold War has taught us that this doesn't suffice to avert wasteful arms races. The problem was that NATO was perceived as one bloc by the Kremlin.

The Kremlin did indeed believe that all important NATO members would participate in a hypothetical aggression, even though they would not have been legally obliged to.

The post-Cold War NATO shows an even worse side-effect: Bored by the peace and relative lack of tensions among members, their attention became focused outward on minimal to ridiculously marginal problems. The defensive alliance became quite extrovert and asserted the right to keep the neighbourhood (not jsut its members) safe.

A focus on tactical to strategic defence was and is enticing for national security planners who want to make do with an affordable or even small budget. Sadly, there doesn't seem to be the right technology to make it work.

The good thing about all this is of course that we Europeans are productive enough to afford a degree of military superiority over our neighbours that discourages even the attempt of an arms race against us. This strategy for preserving peace and providing security does of course only work if your power/alliance can sustain a vastly greater military might.

Asia might not be able to rely on this concept. It might instead depend on geographical barriers (Himalaya, Pacific Ocean). The defensive alliance concept could help Asia as well - but they should avoid NATO's mistake and not appear too united. That is of course one of my rather "twisted" ideas and extremely unlikely to ever gain much ground among pundits ...

Finally, one more remark: The invention of "how to build a defensive army" - be it hardware, tactic or operational art - such an invention would be worthy of a Nobel Peace Prize and easily the greatest thing of the century.

Sven Ortmann

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Times have changed

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Back in 2001, many people got crazy. Military forces were used for policy and additional funds were made available for them. The U.S. armed services were almost buried under the amount of money that flowed into their budget.

Back in 2007, the beginning economic crisis and soon shrinking Iraq invovlement should have led to an end of the money flood, back to normal. This didn't happen, first due to normal lags and later ebcause fiscal austerity was damned as economic suicide by a grassroots wannabe economic experts movement that took over the mainstream media in most Western nations in a few weeks last year.

The time of economic "stimulus package" (or "we cannot do much of use, but we can pretend to save the world by spending!") politics seems to be over now, and finally, things go back to normal. Well, there's at least a trend in that direction.

The published attitudes seem to have moved during the past few weeks. Maybe it was the impression that Greece left on us. Maybe the time was simply right: Cutting military budgets in order to cure the budget disasters has become a real topic, and an accepted one.

The German Einzelplan 14 budget will probably be cut by about a billion Euros per year, but that's peanuts in comparison to the expected cuts in the UK, Greece and U.S.. Even Spain and Italy might easily exceed that sum.

The strange thing about this is that military spending should be about external factors (such as threats), not about internal ones. Save for procurement activities of lasting effect; doesn't the ability to cut military budgets due to fiscal problems kind of prove that we spent too much before?

Sven Ortmann
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War and economic growth

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Oliver Stone's documentary "South of the Border" apparently includes this account of the former Argentine president Kirchner about a conversation with GWB:

It's not exactly uncommon that people believe in positive economic effects of warfare, but those effects are mostly illusions, caused by tunnel vision.

In the realm of macroeconomics, expenditures for warfare are about equal to expenditures for a program to build buildings, then blow them up, build again, blow them up, ... it's consumption that does not stimulate anything and doesn't meet the consumption preferences of the population.

Investments usually increase the economic output (depending on circumstances), while additional consumption does so at most by a factor of 1 unless the economy was running at significantly less than full potential (and only if the circumstances allow it).

A war can of course erase unemployment, but keep in mind that all the mobilised soldiers don't really "work" in the economy during war. They're the equivalent of unemployed people, adding nothing to the nation's economic output.

There is one valuable thing in war, though: War - and especially the emotional mobilisation of the population by it - can provide motivation, break up resistances and such. Re-distribution fo income becomes fairly easy during war.

Motivation is the key in every economy, it drives them. It's what comes before the worker even raises his hand. A very detailed research into the motivation effects on the micro and macro scale could consume the whole career of hundreds of economists, and economists tend to be more interested in researching peacetime economies.

It's therefore difficult to tell what exactly changes due to the changes in motivation, but it's quite safe to say that these effects do not apply significantly to peacetime military spending.

Even IF the motivation of the population in wartime would change enough to enable a net positive economic effect; that effect would not mean that peacetime military spending could be considered as an economic advantage. It's simply a form of government consumption actually.

There are additional reasons why a look at the economic effects is almost excessively difficult; most wars are short. It's possible in wartime to postpone the replacement of old machinery and buildings, for example. These investments are a huge factor in normal, peacetime economies. You can postpone them - which merely postpones investments and frees production potential for other production.

There's also the problem of waste. The GDP metric is generally under fire for being a poor indicator for welfare. To raise a building and then blow it up does increase economic output just as two neighbours helping each other does not while them doing the same and paying each other an identical sum does.

The welfare effect of economic output isn't shown in GDP. The GDP merely shows the extent of official economic activity.

The economic activity of warfare has very little to do with welfare (private consumption drops significantly in major wars), and even worse - much of the war expenses are usually wasted. Again, this waste is not being subtracted from the GDP.

In short; even if (and that's not for sure) warfare does increase the GDP on paper, it's among the most crappy tools for economic recovery. High peacetime military spending is similarly crappy for the purpose.

Then again, it's not surprising or even unbelievable that GWB recommended war as economic policy.

Sven Ortmann
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