The U.S. Defense Subsidy

Matt Yglesias writes:

[B]oth Cato’s Will Wilkinson and Joseph Heath from the University of Toronto agree that America’s massive defense spending is, in effect, subsidizing the national defense of other countries and both agree that it’s perverse that American conservatives like this. As they say, the right would be none-too-keen on the idea of the United States paying for Italians’ health care, so why should they like paying for Italians’ defense?

I like the conclusion of this argument (that defense spending should be cut) and I like the subsidiary thesis that conservatives are stupid and hypocritical. But I’m not 100 percent satisfied with the conclusion. Is it really the case that cutting U.S. defense spending would force Canada to increase its defense spending? In a generic sense, it’s hard to see the argument. If our military were smaller, Canada would need a bigger military to defend it against . . . what? Invasion from the United States? An amphibious attack mounted by Peru?

It’s even harder to see when you pour into the details. Right now our nuclear arsenal has about 4,000 warheads. If we entered a bilateral agreement with Russia that cut that arsenal down to about 1,500 warheads we could spend money. But obviously that wouldn’t imperil Canada’s defenses and require it to build up a nuclear arsenal. Or say we had one fewer carrier group what would the implications of that really be for, say, Portugal.

I think Matt’s overlooking Canada’s proximity to a potentially truculent Russia, and thus badly overstating the superfluity of Canadian defensive capabilities. As I understand it, there’s a real possibility for conflict between Russia and Canada (and Denmark and Norway) over claims to arctic territories, waters, and potential shipping lanes. The Russians have acted pretty boldly so far, planting a flag on the arctic seabed and making noises about a military buildup in the Arctic (which it has subsequently backed away from.) I think it’s pretty hard to conclude that Russia would not likely be more aggressive about this if Canada and other Nato members were not so thoroughly backstopped by American power.

Canada’s likely to scale up in the north in any case, but I’m pretty sure their efforts would be greater in the absence of the American insurance policy. Canadians, Danes, Norwegians, etc. would be pretty unhappy to spend significantly more on the military, but I think that’s partly because the persistence of the American subsidy over decades has allowed them to pretend that they are, unlike the warmongering Americans, spending their budgets on things they value more than the military, instead of acknowledging that they depend upon, but largely take for granted, their U.S.-subsidized defense. Likewise, Americans have become so accustomed to subsidizing much of the world, and to the immense negotiating power that gives the American state, that they are loathe to become but one middle power among others with a merely sufficient defensive capability. So we continue to spend insane amounts of money on the military. Much of this is, as Matt argues, pure waste. But a good deal of it is actually necessary if we’re going to continue to do so much of the work in protecting our allies and thereby maintain our strategic advantage in imposing the American state’s will in the name of the “serious” foreign policy establishment’s idea of “the national interest.” USA! USA! It’s a dismal truth that many, many Americans really believe that they would be put into mortal peril should the U.S. put an end to other states’ dependency on it’s military power.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center

18 thoughts

  1. The thing about this argument against defense spending is that it does a pretty good job of explaining just why unipolarity has it's advantages. If the outcome of the US lowering defense spending is a Canadian-Russian military escalation over the arctic THATS A BAD THING. As it is, for most medium-sized powers it isn't worth building up offensive military capabilities because basically no countries are able to challenge the US in the short of medium term. Plus, aside from oil-baring Arab nations, we've done a pretty good job convincing the world that we have no plans of invading them. But if we cut military commitments and leave allies unprotected… well then they have to build up their own forces and other countries see new opportunities for expansion and potential, now proximate threats to their security. You've got to cut military spending in a way that doesn't spawn half a dozen arms races. This doesn't mean it can't be done (you just have to make up the force reductions with increases in the forces of other allies, like the rest of NATO, for example). But you need to make sure the slack is getting picked up by reliable institutions.

  2. USA' s defense spending in fact it's a matter of argument.she as a high power sized country she is spending much for her defense also a realist country her excess spending is a question.but for earning her national interest she can cost much. when her cost affects her people as well as the world, it's really bad to think.

  3. It's not just that the American Hyperpower acts as a global subsidy for our allies, it also acts as a repressing force for potential regional hegemons. In a way, by having one monopolistic entity in charge of global defense, at a level so high that it sets a barrier of entry for potential rivals that they are locked out of competing, possibly results in a much lower global defense expenditures. Nations that otherwise might pursue military or hard power means of obtaining their goals, instead are forced into soft power pursuits, which in turn results in further weakening of hard power.So in a very weird paradox, we would probably have to spend more on the military in such a world, and wars would be more common AND deadlier, if we were not being such a uncompetitive monopoly.*I suggest a global tax to balance it. Every nation gives the US money to continue building such frivolities like the F-22 and missile shields. Weapons so expensive that they are not designed not for war, but so that other nations can't afford to compete.*Kenneth Waltz and others are probably right that we'd just be more dependent on Nuclear weapons, but assume they've been treatied away for this thought experiment.

  4. More like a monopolistic industry. Apply the standard micro-economic model for a monopoly, only this time the demand is the global demand for “War”, or “Killing others” or however you say this.Monopolizing the industry results in a 'dead-weight loss', compared to a competitive market. However, rather then a net drain on society going into the benefits of a few individuals, we instead result in less war, at higher costs. Thus only the most 'profitable' or necessary wars are engaged in.Global Violence is minimized when only one entity is in charge of the use of force.In a way, it's the opposite of a mafia, since they represent a competition to the recognized monopoly for force (Government), and more in line with a global government.I would rather that global government be backed by the a constitutional republic like the United States then say The unelected leadership in Beijing.

  5. The ever present issue for all countries is piracy. The US Navy's global presence, and ubiquitous naval air resources, has kept piracy tamped down, and improved the efficiency of trade by an easy overlooked margin. If the US were to scale back its enormous navy, the rise in piracy would likely be very notable until regional players starting taking up the slack.Even though Canada is proximate to the US, it would suffer as much from increased piracy in the South China Sea as Taiwan and The Philippines would, leading them to either field a bigger navy or wait for China or Japan to start patrolling those waters more aggressively.I would agree that naval posturing for economic rights has some value, but I suspect that it is easily overestimated.An actual land-grabbing war is a far more distant concern in the modern world, even at the hands of a nuclear semi-rogue power like Russia. Bush Sr., for all his flaws, helped signal the dangers of initiating land invasions. The Georgia situation, unfortunately, has managed to muddy those waters a bit.

  6. “It's not just that the American Hyperpower acts as a global subsidy for our allies, it also acts as a repressing force for potential regional hegemons. In a way, by having one monopolistic entity in charge of global defense, at a level so high that it sets a barrier of entry for potential rivals that they are locked out of competing, possibly results in a much lower global defense expenditures. “Sort of like a, oh, let's be coarse – government?

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  8. teageegeepea – If you're willing to do a little legwork you can probably find out who I really am, and then be disappointed when you find I'm nobody.
    TGGP says:

    Steve Walt ponders why the U.S behaves in such a way here.

  9. It's long past time to pull out of NATO. Let the Euros defend themselves. I for one am beyond sick and tired of paying for French and German wusses.

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