Military spending around the world: necessary defense or a protection racket?
Who, where, how much, and why?
This report, put together by the Stockholm International Peace Research Institute lists the countries with the highest military expenditure around the world. The United States leads the chart with $611.2 billion, followed by China ($215.7 billion) and Russia ($69.2 billion). Saudi Arabia is the only representative from the Middle East in the top 10 (#4 with $63.7 billion).
Of the top twelve countries in the list, half are clearly Western: The United States, France (#5 with $55.7 billion), the United Kingdom (#6 with 48.3 billion), Germany (#9 with 41.1 billion), Italy (#11 with $36.8 billion), and Australia (#12 with $24.3 billion). The US allies Japan (#8 with $46.1 billion) and South Korea (#10 with $36.8 billion) could be considered in the same group (depending on the definition of ‘the West’).
For each country, the report also calculates military expenditure as percentage of GDP, but this captures only part of the picture. Military expenditure is generally decided upon by policy makers in government institutions, and is one of the budget items that compete with a long list of other potential expenses such as domestic infrastructure, education, healthcare, and international humanitarian aid. In this context it becomes clear that military expenditure must be placed on the domestic priority list of a country, and therefore we should examine its proportion to a country’s overall budget as well.
Among the major players in the Middle East — one of this blog’s chief interests — the United States military expenses were thus actually 15.2% of the country’s budget for 2016 ($3.999 trillion). Russia’s expenses were higher at around 19.2% (3.07 trillion rubles out of about 16 trillion rubles). Saudi Arabia planned to spend over a quarter of its budget on “military sectors” over the same year (213 of 840 billion rials). Iran’s military expenses were $12.685 billion in 2016, about 15.7% of its overall expenses ($80.58 billion). Israel’s military expenses were $18 billion out of a budget of $108.6 billion, or 16.5%, although it also receives an average of $3.8 billion in US military aid every year (maps of US foreign aid here).
It goes without saying that the real expenses are higher than the approved budget, and that additional items related to defense and military expenditure are “hidden” in other sections in the budget, often for security and political reasons (e.g. for Iran see p. 1 of the report here which claims that the Revolutionary Guard funding is roughly equivalent to the country’s entire defense budget; for Israel see here).
However one calculates the numbers, others have already pointed out that these figures are astronomical. For a few quick comparisons, the price for a permanent colony on Mars would be around $50–150 billion over ten years. Another Burg Khalifa (the tallest building in the world) would be only $1.5 billion (in 2010 dollars). The fastest train, the Shanghai Maglev train, came with a similar price tag of $1.2 billion (in 2005 dollars). Harmony of the Seas, the largest cruise ship in the world that can accommodate up to 9,000 guests and staff, has a similar cost of only $1.35 billion.
These expenses lead us to ask several questions, which we’ll treat separately below.
First, are these high military budgets justified? Naturally, every government needs to justify its expenses to someone, whether its electorate, its elite, or the local autocrat. It is, however, very easy to justify military expenses. Consider the top 10 countries on the list of military expenditure above. Do countries such as the UK or France, both in peaceful northwestern Europe and with no obvious enemies, really need such high military budgets to defend themselves? The UK, for example, is below its target strength and has only 77,440 soldiers in its Army.
Most of us can’t really answer these questions because the information that is required to do so responsibly is not accessible, and we generally have to take the word of “experts” who know better. There are enough experts, however, who pointed out that the entire defense industry is a racket. As US General Douglas MacArthur pointed out, already in 1957:
“Our swollen budgets constantly have been misrepresented to the public. Our government has kept us in a perpetual state of fear — kept us in a continuous stampede of patriotic fervor — with the cry of grave national emergency. Always there has been some terrible evil at home or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it by furnishing the exorbitant funds demanded. Yet, in retrospect, these disasters seem never to have happened, seem never to have been quite real.”
The same words remain relevant today. Instead of simply buying defense, certain countries use their military budgets to ‘buy’ regional and international influence. This could be done by sponsoring ‘military exercises’ with allies, exercises that can presumably cost tens of millions of dollars.
It could also be spent on maintaining bases overseas to preserve international points of influence. Such bases are rarely only places where one country stores troops, ammunition and facilities. Instead, bases allow the country an on the ground presence and localized knowledge about events, while also giving it more opportunities to project its force in the region (e.g. the Russian base in Crimea that facilitated its annexation, or the new large Turkish base in Somalia). Keeping such bases establishes power relations between the country who owns the base and the one on whose land the base is. Again, data is difficult to compile for obvious reasons. Estimates place the number of US bases around the world at around 800 in 80 countries, or “military presence” (a vague term) in over 1,000 locations in 172 countries. Estimates for the costs of the bases/military presence have ranged between $85–200 billion for 2015. In Germany alone the US continues to maintain more than 30 bases with more than 36,000 soldiers (and has closed over 200[!] installations since World War II).
Second, what are military budgets actually spent on? In reality, it is almost impossible to use publicly available data to dig into the military budget in any meaningful way. The overall budgets are usually known (with the caveats above), while specific items in the budget are sometimes referred to. The specifics, however are easy to hide inside any large scale budget — and in the case of military budgets this effect is amplified for reasons of national security, as countries would rather not reveal (or even know) how much they are spending on a given theater of war.
Consider the US presence in Afghanistan as an example. Most would agree that the military salaries and equipment of the US army in Afghanistan would be considered part of the cost of that item in an hypothetical budget. But what about transportation of troops to/from Afghanistan? the US government’s economic support of the Afghan government? the costs of training troops on US soil to be deployed in Afghanistan? The intelligence agencies which cover Afghanistan together with other countries in the region but maintain a minimal presence on the ground there? Since multiple agencies with separate budgets all overlap in Afghanistan, and since each of those is further divided into subsections with their own funding, it’s probably impossible to give any definitive answer about the expenses involved with the war there. This study by Brown University estimates the overall costs in Iraq, Syria, Afghanistan and Pakistan at $5.6 trillion by the end of 2018, but also include items such as healthcare and disability payments for veterans back on US soil.
Third, who benefits from these massive budgets? As a rule of thumb, the larger the budget the easier it is to siphon some funds and profit. The Pentagon’s DLA, for example, can’t account for $800 million of its enormous budget. Although it is difficult to trace everyone who enjoys lucrative deals, jobs, and commissions, we can at least outline some groups: larger budgets mean a larger military, which means more state-sponsored jobs for people to work in it. These are not necessarily fighting units — armies have vast logistic and command arrays that allow a specific subsection to enter combat. Larger military budgets also mean more military equipment (inc. arms and ammunition). Some of this budget goes to state-owned arms industry. In this case, the people working in these industries, which are often not part of the state’s military, are also largely dependent on the state’s military budget. Much of the military budget goes to private contractors. This is a form of outsourcing in which private contractors supply the army with services (such as transportation or food) or equipment. There are also cases in which armies outsource combat operations at different levels to such contractors. In the Iraq War, for instance, the US army outsourced some of its defense tasks to private companies (e.g. Blackwater, rebranded as Academi). The US Department of Defense has a list (updated daily) of the contracts it signed with external contractors that were valued at more than $7 million. For February 2, 2018, there were ten such contracts totaling over $700 million ranging from military equipment to infrastructural and planning programs.
A major beneficiary of military budgets is the Military-Industrial Complex (MIC), a term used to describe the connection between a state’s military and private industry. Consider this review of top 5 biggest defense contractors in the US: Lockheed Martin, Boeing, Raytheon, General Dynamics and Northrop Grumman (which are all among the top 6 defense contractors globally). Together, they earned more than $17 billion in 2016. Between 64 and 84 percent of the sales of each of them are made to the US government. Their five CEOs alone made together more than $85 million ($17 million on average), while the value of the stocks of four of them tripled since 2011. Clearly, such firms have strong incentives to keep military expenses high, easiest done through lobbying — in 2017, more than $126 million were spent on lobbying in the US alone.
To finish with some food for thought: military expenses are more complex than a simple decision for “more war” or “less intervention”. Rather, significant segments of a state’s society participate in its defense efforts through politics, business, industry and development. Disentangling such a complex system with overlapping interest groups is exceedingly difficult. Unfortunately, neither war nor bloated defense budgets are going away any time soon.
In a future blog post, we’ll consider the link between a country’s military budgets and achieving its political objectives. Is there such a thing as efficiency in defense spending?
