Military Primacy Doesn’t Pay (Nearly As Much As You Think)

by Joshua Tucker on July 16, 2013 · 6 comments

in Foreign Policy,International Relations,Journal Collaboration,Military

Continuing our new series of collaborations with political science journals, we are pleased to present the following guest post from Tufts University political scientists (and blogger for Foreign Policy magazine) Daniel Drezner to discuss his article “Military Primacy Doesn’t Pay (Nearly As Much As You Think)” that appears in the current issue of International Security.  In conjunction with this post, MIT Press will make the article freely available to all for the next 30 days; you can download it here.

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For the past generation, U.S. military hegemony has been a concrete fact of life in world politics.  The coming austerity to the defense budget has triggered anxiety from some quarters of the U.S. national security community.  Advocates for a large military argue that the world is safer and more prosperous today precisely because of the United States’ outsized security capacities and deep engagement with the rest of the world.  Critics, however, have long questioned whether military preeminence yields the benefits claimed by proponents.  Given the unchallenged military supremacy of the United States, some argue that is natural to target cuts in defense spending after a decade of dramatic budgetary increases.  While these debates over the economic merits and demerits of military predominance are common in policy circles, there is less discussion about their theoretical and empirical foundations.  What can international relations scholarship say about the relative economic benefits of military primacy?

This article evaluates whether the economic benefits of military preeminence and deep engagement are as great as advertised.  This evaluation proceeds by analyzing the most plausible arguments put forward for how military primacy can yield economic returns – and then assessing what the scholarly literature and evidence can conclude about those causal mechanisms.  There are three plausible pathways:  The “geoeconomic favoritism” argument posits that private capital will gravitate towards the military superpower because it provides the greatest security and safety to investors.  The “geopolitical favoritism” argument is sovereign states, in return for living under the security umbrella of the military superpower, voluntarily transfer resources to help subsidize the costs of hegemony.  Finally, the “public goods” logic argues that a unipolar distribution of military power is most likely to lead the provision of global public goods that accelerate global economic growth and reduce security tensions.  These public goods benefit the hegemon as much if not more so than other actors.

After reviewing the evidence, each of these arguments is less empirically persuasive than is commonly articulated in policy circles.  There is little evidence that primacy yields appreciable geoeconomic gains.  The private sector responds positively to a country’s military capability, but only up to a point; military primacy is hardly a prerequisite for attracting trade and investment.  The evidence for geopolitical favoritism is also modest.  Geopolitical favoritism does occur, but only during periods of bipolarity.  Economic exchange is actually less correlated with security ties under conditions of unipolarity.  The evidence for public goods benefits is strongest; military primacy does appear to be an important adjunct to the creation of an open global economy and a reduction in militarized disputes and security rivalries.  Military supremacy is only one component of unipolarity, however.  A decline in the hegemon’s economic power undercuts many of unipolarity’s posited benefits.  It is only full-spectrum unipolarity that yields appreciable economic gains.  At a minimum, therefore, this article suggests that the economic benefits from military predominance alone have been exaggerated in policy and scholarly circles.  The principal benefits that come with military primacy appear to flow only when coupled with economic primacy.

There are clear implications for U.S. foreign policy and fiscal policy.  When applying the lessons from this analysis to U.S. grand strategy, the prescription seems clear; an overreliance on military preponderance is badly misguided.  Again, it is not that military power is useless, it is that the law of diminishing marginal returns has kicked in.  The United States would profit more from investing in nonmilitary power resources than in more military assets.  An excessive reliance on military might, to the exclusion of other dimensions of power, well yield negative returns.  Without a revived economy – and the global recognition of a renaissance in American economic power – the United States runs the risk of strategic insolvency.  The United States needs to focus primarily on policies that will rejuvenate economic growth, accelerate job creation, and promote greater innovation and productivity.  If the U.S. economy is perceived to be rebounding, then the biggest economic benefits that have been hypothesized to flow from military predominance will be preserved.  As policymakers must choose between maintaining a large military and taking steps towards fiscal solvency, the results in this paper point strongly towards deeper cuts in defense expenditures.

{ 6 comments }

jonathan July 16, 2013 at 5:17 pm

The article has some strange wordings – like the statement that fiscal conservatives are calling for the defense budget to be reduced. But I like the idea of trying to form a rigorous response to the argument – phrased as I remember by a quote from Kagan – that we need the military to preserve the order in which we prosper.

An argument I don’t remember being presented is simply this: we have in the past demonstrated an extreme capacity to convert domestic production to war production. This argument has 2 meanings. First, if we face real existential threats, we could jump into action. We did it before when technology was more primitive. Second and perhaps more interesting economically, the ability to switch to war production implies that war production does indeed have a private cost. That is, in the past rather than maintain a massive military we let most of those funds flow into private investment because that was deemed the best use of funds in our “free market” economy. We now by contrast devote a vast portion of public money to government investment in the military and that means, using the standard logic of free market conservatives, that this money is displaced from productive use in the private sector. In other words, massive military harms the private sector. That was how we viewed it in the past when government was smaller. It would be odd to say that would not be true now when government is much larger and has more bills to pay apart from defense.

Alexi Maschas July 17, 2013 at 10:40 am

I wonder if the author is not overlooking the most obvious way a superpower might employ their military dominance for economic ends: via the threat or use of force to extract concessions. The United States has not proceed particularly shy in either regard. I seem to recall that many of the CIA and military interventions carried out under the auspices of cold war realpolitik, drug war enforcement or anti-terrorism operations benefitted domestic business interests in tangible ways. United Fruit, for instance, essentially used the CIA as its enforcement arm across Latin America for several decades.

There’s also the fact that the business of war making is often very profitable for the contractors involved. The broken window fallacy might seem to undermine this thesis, because wars destroy as much as they build, but I wonder if by ensuring that the major costs of war (loss of life and property) are borne by other countries, we might not profit domestically via externalization of cost.

Matt Zx July 19, 2013 at 7:53 pm

I like this analysis, I think the truth is closer to what you said than anything else. I believe, in the end, the US model is closer to the old-fashioned imperialist modus operandi than anything else. The only difference is that the “conquering” largely takes place in the economic sphere: replace the legionnaires with the sweatshop contractors, the paying of tribute with “free trade”, and so forth.

So of course you need a big military as a warning to anyone who tries to fight this order – your country will be looted by US multinationals, and if you disagree with that then you might just quickly find some Army boots on your soil from one of the many overseas US military bases. As you mentioned this has played out in Latin America many times already.

Sadly, this makes the economy more of a zero-sum game then anything, instead of allowing some sort of shared, utopian economic boost from global stability (the situations studied in the paper). The political-economic elite gain both from sucking domestic taxpayer dollars AND developing country wealth, while everyone else loses. And we are forced to listen to these bad excuses for an insanely out-sized military budget because the truth is rather unpalatable.

C-Low July 17, 2013 at 2:54 pm

No offense but if we get no value from our supremacy but the fact that the entire world uses the US dollar making the US the financial center of the world, the military financial cost is more than is covered.

Keep in mind unlike the rest of the world when we print money we in a fashion share the devaluation with the world as a whole rather than solely like every other nation.

The US budget problem is the creeping mini socialism that breaks the natural order of capitalism while enforcing/propping up bad self destructive habits. All the while punishing the low end workers trying to work their way up with higher tax’s, regulations, and denial of benefits they could have if they just gave up. Why do you get welfare if you are not married but if you are you don’t qualify (which group could use a hand up and which would need permanent help?). Why do you get unemployment without a job but if you take a new career with a starting salary you get no unemployment (which group could use a hand up and which would need permanent help?). Then of course if it works making the workers dependents why not make the big corporations dependent ala bailouts “to big to fail”, regulations that stifle their competition.

But I guess as long as the politicks get to administer and skim the massive budget its ok. I guess as long as those new “dependents” continue to grow and pick votes for those same politicks who setup this grotesque insult to charity its ok. Well hell all we need now is to somehow get the gen pop to accept politicks not as a charity job old successful people do to give back to the nation (ala founders) but instead a career path that people even consider acceptable to pass through multiple generations, whoops Bush, Clinton, Kennedy, etc……..guess they already won that battle too.

Welcome to the modern day Feudal system.

Lets all keep arguing about the distractions of race, minor wars, abortion, should we be militarily dominant, Hollywood’s daily idiocy, or this or that. Just don’t open your eyes and realize we are all Americans and we are all just the peasant class to be ruled over and decided for by our betters of the modern feudal ruling class.

Matt D July 18, 2013 at 6:57 pm

No offense but did you read the article? It states in there pretty clearly that the UK and the US had similar economic power post-WWI, the UK had much more military power, and yet the US dollar began to act as a reserve currency well in the 1920s, well before the US became economically and militarily dominant in the 1940s. The conclusion: military power is not the primary reason behind the dollar as reserve currency.

Scott C-P July 23, 2013 at 1:56 pm

LCDR Mark Munson, USN, springboards from this article to ask “Does Seapower Pay?” in an article over at CIMSEC: http://goo.gl/KGpO49

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