The economic case for shrinking the Pentagon

Despite the Trump administration’s proposal for the largest defense budget since World War II, the Pentagon isn’t making us feel safer. For most of the past 20 years, the military’s primary preoccupation has been the so-called “war on terror.” And (with good reason) Americans view that war as a failure. Meanwhile, non-military threats from cyber security to global warming are increasing concerns. But there is still little popular pressure to cut the Pentagon’s budget and move to other tools of international relations.   In my new book, “Close the Pentagon: Rethinking National Security for a Positive Sum World,” I suggest a framing for thinking through a revised approach to foreign policy that focuses on the changing nature of the global economy and sources of prosperity. I hope it will provide one more set of arguments as to why it is time to abandon a military-first approach to international affairs.

Gallup polling shows that more Americans think that the Afghanistan War has made us less safe than think that it has made us safer. Pew reports that 62 percent of all Americans think the war in Iraq wasn’t worth fighting. At the same time, the percentage of Americans that see climate change as a major threat climbed from 40 percent in 2013 to 59 percent in 2018. The outbreak and spread of coronavirus has demonstrated once again that we live in a global disease pool and two-thirds of Americans view it as a real threat.

That polling evidence all suggests the military hasn’t provided Americans with a sense of security when it comes to violent threats, and that a range of non-military global challenges are an increasing source of insecurity. And any attempt to calculate the net benefit of the “war on terror” in terms of improved U.S. security compared to costs would have to account for the near half-million deaths, $6 trillion in U.S. expenditure alone, and the fact that more people worldwide now see American power and influence as a threat than Russian or Chinese power and influence.​​

But there is still an extremely limited public appetite for a smaller Pentagon. Gallup reports that 73 percent of Americans have confidence in the military, while only 29 percent think we are spending too much on defense. Polling also suggests at best lukewarm support for spending on non-military approaches to national security challenges: most respondents are happy to cut the aid budget to reduce the deficit.  Those seeking a change in direction need better — or at least more — arguments to persuade people inside and outside Washington alike that a military-first foreign policy simply doesn’t pay.

An approach I try in “Close the Pentagon” is to suggest a framework for thinking through why battlefield supremacy is increasingly irrelevant. There has been a global decline in battlefield conflict — since 1975, the average year has seen less than two inter-state wars ongoing anywhere in the world, and the trend is downward. There are a lot more civil conflicts worldwide (around 30 annually in recent years), but the great majority of those are small-scale. The changing nature of war — and its concentration in poorer countries — reflects an underlying economic reality: the resources that many wars were fought over in the past just aren’t the significant source of wealth and power today.

In 2005, according to the World Bank, total global wealth was $708 trillion.  Physical capital — roads, buildings, factories — accounted for 18 percent of that. Natural capital — land, oil, gold — was worth $44 trillion, or just six percent of the total. The rest of global wealth was accounted for by “intangible” capital — the value of technologies, ideas, and knowledge that allow economies to produce more output from the same inputs. Natural capital is zero-sum –— if I control the oil or land, you cannot. Intangible capital is positive sum.  We can all use both knowledge and ideas at the same time — indeed, the more people who use them the better off everyone else is. You cannot capture intangible capital in a war, and there would be no point even if you could. It should come as no surprise that the places where civil conflicts remain concentrated — the poorest countries — are those with the lowest stock of intangible capital and the highest share of natural capital in wealth.

Meanwhile, intangible capital spreads through global trade, investment, and the movement of people. That means a shift from a zero sum to a positive sum global economy brings not only greater peace and wellbeing, but also the challenges of wealth and connectivity: greenhouse gas emissions, the rapid spread of viruses real and virtual, and financial contagion. And that calls for new thinking about national security and what is best able to deliver it: the role for the Pentagon is rapidly shrinking; the role for international cooperation is rapidly growing.

Of course, not all wars are fought for resources, nor is the idea that economic ties will lead to peace a new one. Norman Angell suggested war had become irrational on economic grounds back in 1909. But it is worth noting that since then the cost of transporting goods has fallen by about 80 percent, global trade has increased 55-fold in value, and the proportion of global wealth accounted for by natural capital has fallen.

Again, argument for reform of America’s foreign policy apparatus that highlights global economic change is no replacement for one that emphasizes the immense human costs of U.S. military intervention, or an accounting approach that chronicles waste and ineffectiveness. “Close the Pentagon” argues those cases as well. But I hope this additional case for a new approach will help change some additional minds.

And there is some reason to think the economic approach is knocking on an open door. For all the support for defense spending, eight in ten Americans agree with the statement that “because the world is so interconnected today, the U.S. should participate in efforts to maintain peace, protect human rights, and promote economic development. Such efforts serve U.S. interests because they help to create a more stable world that is less apt to have wars and is better for the growth of trade and other U.S. goals.”  So, for those who’d like to see a reduced role for the Pentagon in U.S. foreign affairs, perhaps it is worth giving economic arguments for peace a chance.