Wednesday, February 9, 2011

Why the Military Budget Needs to Be Cut

In his important new book,  Rollback: Repealing Big Government Before the Coming Fiscal Collapse, Tom Woods discusses how to rollback ever expanding government. No stone goes unturned, including his look at the military budget. The below is adapted from his book -RW:

To get a sense of the impact the U.S. military has on the American economy, we must remember the most important lesson in all of economics: to consider not merely the immediate effects of a proposed government intervention on certain groups, but also its long-term effects on society as a whole. That’s what economist Frédéric Bastiat (1801–50) insisted on in his famous essay, “What Is Seen and What Is Not Seen.” It’s not enough to point to a farm program and say that it grants short-run assistance to the farmers. We can see its effects on farmers. But what does it do to everyone else in the long run?

Seymour Melman (1917–2004), a professor of industrial engineering and operations research at Columbia University, focused much of his energy on the economics of the military-oriented state. Melman’s work amounted to an extended analysis of the true costs not only of war but also of the military establishment itself. As he observed

 Industrial productivity, the foundation of every nation’s economic growth, is eroded by the relentlessly predatory effects of the military economy. …Traditional economic competence of every sort is being eroded by the state capitalist directorate that elevates inefficiency into a national purpose, that disables the market system, that destroys the value of the currency, and that diminishes the decision power of all institutions other than its own.

Throughout the Cold War, politicians and intellectuals all over the political spectrum could be heard warning of the catastrophic economic consequences of reductions in military spending. The radical left in particular, as part of its critique of American state capitalism (which it sometimes conflated with pure laissez-faire), lent important support to that position. As Marxists Paul Baran and Paul Sweezy warned: “If military spending were reduced once again to pre-Second World War proportions, the nation’s economy would return to a state of profound depression, characterized by unemployment rates of 15 per cent and up, such as prevailed during the 1930s.”

Yet these politicians and intellectuals were focusing on the direct effects of discontinuing a particular spending stream without considering the indirect effects—all the business ventures, jobs, and wealth that those funds would create when steered away from military use and toward the service of the public as expressed in their voluntary spending patterns. The full cost of the military establishment, as with all other forms of government spending, includes all the consumer goods, services, and technological discoveries that never came into existence because the resources to provide them had been diverted by government

Measurements of “economic growth” can be misleading if they do not differentiate between productive growth and parasitic growth. Productive growth improves people’s standard of living and/or contributes to future production. Parasitic growth merely depletes manpower and existing stocks of goods without accomplishing either of these ends.

Military spending constitutes the classic example of parasitic growth. Melman believed that military spending, up to a point, could be not only legitimate but also economically valuable. But astronomical military budgets, surpassing the combined military spending of the rest of the world, and exceeding many times over the amount of destructive power needed to annihilate every enemy city, were clearly parasitic. Melman used the term “overkill” to describe that portion of the military budget that constituted this kind of excess.

By the 1960s the U.S. government, in its strategic aircraft and missiles alone, was capable of unleashing in explosive power the equivalent of six tons of TNT for every person on Earth. “Now that we have 6 tons of TNT per person in our strategic missiles and aircraft alone,” Melman wondered, “have we become more secure than when we had only 1 ton of TNT per human being on earth?”

The labor, time, and other resources that were used to produce this overkill material were taxed away from the productive population and diverted from the creation of civilian goods.

The scale of the resources siphoned off from the civilian sector becomes more vivid in light of specific examples of military programs, equipment, and personnel. To train a single combat pilot, for instance, costs between $5 million and $7 million. Over a period of two years, the average U.S. motorist uses about as much fuel as does a single F-16 training jet in less than an hour. The Abrams tank uses up 3.8 gallons of fuel in traveling one mile. Between 2 and 11 percent of the world’s use of 14 important minerals, from copper to aluminum to zinc, is consumed by the military, as is about 6 percent of the world’s consumption of petroleum. The Pentagon’s energy use in a single year could power all U.S. mass transit systems for nearly 14 years.

Read the rest here.


  1. Wenzel,

    You need to be careful when highlighting the important role the military budget plays in devastating the broader economy or you might upset some of your readers who take issue with people who "piss all over" people like Rand Paul who are "pulling in our direction" with their $500B budget cuts that curiously leave the military budget largely untouched.

    Facts like these are harmful to their worldview. You've been warned!

  2. Dr. Woods obviously did his research before he wrote this essay for the American Conservative and I hope every so called "Conservative" reads and learns something.
    Rand Paul, I have no doubt, wants to cut military spending more than what he is proposing, it is a matter of getting his bill serious consideration. The neo-Cons of Washington would turn on him. He knew what he was doing. Trust me the military spending cuts are coming,whether the American public want it or not.

  3. The military budget is the biggest corporate/union welfare system in the world. Think about how many high 5 and 6 figure jobs spread all across the country (every state I think) that are dependent on war/defense spending. I would argue that the defense budget is more protected in the eyes of politicians then even the welfare system. Its far easier for pols to cut aid to the poor then cut defense. The unions and big business leaders will destroy the pols that do.

  4. M,

    Under a republican system of government, wouldn't a politician who purposefully subverts the will of the voters whom he represents (ie, the American people) be akin to a traitor?

    Anyway, think again! From Rand Paul's campaign website:

    I believe that the primary Constitutional function of the federal government is national defense, bar none.

    I believe our greatest national security threat is our lack of security at the border. On 9/11, 16 of 19 hijackers were here on ‘legal’ student Visas but were not in school or in the states they were supposed to be in.

    Ten years later we are still not policing who we grant Visas to. We gave a Visa to a Nigerian who had made two trips to Yemen, bought a one way ticket with cash and no baggage and his dad tipped off the US Embassy that he had been radicalized.

    I propose a moratorium on Visas from about ten rogue nations or anybody that has traveled to those nations. I would keep this in place until our government proves they can manage intelligently our Visa process.

    I believe we try the terrorists captured on the battlefield in military tribunals at GITMO. I do not believe in trying them in civilian court.

    I believe that when we must fight, we declare war as the Constitution mandates and we fight to win. That we fight only under US Commander and not the UN.

    I believe that defending this country is the primary and most important Constitutional function of our federal government.

  5. More from Rand Paul's website, on illegal immigration (and the role the DoD should play):

    I do not support amnesty. Those who come here should respect our laws. I support legal immigration and recognize that the country has been enriched by those who seek the freedom to make a life for themselves.

    Immigrants should meet the current requirements, which should be enforced and updated. I realize that subsidizing something creates more of it, and do not think the taxpayer should be forced to pay for welfare, medical care and other expenses for illegal immigrants. Once the subsidies for illegal immigration are removed, the problem will likely become far less common.

    I support local solutions to illegal immigration as protected by the 10th amendment. I support making English the official language of all documents and contracts.

    Millions crossing our border without our knowledge constitutes a clear threat to our nation’s security. I will work to secure our borders immediately. My plans include an electronic fence, with helicopter stations to respond quickly to breaches of the border. Instead of closing military bases at home and renting space in Europe, I am open to the construction of bases to protect our border.

    Quick, the guy flipping hamburgers at the fast food joint down the street is a threat to our "national security", call the military! Arrest this unlawful combatant and try him at GITMO!