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US Military Spending in a Post-Hegemonic World

By Taylor Marvin

Via Information Dissemination, Senator Jim Webb has harsh words about the failings of US military policy in East Asia:

“Our situation in East Asia with respect to China and China’s expansionist military activities has deteriorated. We are approaching a Munich moment with China and it’s not being discussed.”

This rhetoric is a bit overblown, but Webb’s argument that the US has devoted to far to many resources in regions of marginal strategic importance over the last decade is correct. East Asia is the central hub of world population and increasingly global economic activity, and a US military biased towards land warfare is of limited practical value in this strategic center. Senator Webb is right to advocate a US priority shift towards the naval and air assets more relevant to the core security challenges of the coming decades. However, Senator Webb’s thesis — that the US military must aggressively shift its priorities to counter potential Chinese military ambitions — ignores the core constraint of US strategy in the western Pacific. China’s projected economic growth means that before 2050 China will have the economic capabilities to surpass US defense spending. US long-term strategy should acknowledge this limitation.

From Wikipedia, here are the world’s top five military spenders:

The US far outspends its closer competitors both in total terms and in percentage of GDP. This spending isn’t for nothing — despite the arguably misplaced priorities of a decade of low-intensity land warfare, US military capabilities greatly exceed all potential rivals. However, there are questions about the sustainability of US military dominance. For this spending and capabilities gap to be sustainably maintained the US must maintain a wide lead in economic output over its rivals. This GDP gap is vanishing:

GDP based on PPP. Source: IMF.

Barring unforeseen catastrophe, sometime in the next two decades Chinese GDP will surpass America’s. This doesn’t imply that the PRC military budget will rise higher than the Pentagon’s — though estimates of China’s military spending vary, because US military spending as a percentage of GDP is roughly twice China’s America will still outspend China by a large margin even at equivalent national incomes. However, there is no reason to believe that the Chinese economy will stop growing when it achieves parity with the US. China’s population is four times as large as America’s, and if China is able to overcome significant internal economic and social issues it could eventually achieve a GDP twice that of the US this century:

Population by country. Source: World Bank.

China’s huge population advantage means that there is significant reasons to believe that the Chinese economy will be much larger than the US’s by mid-century. At some point this implies that China will have the capability to raise its defense spending above America’s. This does not mean that China will chose to do so, but America does need to realize that a time is coming when rivals have the ability to outspend the US, and if American military hegemony is preserved it is because political rivals have made the conscious choice not to challenge US spending levels.

Of course, just because the Chinese have the economic capacity to outspend the United States does not mean that they will choose to do so. Fielding a military capable of expeditionary power projection is enormously expensive:

Image sourceL Wikipedia.

Military expenditures by country, 2010. Image source: Wikipedia. Capability requirements are not exact.

Besides the United States, no nation on Earth even remotely approaches global expeditionary capability. Similarly, even relatively high spenders like China, France and the UK only marginally approach local expeditionary capability, a limitation France and the UK’s difficulty sustaining the Libyan air campaign has dramatically demonstrated. China clearly has an incentive to pursue true local expeditionary capability. Credibly threatening Taiwanese independence likely requires a more developed missile force and oversea troop transport capability than China currently possesses, and recent dramatic increases in other East Asian nations’ military spending make increased Chinese spending a prerequisite for for its local hegemonic ambitions. However, attaining true global expeditionary capabilities — necessary to rival the military capabilities of the US — would require a much larger investment, and its accompanying huge opportunity costs. It’s not clear that the Chinese leadership has any real desire to bear these costs. Recent investments in multiple aircraft carriers and modern naval fighter aircraft (the J-15) could support the assertion that they do, but it is important to remember that a functioning naval air capability is just as much a requirement for establishing military dominance in the western Pacific as it is for global power projection. It is possible that future generations of Chinese leaders will judge the massive investments necessary for an attempt at global military hegemony in the US model to be an enormous waste of resources. Just because a future, larger Chinese economy creates the opportunity for much higher levels of Chinese military capabilities does not mean that China will chose to pursue them.

The prospect of a world where China is able to field a larger total defense budget than the US is largely absent from US political discourse. This is unfortunate. A world where Chinese military spending surpasses the US is extremely dangerous. This danger does not come from the direct threat of a more capable Chinese military — while increased PLA capabilities will likely result in decreased US influence in Asia and increased pressure on US democratic allies in the region, it is unlikely that even a dramatically more capable Chinese military will ever be able to directly threaten the US. The real danger from an eastward shift in global military spending is that it will encourage future US politicians to attempt to outspend the Chinese. This is an exercise in futility. If Chinese GDP is significantly larger than America’s — a likely prospect in the relatively near future — US policymakers will only be able to preserve the US position as the world’s highest defense spender by raising military spending as a percentage of GDP. This is dangerous. American military spending as a percentage of total economic output is already abnormally high, and a large future increase in the US defense budget would likely require raising taxes, gutting the rest of the federal government, or increasing the US debt. All of these options would likely threaten the future security of the United States to a greater degree than increased Chinese military capabilities, and should be avoided. Unfortunately, the United States has been the global military hegemony for long enough that most Americans, and especially American politicians, can’t imagine a world where the US military does not dominate any potential conventional rival. Relinquishing the position of sole superpower will be traumatic, and the incentive to attempt to maintain American military hegemony at the expense of other government programs will be strong.

Of course, this scenario is relatively distant: the Chinese economy remains smaller the the US, and at 2.2% (official) percent of GDP Chinese military spending will have to significantly rise to equal the US 4.7% level, despite pending US defense cuts.Similarly, even if Chinese military spending does begin to approach Americans levels the US military will likely remain vastly more experience and integrated than the PLA, and maintain a technological lead for decades. But if Chinese growth patterns continue this reality will become more likely. Americans should begin psychologically preparing for it.

Update: On the subject of US military spending, someone at The Atlantic does not know the difference between an F-22 and an F-35:

Check out the actual article; it’s well written and informative. Author Joshua Foust produces consistently excellent writing.

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