U.S. Defense Spending and the Free Rider Problem
My New Atlanticist essay “Australia Prepares for U.S. Decline” discusses a recent Aussie white paper that is generating much discussion in the foreign policy wonkosphere. Basically, they see a rapidly rising China and a United States that’s overstretched with other commitments and could therefore reduce our commitments to the Asia-Pacific region. Hence, they’re planning for major defense upgrades.
Andrew Shearer sees this as a wake-up call for the Obama adminstration, while Christian Brose figures it’s about time our allies started taking defense seriously. Matt Yglesias, meanwhile, figures we’re wasting so much on defense that others won’t even notice if we cut back. Matt Eckel thinks his namesake is understating how much America contributes to global stability.
I consider the history of American spending and the impossibility of knowing what portion it is “wasteful” until after the fact — and even then. I conclude,
Yglesias is right that marginal cuts in American military spending don’t necessarily impact other countries. The combination of the sheer volume of American military spending and global conception of our interests creates a free rider problem that we have complained about but accepted for decades. Even our great power allies have much more limited interests than we do and we’ve got enough excess capacity that they would be reasonably confident that we would meet our treaty obligations even with a somewhat smaller force.
How much would we have to cut back to change that equation? Again, it’s unknowable. Clearly, just the hint that we might be recalibrating in Asia seems to have woken up the Aussies. Then again, they’re arguably our most enthusiastic military ally, having demonstrated an uncommon willingness to join in any fight. We would likely have to trim our military to levels currently unimaginable to shake most Western European countries out of their comfort zones and into picking up a significantly larger share of the overall defense burden.
More at the link.