Tuesday, April 27, 2010

Military Spending Moral Hazard

When analyzing the Liberal Democrat position that thee U.K. doesn't need nuclear weapons, Max Bergmann argues that the criticism from Labour leader Gordon Brown and Conservative leader David Cameron overlooks one factor:

"The notion that the UK needs nuclear weapons because of the dangers of Iran demonstrates an outdated world view that sees Britain as isolated and sees security issues in a vacuum. The fact is that the UK is in NATO – which means under Article 5 an attack on one NATO member is an attack on all. This means that an attack on the UK is an attack on the US and therefore the US nuclear deterrent is effectively a UK nuclear deterrent as well. If the UK’s nukes just magically disappeared there would be no practical change in its ability to deter a nuclear attack."

The argument here is not that Iran isn't a threat, or that nuclear weapons are immoral, arguments which you may or may not agree with. The argument here is clearly that since the United States will despite the recent disarmament treaty with Russia keep a sizeable nuclear arsenal, and since the United States is bound by the NATO treaty to defend Britain and other NATO members, its nuclear arsenal constitutes a deterrent. This in other words means that because of the NATO treaty, Britain should let American tax payers pay for its nuclear deterrent, because given the current arrangements it can do so.

This highlights how the current American security arrangements create a "moral hazard" where other countries shift over their military spending on America. Another example of this is South Korea , which spends a relatively modest 2.75% of GDP on its military, despite facing one of the most credible military threats (Only Israel's threat situation is arguably more dire) in the world in the form of the loony but well-armed North Korean regime. If not for the American troops in South Korea, and the pledge to send more in case the North attacks, South Korea would have surely spent more.

This factor is arguably also present in for example Taiwan and most Western European countries, as they rely on the promise of American intervention in case they face attacks. This is good for these nations as they don’t have to spend as much on national defense, but it is not quite as good for America who has to spend more on its military to keep this up.