Spending and the National Defense

Reader FG sent a link to The Federalist (this may not open correctly when Federalist archives it) which argues, in "The Other Security Threat ... " that uncontrolled government spending now poses nearly as great a threat as the Jihadis. FG echoes the cry 'How far from the Reagan Revolution of the 1980s and the GingrichRevolution of the 1990s have we strayed?'  The article says:

President Bush's proposed fiscal year 2005 budget includes estimated deficit spending of $541 billion, though he proposes to cut the annual federal budget deficit in half by 2009. To put that in perspective, next year's deficit almost exceeds the total federal budget of $600 billion proposed by Ronald Reagan in his first year as President. Concurrently, Congress is endeavoring to legislate a balanced budget by 2014. The feasibility of both these goals is dependent on the rates of growth in both mandatory and discretionary spending, and, of course, the strength of the economy. ...

In a time when essential increases in defense spending are matters of national security, the administration's domestic-spending priorities are mysterious, to say the least. These include prescription-drug entitlement, manned missions to the moon and Mars (estimated to cost as much as $1 trillion), the now-defunct International Space Station, and expensive bureaucratic expansions such as the Pension Benefit Guarantee Corporation and the Millennium Challenge Corporation. Further, these priorities include the surrender of traditional conservative agenda items such as Social Security privatization, school vouchers, dismantling the Department of Education (instead, DOE funding has increased by an unprecedented 65% since 2001), and failing to promote free trade and Third World growth and stability through tariff reductions and removals.

I wrote back with an unthinking one-liner. "The struggle against Jihadistan and the entitlement programs are related because the Republicans have to "buy off" people, including their own constituencies in exchange for political support. How can we escape from this cycle is the hard question." It was a facile answer which was met by this reply: "That's the old 'welfare-warfare state' theme. I used to believe it, but I no longer think it is a necessary connection, see Samizdata, and still have to come across a political analysis proving that it is the case now." The article in question was Samizdata's "War is not the health of the State" in which David Carr argues convincingly that the State does not have to permanently grow in order to fight a war.

The British spent the entire 19th Century expanding their empire across the entire globe and in every corner of that empire Her Majesty's footsloggers and cavalrymen were busy fighting wars, rebellions, skirmishes and guerilla campaigns. The glint of Sheffield steel could be seen and the report of Enfield Rifles heard on every continent. On the high seas, the Royal Navy was charged with enforcing the government writ against slave-traders while simultaneously fending off imperial challenges from the French and the Dutch.

Yet, despite all this military activity, the British state was so small as to barely figure in the lives of the average citizen. Comparisons with the leviathan we have now are hardly possible. Nor, at any point in the 19th Century, did taxes exceed 10% of the GDP. Nowadays, people like Brian and I would consider it to be a monumental victory to get that figure down to 40%. ...

A growth chart of the British Welfare State rather bears this out. The Welfare State line climbs steadily upwards not in relation to the number of wars but directly in relation to the increase in enfranchisement. If the historical records are anything to go by, then there is a pretty good case for declaring democracy to be the 'health of the state'.

Carr's main argument is that the size of a state is not a function of its war-making capacity. So why then, reader FG asks, should President Bush expand the government spending in all directions to fight the Global War on Terror? My reply to FG was a little more careful this time.

"There was a time when governments raised taxes to actually pay for fighting. The Samizdata article mentions the Napoleonic Wars and how taxes were reduced after they had been won. They should have mentioned the American War of Independence, too. The Royal Navy was practically decimated by drawdowns at the conclusion of that conflict. But something happened in the last years of World War 1. No longer would men fight simply for King and Country. Thereafter, it became implicit that the "working class", or more precisely their representatives, had to be bribed in order to join the King's Armies. A "Land Fit for Heroes" had to be offered in exchange for sacrifice in war and that meant, in the coinage of that day, the Welfare State.

It was then that domestic welfare expenditure started becoming a major, and finally the principal cost of warfare. In the US, the shadow price of Roosevelt's interventionist foreign policy was the New Deal. Later, Lyndon Johnson's Great Society was the bribe for the Vietnam War. By the 1980s it had become established practice to buy votes in exchange for the right to defend the state. Mercenary soldiers may be an historical anachronism but mercenary voters are thoroughly modern. Even in the Reagan years the main share of government spending was never defense, it was entitlements. It will take a supreme national crisis to decouple entitlement spending from national defense. On the day that survival is not an optional extra to be purchased by concessions to illegal immigration or medical benefits it may again be possible to spend a dollar for a sword without spending two for the right to raise it."