NATO’s New 5% GDP Pledge to Washington Is Utterly Preposterous

The priorities of our political leaders can be very hard to understand. Western countries are suffering years of economic stagnation, deteriorating public services, increasing popular distrust in political institutions, and a host of other problems. Yet our governments have decided that what we really need to do is spend more money on defence—and not just more money, but a lot, lot more money than what we are spending at present.

For NATO countries have agreed that they should spend not just the two percent of GDP they had previously pledged on defence—a target which many of them, including Canada, had notably failed to meet—but five percent. But why the world’s most powerful military organization needs to more than double its expenditure, and why it has picked on this suspiciously round number, remains completely unexplained, perhaps because it is in fact unexplainable.

Defence spending makes no sense in the absence of a threat, and it would seem that the underlying logic of NATO’s new policy is that it faces a serious threat from the Russian Federation. Certainly, no other potential enemy nowadays occupies quite so much attention. But Russia hardly justifies NATO’s proposed spending increases, as can be seen by a simple comparison of modern Russia with the Soviet Union of 40-50 years ago.

In the early 1980s, the Soviet army was positioned in the middle of Germany, about 1,500 kilometres to the west of where the Russian army is today. Backed by its allies in the Warsaw Pact, it enjoyed a significant advantage over NATO. Nowadays, by contrast, not only has the border between Russia and NATO moved far to the east, but the Russian army is a faint shadow of the size and power of its Soviet predecessor. Meanwhile, NATO has gotten a lot larger, absorbing most of the former members of the Warsaw Pact. But, according to NATO’s own official figures, from 1975 to 1984 NATO members spent on average only 4.7 percent of GDP on defence, in other words, less than they are now promising to spend over the next decade.

And so we have a situation in which a much stronger NATO faces a much weaker Russia than it did 40-50 years ago, but somehow we are to believe that the situation requires a higher level of defence spending. Canada, it should be noted, spent on average 1.9 percent of GDP on defence in the period 1975-1984. Yet now we have promised to spend five percent—more than two and half times what we spent at the height of the Cold War. It is hard to see how this makes sense.

In any case, linking defence spending to GDP is nonsensical, as well explained by Robert Higgs of the libertarian Independent Institute. Higgs notes that GDP measures everything that a country produces in a given year, from hamburgers to computer software and nuclear bombs. If you produce more hamburgers next year, your GDP goes up, and so if you have linked defence spending to GDP, you have to spend more on defence. But there is no reason why you should spend more on defence just because you are eating more hamburgers. To make sense, defence spending has to be linked to needs, not to GDP.

A proper defence policy thus begins with an evaluation of a country’s interests and the threats to those interests. From this evaluation, the country can develop a strategy to defend itself against the identified threat, and once it has developed this strategy, it can draw conclusions about its defence needs—how many military personnel it needs, what sort of weapons it needs, and so on. And once it has done that, it can then work out how much it is all going to cost. The budget is thus the last step in a rational defence planning process. NATO’s five percent spending pledge instead makes it the first step. As Higgs says, this is “nonsense for budget-policy making.”

If NATO’s five percent figure was the product of such a rational planning process, one could defend it, but it is not. NATO has definitively not carried out a comprehensive review of its interests, the threats to those interests, the required strategy, and the force structure required to implement this strategy. It has simply plucked the number five percent out of the sky for no apparent reason other than that it’s a number that Donald Trump came up with and everybody wants to make him happy. Again, this is a nonsensical way to draw up policy.

If NATO hasn’t gone through a proper planning process to justify its stance, neither have its individual members. Canada certainly hasn’t. Until recently the big debate here was whether our country should spend two percent of GDP, and even among defence boosters two percent was seen as a desirable figure. But now, without any explanation, we are pledged to spend more than twice that. The Canadian government has produced no plan to justify this dramatic change. It has not said what strategy the extra money will be meant to implement, nor what weapons and force structure the money will be used to produce. What is all this money meant to do? We do not know. For there is no plan. None at all.

The situation in some other countries is perhaps even worse in that they have attempted to come up with a plan but are now blatantly contradicting it. On June 2, for instance, the United Kingdom, published a strategic defence review which concluded that the UK should increase defence spending to 2.5 percent of GDP by 2027, with the possibility of a further increase to three percent should economic circumstances permit. Yet now, just three weeks later, the British government, has thrown the review out of the window and declared that it will spend twice as much as previously promised. Was the review completely wrong? Has something changed so dramatically in the past three weeks as to justify doubling the spending target? The British government isn’t saying. It’s more than a little preposterous.

How to explain all this? I suspect that group dynamics have a lot to do with it. Left to their own devices, hardly any leader of any NATO country would agree to spend five percent on defence, or anything close to that. Put them all together, however, and nobody wants to be the odd one out who is rocking the boat. Consequently, they all end up agreeing to something that it is palpable nonsense, and that most of them know they won’t be responsible for enacting anyway, given the limited amount of time that they spend in office. And here we come to what’s wrong with NATO. In theory, NATO doesn’t decide anything, its members do. But the very existence of NATO changes individual members’ behaviour in such a way as to encourage absurd collective outcomes. Were these outcomes relatively harmless, this might not be too concerning, but they are not. Excess defence spending brings with it considerable risks, encouraging reckless and counterproductive military activities. If one wonders why NATO bombed Yugoslavia and intervened in Afghanistan, it was in large part because it could, just as the US bombed Iran (and many other places for that matter) in part because it could. Military power that isn’t required to defend oneself tempts one into dangerous adventures.

Defence spending needs thorough justification. Perhaps we should spend five percent of GDP on defence, but we can’t know that unless a proper process is followed that produces that number. As it is, we have a figure pulled out of thin air that bears no relation to actual needs and runs the risk of producing an inflated military-industrial sector that may push our country, and others, in undesirable directions. In the meantime, other, arguably much more vital, societal needs will suffer as money is pumped into the military. As President Eisenhower so rightly pointed out, the opportunity costs of defence spending are as high as the costs themselves:

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. … This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.

Source: Canadian Dimension

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