Why military budgets are this big

A common case in favour of the size of arguments goes like "bad things would happen (more likely) if the budget was smaller". This makes sense with expenses such as for seawalls, but it always depends on assumptions rather than forces of nature when applied to military budgets.

The current discussions about what conditions Greece has to meet to get more money of other people for its needs provide yet another natural experiment (or anecdote) on the necessary size of military budgets.

One of the conditions is that Greece shall reduce its military budget that - by current definitions - is still one of the very highest in terms of "% GDP" in both NATO and the EU (see page six here). Obviously, the NATO and EU allies of Greece are convinced it's spending more than necessary.

The recent Greek counter-offer includes a reduction among many, many much more unpopular things - but the reduction is much smaller than previously noted as condition. This is incredible. Politicians who were elected to fight unpopular conditions, who fought to the bone for months against said unpopular conditions, who recently got a strong popular majority support in a plebiscite against the said unpopular conditions now offer to largely accept said unpopular conditions. They partially do so in preference over cutting the military budget a bit more. Meanwhile, their country is a member in the two most powerful military alliances mankind has ever seen, including three and two nuclear powers respectively.


The answer appears to be obvious: The governing coalition's far right wing member party's founder and president is the minister of defence now, and he likes to play with his new toys. He also likes to purchase new and more toys of "questionable" necessity.

Long story, small core lesson. One can point much at abstract theories such as the principal-agent problem or Niskanen's budget-maximizing bureaucrat as I did a few times already, but a clear-cut real-life example - a natural experiment - may be a more powerful demonstration of a simple insight:

Military budgets are not necessarily set wisely and are not necessarily a proportional response to a real threat situation or the potential for future threats. The reason for high military spending in a country may just as well be primitive politics and a preference of interest groups (especially insiders at the top) in favour of high spending. The prejudice that the existing spending level is necessary for national (or collective) security is thus invalid.

The power of this prejudice doesn't come across when I mention it because I don't have that fever in myself. It is a very, very powerful prejudice, though. It makes people claim that Europe couldn't fight its way out of a wet paper bag, doesn't spend much on military power, would be unable to defend itself, would depend on American military power as the central response to any peripheral military challenge.
The reality is that there's hardly any military threat. Even Russia is actually vastly inferior in conventional military terms and faces a double mutually assured destruction deterrence with France and the UK. Russia's conventional military weakness was confirmed by the events in and around the Ukraine, but due to the prejudice almost all interested people appear to draw the opposite conclusion from the events.


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