Self-defence economics vs military economics
Yesterday, I gave a presentation to the Canberra Security Economics Network. Central point:
*Self-defence is special, military expenditure is not*
Spelling this out
*The need to defend the country against invasion, air attack or naval blockade involves existential risk
Any other use of military power should be assessed in terms of (opportunity) costs and benefits
Compared to alternative public or private expenditures
Your framing is interesting.
For one, it implies that one should consider existential risks. I find that many commentators on China in particular would rather not think about this at all.
And if you accept that there could be existential risks, then an important question becomes how best to deal with them.
To the extent that AUKUS can be justified (and I confess I’m not convinced on AUKUS as a specific project), it would be something like:
- China under Xi represents an existential risk to everyone in the Asia-Pacific region, which will start with Taiwan but will go far beyond that if Xi is successful in waging a war of conquest.
- The most efficient way to address that risk is to have an overwhelming international coalition that dissuades Xi from invading Taiwan or anything similarly destructive. USA dominates the coalition, of course.
- AUKUS demonstrates Australia’s commitment to the coalition.
Thanks for this, I watched the presentation and asked a couple of questions but I think my first one was poorly worded. I was interested in your statement:
"*The need to defend the country against invasion, air attack or naval blockade involves existential risk
Any other use of military power should be assessed in terms of (opportunity) costs and benefits"
I was trying to question whether the costs and benefits of defense against existential risk are harder to assess than other uses of military power. On the cost side, for your example of 1500 troops in Astan = 300 lives not saved in Oz you could equally well say AUKUS subs @ $368 bn = X lives. And the (purported) benefits of both seem about equally hard to estimate – so much democracy, women’s rights and avoided terrorism versus so much less risk of invasion or blockade.
I think my question came across as implying all cost-benefit analysis is this bad, when I was just trying to suggest that these two cases are as bad as each other! But from a couple of comments you made about marginal changes and well defined demand curves you might still disagree?