Natsec is how America gets things done

Like it or not, defense considerations are how we provide public goods

Recently, I’ve seen people compare Biden’s Build Back Better agenda to the cost of U.S. defense spending:

Sahil Kapur @sahilkapur

Some context on price tags: The $725.8 billion defense spending bill is for 1 year. The $3.5 trillion Build Back Better plan is over 10 years. Apples to apples, Biden's economic and social policy bill is less than half of what Congress wants to spend on the Pentagon.

Now, this isn’t really an appropriate comparison; $725 billion is the total amount we spend on defense, while the $350 billion a year that Biden asked for would be in addition to existing spending commitments. When you actually break down what the U.S. government spends money on, defense is only a relatively small slice:

But Kapur has a point, which is that defense spending generally isn’t that controversial. Sure, there are people on Twitter who scream their heads off about the military-industrial complex, but military budgets usually get remarkable bipartisan support, receive little critical coverage in the media, and are rarely the subject of bitter political battles.

And despite the apples-to-oranges comparison, Kapur is right that it is useful to note the relative contentiousness of social spending compared to defense spending. Maybe if we proposed a $350-billion-a-year increase in military budgets it would be a different story (though there wasn’t much pushback from elected leaders when we spent big on the War on Terror). But another possibility is that Americans recognize defense as a true public good — something the private sector just can’t provide on its own, and which government has to take care of.

This is especially clear when we look at how scientific research gets funded. In most countries, defense-related research spending represents only a modest portion of public R&D funding; in the U.S., it’s more than half:

This may be because non-defense research funding is sometimes the subject of bitter partisan political battles in the U.S., while defense research tends to get whatever it asks for.

And this money isn’t simply going to develop fancier ways to blow things up; it has major spillovers for private industry. In their book Jump-Starting America, economists Jonathan Gruber and Simon Johnson document many instances in which WW2-era government research ended up giving rise to private industries in the postwar years. Of course the most famous example of this is the internet, which famously began as a project by the Defense Advanced Research Projects Agency (DARPA).

Nor does defense research crowd out its private counterpart; as economists Enrico Moretti, Claudia Steinwender and John Van Reenen found in a recent paper, military R&D spending raises private R&D spending, which ultimately boosts productivity:

[W[e uncover evidence of “crowding in” rather than “crowding out,” as increases in government-funded R&D for an industry or a firm result in significant increases in private sector R&D in that industry or firm. On average, a 10% increase in government-financed R&D generates a 5% to 6% additional increase in privately funded R&D. We also find evidence of international spillovers, as increases in government-funded R&D in a particular industry and country raise private R&D in the same industry in other countries. Finally, we find that increases in private R&D induced by increases in defense R&D result in productivity gains.

But defense’s role in public good provision isn’t just about research; it’s also about physical infrastructure. Political battles over funding for rail and highways are often fierce in America, and this is not a new thing; even in the early 1800s, there was heavy resistance to the idea of “internal improvements”.

In wartime, however — or when the country’s leaders believe they need to prepare for war — there tends to be less opposition to the building of the needed infrastructure. Railroads proved crucial in the Civil War, which spurred a burst of construction and innovation in the North. After the war, the government funded and facilitated the building of transcontinental railroads, realizing that these were crucial in allowing it to control and pacify the far-flung territory conquered in the years before the war. The U.S. was willing to build dams, roads, and bridges as a way of fighting the Great Depression, but it was during the World War 2 years that construction really kicked into high gear.

And then there was the Cold War. As tensions with the USSR ramped up in the 1950s, the U.S. responded with an explosion of public investment that lasted through the late 60s:

Much of this went to build the Interstate Highway System. Though much of the motivation for the Federal Highway Act of 1956 was to grow the economy, President Eisenhower was also famously motivated by the need to evacuate cities efficiently in case of a Soviet nuclear attack. (Eisenhower was inspired to build the interstates by his experience moving military vehicles along Europe’s dense road networks during WW2.) Fortunately the interstates never had to be used for nuclear war evacuations. But they certainly did benefit the economy, facilitating commerce and enabling the creations of networks of cities.

Nowadays, needed repairs and upgrades to America’s road and rail networks require endless struggles in Congress. But back when infrastructure was considered a military necessity, it simply got done.

And finally there’s investment in human capital. It was fear of Soviet technology — especially Sputnik — that caused the U.S. to pass the National Defense Education Act in 1958. This kick-started a massive boom in higher education that briefly made the U.S. the most-educated country in the world, and helped make our university system the world’s best. The creation of a broad-based workforce of engineers and scientists enabled the U.S. to retain and extend supremacy in high-tech industries all the way into the early 21st century.

There’s an important lesson in all of this. America is a vast, heterogeneous, and bitterly divided nation, but the importance of national defense is one of the few things that both parties still agree on.

Even as I write this, a few centrist Democrats in Congress are fighting to gut the climate investment and education provisions in Biden’s Build Back Better bill, while progressives have insisted on delaying a vote on a bipartisan infrastructure bill that isn’t even big enough to begin with. Meanwhile, efforts to boost government research funding earlier this year were largely gutted. The country is simply not rising to the task of making the investments needed to sustain its economic vitality, to say nothing of tackling climate change or competing with Chinese industrial policy.

If history is any guide, the most effective way to improve this situation — short of another Great Depression or some sort of revolution — is to appeal to national security. Only military spending and the exigencies of national defense will persuade Republicans and centrist Democrats to embrace large-scale government investment instead of fighting it every step of the way.

So how can that be done in practice? First, research funding should be increased via the Defense Department — and, when possible, DARPA. When Barack Obama created ARPA-E — an agency tasked with green energy research — in 2009, he erred by making it part of the Department of Energy. That allowed Trump to eviscerate the agency’s funding during his term in office. Instead, this kind of research can and should simply be done through the DoD. The U.S. Military clearly recognizes the national security importance of green energy — it creates energy security in case of supply disruptions in war, and it’s ultimately cheaper than fossil fuels anyway. So green energy technologies that still need major breakthroughs in order to become cheap — better energy storage in particular — should be defense projects.

There’s also a clear national security rationale for infrastructure investments to relieve the crippling supply shortages that have been popping up in the wake of Covid. Any conflict — especially with China — will require the country’s infrastructure to move goods and people around like a well-oiled machine. That will require major port upgrades and automation, as well as repair and upgrades to the road network. The DoD and military can help make the case for spending more — and for identifying and combatting the sources of excess costs that are making infrastructure hard to build and maintain.

The need to compete with China can also spur needed investments in education. Perhaps China’s new test of a hypersonic nuclear missile — a capability the U.S. does not yet have — will act as a new Sputnik moment that causes a panic over America falling behind its rival in high technology.

The U.S. currently does a pretty good job of identifying top STEM talent — which was a big focus of the original NDEA — but it lacks the broad-based mid-level engineering competence required to compete with China in high-tech industries. This is a rationale for cheaper college and free community college (Republicans might be appeased by pairing this with incentives for students to learn STEM subjects). It’s also a rationale for policies to dramatically increase skilled immigration, through policies such as green card recapture, cap exemption, and more generous use of visas like the O-1. (And all this should, of course, be paired with a more vigorous industrial policy, in order to channel large numbers of newly minted mid-level engineers into strategic high-tech industries.)

As for broad-based investment in green electricity, this has national security implications beyond the simple fact that climate change is a threat (which the military already recognizes). The more fossil fuels get replaced, the more existing deposits of shale oil, shale gas, and coal within U.S. borders can be kept in the ground as a gigantic strategic reserve, to be tapped in case of a total war.

It turns out, therefore, that most of the investment that Biden wants — with the possible exception of passenger rail — can be justified pretty easily on national security grounds. A bit of this can be done through defense budgets, but much of it will benefit simply from the Defense Department and natsec experts loudly making the case for more investment.

Now, there will be some who oppose this, especially on the Left. Congressman Ro Khanna, for instance, has been very vocal in opposing defense spending. And on much of the Left, it’s taken as an article of faith that big military budgets lead to war.

If that were true, that would be a reason to be cautious about embracing increased defense spending — even on R&D. But a look at postwar U.S. history definitely doesn’t show a pattern of defense spending increases leading to wars. I’ve marked the start of America’s four major post-1960 wars on a chart of military spending as a percent of GDP:

If anything, wars tended to follow decreases in defense spending. The military buildups in the late 70s, early 80s, and late 00s were notably not followed by the initiation of new wars. So leftists inclined to cut defense spending in order to “starve the beast” should probably be ignored here. Nor should Democrats shy away from national security justifications for government investment because they’re afraid that it will suck resources away from peaceful industries — the U.S. record on infrastructure, education, and research during the Cold War should speak for itself here.

Look, folks. I wish we all lived in a country where a sense of social solidarity, economic optimism, and humanitarianism was enough to spur us to make the big government investments that we need in order to prosper. Unfortunately, we do not. America is a deeply divided nation, and will remain so for the foreseeable future; the importance of national security is one of just a few things that a supermajority of us still agree on. We can use that to do what we need to do, and keep the country going, in the hopes that one day we’ll be more united and more rational than we are right now.

---