Where America leads: #1 in military spending and #1 in arms exports

By | September 28, 2012

America has been the predominant military power for the last fifty years. With the break up of the USSR in the late1980s, the US stands alone in its military spending. Americans of my Gen-X generation, are now asking the question, “Should America Serve as the World’s Policeman?” and more cynically, “Can We Afford It?”

Clearly, the world is still a violent and messy place. It is still a realpolitik world where geopolitical power is sadly demonstrated (as Mao so in-eloquently stated ) “from the barrel of a gun”. There are too many failed economies, unconscionable despots, and tribal conflicts to leave people to their devices.  Unfortunately, we are a far cry from the world envisioned by Woodrow Wilson. In many ways, the UN plays only a supporting role.

The United States has the highest military expenditures. The US spends ~ 4.8% of GDP or $700 billion on the military annually. To put that in perspective:

  • Since there are about 315 million Americans currently, this equates to each of us paying about $2,300 annually in military spending
  • Since there are about 7 billion people in the world, this means Americans pay about $100 annually in military expenditure for each global citizen
  • In the graph from the Economist, you can see that the US military spend is the same as the next 17 countries combined

Military Spenders GraphUnsurprisingly, China has the most soldiers. China has almost 2.3 million soldiers, which is 10x more than the Japanese. In terms of Naval power (shown in the dark blue bars), the US, China and Russia are the only real contenders. China recently acquired and retrofitted an aircraft carrier, but the NY Times notes here that it is only for training purposes and actually has no planes that can land on the vessel. North Korea is also an outlier (as it often is) because it has 49 military personnel for every 1,000 people. So sad.

Military by Country Graph

Military Industrial Complex. President Eisenhower saw it coming 50 years ago. He warned that a Military Industrial Complex would create an environment where the government, armed forces, and private companies share a mutual interest in maintaining a permanent military infrastructure.  Eisenhower said in his 1961 farewell address:

“We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.  The potential for the disastrous rise of misplaced power exists, and will persist.   We must never let the weight of this combination endanger our liberties or democratic processes.  We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.”

Global arms trade is big business. According to the Stockholm International Peace Research Institute (SIPRI), arms exports have been approximately $20-30 billion annually for the last twenty years, as shown in the graph below. It hit a low in the 2002-2003 time frame, and now it is at a high.  SIPRI has a lot of country-level data here for download.

Arms Exports Graph

The US and Russia (ex Cold War players) are exporting the most.  Seems like the military industrial complex in both countries still have a lot of arms to sell to the rest of the world. The US sells a lot to South Korea and Australia, while Russia sells a lot to India and China. Interestingly, the Greeks buy a lot of arms from the Germans and the French.

Arms Exporters GraphSo, what should role of America’s military be? In a fascinating debate on the topic of “America Should be the World’s Policeman”, six experts discussed the pros / cons of an activist US foreign policy here. Some might consider this a politically-charged topic, and it is. It deserves discussion. The safety of 1.5+ million American military personnel and $700 billion in annual US military spending hinge on the outcome of the national debate.

PS: Economist article on when China may outspend the US in military spending here.

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