Military economics

I’ve been wanting to blog this for a while, but just haven’t had the time to sit down and write it. So as I sit here and wait for something other than shock, I figure it’s a good opportunity to do this.

Most people assume that our military strength is derived from our economic and technological strength, which is true. But our military isn’t dominant because we can buy more bombs than anyone else, or because we can design bombs that can hit Saddam’s toilet from 50,000 feet. Our military is dominant because we have figured out the best way to militarily address the fundamental economic problem.

What is the fundamental economic problem? It is the issue of opportunity cost. Every choice we make requires giving up something else. As a nation, we have a choice to buy more guns or to buy more butter, but at some point we have to give up one to buy the other. But how does that relate to our military if its strength is not derived from overwhelming numbers?

During WWII, we used to send up bombing runs of 30, 40, 50 and more B-17 bombers to destroy one factory. We used to have to drop hundreds of bombs and we had to destroy entire neighborhoods and cities to take out one building or even just one room in that building. Every bomb we dropped on that factory could not be dropped somewhere else (opportunity cost); every bomber sent on that mission could not be sent to bomb another target at the same time (another opportunity cost). Every aircrew that was lost and every civilian that was killed represented another opportunity cost (we lost the opportunity for them to make a longer contribution to humanity). But the mass B-17 raids represented the best use of resources at that time.

Over time our technology has improved substantially. Now instead of 30 B-17s being needed to take out one room in a building, One F-117 can drop a laser-guided bomb into that room leaving the rest of the building and the neighborhood intact. Instead of say 700 bombs we can drop one. Instead of risking over 200 men, we need to only risk one.

So what does that mean for us? Assuming that the military is the same size, we can now strike over a hundred targets with the resources that used to be required to destroy one target. Or we can reduce the number of personnel in the military, while still maintaining the same attack capability. In either case we have improved the effectiveness our military.

And therein lies our advantage. We can drop one bomb to destroy a building, our enemy still has to drop 30. We only need to put one aircrew- maybe even just one person – at risk; our enemy needs to risk many, many more. With a few hundred planes we can achieve air superiority and still project force into the theater. Our enemy would need five or ten times as many aircraft to even think about having air superiority and they still wouldn’t be able to use their air force to project power on our ground troops.

Our understanding of economics has allowed us to better manage our military. We can resolve the basic economic problem better than our enemy, which gives us a significant advantage as we have fewer wasted opportunity costs. That is why our economic advantage has helped us to create a more dominant military. It’s not because we can buy more guns, but because we can figure out why it is important to buy better guns that don’t miss as often. We can also better make the decision of which weapons will be the most effective against different types of targets. It isn’t GNP that makes us strong, it is a well-developed economic theory.

Who said economics are unimportant?