Occupation and its discontents

Matthew Yglesias makes a some good points on the viability of maintaining and deploying occupation forces:

Robert Farley has a good post on the question of “Why is it that the United Kingdom, which is in an absolute sense far more wealthy now than it was in 1930, having difficulty maintaining a foreign deployment of about 10,000 total in Iraq and Afghanistan, while in 1930 it deployed many multiples of that total all over the world, plus colonial auxiliaries who were partially paid for by the Crown?” 

From Farley’s Post:

The relative increase in the effectiveness of insurgency strategies isn’t just a consequence of the spread of the AK-47 or of the further development of nationalism in the non-western world; it’s also a consequence of the fact that modern, wealthy states can now deploy far, far lower numbers of troops than they could fifty years ago. Indeed, in 1965 the United States (with a smaller and much poorer population in absolute terms) managed to deploy half a million troops to Vietnam while at the same time maintaining large contingents in West Germany and South Korea.

Matt’s discussion:

As technology improves, the average level of productivity goes up. And as productivity goes up, wages go up as well, at least over the long term. The wages go up, however, more-or-less across the board whereas productivity has only actually improved in the select areas that have seen meaningful improvement. As a result, things that are intrinsically labor-intensive tend to get more expensive and rarer over time, even as overall living standards go up.

A rich American in 2006 is way richer than a rich American in 1906, but the number of people employing large numbers of domestic servants is dramatically down. Similarly, it used to be that people of modest means by the standard of their time (to say nothing of our time) would own hand-crafted furniture that would be absurdly expensive in the modern day. Similarly, while the art of war is certainly enhanced by better technology, this falls overwhelmingly on the “blowing things up from a distance” side of the ledger. Controlling some conquered territory effectively still requires . . . lots of dudes walking around. But it’s much more expensive to employ a bunch of dudes than it used to be, especially since the desire is to find sufficiently high-quality people that they can be trusted to operate the expensive and complicated equipment that’s used for the “blowing thigns up” missions.

One of the bloggers at The Economist (probably Megan McCardle) lets us know her/his sentiments:

Want nations to beat their swords into plowshares?  Then help them get rich! rich! rich!

Well, if you and I get our way on economic policy Megan (I am just going to assume it is her) it will probably happen sooner than if Matt and his allies do, but anyway, more from her:

Occupying foreign nations being one of those labour-intensive things.  The technical name for this phenomenon, with which Mr Yglesias didn’t want to bore his readers, is Baumol’s cost disease; it is thought to infest areas like health care as well as military operations.

Given the side effects pointed out by Mr Yglesias, this is one disease that we should be trying as hard as possible to spread.

I am working on it. Still, I think there is more to say on this. Felix Salmon takes a swipe and has a number of other observations of interest:

But of course not everything which is labor-intensive has gotten more expensive over time – the obvious exception is anything which can easily be outsourced to foreign labor. A pair of shoes, for example, or a cup of rice.

The problem with foreign wars is not that they’re labor-intensive, but that the labor can’t be outsourced. Annoying as it must be to the Bush Administration, if you want to invade and occupy a foreign nation these days, you just have to do it yourself.

Actually I think we have taken to outsourcing quite a bit, but I see his point. More from Farleys post:

Improvements in military technology have also rendered weapon systems more complicated, necessitating longer training, and thus increasing the investment that a state needs to make in an individual soldier. A general shift from mass to firepower, especially since the end of the Cold War and particularly in the United States, has served to cut the boots per buck. This last has a political rationale (more firepower means fewer friendly casualties, and firepower tends to be a more capital intensive investment than mass)

I think everybody so far makes sense, but let us not exaggerate. Our issue is far larger than that. Take our own military spending (hat tip Greg Mankiw):

From 60% of our budget to 20%. Let us look at it as a percentage of GDP.

This emphasizes that while it may be more expensive to put bodies in uniform we are also wealthier and could easily afford to spend more, but we don’t choose to do so. For our allies this choice has been made even more starkly. The discussion of all this was based on Farley’s post which was in response to one by Max Boot. Despite his well placed thoughts, Farley’s disdain for Boot’s point is unconvincing. Here is Max:

The primary culprit is declining defense spending among U.S. allies. According to the International Institute for Strategic Studies, defense budgets among NATO members, excluding the U.S., have fallen from 2.49% of gross domestic product in 1993 to 1.8% of GDP in 2005. Britain is actually above the norm, spending 2.3% of GDP, or $52 billion, on defense. Canada, with a defense budget of $13 billion, is below the norm, at 1.1%.

But all those expenditures fade into insignificance by comparison with the U.S., which spends $495 billion a year, or 4% of the world’s largest GDP, on its armed forces. That’s more than the rest of NATO combined, even though the other countries have, in aggregate, greater demographic and economic resources.

Unless the other NATO members are willing to step up their spending — and what are the odds of that? — there is scant chance that their gripes about American unilateralism will ever be rectified. We act alone, or almost alone, not out of choice but out of necessity.

That last point is one I made repeatedly during the run up to the war in Iraq. For all the talk of unilateralism, our traditional allies really had almost no role to play militarily. Even the troops they have are ill equipped for deployment, require our logistical support and lack the means to deploy  (we have to actually bring them in theater ourselves on occasion.) It was a red herring, and dishonest. Many of our “allies” don’t support us because it is something they can’t do and it leaves them as bit players and looking embarrassingly ineffectual. It is much more profitable to posture, see the Balkans, Darfur and Rwanda for examples of that.

Mark Steyn makes some of the the same points as Max, but of course does it in a far more entertaining fashion.

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