ROI On Defense

You might be interested in this post at the RAND Blog analyzing how the U. S. benefits from its “overseas security commitments”:

On a crisp January day in 1949, President Harry Truman stood before an inauguration crowd still recovering from want and war and envisioned a “world fabric of international security and growing prosperity.”

That idea, that America has an economic interest in promoting a stable and secure world order, has helped guide nearly seven decades of U.S. foreign policy. But a growing debate over America’s role in the world has called into question that basic assumption. Are America’s international security commitments really worth the cost?

Researchers at RAND used decades of economic data and new numbers on U.S. troops and treaties to test that question. They found strong evidence that the economic value of those overseas commitments likely exceeds their costs by billions of dollars every year.

I had several problems with the article. First, from a budgetary standpoint I don’t believe there is such a thing as “overseas security commitments”. I think there are more concrete buckets than that.

That’s called, I believe, a “fallacy of composition”. The more relevant question is whether we could have received as much benefit as we have while spending trillions less on wars in the Middle East.

Second, they ignore opportunity costs. If we had spent those trillions elsewhere, would we have benefited even more? We’ll never know.

This strongly resembles what I would call “directed research”. Somebody set out to prove that our present level of military spending was cost effective so that’s what they did.

I think that the grand strategy I outlined in a previous post is cost effective for reasons much along the lines argued in the RAND piece; I’m not as convinced that individual military expenditures further that grand strategy.