How it would look like if top countries spent their defense budget on welfare instead

It is generally observed that the world’s total military spending rises approximately 1 percent every four years. That was the case until 2017. However, that figure jumped to 2.6 percent when the USA’s military spending grew substantially for the first time in seven years under the Trump administration with a whopping $649 billion cash infusion.

The current collective global military spending figure sits at a deafening $1.83 trillion as suggested by Stockholm International Peace Research Institute (SIPRI). If you think that it is nothing; this is a 76 percent increase from what the world spent during the post-cold war period in 1998. Yes, we injected more money into a whopping 76% military bill in a mere 20 years!

The question now arises, if the US alone spends on its military as much as the next eight-highest military spending countries combined, why does social welfare always take a toss in these countries?

Military spending broken down in numbers

• The SIPRI Arms and Military Expenditure (AMEX) programme says that the total world military spending in 2018 was 2.1% of roughly any country’s GDP or $239 per person. So, your country spends at least $239 to protect you.
• USA and China alone spend half of their GDP on military spending. Norway is the biggest spender per million people ($1.3 billion) and France comes a close second at $0.96 billion. Oman and Sudan spend 15% and 30% of its GDP respectively on military alone.
• MOD Economics Unit predicts that by 2045, the world will touch the $3.5 trillion figure in military expenditure of which the United States ($1335 billion), China ($1270 billion), India ($654 billion), Russia ($295 billion) and the United Kingdom ($108 billion) will be the biggest spenders.
• Hermit nations like Eritrea and North Korea have kept their military spending secret, but going by their heightened military activity and massive poverty it shows that they spend more on warfare.
• Military spending has been increasing considerably in Asia, Middle East countries and Central and Eastern Europe though there is a global economic slump.
• Military spending has decreased (slightly) in Western Europe, the Caribbean, Africa and Latin America.
• Countries that dramatically increased military spending since 2015 are Saudi Arabia, Algeria, Russia and Azerbaijan.

What if each country spends more on welfare than defense? The famous Guns and Butter conundrum…

In macroeconomics the decision to allocate more on defense or civilian spending from GDP is known as the ‘GUNS VERSUS BUTTER’ model. In most cases, it is noted that ‘you have to sacrifice some butter for better guns’ and this security ‘trade-off’ is why many countries are still ‘developing’…

A Reuters reports shows that globally an alarming number of 800 million people still live in extreme poverty, marred by malnutrition and suffering from acute water scarcity in most conflict-torn states and developing countries.

What it takes to solve the world’s problems

An NGO Committee on Disarmament, Peace & Security with the help of United Nations had made a Millennium Goals Vs Global Military Expenditure Target in 2000 which aims to eradicate global issues with the diversification of military expenditure towards welfare by 2015 (we clearly missed that deadline…). The goals we ‘could’ have accomplished are:

Goal 1 Eradicate extreme poverty and hunger - Estimated Cost $39 - $54 billion per year which is actually just 2.5% - 3.5% of annual global military expenditures

Goal 2 and Goal 3 Archive universal primary education and Promote gender equality and empower women – Estimated cost $10 - $30 billion per year which is actually just 0.6% - 2.0% of annual global military expenditures

Goal 4, Goal 5 and Goal 6 - Reduce up to 2/3rds the under-five mortality rate and Improve maternal health and Combat HIV/AIDS, malaria and other diseases – Estimated cost $20 - $25 billion per year which is actually just 1.3% - 1.6% of annual global military expenditures

Goal 7 Ensure environmental sustainability - Estimated Cost $5 - $21 billion per year which is actually just 0.3% - 1.4% of annual global military expenditures

SIPRI suggests that just a 10% diversion of this military spending figure can end global poverty in just 15 years! Moreover, every child’s college education can be financed for free.

Inflation will slightly reduce because militaries spend a considerable amount of costly oil and natural gas, which in turn, dictate global food prices.

The UK is one such region in which defense spending has fallen from 3.8 per to just 2.2 per cent of its GDP. They have decided to focus more on healthcare and international aid as per data by the House of Commons Defense Committee. There was a time when it spent 53% of its GDP during the Second World War!

For NATO countries, it is mandatory to spend a minimum 2% of its GDP on defense, yet they focus more on welfare.

If each country even cuts its defense spending to half, it can build 2.5 homes for each of its citizens for free!

The world needs to take cues from countries like Denmark (29.2%), Sweden (28.9%), France (28.5%), Germany (27.4%), Belgium (27.2%), Switzerland (26.4 %) who spend at least 25% of their GDP on welfare.

If poverty stricken countries can spend more on welfare, they can have at least 20 hospital beds per 1000 people. India currently has 0.9 hospital beds per 1000 persons.

The 15th Annual Conference of the African Econometric Society, American University in Cairo, Egypt observed that a country like Andorra spends mostly on welfare because it has no standing army; it relies on Spain and France for protection.

Costa Rica’s constitution forbids it from having an army. Micronesia, Grenada, The Vatican City, Kiribati, Marshall Islands, Tuvalu etc. do not have any armies yet their healthcare and social welfare facilities are world-class.

The counter-narrative

According to Chinese economists Ying Zhang, Xiaoxing Liu, Jiaxin Xu and Rui Wang countries especially BRICS (i.e. Brazil, Russia, India, China, South Africa) and G7 (i.e. the US, Japan, Germany, the UK, France, Italy, Canada) countries have noticed that military spending is capable of promoting social welfare hand-in-hand. This has been found to be true for developed countries (G7) and slightly ambiguous for the BRICS nations.

Employment will take a 22% hit because standing armies recruit lakhs of youth almost each year. Without a standing army, no country can protect itself from global warfare.

The FMOLS estimation by Eric S. Lin in Defense and Peace Economics journal also shows that military spending is actually capable of promoting the social welfare index drastically.

Studies on a panel of 29 OECD (Organization for Economic Co-operation and Development) countries show that when they increased military spending (military personnel and conscripts), they also increased health and education spending.

The final thought

There may never be a solution to this problem. Though, every dollar spent on militarization may seem as a loss to the global economy, it really is a necessity in the kind of hateful world we live in.

We cannot do without guns because we don’t live in an ideal world. We can however better diplomatic relations or sign arms treaties to finance our butter, because that is the only option humanity is left with now…