Courtesy Reuters

The Economic Content of National Security Policy

In almost any debate about American foreign and defense policies, there is one element upon which both protagonists can usually agree-that economic considerations play a major role in shaping the substance of those policies. Indeed, the economics of national security policy makes strange bedfellows. The radical New Left is convinced that a conspiracy of vested interests shapes American foreign policy toward the protection of U.S. investments abroad and the economic exploitation of other peoples. But when pressed to articulate a rationale for an internationalist and interventionist approach to foreign policy, eminently conservative Establishment types also advance arguments of economic self-interest, citing the need to preserve American access to vital raw materials abroad and warning of the blow to general living standards which would occur should America become isolated from the mainstream of world commerce.[i]

On many other economic matters, as they affect national security policy, the Left and the Right find common ground. Both would agree that economic strength contributes to military power. A recent economics text with a New Left orientation argues, for example, that the Keynesian economics of the postwar period served to strengthen the military-industrial complex and the interventionist policies of the United States.[ii] And as the recent presidential campaign demonstrated, both the Republican and Communist parties agree that large military spending is needed in the United States to maintain full employment. The GOP, for example, prominently featured a campaign document listing by state and locality the employment reductions which would ensue from Senator McGovern's defense cutback proposals. In an unusual show of amity between a Defense Secretary and a Budget Director, Messrs. Laird and Weinberger both gave major speeches stressing the unemployment consequences of reduced military budgets as though defense spending created jobs in a way which other spending could not.

I shall argue that most of the popular views about the interconnections between economics and national security are either wrong or misleading. Our military strength does not depend, to any significant degree, on

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