But the new military Keynesianism is based on a delusion. It refuses to confront the fact that defence spending is, in strictly economic terms, one of the very worst ways to promote broad industrial rejuvenation. The growth multipliers are weak and the long-term productivity gains are non-existent. Unlike, say, investment in large-scale capital projects, building things, creating new fixed assets in energy, transport or digital infrastructure, there’s little diffusion of defence spending through the wider economy. While the construction of new roads, power stations or tram networks might provide decades of cheaper inputs, rearmament has a severe opportunity cost. An arms factory might create demand for steel and provide jobs for workers in much the same way as a high-speed rail link — but the former produces few positive spillovers, while the latter can regenerate whole regions. Rather than building the lifeblood of work, jobs and economic activity for the next century, in short, this khaki-clad Keynesianism sacrifices domestic prosperity for a real or perceived threat from without, or else because of an illusory attachment to the idea of Britain as a “global player”.
In truth, building and maintaining a world-class military exists downstream of a serious level of industrial capacity that Britain now sorely lacks. In the days of Bevin and Glubb, Britain built over half the world’s exported cars. Today it’s around 4%. In the aftermath of the Second World War, the UK was second only to the US in its steel production. Today, it manufactures less than Iran and Brazil, not enough to satisfy even half our own national demand. For all Labour’s rhetoric about a manufacturing renaissance, we simply don’t have the basic foundations of a durable industrial ecosystem: steel production; petrochemicals; plastics and advanced materials; energy independence and abundance; and a self-reliant productive base that isn’t subject to the whims of international oil shocks or geopolitical wrangling.
– Jonny Ball writing What the Anglo-Gaullists get wrong
Ah, yes. Jonny Ball. Written exactly like someone who’s never used a microwave, aerospace quality aluminum, or a cell phone.
The reason that we invest in military industry is not because you’re going to hand out JDAMs to everyone on the street. Though as an American, I point out that would probably be a better solution than whatever you’re doing now.
The reason that we invest in industrial production of military equipment is because those things are the cutting edge of technology. The easier and cheaper they become to make, the more we have that technology end up in your pocket, making your life better.
The fact that you can also point to how cool all of it is because it blows up people that want to kill you or intends to is really just gravy.
Yes, you need a world-class industry to have a world-class military, but no factory gets built in the absence of a demand. I know the Brits have long had a problem with the concept of supply and demand as an economic theory, but it exists. Create the demand via one of the few mechanisms which pretty much everyone agrees governments are free to invest in, militaries. Production comes after, along with all the people getting jobs and more importantly training on how to run those factories who will then want to go run other factories to make more money for themselves. This is how you have an industry. This is also how Britain no longer really has an industry. They gave up on that idea.
How’s that turned out for you?
In reality, Mr. Williams, UK military orders will get filled either from overseas or by companies using imported materials & components, which is the point the article is making as we’ve hollowed out the underpinning base. By the time that base has been rebuilt, presumably starting in 2029, we’ll be starting from an even lower base that depends on sunshine, wind, and unicorn farts.