Matt Steinglass, blogging for The Economist, seems to have a hard time with counterfactuals. He writes:

I’ve written on this before, but I’ll say it again: “the fact that much of metropolitan Europe and East Asia ‘free-rides’ on American military power”, as Mr Salam puts it, seems to me to be a non-fact. Which countries in East Asia does Mr Salam believe spend too little on their own defence? South Korea, with 600,000 men under arms, currently ramping spending up to 3% of GDP despite declining North Korean capabilities? Taiwan, which has also raised defence spending to 3% of GDP and just finished buying $6 billion worth of arms from America? How much need Thailand spend to ensure victory in its border dispute with Cambodia? What is the threat to Singapore, Malaysia, Indonesia, or (apart from tussles with China over undersea mineral rights in the Yellow Sea) Japan? True, Vietnam is buying Russian submarines with a view to denying Chinese superiority in the South China Sea. And perhaps the Philippines could stand to beef up its military to put down insurgents in Mindanao. But what do either of these have to do with “free-riding on American military power”?
The claim fails for the same reasons with regard to Europe: 1. The major European powers spend a healthy 2%-plus of GDP on defence, and 2. No major European country faces any serious military threat. In fact, I don’t believe the phrase “free-riding on American military power” describes any actual countries in the world in the year 2010.

Sigh.

Note that I put “free-riding” is scare quotes. That, of course, is a subtlety that’s easy to miss. I was suggesting that free-riding isn’t the perfect term, but it is useful. Given the way Steinglass approaches issues relating to health systems, public finances, etc., I can’t be too surprised by his reaction. But I am disappointed.

Do I believe that European and East Asian countries are spending “too little” on defense? No, I don’t. I’m not sure if that’s a meaningful concept. Military expenditures are a kind of self-insurance against an anarchic international environment. Choosing the “right” level of self-insurance is a thorny question that doesn’t have a clear answer. This is an environment with more than one imaginable equilibrium. The idea that a state can spend the right amount reflects a planner’s delusion. I tend to think that there is a complex political economy story behind the size of our defense budget. If we ran our defense budget like a lean multinational firm, it would look very different. Political and security imperatives play a big role, as do the PR and lobbying arms of for-profit firms.

The notion that there is free-riding going on doesn’t imply that it’s necessarily a bad thing: this is a core premise advanced by William Wohlforth and others who believe in “the stability of a unipolar world.” “Free-riding” in this vein is a feature, not a bug.

Many of these countries could spend less, e.g., if they consolidated domestic defense industries, outsourced more military functions, etc. I am suggesting that, in the absence of U.S. security guarantees, many of them might be inclined to spend more, not least because of the security competition that might emerge in this counterfactual world. How odd to imagine that U.S. security guarantees could evaporate and have zero effect on the global security environment, and the emergence of threats. This is a very strong version of the William Appleman Williams thesis recently revived by Andrew Bacevich. I’m not sure that Bacevich would believe that an offshore balancing strategy on the part of the U.S. would have zero effect on the global security environment. But who knows? My guess is that it could (a) improve it or (b) make it worse, and that in either case it would do so unevenly. That is, even in a more secure post-American world, some countries would perceive elevated security risks.

My original post was very epistemically modest, in stark contrast to Steinglass’s post. Indeed, I explicitly suggest that the world could be safer as new collective security arrangements emerge.

Perhaps the security competition that would result from a U.S. grand strategy that focused on offshore balancing rather than the more active and interventionist posture of the present would prove manageable. Military budgets would swell slightly, but new collective security arrangements would emerge to keep the peace at reasonable costs. Or perhaps the security competition would spark dangerous spirals of aggression and counter-aggression. It’s difficult to tell, though I tend to think that the former scenario is somewhat more likely.

That is, I tend to think that the world would be somewhat safer if the U.S. pared back its overseas commitments in such a way as to allow for the emergence of alternative security structures.

In historical terms, 3 percent of GDP is trivial for South Korea. This is a happy consequence of robust economic growth. Without a U.S. security guarantee, one can imagine the ROK investing in its own nuclear deterrent. Or perhaps the country would develop other contingency plans, or it would be more inclined to reach a settlement with the DPRK. We don’t know. What we do know is that the South Korean leadership believes that the U.S. presence is quite valuable. Note that many South Koreans reject this premise and have called for an end to the U.S.-ROK alliance, a view that is particularly popular among the young.

“The claim fails.” I love this guy. The claim can’t “fail” because the counterfactual is unknowable. This is not an experimental science. We are dealing with conjectures. Experience and judgment is our only guide.

Steinglass continues:

But even here, I’m baffled by Mr Auslin’s call for more American defence spending for fear that otherwise “foreign governments will expand their regulatory and confiscatory powers against their domestic economies in order to fund their own military expansions.” Assume this were true, and that you are the sort of person who thinks of laws and taxes in terms of “governments expanding their regulatory and confiscatory powers against their domestic economies.” Why in that case would it be a good idea for America’s government to expand its regulatory and confiscatory powers against its domestic economy, in order to forestall other countries from doing so? Or does Mr Auslin think that other countries’ militaries are funded by taxes, while America’s is funded by magic?

Here’s one interpretation: if we accept for the sake of argument that the United States does not need to dramatically increase military expenditures to maintain its current portfolio of commitments — I accept this only insofar as we don’t consider, say, a 15 percent increase in the U.S. defense budget over 10 years as dramatic — this wouldn’t necessarily entail a huge expansion of regulatory and confiscatory powers. But for many other vulnerable states, the increase might prove far larger. And as anyone familiar with the rise of early modern state systems — Charles Tilly is a good source — can tell you, military expansion tends to require expansion of revenue-raising powers and much else besides.

This scenario is non-zero-sum, and in a bad way. Auslin is painting a picture in which U.S. military expenditures go down by x, yet global military expenditures go up by 3x or 5x or 10x as new rivalries and conflicts emerge.

This is actually a very, very simple idea.

As for me, I think that the United States needs to lower its defense expenditures. I’ve written and talked about this before, though not at great length. I just don’t imagine that I have all of the answers about every counterfactual scenario, and I imagine that thoughtful people will disagree about the possible consequences.