Tuesday, June 07, 2011

Defense spending versus spending on humane and environmnental purposes

Recently, I was speaking at an international conference in China on the topic "Creating a Culture of Sustainability". During the Q&A session which followed, one of the participants questioned whether the measures I propose are not "too expensive".

My answer was that the cost would be very little when compared to the cost of all the unnecessary spending in the world, for example on war-preparations alone.

I did not have the figures in hand at the time, so I provide them now for China (as I was in China at the time; however, similar points could be made for each nation in the world).

The Chinese government's published 2011 military budget is about US$91.5 billion. That is the second largest in the world, and has gone up by just shy of 13% of the budget for 2010, when it was US$77.95 billion.

However, that is simply the figure published by the Chinese government, and we know that not everything that any government says can be trusted, so government statements always have to be checked against the statements of independent observers or at least other observers.

In 2010, the US Department of Defense's annual report to Congress on China's military strength estimated the actual 2009 Chinese military spending at US$150 billion, while the Stockholm International Peace Research Institute (SIPRI) estimated that Chinese military spending for 2009 was US$ 100 billion.

However, those sorts of dollar figures do not give us an accurate idea of what is involved. In 2003, the last year for which this sort of comparison is possible for me at present, the Chinese government's published budget was less than US$ 25 billion. In terms of purchasing power parity, SIPRI's estimate was that the figure was equal to US$ 140 billion in terms of what could be provided with that monehttp://www.blogger.com/img/blank.gify in China versus what it would cost to provide the same in the USA. If we ignore Chinese inflation, we could say that real Chinese spending on defense is scheuled to be, in PPP terms, something like 500 billion US dollars in this year alone.

Meanwhile, you might like to note that, according to a report last year from a task force from one of China's top universities, Tsinghua, spending on internal security nationwide is equal to the official defence budget and is expanding much faster.

Put those figures together, and you see that Chinese security spending is approximately US dollars one trillion - more or less as much as the US, when everything is taken as a whole. For the US, see Robert Higgs, “Defense Spending Is Much Higher Than You Think,” The Beacon, April 17, 2010, available here: here Sphere: Related Content

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