NATO is Not Freeriding
U.S. Department of Defense (Brigitte N. Brantley)
The 2016 election cycle provoked a serious debate over the costs and benefits of U.S. support for its traditional alliances. Many see NATO members’ lower levels of military spending as a serious problem that forces the United States to spend an excessive amount on defense. The new administration wants to rectify this problem.
Underpinning this narrative are two assumptions:
1. Our allies are shirking their security responsibilities.
2. If the United States pulls back, our allies will fill the security vacuum to the benefit of the United States.
The truth is that North Atlantic Treaty Organization (NATO) member nations steadily increased their defense budgets during the Cold War. After the Cold War ended, defense spending decreased significantly for about ten years and has remained fairly flat ever since. NATO stopped increasing defense budgets after the Cold War ended because Russia was a much less serious threat than the Soviet Union.
During the Cold War, the Soviet Union spent about twice as much as NATO, and because of this, NATO tended to increase its military budget in amounts roughly proportional to Soviet defense budget increases. If the most compelling reason for NATO member nations to spend on their militaries is to deter Russian aggression from the East, then their current defense spending levels are reasonable. After the Cold War, non-U.S. NATO members went from spending half that of the Soviets to spending three times as much as modern Russia.
So why do many Americans think our European allies should spend more on their militaries? It might be because when compared to the United States, Europe spends less than it has since the early 1970s. Today, NATO member nations spend less than 50 percent of what the United States spends on defense. NATO member nations used to spend about 70 percent what the United States was spending on defense until 2000. With such a large shift, it is easy to see why it appears the United States is carrying the burden for everyone. The primary driver of this shift, however, was not defending Europe, but the wars in Iraq and Afghanistan.
While NATO’s spending stayed relatively flat in the 2000s, the U.S. defense budget nearly doubled as our nation went to war. Without the increase associated with the wars in the Middle East, it is likely that NATO and U.S. defense budgets would not be so different. In fact, prior to the most recent budget proposal, U.S. defense spending was quickly falling back to where it would have been without those wars. There is no conspiracy to freeride, unless we purport that NATO member nations have greatly benefited from Operation Iraqi Freedom and Operation Enduring Freedom.
Another complaint about NATO defense spending is that most members do not allocate the recommended 2 percent of gross domestic product (GDP) to defense. But 2 percent is an arbitrary amount. Decreases in NATO and U.S. defense budgets have historically had similar downward slopes (the U.S. trend is slightly more negative). The rest of NATO started from a much lower point, and the U.S. budget is currently affected by the winding down of wars in the Middle East and challenges in the Pacific, neither of which directly threaten Europe.
For the United States to maximize security and its own prosperity, it needs a peaceful Europe with which it can trade. To keep the peace, Europe must be balanced internally, and it must be able to defend itself against Russia. France, Germany, and the United Kingdom spend roughly the same amount on defense, while Italy is free to play a swing role. There is no arms race, and no European nation has cause to feel particularly threatened or fear domination by another. This is a recipe for an internally peaceful Europe. Meanwhile, these four nations together spend more than double Russia’s defense spending.
Current NATO defense spending levels satisfy our two conditions for meeting broad U.S. interests in Europe: external security and internal harmony. So, the United States should not pressure its European allies to increase spending on their force structures. Their forces are likely adequate to deter the kind of conflict that would seriously challenge U.S. interests in Europe (Russia vs. NATO) while not being so large that they challenge U.S. power or risk another catastrophic internal war.
At the outset of World War II, European military spending was such that the United States could tip the scales, but whether it would be decisive was an open question. The U.S. military now has such an advantage there is no question that it would dominate another European war. That advantage ultimately underwrites the $700 billion in annual trade the United States conducts with Europe and goes a long way toward preventing a repeat of World War II, which cost the United States more than $4 trillion in today’s dollars. The United States spends roughly $6.5 billion on European defense per year; it could spend that amount every year for 600 years and not reach the operational cost of World War II. When viewed in that light, our current support of European defense appears to be a sound investment.
The only room for argument that Europe is not pulling its weight is that it has not played a proportional role in the Middle East. But there are clear examples of European stakeholders fulfilling their responsibilities in the region. The intervention in Libya, for instance, was widely supported and championed in Europe. Seven nations spent a larger percentage of their GDP on that war than did the United States. While there were notable exceptions, Europe demonstrated that it takes its own security seriously.
Even if the United States wanted to pressure Europe to increase defense spending, it is not clear it would be effective. Some have suggested the United States should reduce its own spending so Europe is forced to foot the bill. But since 1949, European nations collectively have increased their defense budget in 72 percent of years. In years when the United States decreased its defense spending, however, Europe increased its budget only 55 percent of the time. Europe might infer that the United States assesses the security landscape as less threatening and reduce its spending in turn.
The United States plays a pivotal role in maintaining security in Europe. Europe benefits tremendously from this and pays very little for it. But arguing that Europe should spend more on its military because of this imbalance is folly. An increase in European defense budgets would not make the United States more secure or prosperous. It would upset a healthy internal balance and reduce U.S. power in the region.
Lieutenant Lavelle is a maritime patrol naval flight officer. He holds a bachelor’s degree in economics from the U.S. Naval Academy and a master’s degree in finance from Johns Hopkins University.