In November 1906, the Russian Council of State Defence met to discuss its new naval shipbuilding plan, the centrepiece of which was a proposal to build two new battleships for the Baltic Fleet. Presenting the plan, the Naval Minister, Admiral Birilev, admitted that there was no overarching defence policy which justified the shipbuilding program, but argued that there were still valid reasons for supporting it. First, Russia’s prestige demanded that it have battleships (a fleet consisting of smaller ships was, he said, ‘the sad lot of second and third-rate states’); and second, commissioning the battleships would save 30,000 jobs in the shipbuilding industry.
Hearing this final argument, the Russian Finance Minister, V.N. Kokovtsov, rejected it out of hand. If the sole purpose of building battleships was to keep factory workers employed, it was a mistake, he replied. From an economic point of view, Kokovtsov said, it was better to close factories than give them work just to avoid unemployment. Heeding his advice, the Council rejected the plan.
‘Taking money out of taxpayers’ hands and spending it on defence does not make the economy as a whole better off and does not therefore increase net employment across the land.’
1906 is a long way from 2012, but the arguments defence officials conjure up to justify big-ticket procurement projects haven’t changed one iota. Lacking proper military justifications for their purchases, they fall back on spurious justifications such as prestige and job creation. The Canadian government’s attitude towards the tainted F-35 aircraft is a case in point. Back in March 2011, for instance, Stephen Harper argued that, “Canada’s participation in the Joint Strike Fighter program is translating into sustainable, high quality jobs across this country in the defence, aerospace and high-tech fields”; while in January this year Julian Fantino said the Joint Strike Fighter program has “resulted in $370 million in contracts for Canadian business and research institutions”. These were not meant just to be arbitrary facts; they were arguments in favour of purchasing the F-35.
The arguments are as poor now as they were 106 years ago. Given their supposed belief in free market economics, the Conservatives of all people should know this. Taking money out of taxpayers’ hands and spending it on defence does not make the economy as a whole better off and does not therefore increase net employment across the land. Kokovtsov was entirely right.
As I have noted elsewhere, ‘military Keynesianism should have no place in modern economic discourse’. This is not an argument against F-35s, since the lack of economic benefits applies equally to other defence procurement projects. What it does tell us, however, is that when the Department of National Defence reviews the aircraft procurement file, the impact on jobs should be left entirely out of the equation.