Tuesday, April 26, 2011

U.S. Military Expenditure: The Power of Factoids

It is often asserted that the U.S. spends more on its military than the rest of the world combined, and until today I assumed it was true. Then, in an online exchange, someone posted a link to an estimate of the relevant figures. If correct--and it looks like an honest and reasonably accurate job--the U.S. spends on its military a little more than half as much as the rest of the world combined.

I am reminded of a similar factoid that used to be in circulation to the effect that the U.S. had (small) x% of the world population, but  (large) y% of world consumption; y, if I remember correctly, was 40. That turned out to be a true statement—about the situation immediately after the end of WWII, before Europe and Japan had recovered from the devastation of the war. I have not seen that one of late, but as best I recall it was in common use twenty years or more after it ceased to be true.

Hence my title. A purported fact that is simple, memorable, and provides an argument for a position that some significant number of people want arguments for has a power almost entirely unrelated to its truth.

All of which leaves me with an image of an office somewhere, containing a hard working inventor of factoids. Being a professional, he takes all customers. For feminists, a factoid about what percentage of female college students get raped. For conservatives, the number of people who die while waiting for critical operations in Canada. For the anti-smoking lobby, the lethality of second-hand smoke.


At 12:26 PM, April 26, 2011, Anonymous Damien Neil said...

The Stockholm International Peace Research Institute estimates global military expenditures in 2009 as $1531 billion, which would place US military spending at about half of the total:


I have no knowledge of what methodology SIPRI used vs. the page you reference (which uses data from the CIA World Factbook), and have no opinion on which data source is more accurate.

At 1:14 PM, April 26, 2011, Anonymous Anonymous said...

Something is amiss here, because the very organization you cite also produced this table, which shows the U.S. spending MORE than the rest of the world combined:

At 3:48 PM, April 26, 2011, Blogger David Friedman said...

(Response to Anonymous)

I believe the "rest of the world" figure there is as of 2004. The U.S. figure is FY2008.

The version I linked to is giving 2007 figures, and shows a much larger number for China than the 2004 figure, which isn't all that surprising.

At 3:55 PM, April 26, 2011, Blogger Jadagul said...

David: that still doesn't explain the difference with the SIPRI figures, which have China spending something like a fifth of what your numbers have it spending. I'm sure it's a methodological difference, and probably a legitimate one. But it's not just a factoid that appeared out of the ether.

At 4:13 PM, April 26, 2011, Anonymous Miko said...

I once gave a talk (for an audience primarily consisting of undergraduate math majors) on how techniques in Calculus could be used to find psychologically memorable factoids. For example, one easy result is that anything expressed as a Pareto distribution usually has interesting sounding "x% of the ___ do (100-x)% of the ___" type factoids for at least a few values of x (with a suitable definition of "interesting"). It wouldn't surprise me to find that someone really does look at that sort of thing full time.

At 4:28 PM, April 26, 2011, Anonymous Anonymous said...

Interesting link. But the comparison isn't that meaningful considering that global spending includes many nations the US won't conceivably have to fight (the UK, Canada, etc.). If you just consider China, Russia, Iran, and North Korea, US spending is 50% more than all of them combined.

At 4:44 PM, April 26, 2011, Anonymous Anonymous said...

"The version I linked to is giving 2007 figures, and shows a much larger number for China than the 2004 figure, which isn't all that surprising."

The increase surprises me. It's gigantic. One or the other number there is suspect.

But at any rate, that "factoid" apparently wasn't total BS.

At 5:47 PM, April 26, 2011, Blogger Andrew said...

This comment has been removed by the author.

At 6:12 PM, April 26, 2011, Blogger Andrew said...

It's probably worth noting that the globalsecurity.org data is a combination of PPP, GDP and percentages, not actual spending:

Except as noted, this table represents the CIA data on spending on defense as a percent of gross domestic product (GDP), multiplied by gross domestic product (GDP) calculated in terms of purchasing power parity (PPP).

At 1:41 AM, April 27, 2011, Blogger TheVidra said...

I remember once questioning the commonly-held assumption that air travel is the safest mode of travel. The way the airline industries calculate the fatality or accident rate is by incidents per distance traveled, in which case air travel is indeed the "safest". But on the other hand, if you find the rate of incidents (or fatalities or injuries) PER TRIP (regardless of its distance), that assumption no longer holds. I do not have the numbers in front of me but when I have some time I can retrace my little research. On a different note, here is a lighthearted article (I am beginning to love this site) on misleading statistics: http://www.cracked.com/article_16241_the-6-most-frequently-quoted-bullsh2At-statistics.html

At 10:29 AM, April 27, 2011, Anonymous RKN said...

In addition to Andrew's point, the methodology used to get these numbers is also limited by the transparency of the nations reporting the data. Reliability of the estimates is a problem for people who would use them to support their claim (factoid), as well as those who, like yourself, would use them as a basis to refute the claim.

Beyond that, I wonder if the estimates include medical expenditures for returning military personnel. One estimate I found for the US had that number at just over 50 billion dollars. That's still not enough to shore up the factoid, but also not an insignificant addition.

At 5:25 PM, April 27, 2011, Blogger Neolibertarian said...

Veterans benefits were nearly $100 billion in 2009.

At 2:25 PM, May 05, 2011, Anonymous lynn chu said...

Yes. The people in the room who invent factoids are called "political operatives."

At 1:46 PM, May 06, 2011, Blogger VangelV said...

I believe the "rest of the world" figure there is as of 2004. The U.S. figure is FY2008.

Fair enough. But the "rest of the world" figure probably includes a lot of American aid that went for military purposes and was recycled into the purchase of American made weapons systems used by foreign governments to help meet American political and military goals. If we were honest wouldn't we count that as American spending? After all, the money came from the American State Department and was used to buy American made military equipment to be used to help the American military and the State Department.

At 1:36 PM, May 11, 2011, Anonymous Jim said...

The use of purchasing power parity is a huge red flag here. PPP is based on the idea that a basket of consumer goods that are easily tradable across borders should have a similar price everywhere (law of one price). Application of PPP to military spending is inappropriate because 1) the mix of military spending is very different from a general basket of consumer goods, 2) the mix of military spending differs widely from country to country and 3) enormous barriers to trade exist for these types of goods. There's just no reason to expect that the law of one price would apply to military spending.

PPP might be a useful way to compare spending on troops' wages across countries, but applying it to all military spending pretty clearly overstates spending by less developed countries. It makes perfect sense when comparing say the US and Colombia to adjust soldiers pay for PPP because the cost of living is lower for the Colombian. But for something like a Blackhawk or a tank, adjusting for the cost of living makes no sense. The generally accepted practice is to use market exchange rates for those kind of things (except among those who want to deliberately understate US military spending).

At 8:02 AM, May 21, 2011, Blogger terry freeman said...

Looking at the "methodology" link, it is revealed that China - the 2nd largest spender in the table - was simply estimated by some unknown method to spend 3.8% on defense. Are we comparing apples to apples here? The U.S. figure seems to be simply taking as gospel the figures reported by the Department of Defense. Other researchers have suggested that much more of the budget goes to related items; for example, as much as half of all "research" funding is for military purposes.

At 8:12 PM, May 22, 2011, Anonymous John B said...

One has to look closer at the figures attributed to US spending.

Congressional bills for defense spending always include a lot of items not even remotely related to defense. And many requirements covering education, politically correct assignments, training,tracking minorities etc spend inordinate amounts of money attributed to defense.

And how much money counted as US spending is actually spent as aid to other countries.

My assumption is that actual US defense spending is much less than commonly reported as a "factoid".

At 10:02 PM, May 22, 2011, Blogger VangelV said...

My assumption is that actual US defense spending is much less than commonly reported as a "factoid".

Than you would not have an objection in cutting the budget in half and getting rid of the spending that you say is not really going to defense.


Post a Comment

<< Home