Tag Archives: History

NATO Defense Spending, Past and Present: Part 1

Discussions and data presentations surrounding the recent NATO summit on member state spending levels on defense and the now-metronomic domestic squabbles over the United States’ own military budget have centered on the percentage of gross domestic product (% of GDP) benchmark. GDP is a hoary and problematic macroeconomic metric in its own right. Further, % of GDP offers no natural rationale for defense or any other budgetary programming, per se. Indeed, because of its fuzziness, GDP is thus dually ambiguous in its role as a primary measure of economic viability and as a stake in the ground for national planning. Is NATO’s goal to get military spending up to 2% of GDP in the coming decade plausible?  This question inspired a look at the alliance’s GDP and defense budget history.

The following essay is the first in a three-part series which together provide a macroeconomic overview of the 55 year old defense alliance. This first essay presents the history of NATO member nation defense spending since the alliance was founded in 1949. Eleven of the twelve founding members (Iceland is excluded from the analysis in this series for a lack of defense expenditure data) and four Cold War additions (Germany, Greece, Spain, and Turkey) are plotted individually because their longevity provides substantial history for member and alliance defense spending context. The twelve post-Cold War enlargement members are grouped into a single category in this first essay but are considered individually in the second and third papers.

The second paper will look a little closer at the defense spending history and trends of individual member nations and selected sub-groups. The third will examine the concept of command spending models such as setting a goal for each member to spend “2% of GDP” via a look at several other hypothetical spending models.

The source for NATO member nation defense spending for 1949-2013 is the SIPRI Military Expenditure Database. The SIPRI dataset also has a table containing most—but not all—of the expenditure data computed as a percentage of GDP. In order to fill in some of the missing information, for example for Turkey for the 1953-1959 period, an analytical dataset for member nation population and GDP was created from the Penn World, International Monetary Fund World Economic Outlook (IMF WEO), and Maddison Project datasets, using Bureau of Labor Statistics Consumer Price Index and World Bank Purchasing Power Parity conversion factor for currency conversion to a constant dollar baseline reference. All currency data in this series have been converted into 2014 U.S. dollars (US$2014).

As mentioned at the outset, “GDP” is ambiguous because it can be computed many ways according to the assumptions underlying a given dataset. The Penn World, IMF WEO, and Maddison data sets demonstrate strong correspondence in most cases where their datasets overlap but in some cases they diverge significantly. The Penn World purchasing power parity (PPP) PWT8.0 dataset was supplemented and adjusted with the other datasets and currency conversion sources to provide data for as many years of each member nation’s participation in the alliance as possible. Information on the adjusted dataset assumptions and methodology is available at this link.

The four graphs shown below present NATO member % of GDP spent on defense in direct comparison to, respectively, GDP, per capita GDP, and member share of cumulative NATO defense spending in a scatterplot format. Both horizontal and vertical axis categories are independent and the time-series/chronology is implied in the data rather than explicitly annotated (typically as the independent axis). Thus the entire history of NATO defense spending—who spent how much historically—is available at one glance.

The first graph shows % of GDP verses GDP. Although specific years are not listed, we can infer approximate chronology from the knowledge that constant dollar GDP has generally grown since 1949. Thus, the more recent years are found higher up the vertical logarithmic axis. The basic pattern is a right hook: as a member’s GDP rose, % of GDP spent for defense typically decreased, though, in some cases, there are notable abrupt shifts, as can most noticeably be seen in the last dozen dots for the United Kingdom (dark orange) and the United States (aqua). These shifts to higher % of GDP spending on defense reflect these nations’ budgetary adjustments to the wars of the past decade.

nato_defspnd_part1_img1-1_mbrgdp_v_pergdpMember defense spending as % of GDP v. member GDP (billions)

The second graph plots % of GDP against per capita GDP. This chart in particular illuminates at least one problematic aspect of a %-of-GDP basis for defense spending when per capita national affluence, rather than aggregate national affluence, is emphasized. One may ask why if %-of-GDP is an admittedly arbitrary but plausible defense spending goal, wouldn’t a progressive per capita defense spending rate be more in line with most modern taxation models? Hypothetically, should those individuals who make more, and presumably benefit more from NATO security, perhaps pay more? This and several similar questions about hypothetical defense spending models are briefly examined in the third essay.

nato_defspnd_part1_img1-2_mbrpercapgdp_v_pergdpMember defense spending as % of GDP v. member per capita GDP (thousands)

The second graph shows that defense spending has congregated in the low single digits of % of GDP as per capita GDP has risen. However, several long-serving members have remarkably vertical %-of-GDP defense spending trends: Italy (Kelly green), Luxembourg (lavender), Spain (pink), and Turkey (dark grey) have remained within a relatively tight bracket of from 1-4% of GDP for defense spending throughout their history in the alliance.

The third graph compares % of GDP to the share or percentage each member nation has contributed to annual cumulative defense spending. The U.S. (aqua) and Luxembourg (lavender) are the obvious outliers in terms of magnitude. Generally, the NATO members show fairly consistent behavior, contributing approximately the same relative proportion over time. Only the contributions of Greece (blue-grey), and Italy (Kelly green), Luxembourg (lavender), and Turkey (dark grey) have varied by more than 300% over the duration of their participation in the alliance.

nato_defspnd_part1_img1-3_mbrshareofnato_v_pergdpMember defense spending as % of GDP v. member per share or percentage contribution to cumulative annual NATO defense spending

The format of the fourth graph sets up the more detailed focus on individual member nation spending patterns which will follow in the next two essays. The fourth graph repeats the same data from the third graph but in a simplified format. In place of the dot scatterplot, the centroid or average of each member nations’ data is represented by a single large dot. The data for 2013 is shown as a smaller dot and the 2013 dot is anchored to the average dot to maintain the relationship. The line connecting the two could be interpreted as a curve but keep in mind the log scale of the vertical axis. The dot-connecting lines are primarily a graphical device.

We see in the fourth graph that, in all cases, 2013 defense spending as a % of GDP is significantly lower than the historical average. This is not to advocate for a return to the arbitrary metric of historical average, merely to account for the present in the context of the alliance’s past.

In 2013, the U.S. spent about 4% of its per capita GDP on defense, everyone else paid less than 3%, and some were in the neighborhood of from 1-2%. One may also note by the relative vertical position of the dot pairs that with the exceptions of Luxembourg (lavender), Norway (dark blue), Portugal (light green), Turkey (dark grey), the U.S. (aqua), and the collective post-Cold War group (plum), the other members’ 2013 contributions were also smaller proportions of the NATO whole than their historical averages (smaller dot lower than large dot).

nato_defspnd_part1_img1-4_mbrshareofnato_v_pergdp_simpMember defense spending as % of GDP v. member per share or percentage contribution to cumulative annual NATO defense spending. This is the same information as the third graph simplified.

In sum, any particular member nations’ defense spending in a particular year in terms of historical averages is not necessarily meaningful in the context of the value of the NATO alliance to either the particular member or to the whole. But the history can be useful for framing questions on apportionment, return on investment (in a very broad sense, of course), and the reasonableness (or not) of command spending “requirements” based on gross macroeconomic parameters.

In the next essay, we’ll move from the 30,000′ view and take a more detailed look at the individual members military spending history.

 

Dave Foster is a civilian analyst for the U.S. Navy. He is a former Marine Corps officer and holds degrees in engineering, history, and management. The views expressed here do not represent those of the Department of Defense or the Department of the Navy.

Lessons From History: Themistocles Builds a Navy

This article is part of CIMSEC’s “Forgotten Naval Strategists Week.”

“I never learned how to tune a harp or play upon a lute but I know how to raise a small and obscure city to glory and greatness where to all kindred of the Earth will pilgrim.”

Thus spoke the great warrior politician Themistocles in the 5th Century B.C. Themistocles is famous for a lot of things: his heroic actions at the Battle of Salamis, his secret plot to rebuild Athens’ walls after the Second Persian War, and his six-pack abs in “300: Rise of an Empire” (author’s note: thoroughly underwhelmed by that movie). But his biggest impact on history was his fateful advocacy early in his career for Athens to build a first-rate navy. Themistocles should be recognized as one of the earliest naval theorists because he successfully promulgated a sea-view of the world and brought Athens onto the sea.

Themistocles

Portrait of a naval theorist.

Athens has gone down in history as a naval powerhouse but that was not always the case. The city of Athens is actually a few miles away from the sea, could only offer up fifty ships during the First Persian War, and did not even have a defensible port until Themistocles’ rise to prominence. Athens was a continental city-state and a poor one at that; it had little to offer in terms of natural resources. The striking of silver in the mines of Laurium in 483 B.C. changed this. Athens was faced with a choice of how to divide up the windfall. The prevailing idea was to take the money and divide it equally among the population. Themistocles, apparently alone, proposed to use the funds to finance construction of a 200 ship fleet and managed to win over the population. The rationale behind his advocacy is controversial to this day: he claimed that the navy’s purpose was to challenge Athens’ island rival, Aegina, but others have attributed to him the base motivations of wanting to secure power or the foresight to see the invasion of Xerxes coming three years later.

Regardless of Themistocles’ true motivations, though the high-minded ones seem more plausible, his success is remarkable because it achieved a full reorientation of Athens’ politico-military focus from land to sea. This was all the more surprising because ancient Greek culture gave primacy to the strength and heroism of land combat. Even Plato complained that Themistocles’ actions transformed the army “from steady soldiers… into mariners and seamen tossed about the sea… [Themistocles] took away from the Athenians the spear and the shield, and bound them to the bench and the oar.”

History proved Themistocles right. The 200 Athenian ships, combined with his deft admiralship, were instrumental in defeating the Persians at the Battle of Salamis and, far more than the Battle of Thermopylae, turned the tide of the war in Greece’s favor. Moreover, once the Persians retreated across the Aegean Sea, Athens used its fleet to liberate the occupied islands and Ionian cities in modern Turkey. The new Athenian dependencies evolved into the Athenian Empire whose domination of trade in the Aegean launched Athens’ golden age. Their art and architecture are still the standard by which we judge all others classics. It is difficult to say whether Themistocles foresaw all of these circumstances playing out when he first advocated for the fleet but his strategic argument for the Athenians to take to the sea reflects an appreciation for what dominating the sea could achieve.

Athenian_empire_atheight_450_shepherd1923

The Athenian Empire at its height. If not for Themistocles, they would have had to swim to build it.

Lessons Learned

1) It is never too late to become a sea power.

 History is full of examples of continental powers who failed to embrace the sea to their detriment: the Persians, Ming China, and the Ottomans are but a few. Themistocles’ success demonstrates that states, with proper planning and political determination, can alter policy and project their presence onto the water.

2) States should maintain a military force that augments their commercial interests.

For those following politics in the United States, the parable of the silver mines of Laurium might lead one to assume that Themistocles’ argument supports military spending at the expense of social programs. That is not entirely the case. Blanket military spending does not mean financial stability; the Habsburgs are a great cautionary tale for military spending becoming a money pit. The true reason why the Athenian navy was such a boon to the state was not just its military value but the commercial value in trade that it fostered after the Persian Wars ended. We conclude that the United States should be careful about making budget cuts to military forces that make the global trade system work. In particular, one needs to tread lightly around investments that are meant to counter maritime piracy; it is no accident that shipping insurance rates soar in places where the United States Navy does not patrol.

Matthew Merighi is a Masters Degree candidate at the Fletcher School of Law and Diplomacy at Tufts University.

100 Years Ago: Veracruz 1914 (Part 3)

Sailors Returning to their Ships After Combat Ashore in Veracruz (Naval Historical and Heritage Command)
Sailors Returning to their Ships After Combat Ashore in Veracruz (Naval Historical and Heritage Command)

This is the third of a three part series on the American occupation of Veracuz in 1914. The first and second installments can be found here and here.

24 April marked the end of the combat phase of the U.S. invasion of Veracruz, with the “ABC Powers” of Argentina, Brazil, and Chile offering to mediate between the U.S. and Mexico.  President Wilson agreed to participate in these talks and ordered the troops ashore to refrain from offensive operations.

The negotiations proceeded to drag on even though one of Wilson’s original objectives behind the operation was was met in July when Mexican President Victoriano Huerta resigned.  However, negotiations with Venustiano Carranza, the head of the Constitutionalist opposition to Huerta who then took power, proved to be not particularly fruitful either, with the parties only coming to a satisfactory agreement for the withdrawal of American troops in November.

Of note, the other main reason for the invasion, preventing the delivery of the weapons onboard Ypiranga to Huerta’s army, was never achieved and did not matter regardless, as they were eventually delivered (the Americans let the ship leave Veracruz in early May and deliver its cargo at Puerto Mexico), but Huerta resigned before they could have any impact on helping the Army keep him in power. 

Probably the main reason why some history buffs know about Veracruz is the number of medals awarded to the participants, including men like Smedley Butler and John McCloy who each earned one of their two Medals of Honor there.  Members of the sea services earned fifty-five Medals of Honor for heroism or service during the four days of fighting.  One reason for that high number was that Veracruz was the first action in which Navy or Marine officers were eligible for the award.  Butler was embarrassed by his, stating in his biography that

“I received one, but I returned it to the Navy Department with the statement that I had done nothing which entitled me to this supreme decoration.  The correspondence was referred to Admiral Fletcher, who insisted that I certainly deserved the decoration.  The Navy Department sent the medal back to me with the order that I should not only keep it this time, but wear it also.”

Another frequently told anecdote has an admiral conducting an inspection in the 1920s, who upon seeing the medal on the chest of a man that had earned it in the First World War exclaimed “Holy smoke! Here’s a Medal of Honor that’s not for Veracruz!”

The U.S. Navy and Marine Corps both learned some lessons from Veracruz.  It marked Naval aviation’s first involvement in anything resembling combat.  It also marked one of the last instances that ship’s company sailors fought ashore as infantry, something that had been relatively common up to that time, with U.S. sailors having recently fought ashore in Latin America, Hawaii, Korea, Samoa, China, and the Philippines.  As for the Marine Corps, the 3,000 Marines eventually assembled and sent ashore was “the largest concentration of Marines in the history of the Corps, to date.”

While U.S. memories of Veracruz are almost non-existent today, it had a massive and lasting impact on Mexican attitudes towards its northern neighbor. In Jack Sweetman’s the Landing at Veracruz: 1914, he describes the occupation as “a kind of Caribbean Pearl Harbor.”  Even the Constitutionalists fighting against Huerta opposed U.S. military intervention in Mexican affairs, with Pancho Villa the only leading figure in Mexican politics who did not oppose the U.S. landing, ironic in light of him being the main target of another U.S. invasion a few years later.  Just as the niños heroiques of 1847 entered the pantheon of national heroes, martyred defenders of the Naval Academy like Cadet Virgilio Uribe and Lieutenant Luis Felipe José Azueta are remembered to this day.  A new adjective was added to the title of the Naval Academy, now known as the Heroica Escuela Naval Militar in honor of the cadets’ resistance to the norteamericano invasion.  This year the Mexican Navy is participating in a months-long series of events to mark the centenary of an event that the service actually played little part in.

Whether or not the Veracruz operation was a success is difficult to determine. Huerta was forced from office, but one would be hard pressed to prove that the American attack against Veracruz caused his removal.  It did not end the Civil War, with Mexico undergoing several more years (or decades, depending on when one believes that the Civil War actually ended) of chaos and violence.  A prominent event in Mexican history, it remains mostly a source of obscure service lore to Americans.

Lieutenant Commander Mark Munson is a Naval Intelligence officer currently serving on the OPNAV staff. He has previously served at Naval Special Warfare Group FOUR, the Office of Naval Intelligence, and onboard USS Essex (LHD 2).  The views expressed are solely those of the author and do not reflect the official viewpoints or policies of the Department of Defense or the US Government.

 

 

100 Years Ago: Veracruz 1914 (Part 2)

Sailors Parading through Veracruz (Naval Historical and Heritage Command)
Sailors Parading through Veracruz (Naval Historical and Heritage Command)

This is the second installment in a three part series on the American occupation of Veracuz in 1914.  The first article can be found here.

On the morning of 21 April 1914, Rear Admiral Frank F. Fletcher, commander of the U.S. Navy task force offshore Veracruz, Mexico, complied with the order he had received from from Secretary of the Navy Josephus Daniels the night before. Fletcher ordered the landing of 1200 Marines and sailors from his ships to seize the customs house in Veracruz in order to prevent the delivery of the weapons onboard the German freighter Ypiranga to the Mexican Army, even before he was reinforced by ships commanded by his counterpart off Tampico, Rear Admiral Henry T. Mayo, and the Atlantic Fleet’s steaming from Norfolk. According to John Eisenhower’s Intervention! The United States and the Mexican Revolution, the Americans anticipated resistance from the Veracruz garrison of 600 soldiers, and 2000-3000 other Mexican troops in the region that could be augmented by militia and freed prisoners. Fletcher hoped that moving ashore quickly  would preempt a defense by local troops, enable a potential occupation, and allow him to avoid using his ships’ big guns to obliterate the city.

According to another account of the Veracruz operation, Jack Sweetman’s the Landing at Veracruz: 1914, the “Naval Brigade,” commanded by Captain William Rees Rush, the commanding officer of USS Florida, was composed of two regiments: the First Marine Regiment (22 officers and 578 men assembled from Marines onboard Fletcher’s ships) and the First Seaman Regiment (30 officers and 570 sailors from Florida and USS Utah).  They went ashore from their ships anchored in the harbor onboard whaleboats towed by motor launches to Pier Four in the port.

As soon the landings started, the American consul in Veracruz telephoned General Gustavo Maass, the local Mexican commander, encouraging him not to fight back and allow the Sailors and Marines to come ashore unopposed.  Maass, in a rage, instead immediately informed 100 men from a regiment billeted nearby to engage the Americans.  After a conversation with the Minister of Defense, Maass was forced to reverse himself, however, as the Minister instructed him to withdraw his troops ten miles inland to the town of Tejería.  The Mexican Army’s involvement in the fight thus almost immediately ended, with the bulk of resistance over the next few days conducted by Veracruz’s civilian residents, who had some military training and organization as a militia (the “Society of Defenders of the Port of Veracruz”) as part of a program Huerta had implemented the previous year.

That same morning, Ypiranga was sighted steaming towards the harbor and was interdicted by crew from USS Utah.  The master cooperated and provided shipping documents to the boarding team, which ironically showed that the weapons on the ship had not originated in Hamburg, but were Remingtons made in the U.S. that had been routed through Europe to evade Wilson’s embargo on arms exports to Huerta’s army.

With the Mexican Army out of the fight, one of the main sources of resistance left was from the Naval Academy, where cadets fired at the at the Americans landing at Pier Four.  They emulated the example of the niños heroiques, cadets at the Mexican military academy in Mexico City in 1847 who threw themselves to their deaths from the cliffs of Chapultepec to save the flag and avoid surrender to a previous generation of American invaders.  The cadets defending the Naval Academy in 1914 soon joined the ranks of the honored dead after fire from the guns of Fletcher’s ships silenced their resistance (enabled by Chief Boatswain John McCloy, who drove the motor launch he commanded towards the Academy, fired against it to draw a response, thus allowing the location of the defending cadets to be spotted and engaged by the ships’ guns, an act earning McCloy his second Medal of Honor).

That afternoon Admiral Fletcher cabled Washington with his first report of the landing stating that

“Mexican forces…opened fire with rifle and artillery after our seizure of the Custom House…Ypiranga arrived Veracruz two PM anchored in outer harbor and [was] notified he would not be allowed to leave port with munitions of war aboard.  Holding Custom House and section of city in vicinity of wharves and Consulate.  Casualties two PM four dead twenty wounded.”

The following day on 22 April, additional forces flowed into Veracruz with the arrival of ships and Marines from both Tampico and the Norfolk-based Atlantic Fleet, with the additional Sailors and Marines augmenting the Brigade ashore and expanding the American occupation throughout the whole city by engaging in fierce house-to-house fighting.  The famous Marine hero Smedley Butler, then a Major, described a urban battle scene not particularly different from those in which Marines would fight throughout the next century:

“The sailors who traveled openly through the streets were badly shot up, not only by Mexicans but in at least one instance by their own men, but the Marine casualties were slight.  Two of my men were killed and four or five wounded.  We Marines decided on different tactics than the sailors.  Stationing a machine gunner at one end of the street as a lookout, we advanced under cover, cutting our way through the adobe walls from one house to another with axes and picks.  We drove everybody from the houses and then climbed up on the flat roofs to wipe out the snipers.”

Meanwhile, in Washington, Secretary of State William Jennings Bryan apologized to the German government for the unlawful detention of Ypiranga.  Bryan, like President Woodrow Wilson and Navy Secretary Daniels was well known as a devout Christian with a pacifist reputation and opposition to the military adventurism of the previous Republican administrations in Latin America and the Philippines, but was ironically overseeing the violent invasion of one of the U.S.’s closest neighbors on remarkably flimsy grounds.

By 23 April Admiral Fletcher had transferred his command ashore with most of the resistance having melted away, but, according to Sweetman’s account, was unable to convince any of the local authorities to restore some form of government, as a law passed in the wake of the 1862 French invasion of Mexico made holding “office under a foreign power occupying Mexican soil” a criminal offense.  The official casualty figures by 24 April listed 126 Mexicans killed and 195 wounded (an amount probably significantly lower than the actual total, since these numbers were based only on wounded and dead recorded by local hospitals), with 17 killed and 63 wounded Americans.

Although the Naval Brigade had been reinforced and occupied virtually all of Veracruz, Admiral Fletcher was concerned that the Mexican Army was massing up to 16,000 troops in the vicinity of the city, dwarfing the number of Marines and Sailors ashore, many of whom were also needed back on ship in case of future operations at sea.  Therefore the U.S. Army’s Fifth Reinforced Brigade, commanded by Brigadier General Frederick Funston, was dispatched from the U.S. on 24 April, arriving a few days later.  After negotiating the status of the Marines, the Army troops went ashore and took responsibility for the city from the naval units in a ceremony on 30 April (the debate over who “owned” the Marines foreshadowed future arguments over task organization in a joint force.  Ultimately the Marines that were attached to Navy ships returned to their afloat commands, while the rest of the force “chopped” to Army control).  Despite significant support for a broader war with Mexico in the press and segments of Congress, Funston led an uneventful, combat-free, occupation of Veracruz for another seven months as the machinations associated with a diplomatic solution to the crisis were worked out.

Stay tuned for the third and final installment of this series, which discusses the aftermath of the occupation.

Lieutenant Commander Mark Munson is a Naval Intelligence officer currently serving on the OPNAV staff. He has previously served at Naval Special Warfare Group FOUR, the Office of Naval Intelligence, and onboard USS Essex (LHD 2).  The views expressed are solely those of the author and do not reflect the official viewpoints or policies of the Department of Defense or the US Government.