Non-Scary Scare Stories About Pentagon Budget Cuts

Is it really true that defense department R&D plays a crucial role in the American economy?

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It's a challenging time to be a champion of the military industrial complex. With the Iraq war just over and the Afghanistan war ongoing, what do you say when people start talking about cutting the defense budget--that cuts would compromise our ability to keep launching disastrous wars?

No! You say that the Pentagon is a crucial cog in the research-and-development wheel that keeps our nation's economy rolling. Or, better yet, you get the New York Times to say it. The Times reported in a front-page story yesterday that the Pentagon has an "unmatched record in developing technologies with broad public benefits..."

The story doesn't quote an expert saying this; it just asserts it as fact. Which would be OK if the story went on to provide compelling evidence. But in backing up its claim that the Pentagon research budget has "a remarkable record of success," the Times provides evidence such as this: "The Navy, which started budgeting for research in 1946, counts 59 eventual Nobel laureates among the recipients of its financing."

Nobel laureates were getting cranked out at exactly the same rate before 1946 as after. So weren't we taxpayers getting a better deal before 1946, when they did their Nobel-worthy work without our help?

But wait. The Times story includes a specific example. Those Nobel laureates include "Charles H. Townes, whose pioneering work in the development of lasers laid the groundwork for compact discs and laser eye surgery."

I don't know anything about Charles H. Townes, but if he's a Nobel Laureate who laid the groundwork for compact discs and laser eye surgery, here's my guess: Even if he had never gotten whatever DOD support he got, he would have done something pretty productive with his mind. He might, for example, have done research in the private sector, maybe starting his own company or going to work for one.

To be sure, there are differences between private-sector R&D and defense department R&D. Private sector R&D focuses on things there is a commercial demand for. So in the private sector you might find support for research leading to, say, compact disks and laser eye surgery; or to other products and services that people value highly.

Defense department research, in contrast, focuses on services that people are more ambivalent about--like getting blown up. If more benign services get developed in the process--like if blowing people up involves technologies that help them play digital music--that's a happy accident. So it's far from clear that, however many anecdotes there are about Department of Defense spinoff technologies, DOD expenditures were the most efficient path to them.

A translation of the Charles Townes story into economic terms might go something like this: If we cut defense spending it's not as if the dollars we would have spent disappear; they go various other places--some of them go into commercial R&D, some of them go into consumption (which people seem to like), and so on. And it's not as if the human resources those dollars would have supported just dry up and blow away; they get put to a different use.

Whether, on balance, this redeployment of financial and human resources leads to more valuable goods and services going to more Americans is a difficult question. To answer it, you have to ask not only the question I've asked--what becomes of a Charles Townes who never gets Pentagon funding--but lots of others, such as: For all the Charles Townes anecdotes, how many anecdotes are there that the Pentagon refrains from sharing with the New York Times, such as stories about Pentagon funding recipients who had thoroughly lackluster  careers?

There are scholars who actually study the relative benefits of different kinds of research. The Times article cites some of this research toward the end. What's weird is that both studies cited show that defense research spending provides fewer benefits than other kinds of government research spending. In other words, the only real quantitative data cited in the story tends to deflate the story's premise.  

I'm not saying this is an open and shut case. The New York Times story does allude to other evidence in support of Pentagon spending that, though anecdotal, is worth considering (in particular the famous example of the creation of the Internet). I'll be considering such evidence in this space in the coming days or weeks. Meanwhile, my reading of this piece leaves me where I was before I read it: deeply unconcerned about coming cuts in the Pentagon budget.

[Footnote: After I drafted this post but before I published it, I came across this post by Cliff Bob from the excellent blog Duck of Minerva. He shares my opinion of the Times piece, and in analytical terms his post encompasses my argument and goes beyond it.]