John Maynard Keynes and his followers famously maintained that government spending helped the economy, even if it was intrinsically unproductive, with such devices as paying people to dig holes and fill them in again. Few economists believe this nonsense any more, and in many spheres even politicians have been gradually weaned off the Keynesian doctrine.
But one big-spending bastion remains untouched: the military. Successive Australian governments have protected the Defence Department from any expenditure restraint, even when other spending was being cut. And the pattern continued yesterday with the prime minister’s launch of “Defence Update 2005,” including a $1.5 billion expansion of the army.
The Australian editorialises strongly in favour of the build-up, saying that “it is hard to make any case against the announcement of a bigger, and better armoured, army.” Some of its arguments could almost be taken as self-parody, such as “the fact that we have not deployed a full combat battalion to Iraq is … disgraceful.”
A note of caution is sounded on the op-ed page by Paul Dibb, former deputy secretary of defence and one of the last people who could be described as anti-militarist. And indeed he is all in favour of throwing more money at the military, but he worries that the government has provided “no real strategic guidance for force structure priorities.”
“If we are not careful, this will produce a one-shot ADF that will leave nothing left over once we have protected such a small and vulnerable force. Where are we going to use this capability? Army admits that it will not be able to mount an opposed landing against a capable enemy. So, just what is its purpose?”
But this sort of questioning misses the point. For a government department, spending is not a means to some purpose, it’s an end in itself. Bureaucrats get increased prestige, bigger toys, more subordinates. The fact that from the taxpayer’s point of view the money might just as well be poured down the drain is neither here nor there. Keynesianism still lives.