12. When It Comes to National Defense, It’s More than Size that Matters

12. When It Comes to National Defense, It’s More than Size that Matters

In the debate over whether or not China will soon rise to challenge the United States as the world’s hegemon, it is often assumed that states with large aggregate economies are necessarily more militarily powerful ones. This assumption is then used to argue that the West, and the United States in particular, must support the status quo of a large state—in this case the United States—that can act to balance the power of the Chinese state.

This framework of bigger-is-always-better stems from decades-old methods that remain popular among scholars and pundits who write on international relations and foreign policy.

The theory goes like this: regimes in states with economies with a large gross domestic product (GDP) have more access to resources. This means more access to weapons, food, personnel, and a variety of other resources necessary to carry out military operations or project power in the international sphere.

Consequently, theorists in international relations have long used the GDP (gross domestic product) and similar measures—such as the Composite Index of National Capability—as proxy measures for a state’s power.1

The widespread use of these methods has led many to compare nations’ foreign policy prowess based on aggregate measures. Nowadays, for example, it is common to hear how China, which has a GDP approaching that of the United States—is now a peer nation in terms of foreign policy and war-making power.

But this can be misleading. Aggregate measures are less useful than many imagine.

Certainly, GDP obviously has something to do with a state’s ability to project power. It is, after all, a measure of production, and societies that can produce a large quantity of goods and services can presumably produce a large amount of weaponry while supplying large armies.

But measuring military capability isn’t really this straightforward. Aggregate wealth measures like GDP cannot account for differences in the net wealth that a society enjoys. It is net wealth that really demonstrates a nation’s power when it comes to international relations. Once we take these differences into account, we soon find that many large middle-income countries assumed to be very militarily powerful—a current example being China, of course—are not as powerful as assumed.

The Importance of Net Wealth and “Disposable Surplus”

Regimes in states with large populations usually have access to large amounts of resources. China and India, for example, are both among the top ten nations in terms of GDP. At first glance we might conclude that, in military terms, these states can therefore easily compare favorably against states with smaller economies and smaller aggregate GDPs. But there’s much more to the equation than that. In many cases, a country’s large output is due largely to its sizable population and not its economic efficiency or productivity. In a 2018 article in International Security, political scientist Michael Beckley explained why a big population isn’t always an asset for a state that desires to increase its power in the international sphere:

A big population is obviously an important power asset. Luxembourg, for example, will never be a great power, because its workforce is a blip in world markets and its army is smaller than Cleveland’s police department. A big population, however, is no guarantee of great power status, because people both produce and consume resources; 1 billion peasants will produce immense output, but they also will consume most of that output on the spot, leaving few resources left over to buy global influence or build a powerful military.

To rank among the most powerful nations in the world, a state needs to amass a large stock of resources, and to do that a state must be big and efficient. It must produce high output at low costs. It must not only mobilize vast inputs, but also produce significant output per unit of input. In short, a nation’s power stems not from its gross resources, but from its net resources—the resources left over after subtracting costs.2

The relative scarcity of net resources limits a state’s ability to extract resources from the population for military purposes. While a state can theoretically starve a population—up to a point—in pursuit of military goals, this also presents significant political problems in terms of internal political resistance. Moreover, a starving population—or even an impoverished one—is not known for its efficiency in producing well-trained troops and high-quality military hardware.

Along these lines, Klaus Knorr, in his book The War Potential of Nations, points out that a state’s control over some factors necessary for war making is decidedly limited. Variables like “minimum civilian consumption,” “output of productive reserves,” and “labor productivity” cannot be changed much via government fiat.3 These are limitations on state power. For Knorr, what matters is a state’s “disposable surplus,” or the amount of resources above and beyond what is necessary to maintain a politically acceptable standard of living for the bulk of the population.

We can see that a state from a nation with a relatively wealthy population, highly productive workers, and a standard of living far above subsistence is less limiting for state policy than a relatively unproductive workforce that lives closer to a subsistence level.

Nonetheless, international relations scholars have for decades focused primarily on aggregate resource totals. This has led to a reliance on GDP and the Composite Index of National Capability (CINC), which combines data on population, urban population, troop totals, military spending, iron and steel production, and energy consumption.

Why Do Smaller States Beat Larger States?

Beckley provides several examples of how these aggregate measures have failed to explain why smaller, richer countries often outperform much larger countries in international conflicts.

For example, why did China repeatedly lose to Britain in the Opium Wars during the nineteenth century? China had a much larger GDP than Britain at this time, and indeed, Britain never overtook China in terms of GDP. Although the CINC measure suggests a British advantage for the period, the advantage was by no means overwhelming. Yet Britain repeatedly devastated China in a series of military conflicts.

Nor can aggregate measures explain why Japan repeatedly humiliated China during the late nineteenth and early twentieth centuries. During this period—as today—China’s GDP was far larger than Japan’s. The CINC measure for the period shows an even bigger advantage for China against Japan. But Japan repeatedly prevailed.

Aggregate measures also fail to explain how Germany handily defeated Russia on the eastern front during the First World War. On paper, in terms of GDP, Germany and Russia were nearly evenly matched. According to the CINC measure, Russia held the advantage. But Germany overwhelmed the Russian Empire during the war, and the Russian regime collapsed soon after.

To see the questionable explanatory power of aggregate measures in a “cold war,” we need look no further than the conflict between the Soviet Union and the United States. Although the US held an advantage in GDP in the 1970s and 1980s, the CINC for that period indicates a Soviet advantage. By the 1970s, the Soviet Union was the world leader in terms of army size and military research and development. Moreover, “the chief analyst of the Soviet Union in the US Central Intelligence Agency…concluded that the Soviet Union was twice as powerful as the United States, and rising.”4

Although the Soviet Union had a larger population than the US and was three times the physical size of the US, the Soviet Union essentially surrendered to the US in the Cold War in 1990.

In these cases we find that countries with smaller economies and smaller populations are often, in fact, the more powerful states in interstate conflicts. It is the more productive, well-organized, and wealthier nations that hold the advantage. The CINC measure distorts reality in modern times as well. As Beckley notes, if we used the CINC as a gauge of global power, we would conclude that:

Israel is, and has always been, one of the weakest countries in the Middle East; Singapore is one of the weakest in Southeast Asia; Brazil dominates South America with roughly five times the power resources of any other state; Russia dominated Europe throughout the 1990s, with more power resources than Germany, France, and the United Kingdom combined; and China has dominated the world since 1996 and currently has twice the power resources of the United States.5

Obviously, none of these scenarios are true in real life.

Measuring Foreign Policy Power More Accurately

Much of the problem in describing relative power in these cases stems from the fact that GDP and CINC exaggerate population as an advantage. Rather, it would be better to come up with a formula that takes a more realistic view of the relative importance of both wealth and population size. But how can we measure this?

In this, Beckley takes a cue from Swiss economic historian Paul Bairoch, who suggested that the “strength of a nation could be found in a formula combining per capita and total GDP.”6

Why use GDP per capita? The reason for this can be found in the fact that GDP per capita is a fairly reliable proxy for economic development. More developed nations are better at many things that make a state more likely to win in military power and power projection. Developed economies have more efficient workers, more reliable technology, more durable materials, more technically skilled soldiers, etc. More developed countries are also able to produce large amounts of weaponry without devastating drops in the population’s standard of living. In other words, highly developed societies are more efficient.

So, it’s not enough to look to measures that are heavily influenced by total population size. Beckley explains how incorporating GDP per capita into measures of power is important in putting total population size into proper perspective:

Dividing GDP by population controls for some of the costs that make the difference between a state’s gross and net resources. Combining GDP with GDP per capita thus yields an indicator that accounts for size and efficiency, the two main dimensions of net resources.

To create a rough proxy for net resources, I follow Bairoch’s advice by simply multiplying GDP by GDP per capita, creating an index that gives equal weight to a nation’s gross output and its output per person. This two-variable index obviously does not measure net resources directly, nor does it resolve all of the shortcomings of GDP and CINC. By penalizing population, however, it provides a better sense of a nation’s net resources than GDP, CINC, or other gross indicators alone.7

 With this method, it becomes more clear why comparatively smaller, less populous, less militarized countries (i.e., Britain in the nineteenth century) have so often prevailed against states that rule over larger economies and larger populations.

This is, of course, relevant to modern comparisons between China and the United States. If we look at 2020’s nominal GDP totals, we find that China’s GDP is approaching that of the United States. China’s GDP is 70 percent the size of the US’s GDP, and the second largest in the world. The US comes in at $20 trillion while China’s GDP is $14 trillion.8

This would seem to make China a fairly even match for the United States, especially when fighting on its own turf. Moreover, the CINC measure, using the most recent index data—for 2007—shows China has an advantage. According to the Correlates of War Project, China’s CINC index value is 0.19, but the US’s value is only 0.14.9

But what about GDP per capita? According to the International Monetary Fund, per capita GDP in the United States in 2020 was $63,051. In China, per capita GDP was $17,206. That’s only 27 percent the size of the US measure.

If we use Beckley’s formula and “simply multipl[y] GDP by GDP per capita,” we find that China’s advantage disappears. By this measure, the US’s power is more than three times that of China.10  Although much is made of the US regime’s debt and the declining relative power, the fact is China suffers from all the same economic ailments the US does but without the high levels of worker productivity and without America’s dozens of economic allies worldwide.

What If the Red States and Blue States Split Up?

This debate over whether or not “bigger is better” has much relevance to the debate over secession in the United States. China certainly isn’t the only country that matters as far as American international relations are concerned. But it is likely to be held up as the great bogeyman and the reason for why secessionists must never be allowed to succeed. So, even if we illustrate—as we do above—that the United States in its current form holds a sizable advantage over a more resource-starved China, how would things look if the US were to break up into smaller pieces?

We could play out many different scenarios, of course, but just as one of many potential thought experiments, let’s assume the United States devolves into only two new countries: the Blue States of America (BSA) and the Red States of America (RSA).

These two new countries are composed of the following states:

Red (27 states): Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming.

Blue (23 states, plus DC): California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin.

As American leftists are often happy to point out, blue America—at least in the aggregate—is richer than red America. This is largely due to the presence of a large number of big, productive cities in the blue states. As a result, the BSA (Blue-State America) contains most of the USA’s current $21 trillion GDP: $12.3 trillion. The BSA contains 170 million residents, for an overall per capita GDP of $73,000.

In the RSA (Red-State America), these numbers are smaller. In the 27 states, total GDP is $8.9 trillion, spread out over a population of 158 million. The GDP per capita is $56,000.

In terms of economic power, both of these new countries remain near the top of the heap. The BSA, of course, has a per capita GDP among the highest in the world, right behind Ireland, and ahead of Switzerland. The total GDP for the BSA is behind only the EU and China, and larger than those of India, Japan, and Germany.

In the RSA, the per capita GDP puts it well within the company of wealthy nations. At $56,000, it’s right between Austria and the Netherlands. Total GDP, although behind that of the BSA, is about equal to India’s, and remains larger than those of Japan, Germany, and all the rest.

Using the Beckley-Bairoch approach, we find that the relative military power in both the BSA and the RSA is still larger than that of the Chinese regime. Naturally, neither has the total military resources of the United States as a whole, but great wealth goes a long way in either case.

This is just a very basic calculation, but it’s easy to see how successor states to the US would retain advantages over China even if the US broke up into several smaller pieces. China would still have all the usual troubles in its own backyard. No matter how many new pieces the United States might devolve into, the fact remains that North America is insulated from Asia and Europe by two oceans. In China, meanwhile, the regime:

does not devote all, and perhaps not even a majority, of its military resources to contingencies involving the United States. China shares sea or land borders with nineteen countries, five of which fought wars against China within the last century; its northern and western borders are porous and populated by disaffected minority groups; and its government faces a constant threat of domestic rebellion. As a result, the People’s Liberation Army (PLA) devotes substantial resources to internal security and requires 300,000 troops just to police China’s borders….In a separate study, I found that developing countries systematically fail at warfare, regardless of the size of their defense budgets, because they lack the economic capacity to maintain, modernize, and integrate individual technologies into cohesive military systems.11

Sovereign States, but Allies Too

 We’ve been assuming so far, however, that these post secession states in North America would have to each face China independently in case of a clash. This, however, is not a good assumption. It is not at all a given that these independent states would shun the idea of mutual defense. In fact, experience suggests the opposite. This is apparent even to those who are not exactly entrenched advocates for secession. As noted by Eric Sammons at the conservative Crisis Magazine:

Foreign policy presents another challenge for an American secession movement. Secession opponents fear weakening American hegemony across the world. Would a divided America result in greater global influence for China or Russia? Would it lead to a possible invasion by those countries?

It’s impossible to say for sure, but there is no reason that a divided America could not remain a confederation of allies when it comes to military defense. An attack on any one new American nation-state could be considered an attack on all nation-states.12

 This observation that a NATO-like institution for North America could easily arise should be obvious to anyone who’s noticed that countries with similar backgrounds—think Canada, the USA, Australia, and the UK—have been generally united on foreign policy for over a century now.

In spite of this, it’s not uncommon to hear claims that neighboring states are all poised to go to war with each other at any given moment. This, we are told, would be the natural outcome if the United States allows any portion of the nation to become independent. These anti-secessionists often point to examples like the Yugoslav wars and claim ethnic cleansing is on the horizon. But North America isn’t southeastern Europe. In the case of North America, we’d be dealing with countries that share a common language, a high standard of living—and thus much to lose from an internecine war—and have deep and extensive trade relations.

Moreover, if one is going to claim that two nations with such similar backgrounds are bound to go to war, one will need to explain why Canada has been at peace with the United States for 206 years. Conceivably, one might claim this is only because Canada was too small to challenge the US. But this ignores the fact that Canadian foreign policy was set by Britain—a world power and peer of the US—until 1931.13 Yet, in all those years after the War of 1812, during which the British state shared both extensive land and maritime borders with the US through British Canadian domains, London was apparently uninterested in war with the US.

However, we’re expected to believe that if the United States were to break into smaller independent states, the “Blue States of America” will welcome a Chinese invasion of, say, Tampa Bay just to stick it to the red states. This may seem plausible to more paranoid anti-China Cold Warriors who seem to believe every left-of-center American is an agent of Beijing. But the Tampa Bay scenario is about as likely as Canada asking the People’s Liberation Army to invade Boston.

Conclusion

The importance of looking beyond aggregate measures of military power naturally extends beyond the relationship between the US and China. We find similar situations when we use the Beckley method to look at European states’ power relative to Russia. Russia’s GDP per capita, for example, is only about half that of Germany, and when we compare the two states by combining GDP and GDP per capita, Germany’s military efficiency is five times that of Russia. Combining Germany’s potential military power with that of other European states, like France or the UK, Russia remains far, far behind its supposed western European adversaries.

Obviously, no single measure can provide a complete picture of the many factors relevant to analyzing the relative power of states. Yet pundits and scholars who comment on international relations have for too long relied on crude aggregate measures which suggest far higher levels of relative military power than is likely in cases like Russia and China, or even India, Brazil, and many Arab states. This isn’t to say that states like China or Russia are irrelevant. Their sizable conventional militaries mean they can indeed project power onto their immediate neighbors, just as the US can. But it is not the case that large, populous states hold all the cards. Economic development—which, we know, tends to be more developed in smaller and more decentralized states—is likely a more critical factor.

  • 1For more on the Composite Indicator of National Capability, see The Correlates of War Project, https://correlatesofwar.org/data-sets/national-material-capabilities.
  • 2Michael Beckley, “The Power of Nations: Measuring What Matters,” International Security 43, no. 2 (Fall 2018): 14, https://doi.org/10.1162/ISEC_a_ 00328. Klaus Knorr, The War Potential of Nations (Princeton, N.J.: Princeton University Press, 1956), pp. 231–32.
  • 3Klaus Knorr, The War Potential of Nations (Princeton, N.J.: Princeton University Press, 1956), pp. 231–32.
  • 4Beckley, “The Power of Nations,” p. 33.
  • 5Ibid., p. 41.
  • 6Paul Bairoch, “Europe’s Gross National Product: 1800–1975,” Journal of European Economic History 5, no. 2 (Fall 1976): 282.
  • 7Beckley, “The Power of Nations,” p. 19.
  • 8If we consider purchasing power parity, China GDP is slightly larger than that of the US.
  • 9The Correlates of War Project.
  • 10This incorporates purchasing power parity into GDP and GDP per capita comparisons. If nominal values are used, the US is five times as powerful as China under the GDPxGDP per capita calculation.
  • 11Michael Beckley, “China’s Century?” International Security 36, no. 3 (Winter 2011/12): 41–78.
  • 12Eric Sammons, “The Catholic Case for Secession?” Crisis Magazine, December 23, 2020, https://www.crisismagazine.com/2020/the-catholic-case-for-secession.
  • 13The British Parliament passed the Statute of Westminster in 1931, effectively granting de jure sovereignty to Canada.