Asia, Economic Stimulus and Military Spending

Joe Hung has an interesting piece in the China Post about the possibility that Japan, spurred by recent provocations from North Korea as well as a desire to inject fiscal stimulus into its flagging economy, might begin throwing off some of the chains that constrain its military development.

The piece is heavy with baggage from the era of Japanese expansion during the Depression and Second World War, and as such strikes a bit of a discordant note to Western ears; however, the political and economic discourse of this economic crisis has been heavy with references to the experiences of the 1930s. In the United States, where the Depression was experienced as a deflationary spiral that spawned unemployment and breadlines but little political instability, those recollections have focused the debate around Keynesian economics and the expansion of the social safety net. In Germany, where hyper-inflation and political instability propelled Hitler to power (and the Nazis’ subsequent economic stimulus kept him there), priorities are different. Numerous news outlets have noted how these different historical experiences have helped shape each government’s response to the current mess, causing friction at a time when unanimity is paramount.

Well, the experience of the 1930s in Asia was of a militarized and imperialist Japan that wrought war and havoc across much of the continent. It ought to be no more surprising to see these parallels get drawn than it is to hear people in the United States talk about the Smoot-Hawley tariff. Still, I think they’re overblown. People have been predicting that Japan would begin rearming for decades. Its leadership since the War has been basically conservative, and there have always been nationalist elements in Japanese political discourse that would seem to point toward a “normalization” of Japan’s military role. That said, there are still large elements of the Japanese population that revere the “no war” clause of the country’s constitution, and previous efforts to stick Japan’s toes into the waters of international security politics have been extremely controversial. All that to say that if and when Japan reevaluates its military stance, it will happen because of real security concerns and generational political evolution at home, not as a knee-jerk response to an economic crisis.

Finally, this touches on the larger issue of military spending as economic stimulus. Clearly, if Keynes is to be believed, the government simply needs to pump money into the economy at a time like this, avenue be damned. He famously said that the government could bury money in the ground and then pay workers to dig it up and get the desired effect. Still, anyone with a basic command of economics knows there is good stimulus and less-good stimulus. Good stimulus spending a) creates jobs and b) is targeted in a way that will aid in the long-term growth of an economy. Military spending helps with some of that (defense R&D for example often proves useful in the private sector), but it’s hardly the most efficient. Most of the time, a tank just drives around or, with bad luck, gets blown up. It doesn’t create wealth. I haven’t seen many signs that Japan is ready to rearm on its own merits. I doubt the dubious economic benefits will push it too far in that direction.