Governments always look for an excuse to expand power. And General Douglas MacArthur was right, government always try to keep “us in a continuous stampede of patriotic fervor -with the cry of grave national emergency” by conjuring “terrible evil at home, or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it”
The geopolitical tensions over Spratlys Island have prompted the Philippine government to shop for arms, according to yesterday’s news.
From the Philippine Daily Inquirer,
Amid increasing concern over renewed tensions in the South China Sea, the Philippine Embassy here is shopping for excess defense equipment from the United States under Washington’s Foreign Military Sales (FMS) program.
Jose L. Cuisia Jr., the Philippine ambassador to the US, said he has asked the Department of National Defense and Armed Forces back home to provide him with a wish list of military equipment they will need to shore up the country’s defense capability.
He said he expected the defense department to “prioritize” its modernization goals, but was careful not to explicitly link the purchase of US excess defense articles to the Philippine military’s job of securing the territorial sovereignty of the country in the face of China’s alleged intrusions into the areas of the disputed Spratlys group claimed by the Philippines
The idea that the Philippines can resolve the current dispute with China over an ‘arms race’ or by brinkmanship is not only unfeasible and anachronistic but outright ridiculous.
Unfeasible because in almost every aspect, the Armed Forces of the Philippines cannot measure up to China’s People Liberation Army in terms of numbers and in technology.
In addition, China is by far wealthier (in terms of GDP per capital) than the Philippines and thus can afford to spend more for her military services. [Google Public Domain]
Chart from Tradingeconomics.com
Considering that China has unveiled its newest stealth warplane and aircraft carrier, it would seem that no amount of nonsensical ‘arms race’ will prevent a ‘determined’ China from encroaching on Spratlys.
But this isn’t to say that China will do so.
I say anachronism too because military engagement has not been the du jour foreign policy for China.
Had she assimilated an imperialist path, Taiwan, which China claims as part of her territorial sovereignty, would have been invaded. And so with the Japanese held Senkaku Islands, which China has claims too along with the Spratlys. A similar political friction arose in Senkaku Island in 2010 following a collision between Japan’s Patrol boats and a Chinese trawler.
Yet China’s geopolitical strategy has been to expand trade and investments around the world.
Derek Scissors of Forbes magazine writes,
China's hefty investments in sub-Saharan Africa have received deserved attention, but its investment in Latin America has been overblown by some. One reason is a common event in bilateral commercial transactions--grand announcements that never come to fruition. In mid-April Venezuela proclaimed a $20 billion oil-for-loans deal with China, but Caracas' track record in this area encourages skepticism. China has little investment in the Arab world, which is perhaps surprising in light of its focus on energy, but it has sizable engineering and construction contracts there. Australia, at $30 billion, is the single biggest draw for Chinese investment. The U.S. is second at $21 billion, Iran third at $11 billion.
The places where the Chinese have invested most often are also the places where their investments have been most often thwarted: Australia, the U.S. and Iran, in that order. Failures stem from a variety of causes, such as nationalist reactions in host countries, objections by Chinese regulators and mistakes by the Chinese firms themselves. According to the Heritage tracker, the value of failed investments from 2005 to 2009 is a staggering $130 billion. Chinese investment could have been a full 40% larger than it was had the failed deals closed.
So the more appropriate action to resolve any territorial dispute should be to actively increase trade with China.
As Frederic Bastiat once said,
When goods don't cross borders, armies will
Greater trade will likely ensure an amicable or diplomatic settlement because both China and the Philippines would like to see a continuity of this mutually beneficial relationship.
And this goes back to the reason why the call for more military spending represents a war against the citizenry.
As the great Ludwig von Mises wrote,
The adequate method of providing the funds the government needs for war is, of course, taxation. Part of the funds may also be provided by borrowing from the public, the citizens. But if the Treasury increases the amount of money in circulation or borrows from the commercial banks, it inflates. Inflation can do the job for a limited time. But it is the most expensive method of financing a war; it is socially disruptive and should be avoided.
More military spending means higher taxes and risks of higher inflation. It also means redistribution of wealth from the ‘productive’ private sector to government appointed intermediaries and suppliers or non-productive capital consuming activities.
Doing so leads to lower economic growth, higher unemployment, lower investments, higher risk premium and a lower standard of living. Also this amplifies the risks of corruption.
In addition a military build-up could also extrapolate to using newly acquired weapons against the citizenry to suppress political dissent or for repression or to expand in the engagement of military conflict with local subversives.
So instead of seeking diplomatic solutions, the likely path is to have more turmoil which heightens political instability which should further weaken the economy. It's another lesson we never seem to learn.
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