Go Luxemburg!

According to Michael Beckley, the United States should be deeply concerned about the power-political position of Luxemburg, Denmark, Switzerland, and others. Okay, not really. But that’s the implication of Beckley’s top-line response to Erik Voeten’s dissection of his recent article in International Security.

Normally economic growth rates dovetail with changes in wealth gaps. But these measures often diverge when comparing a rich country like the United States to a poor one like China. 

Since 1991, China’s per capita income rose 11 percent annually while America’s rose 3.5 percent annually. But 11 percent of $900 (China’s per capita income in 1991) is less than 3.5 percent of $24,000, the United States’ per capita income for that year. As a result, the average Chinese citizen is $17,000 poorer compared with the average American today than he was in 1991.

There’s a reason the United States doesn’t worry about Luxemburg revisionism; although the country’s 2011 average income of $84K (PPP) places it second in the world (the United States is seventh), its total GDP (PPP) of $41,271M is well below that of the United States, which weighs in at a hefty $15,065,000M. In consequence, the US enjoys a significantly higher tax base to convert into military hardware and logistics than does Luxemburg — rendering the former the most powerful country in global history and the latter a very nice place to be a banker.

Contra Beckley, the point of comparing growth rates (in these debates) is to get some sense of the distribution of total wealth in coming years. Insisting, as Beckley does, that relative growth rates are irrelevant because they “compare countries to their former selves” strikes me as deliberately obtuse. We look at relative growth rates in conjunction with existing wealth — which is why Washington worries about future Chinese capabilities much more than it does that of Uzbekistan.
Of course we can “imagine,” as Beckley suggests, reasons why having a higher per-capita income might be useful when it comes to converting resources into military power. But we can also “imagine” reasons why having a low per-capita income makes it cheaper to develop, build, and field military forces. Moreover, there’s something deeply wrong with this line of argument. China’s middle class numbers roughly 250 million people. The entire population of the United States is about 307 million. There are a host of reasons why China should be concerned about a population of urban poor and peasants that numbers around 750 million, but I’m pretty confident that the impact of per-capita GDP on military capabilities isn’t one of them. 
I agree with Beckley that the United States enjoys a host of advantages in innovation and technology — and particularly military technology — that, in conjunction with its total wealth, global alliances, and other factors will keep it hovering around the top of the global power hierarchy for a great while longer.   But even if China isn’t able to close the innovation gap, it still has access to enough cutting-edge technology to produce perfectly serviceable ships, planes, tanks, missiles, and the like. And it is worth keeping in mind that the US and the USSR defeated Germany in World War II despite the Third Reich’s ability to field more sophisticated military technology. 
At the end of the day, Beckley’s argument strikes me as an example of the “if you squint hard enough” syndrome. Yes, there are a variety of factors that give the United States an advantage over would-be peer competitors. And yes, US relative decline has been profoundly overstated by some participants in these kinds of discussions. Yet if China — as an aggregate entity — continues to become wealthier relative to the United States, we should expect it to be able to acquire an awful lot of stuff relevant to military power… whether tanks, satellites, and aerial refueling capabilities, or a large highly-educated workforce and cutting-edge technology. Countries such as Denmark and Luxemburg? Not so much.
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