Tag: free riding

Law of the Sea Treaty: A Tool to Combat Iran, China, and Russia?

Every few years, the Law of the Sea Treaty rears its head as a one-size-fits-all solution to a host of current maritime problems. This time, Secretary of Defense Leon Panetta and General Martin Dempsey, chairman of the Join Chiefs of Staff, are urging the Senate to ratify the treaty. The officials claim it will act as a tool to deal with aggressive actions by Iran, China, and Russia. But as I have long argued, no matter the current rationale for the treaty, it represents a bad deal for the United States.

Panetta and Dempsey rolled out three hot issues to make their case:

  • Iran is threatening the world economy in the Strait of Hormuz? The Law of the Sea Treaty (LOST) will help solve this.
  • China is threatening the Philippines in the South China Sea? LOST is a crucial tool to prevent war.
  • Russia is claiming land in the Arctic region to extract natural resources? LOST will put the screws to Moscow.

These international controversies will be magically resolved if only the Senate ratifies the convention.

If this sounds too good to be true, it is. It is not clear the treaty would do much at all to alleviate these flashpoints. Especially since the two most important potential antagonists, China and Russia, already have ratified LOST. And it is certainly not the best option policy-wise for the United States with each issue: Iran’s bluster in the Strait of Hormuz may prove its weakness. U.S. policy in the South China Sea suffers from a far more serious flaw: encouraging free-riding by allied states. Russia’s move into the Arctic has nothing to do with Washington’s absence from LOST.

The treaty itself, not substantially altered since 1994, is still plagued by the same problems that have halted its ratification for decades. Primarily, it will cede decisionmaking on seabed and maritime issues to a large, complex, unwieldy bureaucracy that will be funded heavily by—wait for it—the Untied States.

On national security, the U.S. Navy does not need such a treaty to operate freely. Its power relative to all other navies is the ultimate guarantee. Serious maritime challengers do not exist today. Russia’s navy is a rusted relic; China has yet to develop capabilities that come close to matching ours. Moreover, it is doubtful that the United States needs to defend countries such as the Philippines when flashpoints over islands in the region affect no vital American interests.

The average American knows very little about this treaty, and rightly so. It is an unnecessarily complicated and entangling concoction that accomplishes little that the longstanding body of customary international law on the high-seas or the dynamics of markets do not account for. My conclusion in testimony before the Senate Committee on Armed Services in 2004 still holds true:

All in all, the LOST remains captive to its collectivist and redistributionist origins. It is a bad agreement, one that cannot be fixed without abandoning its philosophical presupposition that the seabed is the common heritage of the world’s politicians and their agents, the Authority and Enterprise. The issue is not just abstract philosophical principle, but very real American interests, including national security. For these reasons, the Senate should reject the treaty.

Obama-Lee Summit: Time for New Thinking on the Korean Peninsula

Three issues are likely to dominate the talks this week between President Obama and South Korean President Lee Myung-bak. On the economic front, the two leaders will emphasize the extensive potential benefits of the bilateral free trade agreement.

On the security front, there will be considerable discussion of both North Korea’s nuclear-weapons program and the future of the U.S.-South Korean alliance. Unfortunately, leaders of the two countries are locked into increasingly obsolete and dysfunctional policies with respect to both issues. New thinking on those security matters is badly needed.

Seoul and Washington routinely contend that they will not tolerate North Korea having a nuclear arsenal. But other than the long-standing attempt to isolate Pyongyang internationally, U.S. and South Korean officials present no plausible strategy for preventing Kim Jong-il’s regime from expanding its nuclear capabilities. The much-touted six-party talks clearly have not worked. Moreover, without China’s active cooperation to deny crucial food and energy aid to North Korea (and there is no indication that Beijing is willing to take that step), North Korea cannot be truly isolated. Obama and Lee need to consider the possibility of learning to live with a nuclear North Korea, since the current U.S.-South Korean strategy for dealing with the nuclear issue is hopelessly ineffectual.

Policy regarding the bilateral security alliance is no better. Predictably, Lee and Obama will reaffirm the importance of that alliance. But from the standpoint of American interests, this commitment makes little sense. The principal effect of Washington’s security blanket for South Korea is to enable that country to shamelessly free-ride on America’s military exertions. Despite being located next to perhaps the most dangerous and unpredictable country in the world—Kim Jong-il’s North Korea—South Korea continues to spend an anemic 2.5 percent of its gross domestic product on defense. That is woefully inadequate, and the only reason Seoul can get away with such irresponsible behavior is that South Korean leaders believe they can rely on the United States to take care of their country’s security—at the expense of American taxpayers.

That arrangement was dubious even when South Korea was a weak, traumatized country facing a North Korea strongly backed by both the Soviet Union and Communist China. Today, South Korea is a wealthy country, and Moscow and Beijing regard North Korea as an embarrassment, not a crucial ally.

President Obama should inform Lee that an America whose government is hemorrhaging red ink at the rate of $1.5 trillion a year can no longer afford to subsidize the defense of free-riding allies—especially those that are perfectly capable of providing for their own defense. This summit meeting creates an opportunity for Washington to begin phasing-out the obsolete military alliance with South Korea.

Panetta’s Obligatory Warning to NATO on Military Spending Will Accomplish Nothing

On Wednesday, Defense Secretary Leon Panetta issued a warning to NATO allies that reducing military spending on both sides of the Atlantic will risk “hollowing out” the alliance’s capabilities. Panetta implied that Europeans cannot continue to rely on the United States for their security. Following former defense secretary Robert Gates’s comments in June, Panetta joins the long list of U.S. presidents, secretaries of defense and state, and innumerable lower-level officials who have pleaded with Europe to pick up the slack on military spending, provide for their own security, and close the gap in capabilities.

But Secretary Panetta’s speech also praised NATO for the mission in Libya and he extolled Europe’s leadership in the campaign: “The alliance achieved more burden-sharing between the U.S. and Europe than we have in the past…on a mission that was in the vital interest of our European allies.”

Relative to past NATO operations, it may be true that Europe contributed more in this instance. But this ignores the fact that the mission would not have been possible without the unique capabilities of the U.S. military. As Justin Logan pointed out, the Europeans quickly ran out of munitions and relied on the United States to conduct air strikes. “Thus, Washington essentially borrowed money from China to buy ordnance to give to Europe to drop on Libya.”

Panetta’s finger-wagging will do little to alter the incentive structure European states confront when determining what they should spend on defense. As I explain in an article recently published at Big Peace, until the United States takes concrete steps to force Europeans to spend more for their security, they will continue to free-ride on the U.S. taxpayers’ dime.

Cutting the Pentagon’s budget without imposing additional burdens on our troops requires getting our allies to do more. That is unlikely to happen unless U.S. officials, beginning with Secretary Panetta, force the issue. Unfortunately, he is merely one of many in Washington who seem to forget how incentives work:

Those who simply assume that others would not do more to defend themselves and their interests often ignore the extent to which U.S. actions have discouraged them from doing so. Just as some welfare recipients are often disinclined to look for work, foreign countries on the generous American security dole do not see a need to obtain military power. Our great power, and our willingness to use it, even when our own interests are not at stake, has allowed others to ignore possible threats, always confident that the United States will be there to rescue them.

The Obama administration’s rhetoric merely reinforces this message. The National Security Strategy, published in May 2010, declares “There should be no doubt: the United States of America will continue to underwrite global security.” Taking their cue, U.S. allies have proved understandably disinterested in military spending.

Despite Panetta’s pleas, U.S. strategy—and NATO’s very existence—allows this free-riding to continue. The Libya operation appears to have reinforced these destructive tendencies. If Washington really wants our allies to spend more to defend themselves and their vital interests, U.S. officials must jettison their reflexive attachment to the NATO alliance, an organization that has been irrelevant to U.S. vital security interests for at least two decades.

Secretary Panetta understands the United States is dealing with its own fiscal problems, but he has missed a perfect opportunity to offload a share of our burdens on to our rich allies.

Pawlenty Understands Incentives, Except When It Comes to Defense

Former Minnesota governor Tim Pawlenty’s brief visit to Cato yesterday elicited some snide commentary in the blogosphere, especially this piece by the Huffington Post’s Jon Ward. Ward notes how the just-declared presidential candidate has been pretty adept at annoying audiences with his answers to questions. This one rankled the questioner, and a number of others in the auditorium.

I’m not one who is going to stand before you and say we should cut the defense budget.

[…]

I’m not for shrinking America’s presence in the world. I’m for making sure that America remains the world leader, not becoming second or third or fourth in the list.

One can sort of forgive a governor for not knowing much about foreign policy, although governors who aspire to be president should probably know that the U.S. government could cut military spending in half and still spend more than our next two potential rivals, combined.

The average governor, however, should know that people don’t feel obligated to pay for things that you are willing to give them for free. And Pawlenty does understand this when it comes to domestic spending. Check out his comments about the difference between a cash bar and an open bar at a wedding reception, via the Daily Caller:

If people have the impression that things are free, and they get to consume it endlessly, and the provider has the only incentive to provide on volume, and the myth or the lie is created that the bill goes somewhere else and that a third party pays for it, that is a system that I can tell you is doomed to failure and inefficiency. And that’s much of our government, unfortunately.

But the same principle applies in military spending. Our European and East Asian allies are consumers of the security provided by the U.S. military, and all Americans are the third party payers. As my colleague Ben Friedman likes to say, we agree to defend our allies, and they agree to let us. We shouldn’t blame them for under-providing for their own defense; it’s our fault for agreeing to do it for them.

Cato President and Founder Ed Crane’s quick take on Pawlenty’s view on defense military spending is worth repeating:

There is a difference between military spending and defense spending. The Constitution provides for a military to defend the U.S—not to democratize the world. One would hope that presidential candidates would consider America’s commitments overseas very seriously before endorsing those commitments.

Cato scholars have been out in front for years making the case for a principled, constitutional view of “defense” that does not include defending others who can and should defend themselves. If we adopted a strategy of restraint, we could responsibly make significant cuts in military spending, deliver the savings to American taxpayers, and remain the safest and most secure country on the planet. Yesterday, Tim Pawlenty took the opposite tack. He argued that the U.S. military should continue to serve as the world’s policeman/armed social worker, allow other countries to free ride, and require U.S. taxpayers to foot the bill.

Although that might be popular elsewhere in Washington, I can’t imagine it will sell in Cedar Rapids, Iowa, or Manchester, New Hampshire.