Document created: 3 September 03
Air University Review, July-August 1975

Defense Policy in a World of
 Limited Resources

a look at the possibilities

Captain Chris L. Jefferies

In November 1973 the Department of Defense invoked the Defense Production Act of 1950, which gives it authority to take first priority in domestic petroleum production, to acquire 19.7 million barrels of aviation fuel. This action diverted an additional 300,000 barrels of fuel per day from domestic supply to defense needs. The diversion was taken in response to the Middle East oil embargo, which had critically limited the availability of overseas petroleum sources upon which Defense had been depending for fifty percent of its fuel needs. On 20 December 1973, however, William E. Simon, the newly appointed Energy Administrator, ordered the Department of Defense to surrender 1.5 of its 19.7 million barrels for the use of domestic airlines in their international routes. The Department of Defense protested the loss of this portion of its fuel allocation in a letter from Secretary of Defense James R. Schlesinger, claiming that it would “weaken our defense posture and leave Defense supplies almost thirty percent below the amount required for military war reserves.” 1 Under Defense pressure, Simon reduced the amount to 900,000 barrels.

Thus occurred what may become a classic confrontation over the allocation of resources between military and civilian needs and may well presage an emerging pattern of military-civilian relations. As resources become increasingly scarce and expensive in a world of limited resources, confrontations between the military and civilian organizations over their use may occur more frequently and over even more critical issues.

The realization that the earth does indeed have finite resources and that both the world’s population and its resource consumption are increasing exponentially has caused many to reflect upon the consequences and, most important, to question the utility, validity, and wisdom of continued unlimited growth. As the world’s population doubles every thirty years, with a corresponding doubling of resource consumption and an increase in pollution and ecological damage caused by exploiting these resources, concern centers on the prospect that these trends may soon converge in a serious, if not disastrous, crisis for civilization as we now know it. Hence, it is argued, growth must be limited.

Studies of the issue range from “doomsday” predictions that, if present growth continues, our social and economic system will collapse in as little as seventy years;2 to a more moderate and practical assessment of an impending breakdown which can be avoided by “systematically” integrating resource and environmental use, population control, and social values into a “framework” for policy-making research;3 to an optimistic, ethereal evaluation of the future centered in a “transformation,” already occurring, from which man will gain “empathy with nature and other people” and a “transcendent merging with all existence,” thus preventing the “rape of the world.”4

Whether or not one can accept these evaluations of the consequences of continued economic growth and expansion, he must accept that there does appear to be a limit to the type of growth which civilization is now experiencing. If this limit is reached because of the population explosion, environmental damage, or a massive failure of the world’s present economic system coupled to ever increasing inflation, at the base of it must be the finiteness of resources available for man’s exploitation.

This article is not an attempt to evaluate the validity of the “limited growth” concept. Indeed, it accepts that premise. Given the fact of limited resources, then, it is an attempt to explore the issue of defense policy and the use of force in a world of limited resources, a world most graphically suggested by the recent oil crisis. It will do so by examining the trend of defense spending, the likely short-term effects of limited resources on defense policy, and some long-term implications.

the increasing costs of Defense spending

In our consideration of defense in a world of limited resources, we must first examine the argument that defense spending in the United States represents an increasingly smaller proportion of the nation’s gross national product (GNP) At first glance the claim appears to be fact: the FY 1974 Defense budget represented six percent of GNP, the sixth successive yearly decline The FY 1975 budget claims to remain constant at six percent, but examination of the budget indicates that it marks not only the end of the decline but probably the beginning of an increase.

First, the requested obligational authority of $92.9 billion for 1975 defense expenditures did not include a supplemental request for obligational authority of $6.2 billion to meet the previous year’s defense budgetary obligation. In addition, $1.5 billion of the Atomic Energy Commission (AEC) budget is to provide for military purchase of weapons. Together, then, the 1975 defense budget request, the supplemental request for 1974, and the military portion of the AEC budget equal $101.3 billion or 6.5 percent of GNP.5 Although the validity of doing so can be questioned, it is also argued that the costs of past wars should be categorized as part of the defense budget, as well as costs for veteran’s benefits and interest on the national debt that has financed the wars. If this were done, the defense budget for 1975 would actually represent 8.5 percent of GNP. 6

Second, the portion of the budget providing for strategic forces is less today than in the early 1960s because our present systems were funded then. The 1975 budget, however, includes expenditures indicating a new phase of strategic force modernization; almost one-third of the budget is for research and development of new weapon systems (the B-1, Trident SLBM, etc.), which will require sharp increases in future expenditures. This is made clear in the President’s 1975 Budget Message. “These increases [in defense spending] are required to meet today’s higher costs of maintaining force levels. They would also provide for a vigorous research and development effort that would enable us to produce new weapons systems ....”7 Because obligations incurred for major equipment, research and development, and construction indicate the measure of succeeding years’ expenditures, the Brookings Institution estimates that if present policies on expenditures are continued as planned, the trend of higher spending foreshadowed this year may reach, in current dollars, $142 billion by 1980, or almost 9 percent of the projected GNP for that year.8

The significance of these increases for our purpose lies in their causes. The Brookings study identifies four: the increased costs of defense manpower (the all-voluntary force); the growing ratio of manpower-to-force levels brought about by increased weapon sophistication; the increasing costs of military retirements; and the increasing technological complexity and higher performance demanded of each new system.9 To cope with these increasing costs, we traditionally rely on the nation’s economic growth, a continually increasing GNP. Thus, if defense costs remain a near-constant percent of GNP, increasing costs can continue without substantial alterations in defense spending patterns. But suppose GNP declines. Will defense costs decline as well? If not, high defense spending could become an economic burden. Of the four causes of increased costs isolated by Brookings, only one, manpower costs, is likely to decline with a decline in GNP, since it alone is a direct reflection of general economic conditions (i.e., as the cost of living goes up, so do military salaries; if it should go down, so would salaries). The ratio of manpower-to-force levels may level off, but it, like increasing sophistication of weapon systems and the increasing number of retirees, is normally not closely related to economic conditions. Indeed, the number of retirees will continue to increase for at least another decade largely independent of economic conditions since we have not yet passed the “hump” of the Korean War era retirees. Thus, with a decline in GNP brought about by a scarcity of resources, 10 the increasing costs of defense will represent an ever increasing share of GNP unless present defense policies, philosophies, and strategic doctrines were to change.

The point of discussing the increasing costs of defense is not to decry defense spending or to imply that it is too high. It is to make the point that as costs continue to increase, and as resources become more expensive and scarce (implying economic contraction rather than growth), fiscal pressures and competing domestic requirements may well force a re-examination by society of the role of defense with its increasing costs. It is this possibility that demands attention: that we, the military, recognize the problem and consider some of its possible effects on defense policy.

limited resources and defense:
the short term

The immediate effects of limited resources on defense are not too difficult to identify. Indeed, scarcity is not new to the armed forces, the pattern of response having been set in other periods: an attempt to constrain costs by increasing productivity and improving resource management, by slowing force modernization, or by reducing commitments and force readiness. The last effect was most evident in the oil crisis when fuel shortages forced a decrease of 20 percent in the time spent by ships at sea and 33 percent in flying time for the Air Force. While the effects were soon overcome with an increased supply of fuel, their significance was not lost: degradation in readiness and proficiency. Can we not, first, expect such trends to become intensified as resources become increasingly scarce and costly?

Additional indications suggest that the armed forces are indeed aware of resource limitations. In a recent Air University Compendium of Research Topics, the area concerning energy is of importance for our consideration. It suggests a study to “develop policies, programs and procedures which will allow the Air Force to make more efficient use of energy resources.”11 Two effects of the energy crisis are addressed: (1) the increasing difficulty of procuring sufficient fuel to support air and ground missions and (2) increasing fuel costs, which require a greater share of limited funds. The objects of the study: to identify operations and procedures causing undue drain on energy resources; and to design policies, programs, and procedures that will encourage the more efficient use of available resources.

In addition, the prospect of limited resources is causing the armed forces to re-examine the increasing costs of new weapon systems. Both the Navy and the Air Force, for example, are interested in an “austere” fighter, a lightweight, low-cost aircraft that, in the words of Secretary of Defense Schlesinger, “would permit us to procure and operate a larger number of aircraft within the same budgetary resources.”12

While effects on readiness and capabilities, on a growing awareness of increasing costs, and on greater conservation efforts are apparent, more difficult to determine are the effects that limited resources are likely to have on strategies for the use of force. Cost considerations, for example, raise the issue of counter-force versus deterrence by mutually assured destruction (MAD), labeled by a military-related journal as the “most important single defense issue of the day.”13 Regardless of the esoteric and technical arguments for or against a counterforce strategy, a world of limited resources may well decide the issue: the greater accuracy and increased numbers of missiles required to make counter-force strategy credible require increased expenditures for development and production, the resources for which soon may not be available. Thus, competing domestic demands in a limited resource world may force a reliance on our established MAD doctrine and capability. Indeed, this possibility was suggested with the deletion, by the Research and Development Subcommittee of the Senate Armed Services Committee, of $77 million requested in the 1975 defense budget to improve the yield and accuracy of strategic missiles.14 The possibility was further suggested by the House Armed Services Committee’s deletion of $15 million requested for research and development of an advanced ballistic re-entry system.15

While Congressional opposition to defense expenditures is not new and most of the funds for the two programs were subsequently restored, at the very least the action illustrates how opposition to increasing defense costs may have a very direct effect on military strategies—even more so as the effects of limited resources begin to be felt on the economy. Beyond that, the action could indicate a developing trend: opposition to increasing defense expenditures as they compete with domestic spending needs. Indeed, the latter possibility is further suggested by the closeness of the votes on two key amendments to the 1975 Defense Authorization Bill that would have led to significant defense expenditure reductions: manpower cuts in Europe and cuts in research and development were defeated by very close votes (24 and 21 votes in the House and 2 and 11 votes in the Senate), indicating an increasing “sense of legislative uncertainty and conditional commitment” to high levels of defense spending.16

limited resources and defense : the long term

To this point, we have been considering some possible short-term effects of limited resources on defense, suggested by trends and actions already discernible: a growing awareness within the military of shortage importance; increased efforts to conserve and husband resources; and possible reliance on a strategic war doctrine reflecting the increased costs of resources (i.e., less reliance on counterforce). More important to our discussion, however, are the long-term effects that a resource shortage is likely to have on defense policy and the use of force, changes in policy that may occur as resource shortages become more acute and more frequent—a probability suggested almost daily in the press since the oil crisis.

Military Capability and Policy. First, may we not expect a change in military doctrines and capabilities reflecting a national concern with assuring the availability and supply of the needed resources? The energy crisis raised the issue and indicated a possible trend in this direction. In an interview taped by the Public Broadcasting System during the crisis in 1973-74, Secretary Schlesinger said that Arab countries “ran the risk of increasing public demand for force against them if they carried their oil curbs too far.”17 The Arabs immediately interpreted this remark as a threat of American intervention against them and reacted by mining their oil fields for destruction if anyone tried to occupy them by force.18 The issue brought into the open then the question of whether or not the United States or other Western nations actually contemplated the use of force to assure a continued supply of oil. The New York Times reported that British Members of Parliament and American “officials” had been “involved in discussions about it.”19 A Lebanese weekly magazine published details of what it described as American “contingency plans” to occupy the Persian Gulf oil fields. U.S. military sources, when questioned about the matter, replied that we had contingency plans for every conceivable military action, “even the occupation of Ottawa.”20

If, indeed, a policy of the use of force to assure supply of scarce resources is truly considered an alternative, then it should be reflected in planned U.S. force structures. In an article addressing “some energy security matters,” Brigadier General George A. Lincoln, USA (retired), former Director, Office of Emergency Preparedness, points out:

Neither the sources of supply nor the transport lines are under our control. . . . As to force and threat of force….Mention of general war brings up thoughts of protecting transport lines, and the sobering possibility that within a decade or so the foreign supply line for oil would require the equivalent of a super tanker every fifty miles from [the Persian Gulf] to the coast of the US.21

It is undoubtedly this “sobering possibility” that has prompted a Mahan reaction in the Navy to push for two particular weapon systems: Nimitz-class carriers, “floating sovereign airfields….whose purpose . . . is to protect the sea lanes from air attack”;22 and “sea control ships,” small carriers with helicopters and V/STOL aircraft whose mission is surveillance and defense against submarine and surface threats. Admiral Elmo Zumwalt, former Chief of Naval Operations, points out that 69 of 72 raw materials must come to us by sea.23 With a protracted conventional war in Europe requiring overseas support unlikely in light of the current doctrine and strategy of nuclear war, assuring secure lines of resource supply does seem a likely justification for these weapons.

Army structures also reflect the possibility of force to secure resources. The New York Times reports that the Army is “shuffling its forces to increase their flexibility and hitting-power and to speed overseas reinforcement.”24 “Shuffling” includes formation of lightly armed ranger battalions, four new “heavy” reserve brigades (2 mechanized, 2 armored), and a “tri-cap” (triple capability) division—a mix of armor, helicopter, and infantry. Justification, of course, includes concern for dealing with major aggression in Europe, but, more significantly, for dealing with “crises” in the third world. Can such a major “shuffle” be justified for third world crises solely on the basis of evacuating U.S. citizens and safeguarding “vital communications links”? A negative answer is suggested by the Nixon Doctrine and his statement on 8 September 1973 that “the United States cannot be at the mercy of Mid-East oil producers,”25 by Secretary of State Henry Kissinger’s “warnings” against “economic strangulation” of the U.S., Schlesinger’s statement concerning possible intervention to secure oil resources, Naval concern for sealane security, and an Army “shuffle.” Thus, there indeed appears to be a very real possibility that, in a world of limited resources, force might be employed to assure their availability and supply.

The idea of using force to assure resource availability, however, raises a paradox. The immediate U.S. public response to the increasing costs of defense as resources become scarcer will probably be negative, a reaction likely to lead to significant cuts in defense spending. However, as scarcity increases and it becomes readily apparent that we are in competition with other nations for resources, the mood is likely to change with a corresponding increase in defense spending to levels providing the means to assure resource supply.

This leads to another paradox: as resources become scarcer, hence more expensive, may not the point be reached when the process of securing them requires expenditure of more resources and costs than may be gained by their acquisition? The high cost of using force was classically illustrated during the October war between Israel and the Arab nations when costs of the three-week war ran to an estimated $1 billion per day, the totals being greater than the combined GNP’S of the countries involved.26 Had it not been for external assistance, the conflict would have been limited to less than half the time and the economies of the three principals would have collapsed. Clearly the use of force on such a ‘scale illustrates its disutility and the fact that the costs may be greater than the gains, particularly if the issue concerns the availability of resources and there are no “external” sources to assist in the deficit.

A “New” Environment? Second, Defense policy and the use of force cannot legitimately be considered in isolation from the societies in which they are conceived. Thus, to the extent that our analysis of the effects of a limited resource environment on defense does not relate to this broader context, it is necessarily incomplete; indeed, its purpose is to explore what appear to be effects based on society as we now perceive and experience it while the significance of a limited growth environment and the costs of defense spending become increasingly apparent. Accepting a limited resource and growth hypothesis, however, means accepting an implication that our society must change. It is too firmly based and dependent upon an ever expanding and growing economy to continue unchanged in an environment of limited resources. To be complete, then, our analysis of the effects of limited resources on defense and the role of force must move beyond the symptomatic stage of immediate and long-term effects and into a consideration of the possible role of force and defense policy in a new environment.

In this context, then, the “net cost” issue can be expanded to embrace yet another aspect of the use of force in a world of limited resources, perhaps the most important aspect of the entire issue. Is it not possible that resource damage and the extreme cost of resorting to war may bring into even sharper question the utility of war, particularly nuclear war? Because nuclear weapons are so destructive to resources and subsequent contamination so greatly limits their use, could the result be greater hesitation to use nuclear weapons, decreasing the likelihood of nuclear war? Might this be the “new” environment?

Indeed, the greatest proportion of U.S. defense expenditures is concerned with countering perceived Soviet aggressive tendencies and reactions. If the Soviets were to limit their spending for defense, would it lead to a corresponding U.S. decrease in defense expenditures, hence a decrease in military tensions? While speculation that such mutual interaction would occur has long served as justification for those seeking a unilateral U.S. defense reduction, it is clearly far from certain. Nevertheless, the possibility exists and some evidence indicates that the Soviet Union may be also becoming aware of the increasing costs of defense spending as resources become scarcer. Thomas Wolfe, in an analysis of the economic issues affecting Soviet attitudes toward Salt, cites a school which maintains that economic factors are a weighty “perhaps even overriding factor in persuading leaders to seek a halt in arms competition.”27 These factors include a growing need for investment and technological innovation in the nondefense sector 28 and rising consumer demand, both trends indicating that difficulties could arise in meeting an additional major round of arms procurement. In addition, this school argues that the slowdown of economic performance of 1968-1969 supports the thesis that the Soviet economy is “hurting” from the large military programs of the previous years. Slippage of previously planned investment for long-term economic growth in nondefense and agriculture is likewise regarded as an adverse effect of high military priorities.29 Indeed, logic alone suggests that the Soviet government cannot be entirely insensitive to pressure for nonmilitary’ resource allocation. Failure to recognize it would surely affect both national morale and international standing as a technically and economically advanced nation. As apparent as these trends may be now in a relatively resource-abundant environment, may they not be intensified in an environment of resource scarcity and ever increasing costs?

While the characteristics of a monolithic and authoritarian state would undoubtedly give the Soviets an initial advantage over capitalist societies in allocating limited resources, they would soon find themselves in the same position as— if not worse than—the capitalists with regard to defense versus consumer needs. Capitalist economies allow a much greater private consumption sector that can absorb significant increases in defense expenditures before a point is reached where guns clearly come before butter. In an economy as heavily geared to defense expenditures and defense-related industry as that of the Soviet Union, the consumer sector is very thin. Hence, as resources become increasingly scarce, a greater proportion of consumer goods and investment capital must be lost to defense in the U.S.S.R., with the competing “costs” of defense spending manifesting themselves sooner and more dramatically as more resources are diverted from domestic needs to defense expenditures. Thus, the constraints of limited resources could well hasten agreement on arms limitation and ultimately lead to a “new” environment in which the risk of nuclear war is minimal. While the arguments supporting the point that increasing costs and scarcity of resources may lead to a rational decrease in the likelihood of nuclear warfare are admittedly tenuous and certainly no justification for a change in strategic war doctrines and capabilities in the present environment, the possibility must nonetheless be addressed in our consideration of the effects of limited resources on defense and the use of force.

In summary, then, does the confrontation between the Department of Defense and the Federal Energy Office that occurred during the fuel crisis indicate an emerging pattern of relationships between the military and society, symptomatic of the “realities” and limitations of resource shortages? Certainly events and trends discernible now indicate the potential for such a pattern, even though it is far from certain. Nevertheless, there is no question that increasing costs and scarcity of resources are already beginning to have an impact on defense policy. Of even greater importance is the question whether the shortages lead policy toward greater reliance on force to assure the supply of needed resources or toward a decreased likelihood of nuclear war and the use of force. It is an issue that deserves attention and concern, as this article has attempted to illustrate.

United States Air Force Academy

Notes

1. Aviation Week and Space Technology, January 7, 1974, p. 14. See also Aviation Week and Space Technology, January 14, 1974, pp. l4-l5; New York Times, November 16, 1973, p. 20.

2. Donella H. Meadows and others, The Limits to Growth (New York: New American Library, 1972).

3. Kan Chen and Others, Growth Policy: Population, Environment and Beyond (Ann Arbor: University of Michigan Press, 1974).

4. George B. Leonard, The Transformation (New York: Dell Publishing Co., 1973), p. 85.

5. The Budget of the United States Government: Fiscal Year 1975, (Stock No.410l-00088, U.S. Government Printing Office), pp. 60, 69 (hereafter cited as The Budget). For Supplemental Appropriation information see Budget Appendix, pp. 265-351, or Barry M. Blechman and others. Setting National Priorities: The 1975 Budget (Washington, D.C.: Brookings Institution, 1974), p. 68.

6. New York Times, May 20, 1974, p. 31.

7. The Budget, p. 9.

8. Barry M. Blechman and others, Setting National Priorities: The 1975 Budget (Washington, D.C.: Brookings Institution, 1974), p. 97.

9.Edward R. Fried and others, Setting National Priorities: The 1974 Budget (Washington, D.C.: Brookings Institution, 1973), pp. 265-301.

10. The pattern indicated by the oil crisis which precipitated an annual GPN decline rate of 4.1 percent for the first half of 1974, New York Times, July 19,1974, p. 1.

11. Air University Compendium of Research Topics, vol. I, Academic Year l973-74 (Maxwell AFB, Alabama: Air University, 1973), p. SAC-26.

12. Secretary of Defense James R. Schlesinger as quoted in Air Force Magazine, June 1974, p. 34.

13. Ibid  p. 7.

14. “R&D Funding Under Fire,” Air Force Magazine, June 1974, p. 12.

15. Claude Witze, “The Budget Is Off the Pad,” Air Force Magazine, June 1974, p. 10.

16. New York Times, July 20, 1974, p. 1.

17. As quoted by New York Times, January 7, 1974, p. 6.

18. New York Times, January 10, 1974, p. 17.

19. New York Times, January 12, 1974, p.3.

20. Ibid.

21. George A. Lincoln, “Energy Security—New Dimension for US Policy,” Air Force Magazine, November 1973, pp. 49, 55.

22. New York Times, May 27, 1974, p.1.

23. Ibid.

24. New York Times, May 1,1974, p. 16.

25. As quoted by General Lincoln in Air Force Magazine, November 1973, p. 49.

26. New York Times, November 5,1973, p. 1; December 8,1973, p. 2.

27. Thomas W. Wolfe, Impact of Economic and Technological Issues on the Soviet Approach to SALT (Santa Monica: The RAND Corp., June 1970), p. 11.

28. For a more current analysis arriving at essentially the same conclusions, see the New York Times, June 5, 1974, p. 57. The article is an interview with Arthur F, Burns, Chairman, Federal Reserve System, conducted upon his return from talks with Soviet Premier Alexei I. Kosygin: Finance Minister Vassily Garbuzor: the head of the Soviet State Bank, Mefoldi Sveshnikov; and the head of the Soviet Bank for Foreign Trade, Yuri Ivanov.

29.Wolfe, p. 10.


Contributor

Captain Chris L. Jefferies (M. P. A., University of Pittsburgh) is an instructor in the Department of Political Science, USAF Academy. As a navigator, he has flown 817 combat airlift missions in C-130s, strategic airlift in MAC C-141s, and in the Belfast transport aircraft while on exchange assignment with the Royal Air Force. Captain Jefferies is a Distinguished Graduate of Squadron Officer School and of the Junior Management Course, RAF School of Administration.

Disclaimer

The conclusions and opinions expressed in this document are those of the author cultivated in the freedom of expression, academic environment of Air University. They do not reflect the official position of the U.S. Government, Department of Defense, the United States Air Force or the Air University.


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