So, before we got so rudely interrupted by Russia invading Ukraine, I was discussing how the US could have chosen, since the end of WWII, to reduce working hours rather than maximize GDP. But...let's get down to what GDP is. It's a measure of our ability to have an economy that funds war. That's the real purpose of its measurement. The reason we have the technologically advanced army today, relative to the disrepair of the Russian armed forces, is the fact that we actually have an economy that can fund it. If you don't have an economy to fund a war effort, what ends up happening is what you got in a lot of communist countries. Their economies were poor, but they channeled most of their money into military capabilities. We, on the other hand, grew our economy, and were able to raise the living standards of our people (despite the obvious dysfunction under the surface), and still outspend the soviets on war.
We arguably overspend on war. But, at the same time, we have reasons for it. Because we spend nearly $800 billion a year on our military, or nearly 4% of our GDP. We're able to have the logistics to wage war anywhere in the world at a moment's notice and not fall flat on our face like the Russians do. The russians spend a relative lot on war. While in raw numbers they spend roughly 1/10th what we do, they also spend roughly 4% of their GDP on military. Of course raw numbers dont mean much. In PPP their GDP is actually $4.32 trillion instead of $1.71 trillion, which is roughly 1/5 of ours. And that means their paltry $70 billion in spending is actually closer to $177 billion, or 1/5 what we spend. Still, given their economy is far smaller, they can't really field what we have, and even countries like the UK, France, and Germany can compete with them militarily. With Germany ramping up its military budget, they actually spend more than Russia does in raw numbers, although this may be lower accounting for PPP. Still, NATO is overwhelmingly able to counter Russia as a military threat if they step outside of Ukraine and into NATO territory. So they're not the real threat.
What we have to worry about...is China. China spends roughly 1/3 what we do on military, at around $252 billion. Their GDP is around $15 trillion, but accounting for PPP, it's slightly larger than ours at $24 trillion. If we buffed up China's numbers the way I just did with Russia, we get a number closer to $403 billion, or slightly more than half of ours. And they spend much less GDP (closer to 2%) on military. If they wanted to, they could match us.
If we worked less, our GDP would be lower. It's currently around $21 trillion, but let's face it, that's assuming $72k per capita GDP, if we reduced that to $56k (my 25% scenario), that would make our overall economy closer to $16 trillion. Still slightly larger than China in real terms, but much smaller in PPP. What gives? Well, China, despite having a relatively low living standard, has a metric crapton of people. They have 4x our population, and things are such where they tend to be roughly the same size as us, but their living standards are 1/4 of ours. So they're poor, but they have more people. Russia isn't much different than China in GDP per capita in nominal terms, but Russia has less than half of our population, while China has 4x our population. So China just brute forces its way to being our size, despite being relatively unadvanced economically. And with China rapidly growing, that could be problematic if we want to work less. Because let's face it. Is China going to allow us to achieve an anti work future? Despite what the tankies might think (if they're anti work at all), no. They are an authoritarian communist state with crappier living standards than we have in the west, and their values are, in my opinion far worse than ours for it. They align closer to Russia than to us in pure ideological terms. And sadly, we kind of have to compete with them if we want to maintain our way or life. It's kind of the darwinistic aspect of this planet's way of life. Survival of the fittest, adapt or die, and competition with China keeps us working, while under pax americana, we could all relax more.
Does this mean we need to give up on anti work goals completely? Quite frankly, no. I'm still convinced we could accomplish UBI with a relatively minimal impact on our growth over time. As far as reducing the work week to 30 hours or less, that might be another story. I have projections here. $43k for 50% tradeoff between growth and work weeks, and $56k for 25%. Still, that would put us at $12.5-16 trillion GDP. Not terrible. Assuming we kept the same 4% target for military spending, that's still $500-640 billion. And that still allows us to outspend China 2-2.5:1 in real terms or around 1.66-2:1 in PPP. Assuming we can call on the help of other advanced economies in the area and around the world, such as South Korea, Japan, and Australia in the far east, and UK, France, and Germany in the west, eh, we probably could still outgun china. Still, in a total war, similar to say, WWII, China would be pumping most of its economy into war, and so would ours. If they outspend us, they could win.
At the same time, if we can automate production of war machines, minimize manpower, we could do a lot more with less. GDP growth, after all is a matter of technological advancement, and that would continue to happen. If we decide to relax and take it easy, and then ramp up production in an all out war effort, we could greatly increase our GDP. In other words, say we did work 30 hours a week at $56k a year GDP per capita. If we really wanted, in a state of total war, we could boost our production up to 40, 50, 60 hour weeks if needed, and mass mobilize our economy to beat China. After all, that's what we did during WWII. It's a huge reason I didn't start my projections back in 1938 but in 1950. because WWII mobilizing the economy caused such massive growth it was abnormal and just messed up my projections. So, we could do it again.
That said, I think a balancing needs to be reached here. Clearly we can't go full on anti work at this time as we do need to keep up with China and maintain competitiveness with them. Russia going full on Nazi Germany in the past few weeks has convinced me that despite its flaws, Pax Americana is a good thing for the world, and that if we weren't so dominant, that Russia and China would probably be far more imperialist and far more dangerous. So, we do need to maintain an economy to defend ourselves, but at the same time, I do think we can have UBI and work less somewhat. The fact is, if push came to shove and we needed to enter a state of total war again, we could max out our GDP by working more real fast, kind of like Goku going all Kaioken on his opponents.
I mean, I honestly do think having a $600 billion military budget wouldn't be the end of the world for us. Should we cut it more than that? No. Because we need to be the big dog, and we need to be able to fight a war on multiple fronts (say Russia AND China) at once. I do think a multipolar world with other allies in Europe and Asia, and them contributing to defense is good though. The more countries like Germany, or Japan, which have been relatively pacifist and relied on us for defense because they used to be the big baddies, start building up their militaries as western style capitalistic democracies, the more we can sit back. So I definitely think shifting toward more western countries working with us toward joint defense, rather than the US doing it all is a good thing. It would allow us some breathing room to reduce our work week and implement a UBI.
But yeah, we are going to keep needing a strong military, and while $778 billion seems excessive, maybe it's about right given the need to be able to counter threats from countries like Russia, China, and North Korea, which I would describe as the new potential "axis of evil" forming going forward. After all, with us sanctioning Russia, and his willingness to cut ties with the west, Russia may form closer relations with China instead. We will have to see.
So, long story short, yes, I do think our aspirations are compatible, but at the same time, we need to be fairly moderate and reasonable about them. We can't go full on anti work and just dump all GDP growth into fewer working hours. We might only be able to do this with say, 25% of our growth. Maybe 50% at most.
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