Thursday, October 20, 2016

Lilliputian Foreign Aid Percentages Coupled with Gargantuan Military Budget Amounts: What, If Anything, Is Hiding Behind Two Allegedly Damning Statistics About Uncle Sam?

    Most of us are familiar the adage attributed to Mark Twain, "There are three kinds of lies: lies, damned lies, and statistics." Fewer of us know Georges Fischer's saying: "Statistics are like bikinis; they show a lot, but they hide the essential" (Les statistiques, c'est comme les bikinis : ça montre beaucoup, mais ça cache l'essentiel).

    Let the following be a demonstrating why, or in what ways, such sayings are largely truthful.

    You have probably heard and read — not once but many times — that America’s aid to the developing countries of the Third World is nothing short of disgraceful, as it amounts to nothing but a much smaller percentage of that of many other Western nations.  For example, in 2013, the official development assistance by country as a percentage of Gross National Income was at about 1% or above for Sweden, Norway, and Luxembourg, with the United States arriving a dismal 20th, at "only" 0.17%.

    But wait!  There is a second statistic, one that is just as, if not more, damaging:  you have also probably heard or read that the amount of money that America uses on its military is far larger than that that other nations use, and indeed, you have probably heard broadsides to the effect that America's defense budget is larger than that of the next 20-25 or so nations combined.

    Paired, this pair of statistics, this couple of “facts”, seems to give nothing but a damning image of Uncle Sam.

    Both of these “facts”, incidentally, are mentioned in the famous rant that is often called "The Most Honest Three Minutes In Television History".  (In the opening scene of The Newsroom's Episode 1, Aaron Sorkin has his Will McAvoy character (Jeff Daniels) spit out: "we spend more than the next twenty-six countries combined, twenty-five of whom are allies … We [used to wage] wars on poverty, not poor people").

    So we have here two “facts” that, by themselves, “prove”, or ought to prove, and that behind the shadow of a doubt, that America is egoistical, that Washington is power-hungry, that Uncle Sam is war-mongering, that Americans are blind, and that the rest of the world is in distress because of Uncle Sam's despicable policies.  (Or, that at the very least, its leader — except when he or she happens to be a Democrat, of course — and/or the leader's policies are racist, greedy, bellicose, and self-centered.)

    First of all, Matthew Cina puts the high military figures into perspective:
most European nations, namely France, Germany, and the U.K. are purposefully downsizing their militaries in favor of relying on the U.S. to come defend them in case of an incident. Even more to the point, half the reason the U.S.'s military budget is so expensive, besides the technology that is literally decades past the competition, is because we take care of our soldiers. A Chinese soldier is paid one-ninth that of a U.S. soldier, and even then, the Chinese soldier gets drastically smaller healthcare or Veteran benefits. If the U.S.'s big military budget comes from futuristic technology, taking care of our soldiers, and single-handedly protecting the western world, I think it's worth the bill. 
    As for Megan McArdle, she adds that
The freeloading countries don’t even send a fruit basket to Washington to say thanks. In fact, as a rightish American who’s spent a bit of time abroad, I can personally attest that many of those NATO members’ citizens feel free to disparage our massive military budget, as if their smaller budgets were some sort of moral sacrifice rather than an unearned benefit paid for by U.S. taxpayers.
    Which, indeed, is what the usual popular outrage discussed in this post is all about.

    Indeed, Loren Thompson points out in Forbes some salient facts about the "military-industrial complex":
most of the defense budget is not spent on weapons, it is spent on items like military pay and benefits, training, maintenance and the like. The amount of money set aside for developing and procuring military equipment in the budget agreement Congress reached [in May 2017] is $197 billion — a third of the $593 billion defense budget, and barely 1% of GDP (which stands at $19 trillion). … how much of a problem can the "military-industrial complex" be when it only represents 1% of the economy? Healthcare is 17%, but nobody refers the "healthcare-industrial complex." … As I often point out, the amount of money the Army gets for weapons each year is a fraction of what Americans spend on beer or cigarettes.

    But even if we decide to ignore the above, may we be allowed to take a closer look at these facts and figures?

    What is the first thing that we notice?

    We notice that one “fact” is a percentage figure. And we notice that the other “fact” is an amount figure.

    More precisely, one puts America (and other countries) in a list according to a percentage of GNP.  While the other puts America (and other countries) in a list according to absolute dollar terms.

    Does this signify anything?  At all?

    As a matter of fact, yes.

    It signifies a great deal.

    Both ways of making comparisons are valid and, in an ideal world — in a world where the reader, the student, the citizen, is given all necessary data — all figures, all facts, and all relevant statistics would be supplied — would be set forward for him to make up his own mind.

    How about if we provided all necessary data on these two subjects?  Wouldn't that be something?

    (For instance, changing the dollar figure of military expenditures to the dollar figure of military expenditures per capita used to drop the U.S. to third place a few years ago (with $936 per person, in third position following Israel and Singapore, with respectively $1,429 and $1,010 per person) and today to fourth place.)

    In the meantime, how would you like to try a fun experiment?  We have two "facts" about America, right, based upon two different types of calculating statistics.

    How about this?

    How about if, in each category (foreign aid and military budgets), we tried reversing the way the positions of countries are calculated?

1) What Happens If We Calculate Uncle Sam's Foreign Aid According to the Process Used to Compute Uncle Sam's Military Budget?

    Shall we try the foreign aid list first?  Let us see what happens when we calculate foreign aid in absolute terms and what position the countries end up in then.

    Lo and behold!

    While America’s development assistance as a percentage its GNP is indeed smaller than that of other aid nations, the net amount that it donates in absolute terms turns out to be — by far — the largest!

    At $31 billion, it is close to double that of the next country in the list (the UK, at $18 billion) and until recently (Germany has inched up over the past couple of years), more than double than every other country on the list, including all the Scandinavian countries combined (indeed, with the smaller Northern European countries mentioned above dropping to four to five times less than the USA each). As it turns out, for those among you who love the "combined" comparisons, the U.S. gives as much as Sweden, the Netherlands, Canada, Norway, Italy, Switzerland, and Australia combined.

    Obviously, it turns out that because the US is the superpower, in economics as well as everything else, the (far) lower percentage turns out to be an amount (far) superior to any amount offered by less rich countries.  (Now, think about this:  Does a farmer in central Africa, in southeast Asia, or elsewhere have a chance of profiting more from a donation of millions of dollars or from a donation of 1.40%?  The question doesn't make much sense, does it?)

    Now, you may well reply : Yes, you may agree …somewhat, but still, think about the following:  if Washington were to raise its percentage to the same level as, say, Japan and and the Europeans, wouldn't the amount of aid be that much larger?

    Alright, let us keep this in mind, we will get back to it (in the third part of this post), but first we must address the second “fact” discussed above.

    For the moment, notice that many people who reacted as mentioned above have not been willing to even entertain the thought that the Washington critics were even slightly wrong, not to say misleading.

    Indeed, those critics do not advertise the “amount” aspect of the aid matter, for one simple reason:  it does not go far in nourishing their (self-serving) message, which is that Americans, or their leaders, are inherently greedy, simple-minded, self-centered, short-sighted, etc.

    That is why we do not learn that, in real terms, the U.S. is
• top donor at the office of the UN High Commissioner for Refugees
(its $157 million is three times as large as the next country (Holland)),
• top donor at UNICEF (along with the UK and Japan),
• top donor at the UN's fund in the fight against AIDS (half a billion dollars),
• and of course top donor at the United Nations itself.
Related: • Misleading Statistics — Would the EU Really
Dominate the Olympics in Medals Won If It Were "United"?

• The Misleading Statistics of Gun Control
• Mass shootings in the U.S. have fallen so much in the past century
that the political left has had to redefine what a mass shooting is
• Facts Which Europeans and American Leftists Conveniently Ignore

2) What Happens If We Calculate Uncle Sam's Military Budget According to the Process Used to Compute Uncle Sam's Foreign Aid?

    What do we notice with the military budget “fact” mentioned above?

    Lo and behold!

    Yes, this description of a problem with America turns out to be exactly the opposite of what was criticized in the foreign aid field.

    (Needless to say, one problem with statistics is that, as we have seen, there is more than one way of calculating sums, ratios, and other types of proportions)

    If we calculate military budgets as a percentage of GDP, we find that the figures change drastically.  We find that the USA falls to fourth place (3.5%) in one report, below Israel (5.2%) and Russia (4.5%).  First place?  That belongs to Saudi Arabia with almost three times as large a percentage (10.4%) as America. By capita, Riyadh also spends as much as three times the amount as the next country (as mentioned, not the United States) on the list.

    In early 2017, The Wall Street Journal summarized America's defense budget over the past 30+ years:
The U.S. spends barely 3% of gross domestic product on defense—about 16% of the federal budget—down from 4.7% in 2010 and a modern high of 6% in 1986.
    If we calculate military expenditures as a percent of GDP, the U.S. drops even further, falling to 9th place in one study and to 11th place in another, below eight or nine countries in or close to the Middle East (including Israel) as well as Russia.

    And if we try calculating the dollar figure per GDP, we find that the figures change drastically.  The U.S. drops down, not to second place, not to fourth place, not to 10th or 15th or 20th place, but almost all the way down to 30th place (it's actually position 29)!  This is according to the Global Militarization Index (GMI), which compares a nation's military expenditure with its gross domestic product (GDP) and which is roughly comparable to… the foreign aid statistic so widely bandied to scold America for.

    In some earlier studies, America has appeared at or near the 50th mark (#47, to be exact)!

    But hold on — what many of the above studies seem to fail to do is mention North Korea, although it has been reported variably as spending an astonishing quarter to a third of its GDP on its armed forces and should therefore belong in first place.  Indeed, let's go to the NationMaster website, where the 10-year-old figures for military expenditures as an estimated percent of gross domestic product already then put the US all the way down in position 27.  This makes more sense, with North Korea coming up front. (At almost 23%, it is double the percentage of the next entrant (not the United States but Oman).)

    And what nations follow it?

    The next nine countries are all in the Middle East. The first 30 nations are all in the Middle East, in Africa, and in Asia, from Yemen, Eritrea, and Mauritania to Chad, Angola, and Swaziland. Besides Israel, Bosnia, Greece, and the United States, along with Turkey, there is not a democracy and/or a European country among the first 50 or 60 nations.

    Does that leave those Western nations off the hook, however? Hardly, given the very fact that many of them are cosseted by Washington’s providing for their defense, which — who knows? — may go some way towards explaining why they can afford having both their amounts and their percentages be so low — all the while basking in the self-serving statistics of a Newsroom monologue.

    As for the developing countries, an inordinate amount of money is spent by Third World leaders on the army, on security forces, and on police battalions, forces that amount to their leader's (to their leaders') personal bodyguard and forces which are then often turned loose… on the countries’ own population.

3) How Do We Tie Points 1 and 2 Together and Which Fundamental Factors Are Being Overlooked?

    Now we're getting to the gist of things.

    Because what you are saying now is:  Hold on for a second:  Back in section 1, you said that we would tie this second “fact” in with the first “fact” mentioned above.  How so?  Well, it so happens that this — any number of countries run by an autocrat using the country's military as his personal bodyguard — is the… type of country that… many of Washington’s critics would have America provide… a larger percentage (or a larger amount, whichever) of aid to!

    Of course, the critics will say, rubbish, they in no way want to provide aid to régimes that are oppressive and murdering their own people.

    I think it would be quite easy to come up with a number of examples disputing their claims.  (Leftists' support for and their aid to Saddam Hussein's Iraq — including peace-for-oil — comes to mind, for I don’t know which reason.)  But if it is true that a number of these countries are not having their personal bodyguard forces machine-gun their unarmed civilian populations (or otherwise disposing of internal enemies, imaginary or other), they are using quite an amount of moolah to buy luxury vehicles for their government ministers, and putting their friends in high places, and engaging in other types of corruption.

    Corruption, inefficiency (except in repression), wasted money:  this is a seemingly integral part of a number of the countries that would supposedly benefit from increased American (and Western) aid.

    Have you ever heard the old joke told inside the NGO community:  How can you predict when a famine is about to threaten an African nation?  Give up?  It's when the country's president needs a new Mercedes.

    Enter Kenyan economist James Shikwati.
If [Westerners] really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own two feet.
    Thus spoke James Shikwati to Der Spiegel's Thilo Thielke in July 2005 as the Kenyan economics expert pleaded, For God's Sake, Please Stop the Aid! (See also Dambisa Moyo's Dead Aid (Why Aid Is Not Working and How There Is a Better Way for Africa).)

    Good intentions such as eliminating hunger and poverty
have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.

 … Huge bureaucracies are financed [with the aid money], corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.

 … Africa is always only portrayed as a continent of suffering, but most figures are vastly exaggerated. In the industrial nations, there's a sense that Africa would go under without development aid. But believe me, Africa existed before you Europeans came along. And we didn't do all that poorly either.

 … Millions of dollars earmarked for the fight against AIDS are still stashed away in Kenyan bank accounts and have not been spent. Our politicians were overwhelmed with money, and they try to siphon off as much as possible. The late tyrant of the Central African Republic, Jean Bedel Bokassa, cynically summed it up by saying: 'The French government pays for everything in our country. We ask the French for money. We get it, and then we waste it.'

 … There must be a change in mentality. We have to stop perceiving ourselves as beggars. These days, Africans only perceive themselves as victims. On the other hand, no one can really picture an African as a businessman. In order to change the current situation, it would be helpful if the aid organizations were to pull out.
    Case in point.  Tanzania was supposed to be Sweden’s showcase in the aid “industry.”  A couple of decades ago, it was said that there was as much chance of seeing a blond head behind the wheel of a vehicle in Dar es Salaam as a black one.  Now, I have a question for you:  How often do you hear the government in Stockholm bragging about the wonderful advances it has made in Tanzania?  Not often, do you?  As a matter of fact — and I write this perhaps primarily for those who love to dish out statistics — the per capita income in that Western African country has decreased since Sweden’s millions of kronor started flowing in.

    So: must we do nothing, ask Washington’s critics?

    I will try to answer that in the a later post.  For now, just notice that the question doesn’t, as before, even start to cast doubt, be it a single iota thereof or otherwise, on the claims, implied or otherwise, that foreign aid is working, that aid in general is undoubtedly a proof of generosity, that Uncle Sam's military budget is a monstrosity, that Washington is greedy and evil, and that Americans are devious and mean.

    In fact, isn't the (pressing) question meant to change the subject as quickly as possible?  Change it back to the old we-are-still-the-most-compassionate-most-intelligent-most-humane-people-to-ever-tread-the-face-of-Earth mantra?

    To sum up: 

    What is the reason that all of us are not more familiar with the net amount figures in the matter of foreign aid?  Because it would be much harder for the critics to depict America capitalists as greedy, clueless, heartless clods.

    And what is the reason that we are not more familiar with the percentage figures on the question of military budgets?  Because it would be much harder for the critics to demonize Americans as bellicose imperialist warmongers.

    By the same token, it would be much harder for America's critics — U.S. leftists and Europeans foremost amongst them — to laud themselves as the most compassionate people in the world, as the most intelligent people in the world, as the most tolerant people in the world, and as the most humane beings in history ever to walk the face of the Earth.