[News in War History] Despite Witnessing Nazi Defeat After Spending Half of GDP... Global Military Spending Hits All-Time High

In Ancient Times, Soldiers Had to Buy Helmets and Shields to Enlist
During WWII, Over 40% of GDP Was Spent on Military
Military Spending Rises Again in Ukraine War... Balance with Economy Is Crucial

Editor's Note[News in War History] is a content series created to provide multifaceted perspectives on war and conflict news from around the world as it unfolds moment by moment. Through 'News,' we first understand the current situation; through 'History,' we analyze the hidden meanings behind the news; and we also offer 'Implications' for the near future. We visit you every Sunday and plan to publish a book after the 40th episode.

As security concerns have grown following the outbreak of the Ukraine war, countries worldwide have rushed to strengthen their military capabilities, pushing global military spending to an all-time high. After the end of the Cold War, national defense budgets, which once fell to around 1% of GDP, have now surpassed 2% and are approaching 3%.

With the sudden increase in defense budgets prioritized over all other items, governments face mounting pressure to cut welfare spending, putting their approval ratings at risk. Citizens, burdened by worsening inflation and living costs, are resisting governments’ attempts to justify tax hikes under the pretext of increasing defense spending, leading to growing tax resistance.

The issue of military expenditure, which significantly impacts not only defense but also national economies and individual lives, has persisted throughout human history. Unlike the modern era, where war is not an everyday occurrence, in ancient and medieval times?when wars broke out almost daily?more than half of a nation's budget was often consumed by military expenses. In this session, we will explore the economic implications of military spending.

◆News: Global Military Spending Nears 3,000 Trillion Won... Records All-Time High

[Image source=US Military Mortgage Center]

Let's start with the news. According to CNN on the 24th (local time), the Stockholm International Peace Research Institute (SIPRI) announced in its '2022 Global Military Expenditure Trends' report that global military spending reached $2.24 trillion (approximately 3,000 trillion won), marking the largest scale ever, a 3.7% increase from the previous year.

SIPRI explained, "Global military spending has increased every year for eight years since 2015 and has risen by 19% over the past decade compared to 2013." Particularly, military spending in Europe, where security concerns intensified after the outbreak of the Ukraine war, surged the most. European countries’ military expenditures rose 13% year-on-year to $480 billion, the highest since the end of the Cold War in 1989. The countries that increased their military spending most sharply were those bordering Russia, including Finland (36% increase), Lithuania (27% increase), Sweden (12% increase), and Poland (11% increase).

[Image source=Reuters Yonhap News]

The country with the highest military spending last year was the United States ($877 billion). The gap with China, ranked second with an estimated $292 billion, was more than threefold. However, unofficial estimates suggest that China's military spending is more than twice the reported figure, indicating that the gap with the U.S. may be smaller than official numbers suggest.

Following these two countries, Russia (estimated $86.4 billion), engaged in the Ukraine war, ranked third in military spending, India ($81.4 billion) was fourth, and Saudi Arabia (estimated $75 billion) was fifth. European countries such as the United Kingdom ($68.5 billion), Germany ($55.8 billion), and France ($53.6 billion) followed.

There was a change in rankings at ninth and tenth place. South Korea’s military spending reached $46.4 billion, surpassing Japan ($46 billion), which was ninth last year. This year, with heightened military tensions surrounding the Taiwan Strait following Ukraine, global military spending is expected to increase further, raising concerns.

◆History 1: Why Soldiers Bought Their Own Weapons and Armor in Ancient Times... Budget Shortages

[Image source=Netflix historical drama 'Roma Jeguk' still cut]

In ancient times, when industry was minimal and national finances were poor compared to today, the burden of military spending was truly formidable. When wars dragged on, the country that launched a preemptive strike often faced economic collapse due to the heavy military burden, so caution in attacks was always necessary.

This military burden of states at the time is also mentioned in China's Sunzi Bingfa (The Art of War). According to the Operations chapter, "凡用兵之法 馳車千駟 革車千乘 帶甲十萬 千里饋糧 則內外之費 賓客之用 膠漆之材 車甲之奉 日費千金 然後 十萬之事擧矣" appears.

Translated, this means: "In warfare, one needs 1,000 chariots and 1,000 heavy chariots, 100,000 sets of armor and helmets, and must transport provisions over a thousand li. The costs inside and outside the country, hospitality expenses for guests, materials for repairs and maintenance, and military supplies consume 1,000 gold coins daily, only then can an army of 100,000 be mobilized."

At the time, the average commoner's wealth was about 3 gold coins, so 1,000 gold coins was an enormous sum. The Art of War emphasizes that if such vast amounts of money disappear daily during prolonged wars, even the wealthiest nations could go bankrupt.

Given the limited industrial development of ancient states, reducing military expenses was an urgent priority. Consequently, across both East and West, most soldiers in ancient times had to prepare and bring their own weapons, shields, armor, and horses. It was rare for states to provide equipment directly, except for superpowers like the Roman Empire. Even Rome is estimated to have spent over 50% of its total national budget on maintaining its military, highlighting the heavy military burden.

◆History 2: Military Spending Fell Below 3% of GDP Only After World War II

The appearance of a military aircraft assembly plant located in Tulsa, Oklahoma, USA during World War II
[Image source= U.S. Army]

Understanding the significant share of military spending in national economies became clearer after the 16th century, when countries began keeping accounting records and budgeting. As wars grew larger, military burdens increased.

According to Paul Kennedy, a renowned British historian, in his book The Rise and Fall of The Great Powers, between 1535 and 1547, England’s military spending averaged about 29.4% of total government expenditure. However, after military mobilization units exceeded 100,000 in the 17th century, from 1685 to 1813, average military spending surged to 74.6% of total government expenditure.

Fortunately, after the Industrial Revolution, with significant economic development and vastly improved productivity, the military burden began to decrease. From 1870 to 1913, major powers like the UK, France, and Russia maintained defense budgets at about 30% of total expenditure, roughly 6-7% of GDP. Compared to modern times, where defense spending is generally 1-2% of GDP in peacetime, this was an enormous proportion.

The most extreme military burden in human history occurred during World War II. The Axis powers, Nazi Germany, spent over 50% of GDP on defense; the UK spent 45%; the Soviet Union over 44%; and the U.S. about 32%. Nearly all economic resources were consumed by the war effort, making these countries true military states.

After World War II, during the Cold War and post-Cold War periods, military spending proportions significantly decreased as military tensions eased. From the 1950s to 1970s, most government spending in major countries was devoted to economic reconstruction and welfare, and almost all Western countries except the U.S. lowered defense spending to around 1% of GDP.

◆Implication: Finding a Balance Between Preserving National Identity and Economic Weakening

[Image source=AP Yonhap News]

However, the Ukraine war has shattered 30 years of peace in Europe, rapidly changing the situation. NATO and the U.S. have long pressured European countries to raise defense spending to 2% of GDP, but European nations, which had resisted, have now voluntarily increased their military budgets significantly.

Yet, with soaring prices of grain, oil, and gas due to the Ukraine war, inflation has worsened, placing governments in a difficult position of needing to stabilize the economy while increasing defense spending. While military spending is necessary to maintain national security and prevent economic damage, excessive spending can hinder economic development.

One country that illustrates the economic impact of excessive military spending is North Korea, known as the country with the highest military spending relative to GDP worldwide. According to the World Bank, in 2019, North Korea allocated 26.4% of its total GDP to defense. Considering that countries embroiled in civil wars like Libya and Yemen spend around 10-15%, this is an excessively high proportion.

Ultimately, finding the optimal balance between economy and defense has become an urgent task for all countries. Especially for South Korea, where nuclear threats from North Korea, military tensions around the Taiwan Strait, and Russian military provocations all converge simultaneously, it is imperative to swiftly find solutions.