Americans accept the need to invest a substantial part of our national income on defense to keep our country safe, but we have not been safe against a pandemic. Even with a vast national security budget, we have neglected public health investments that could have made our country much more secure against the risks of a new contagious disease like the coronavirus. The devastating cost of this pandemic is a warning against identifying national security only with military defense.
The United States needs a broader definition of national security if we are to be better prepared for the next challenge. National security spending should include any public investments that can reduce the likelihood and potential cost of any risks that could involve devastating damage to our country. Even when the probability of such catastrophic risks is low, it could be worth spending money to make it even lower.
For the risks of a pandemic, we could have invested in a manufacturing capability for emergency production of personal protective equipment and medical test kits, which would have been at least as valuable for our national security this year as any missiles and warships. The next deadly disease could emerge in a less developed country, and Americans would be safer if we had our mobile medical reserve corps ready to deploy and contain the initial outbreak. From this view, a withdrawal from the World Health Organization marks a step in the wrong direction.
The United States should also consider national investments to reduce our vulnerability to the risks of increasingly catastrophic damage from storms and wildfires. Those who are skeptical about the risks of climate change may believe that its probability of causing such catastrophic damage is relatively small, but even relatively small risks should be taken seriously when a significant part of our own country is at stake.
Even within the scope of 21st century military operations, the effective manner of our national security spending has been reduced by its focus on purely military capabilities. The ability of the United States to achieve the goals of military missions in Afghanistan and Iraq was severely limited by the insufficient investments in civilian capabilities to support domestic restoration of order and governance after the conflicts.
Investments to provide national security against catastrophic risks need public funding because the demand for national security cannot be left to private markets. Society would not allow a private investor to extract from millions of people the full value of saving their lives in a national disaster. A competitive market for insurance against such catastrophes would be inhibited by rational doubts about the ability of a private firm to pay huge claims when the whole market has been devastated.
Standard models of economic growth that ignore such risks suggest that a policy of lower taxes would encourage private investments in economic growth that could increase the welfare of everyone in the future. But when possibilities of rare catastrophic risks are factored in, we find that reliable economic growth in the future could actually need substantial raising of taxes for public investments in defensive measures, even if these public investments seem unnecessary and wasteful most years.
We cannot afford to provide full national security against all catastrophic risks, nor should we credit the claims of all suppliers about the effective manner of the defense systems that they would like to sell. With limited resources, we should focus on the investments with real possibilities of making serious risks less likely or less damaging. Decisions about public investments in any area of national security should be guided by the best available analysis from those with expertise in the area.
Ultimately, our leaders must determine funding priorities in the national security budget, and so we need leaders who will make effective use of available expertise for these vital decisions. After all the bitter losses that people have suffered in the pandemic this year, we should understand the paramount importance of electing national leaders who can be trusted to prudently assess how our country should invest in keeping Americans safe against the complex risks of the world beyond military threats.
Roger Myerson is a Nobel Laureate in economics and the David Pearson distinguished professor of global conflict studies at the Harris School of Public Policy and Economics Department with the University of Chicago.