Scucca

There certainly are some regional issues, given the nature of geographic concentration. However, for the British economy, we have to consider the opportunity costs. With spin-in (where R&D resources are focused on finding military use for civilian know-how), we have to appreciate that the military production leads to reduced civilian economic success. Our economic growth is essentially stunted by wasting scarce resources (particularly scientists and engineers) on a illiberal trade with only limited economic benefits

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gunner

I don't think there's an abundance of engineers, Scientists out there due to the UK not actually manufacturing anything anymore [That's unfortunately the reason we're scarce], so i wouldn't say the defense industry has robbed the civilian economy of that kind of resource.
My time in further education was with guys made up from the defense industry compared to civilian manufacturing by about 75% per a class.
What you consistently ignore is defense is not about economics, its about "DEFENSE". Too right the industry could be more economically viable but you have to understand that's not the main objective.
Did you misunderstand were i state my employer is using its workforce for many civilian contracts?

Paul.

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Always judge a lady by the contents of her mind, never by the shape of her bum.

Scucca

Its a basic application of opportunity costs. Resources used in the military sector are resources that could have been used in the civilian sector.

And that would be a reference to economics: i.e. national defence is a public good. However, once we refer to defence economics we are confronted with an understanding that this is only one aspect. Arms production has direct economic costs: from Keynesian analysis (with the military sector less effective at demand management than civilian expenditures) to endogenous growth theory (with economic welfare losses caused by stunted technical progress)

There are very few military-specific firms (which was further encouraged by the 'peace dividend' blip). That does not impinge on my argument

gunner

Dockyard buyout pays as Babcock profits rise 48pc - Telegraph

An example of a profit making defense industry contractor. Your getting a little contradictory one minute you write,

" We are wasting scientists and Engineers, who could be used in the civilian sector"

But then you concede the point,

" There are very few defense only type firms" So unless you have a breakdown of a particular company's accounts how do you know that, that said company is not making more from civilian type contracts? So in effect the manpower resource of Engineers and Scientists are in fact not being "wasted"

Its called diversifying and that's what many defense industry contractors are doing. So do you think we should not have a defense industry?

http://www.telegraph.co.uk/news/ukne...the-1930s.html


Isn't the UK,s social security budget twice that of the defense budget?

Paul.

Scucca

Nope! I'd only be a 'little contradictory' if the military sector was characterised by spin-offs, with diversification of the arms firm representing new opportunities created by military R&D. Such opportunities are increasingly rare. With spin-in dominating, it is quite correct to refer to crowding-out where the effectiveness of R&D resources is hindered.

I'd certainly discourage it as far as possible, with preference for procurement from foreign company. Indeed, given the increased importance of economies of scale generated by the fixed costs from R&D expenditure, we are at a cross-roads. We either have to see further integration of European companies (and therefore run the risk of intensifying military industrial complex losses) or see our defence industry naturally dwindle.

My choice of comparison would be military burden (i.e. military expenditure as a % of GDP). For example, in 2005 the UK achieved a burden of 2.7%. Germany was at 1.4%.

gunner

The downside with procurement from a "foreign Company" is you are going to be, beholden for all support services, unless there willing to give you that technology, which is highly unlikely.

What if that company turns Foe?

Paul.

Scucca

Offsets are standard practice, so there is no reason that long term domestic support services can't be achieved.

The US dominates arms trade. If they went foe, I'd suggest that traditional warfare would not be an option!

Clearly, you are right that there is no perfect answer to procurement. However, the economic costs we have paid are huge and that really cannot be justified with "what if" scenarios.