Super Hornet purchase to go ahead

I posted previously on the decision of the Howard Government to purchase the Super Hornet jet fighters. A Four Corners show (and some excellent posts by Robert Merkel at LP) convinced me that there were serious questions about these purchases as interim replacements for the F111's. They seemed an expensive short-term option at $6.6 billion. The Labor Party also strongly criticised the Government for its decision to proceed with the purchases while it was in opposition. Well guess what? Joel Fitzgibbon the new Labor Defence Minister has decided to go ahead and purchase the planes after slamming the purchase only a few weeks ago. There would be financial penalties and political costs in cancelling the order but Fitzgibbon certainly sounds to me like he has changed his tune. To quote him now:

"I hold no doubt that the Super Hornet is more than capable of doing the job," Mr Fitzgibbon said. We embrace the Super Hornet as a very special aircraft which is more than up to the job."

The Opposition's defence spokesman, Nick Minchin, correctly identifies this as a humiliating back down for Mr Fitzgibbon.

"Conducting his much-vaunted review and what do we find, they're going ahead with the order anyway," he said.

"This ought to teach Mr Fitzgibbon to stop playing politics with the nation's defence and with these acquisition projects and just get on with his job of ensuring this nation's defence.

"This is a day of shame for Mr Fitzgibbon."

I agree although I seem to have a limited amount of egg on my own face - I certainly did not make the extravagent claims of the Labor Party. I'll be interested to see what Robert Merkel makes of this (Update: he responds here). I'll update as I learn more - The Age has already done its patriotic duty by putting the best possible gloss on Fitzgibbon's backflip. .

Hat tip to the Currency Lad.

Flying blind with the Super Hornet

Four Corners tonight raised disturbing questions regarding Dr. Brendon Nelson’s decision to scrap the F111’s (no, the alleged 'wing defects' seem to be a myth) and to purchase 24 Super Hornets for $6.6 billion. The claim is that the Russian-made Sukhoi 30 fighters (bought by India, Indonesia, Malaysia and China) sell for half the price and are much better aircraft.

A case was made that we have wasted billions of dollars, ended up with second-rate fighter aircraft and possibly lost air superiority in the region. More than that, the purchase seems to have been made without careful evaluation of the capabilities of alternative aircraft and largely on the basis of the personal views and convictions of Brendon Nelson.

The Super Hornets have not been purchased by any other country outside the US and are intended to be an interim replacement for 100 Joint Strike Fighters (JSF) due from the US to arrive in 2014 at a cost of $16 billion. Paying $6.6 billion for an interim aircraft seems a lot when the FIII’s seem such a fine fighter. Moreover committing at an early stage to the JSF leaves us vulnerable to US corporate opportunism and 'holdup'.

Defence staff dispute the claims of poor quality of the Super Hornets but the criticisms of procedure, waste of public money and carelessness with respect to our defence priorities need to be assessed. I’ll summarise press links as they come to hand. I welcome comment particularly from those with a defence focus - there does seem to be an problem here.

The full-transcripts and a video of this edition of Four Corners is available at its website.

Costs of the war on terror

Greg Mankiw's blog provides estimates of the cost of military operations in Irag, Afghanistan and the war on terrorism from the Congressional Budget Office.

The estimated present value of costs from 2001-2017 is between $1.2-$1.7 trillion. This is, of course, a vast amount. But it is quite a bit smaller than the estimates of Linda Bilmes and Joseph Stiglitz (here) which came up with a figure of up to several trillion dollars for the war in Iraq alone. I discussed the BS estimates in an earlier post. The CBO exclude general macroeconomic costs - such as interest rate effects of the war which BS consider but quite a few of the BS estimates just seem too high.

The amount appropriated to the US Department of Defence for these activities in 2007 was $604 billion.

These estimates consider costs alone not benefits. They do however provide a dramatic illustration of the opportunity cost of these activities.

Recruiting labour for the ADF

PM Howard has just announced a series of financial moves to boost recruitment into the Australian military from a total of 51,000 to 57,000.These include retention bonuses, possible recruitment bonuses, allowing introductory ‘gap year’ programs of 1 year service in the ADF, reducing service entry requirements and reducing the time taken to achieve entry. As yet there are no proposals for simply increasing salaries offered – the immediately most effective way of improving the attractiveness of serving in the military.

It is interesting to consider the long-term labour recruitment issues facing the military in Australia, the United States and in other countries – particularly those poorer countries supporting international terrorism. The threats of terrorism, and unconventional or asymmetric warfare, clearly indicate that technology alone is not enough to resolve future military conflicts – terrorists will fight on their terms not ours. In addition, Australia’s ADF have recently had substantial police-military roles in East Timor, the Solomon Islands as well as their partly peacekeeping roles in Afghanistan and Iraq. All of these activities are labour not technology intensive.

Australia, like the US, is a high income country with good future social and economic prospects and relatively low, though increasing, fertility. Women have substantial gender equality and over 60 per cent are in the paid workforce – this increases the opportunity cost of having children and helps create low fertility. A family’s children have high human capital and consequently, the cost of a death of one of them in terms of foregone human capital, is high to the individual concerned and to their family. In wealthy societies, apart from high living standards, young men and women enjoy a variety of recreations, healthy sex lives and normal male-female relationships. Australia is a society with few strong internal conflicts, few direct external military threats, moderate religious views and moderated libidos and an eminently sensible national contempt for religious and ideological fanaticism. It is predictably difficult to motivate young men to risk their lives for political or religious objectives given the possible opportunity value of benefits foregone.

The countries that support terrorism and religious fanaticism have almost none of these characteristics in common with Australia. For the most part they are low income countries with failed social and economic development programs and joyless, repressive social mores. All are undemocratic dictatorships, failed states or have subversive, militant, undemocratic groups within their fledgling democracies. In almost all, fertility rates are among the highest anywhere, in part because the only role for women is to raise children - they have low levels of education and low levels of workforce participation. A family’s sons have low human capital, poor economic and social prospects – unemployment prospects are, for example, very high. Young men and young women have sexless, joyless lives that trigger male aggression/fanaticisms and female fatalism. The cost of death is relatively low to individuals and to their family particularly if the death can be rationalized in terms of martyrdom or other religious myths. The joyless, low-living-standard societies containing such families are wracked with internal conflict, external military threats and religious fanaticism. In such settings it is much easier to motivate people to risk their lives for bizarre religious or political objectives than it could ever be in countries such as Australia or the United States. Those serving in the military have less to lose and the prospect of a good life in the hereafter makes sense to those whose current lives are worth little to themselves.

In David and Goliath conflicts between rich societies with advanced technologies and poorer societies without either technology or future prospects, terrorism is an equilibrium strategy for those without technology in dealing with international conflict.

Then labour rather than capital-intensive military responses to terrorist threats are called for by wealthy countries particularly if, as has become standard, the poorer societies use their local populations as hostage to technologically-based military responses. Civilian casualties matter relatively little to societies who value their own live children at relatively low levels whereas, those in wealthy countries, feel pain at seeing even their enemy’s civilian populations being subject to attack, even if they are clearly being used as hostages. The winging of left-leaning Australian intellectuals over Israel’s aerial bombardment of southern Beirut, even while Hezbollah was launching almost continuous daily missile attacks on non-military targets in Israel, was a recent instance of the hypocrisy of the left.

Australia and the United States need to meet their military human resource needs by taking advantage of their wealth by paying incomes to service-people that compensate them for the substantial economic and social benefits they put themselves at risk of losing by joining the military. Wealthy societies have the financial capacity to provide such benefits and do not need to rely on such things as conscription. The Australian military has an excellent reputation for being well-trained and effective – they need to continue to be intensively-trained to retain their military edge.