A Simple Proof that "National Defense" is Not a Public Good
“National defense” is a textbook example of a public good. Unlike Austrians, I have no problem with the concept of public goods. I just deny that national defense is a valid example. In fact, I will be so bold as to claim I can prove that national defense is not a public good.
1. For national defense to be a public good, the social benefits of its existence must exceed its social costs. (From the definition).
2. The social benefits and costs of national defense are the sum of all people‘s willingness to pay. (By definition).
3. On average, people’s willingness to pay for their own physical security is higher than their willingness to pay to reduce the physical security of others. (My critical assumption, which I’ll call Limited Malevolence).
4. If no country had national defense, people’s average physical security would be higher than it is now, because the danger which any given country’s national defense deters is attacks from the national defense of other countries.
5. Since the existence of national defense reduces people’s average physical security (from 4), and people’s average willingness to pay to increase their own physical security exceeds their average willingness to pay to reduce the physical security of others (from 3), the net social benefits of the existence of national defense are negative.
6. Therefore (from 1 and 2), national defense is not a public good. QED.
If you wanted to reduce my proof to a slogan, it would be: “National defense: If no one had it, no one would need it.”
If textbooks were accurate, they would drop national defense as an example of a public good, and replace it with the abolition of national defense. Unfortunately, I fear that even the typical economist is too nationalistic and hawkish to take my proof seriously.