For a New Political Economy of Defence

The Ukraine crisis, hard on the heels of the debacle in Afghanistan, should demand from social democracy a moment of unflinching realism. The unavoidable question is: how are we going to change?

Since we are now in a world where sovereignty, democracy, international law and human rights can be overridden by the arithmetic of tanks – not in the Middle East but in Europe – what is the mixture of conventional deterrence, nuclear deterrence, multilateral diplomacy and domestic political resilience needed in response?

The short answer is: not what we’ve been doing so far.

Vladimir Putin’s aim is not simply to cancel Ukraine’s sovereignty, subsuming it into a “soft federation” with Russia. Nor is it merely to force Europe back to a pre-1997 status quo, demilitarising the Baltic States, the Black Sea and the Balkans, as demanded in two draft treaties. Nor is it only to sow divisions within NATO and the European Union.

Putin wants to turn geopolitics in the Western hemisphere into a two-player game between Washington and Moscow, in which Europe is the board, in which the rules are set arbitrarily, and where he sometimes gets to pick who is President of the United States.

That is the new context in which British security and defence policy must be made. If Putin’s strategy succeeds it would be a no-win situation for the left in any country, but above all ours – which is mired in culture wars, detached from the European Union, with a dysfunctional political elite and awash with Russian oligarchic capital.

But the Ukraine crisis is just one factor demanding urgent update to Labour’s security and defence policy. The second is the fragility of US democracy.

The UK’s long-term position in defence policy has been described as “bandwagoning” – overt reliance on the US to “provide operational enablers that it cannot itself generate, while attempting to provide niche or complimentary capabilities to its ally”. But you cannot realistically “bandwagon” a country where political polarisation creates the realistic threat of internal conflict, whose global actions have become ineffectual, short-sighted and unpredictable, and whose geopolitical stance veers between sullen isolationism and bouts of assertiveness towards China.

The third factor demanding change is the speed of technological innovation. Space and cyberspace have emerged as fully-fledged domains of warfare; new weapons – lasers, hypersonic missiles, anti-satellite missiles, area denial technologies and low-cost drones – are challenging the traditional dynamics of deterrence. Above all, we have seen the emergence of hybrid or “greyzone” warfare as the strategy of choice by Russia.

In the Russian doctrine – so-called New Generation Warfare (NGW) – a mixture of disinformation, hacking, electoral interference, corruption and targeted assassination is conceived no longer as the sideshow for conventional military operations, but the main event. Russia regards a “Third Cold War” as winnable; its desired outcome is the collapse and fragmentation of Western democracies and the reversal of decades of social liberalism.

What should British social democracy’s role be faced with these major changes? It can stick to what it knows, preferring to concentrate on climate and redistribution policies, leaving the major pro-active decisions on defence to Conservatism and the military professionals. Or it can take an active and leading part in the design of the changes needed to defend and rearm our democracy – as it did during the re-armament debates from 1937 onwards.

In this essay I will argue Labour should choose the latter. The search for solutions should begin from (a) a social-democratic reading of the geopolitical reality, (b) the need to integrate defence policy into Labour’s strategic goals of economic, social and climate justice; (c) the social-democratic mandate to defend democracy against hybrid attack.

The national security ecosystem of the UK must be redesigned to survive a prolonged situation in which the US is an unstable ally; where Chinese and Russian geopolitical power is rising; where the EU and NATO are in danger of losing their strategic coherence; where existing armed forces have to be reconfigured around new weapons systems and towards new threats; and where all Western democracies are undergoing a process of internal challenge.
The centrepiece of Labour’s response to the post-Ukraine situation should be a new political economy of defence.


The Tory legacy of incoherence

During 12 years in power, the Conservatives have weakened Britain’s national security – through a mixture of needless austerity, incoherent procurement decisions, reckless personal engagement with Russian and Chinese oligarchs, squandering diplomatic goodwill through Brexit and abandoning key security architectures in Europe. Above all – both in SDSR 2015 and the Integrated Review of 2021 – they have adopted force structures and defence postures that do not match the threat that Russia now poses.

The thread that links this catalogue of mistakes is a mixture of post-imperial hubris and neoliberal economics. Neoliberal economics mandated severe defence cuts at the precise moment when threats were proliferating and the domains of warfare expanding. It also mandated the privatisation of much of the defence industrial capacity, leaving it prey to US rather than UK sovereign priorities (an approach which began under Thatcher and was pursued under Blair).

Elite self-enrichment, and the hubristic notion that Britain could only prosper from opening its domestic markets to the rising global powers, led the Conservative Party under Cameron, May and Johnson to become a conduit for Russian oligarchic wealth. The same logic led the Tory government to open Britain’s fibre-optic communications infrastructure and nuclear energy system to strategic Chinese investment and potential espionage, and to allow major semiconductor producers and their IP to be transferred to Chinese ownership.

Boris Johnson then ripped up three decades of British leadership and engagement in European space, defence, security and policing by insisting on a hard Brexit. He unilaterally rewrote Britain’s strategic posture in the Integrated Review, committing the UK to a doctrine of global reach, nuclear re-armament, a new and deliberately ambiguous “first use” of nuclear weapons posture, a space force, and an “Indo-Pacific tilt”.

Throughout this process, institutions designed to enhance national security were disrupted and discarded. The National Security Council created by the Cameron/Clegg administration became a hollow shell. The practice of regular, public National Security Risk

Assessments was abandoned, resulting in the appearance of the Integrated Review without any serious assessment of the risk of collapse in Afghanistan, just five months before the fall of Kabul; and zero consideration of the possibility that Russia could mobilise massive conventional forces to coerce Ukraine into acceptance of the annexation of Crimea and the Donbas.

As a result, when Labour comes to power, it will inherit incoherence across the board: in defence procurement, industrial capacity, in force design and deployment and in energy security. Despite recent increased spending commitments, there remain significant gaps, measured in billions, between procurement pledges and the money allocated to them, leading to massive uncertainty about the development of major platforms.

Since 2012 the number of fully trained troops in the British Army has been cut from 102,000 to 72,000. Under the Future Soldier project it has been (conceptually but not yet in practice) redesigned around the reduced commitment of a single, understrength warfighting division (including one brigade entirely reliant on the problematic AJAX capability) plus two brigade sized light infantry units dedicated to training and co-operation with armies in the global south.

The UK armed forces – from the naval Carrier Group, to the A400 strategic airlift capacity, to the new Ranger Regiment, to the shrunken warfighting division – are now overtly configured for global expeditionary power projection prioritised in the Integrated Review – when they should in fact be configured for deterring Russian conventional aggression in Europe.

Labour’s task will be to sort this mess out, and quickly. We need armed forces with sufficient firepower and personnel to play a major role in deterring conventional aggression in Europe, which means a) a NATO-wide counter-hybrid warfare strategy and b) a significant increase in the kind of heavy manoeuvre units, long-range fires, anti-air and anti-missile capabilities needed to deter the juggernaut Putin has created for rolling across NATO’s borders.

We need a defence industry that can – in co-operation with both US and European partners – rapidly re-equip the armed forces for conventional deterrence on a scale we have not chosen, but must now accept.

In turn that means fostering academic, research and industrial capacity in all five domains of conflict on a scale not needed since the 1980s. And it means solving permanently the problems that have beset procurement for decades: dud systems, contractual “lock-in”, inter-service rivalry and perpetual funding black holes.

Above all, because we’re facing an adversary that wants to delegitimise the British state, and degrade our democracy, we need armed forces with much stronger roots in civil society, recruited from all its parts, who look and sound like the real Britain they are defending and who enjoy genuine popular support from across the cultural divides.

The key to achieving all this is a new political economy of defence.


A new political economy of defence

In November 2018, in an unpublished speech entitled The Defence Purpose, then-Chief of Defence Staff Nick Carter called for Whitehall to begin thinking of defence as “political economy” not just “expenditure”. If you maintain defence spending at 2% of GDP, he argued, and continually try to act as if you are a Tier One power, matching all threats with new weaponry and forces to meet them, you are basically disarming yourself by stealth.

Britain, said Carter, needs “the ability to cope effectively with a sudden and drastic change in the defence budget – e.g. going from 2% to 5% of GDP if faced with a sudden, unforeseen threat – and to expand both our capabilities and capacity in a wide range of areas (forms of power), not just in classic military “hard power”.”

A new political economy of defence would see defence spending as an investment, with positive spin-offs across society, in terms of growth, skills and social cohesion. In turn, it would reconceptualise non-military industrial capacity, research and skills as potential contributors to defence. Defence thinkers, he argued, should “revisit and learn from models of mobilisation where both military and civilian elements work together: our own wartime experience; the USSR; Cold War Norway; today’s Finland and Israel”.

The speech was met with a deafening silence, even within the limited circles it was heard in. Though Carter ploughed ahead with its operational concomitant – the new Integrated Operating Concept (IOC) for the armed forces – his three most challenging questions have remained undebated outside specialist circles. They are:

Could the UK rapidly expand its defence spending from 2% to 5% of GDP (or higher) in a crisis?

Are we prepared to conceive defence spending as an investment with socio-economic multipliers?

Are we prepared to emulate countries that have large reserve armies, state-directed industrial strategies geared to defence, and whose political cultures foster high social resilience in times of conflict?

The answers coming implicitly from the political class on all sides, were not simply “no”, but “we don’t even want to think about it”.

But if you turn Carter’s challenge into a series of proposals, their obvious congruence with Labour’s industrial, fiscal and social objectives becomes clear.

To put the UK in a position to more than double its defence spending in a crisis would need the wholesale, smart reindustrialisation of Britain. It would need government-fostered clusters in science, engineering, materials, space, cyber and defence leadership – linking universities with manufacturers and technology companies in a wholly new and intensive collaboration, in part funded by the state.

Carter, as a non-economist, mis-states the GDP implications. If Britain rapidly re-armed, raising its defence spending from the £50bn planned for 2024 to (say) £125bn, that need not be a zero-sum deduction from other expenditure, and would – if done right – boost GDP by a similar or larger amount, because of the multiplier effects.

But the Treasury and the OBR have long denied there the existence of positive multiplier effects to public spending, calculating the impact of every £1 invested to be between 33p and £1 added to GDP. That, in part, is why there was a deafening silence. You cannot coherently respond to Carter’s challenge to recategorise defence spending as investment in socio-economic resilience without ditching the “Treasury view” on the fiscal multipliers – a view Labour economists have always disagreed with. Although the precise impact of wartime defence spending multipliers are contested – because re-armament can crowd out “normal” productive capacity – we are talking here of a controlled, peacetime expansion.

As to Carter’s third challenge – a military supported by a society-wide self-defence culture, with Finnish-style reserve and homeland defence system, and defence priorities built into the mission statement of every ministry – that is light years from how Britain has operated since the Second World War.

Britain’s military elites seem comfortable with the way things are: an archaic, white, public school culture among the officer caste; the army still largely recruited among the “boys from the Mersey and the Thames and the Tyne” as Elvis Costello sang. They seem happy with a reserve force so small that it is in reality an auxiliary – i.e. a vital part of the professional standing army, not a parallel Territorial Army capable of being mobilised during a crisis and forming a visible part of the social fabric in peacetime.

If Ukraine is not a blip, but the opening act of a prolonged geopolitical crisis, this will need to change. And Labour, if its politicians and members are prepared to unite around the project, could be the changemaker. However, this will not be easy, because divisions over defence policy run deep.


Labour’s three traditions on defence

There are three political traditions within Labour on defence, each of which can be traced to historic roots going back to the party’s foundation.

The dominant tradition has been the “armed pacifism” built into the Labour ethos at its foundation by the Independent Labour Party. Hardie, Macdonald, Lansbury and Attlee all came from this tradition and indeed helped create it; in the post-war period that tradition has included Wilson, Kinnock, Miliband and (despite the efforts of some of his advisers) Corbyn. Even Gaitskell – both on the Suez adventure and when opposing the independent nuclear deterrent – could be seen as part of the tradition.

It embodies a preference for peace over war; a preference for active disarmament in peacetime; a preference for international law and institutions (the League of Nations and then UN) over bilateral power-projection; a preference for resolving international crises through negotiation and concession rather than confrontation; and distaste for and disengagement from the UK’s class-ridden military culture. While it accepts the need for a nuclear deterrent, it has always advocated active multilateralism and resisted proliferation.

A smaller tradition numerically, but more decisive at critical moments, could be described as “trade union patriotic militarism”. This is the thread that links Arthur Henderson (Labour’s wartime leader from 1914-1917) to Ernest Bevin, who was the earliest proponent of re-armament in the 1930s and minister for Labour during the Second World War, to stalwart modern Labour rightwingers like John Spellar, and military-industrial insiders like former Barrow MP John Woodcock. This tradition has strong roots in the socially conservative and patriotic sections of the working class and, historically, the skilled trade unions.

During the Iraq-Afghanistan crises, Blairism effectively grafted itself onto this tradition – adding the philosophy of liberal interventionism to the traditional doctrines inherited from the Cold War. The default attitude of this faction is pro-nuclear, pro-military spending, pro-intervention, pro-big defence contractors, but it has no specific geopolitical stance other than to accept whatever the American superpower wants to do. On nuclear deterrence it generally wants whatever America wants.

The third tradition is anti-imperialism – which sees wars of national liberation against colonialist powers as justified; which is hostile to wars of aggression and reluctant to support British participation in wars even where there is justification; and which believes the “main enemy” is always the ruling class of your own country, not just in August 1914 but in September 1939.

Though this tradition was present in the Labour Party at the outset, from the early 1920s to the 1980s it was mainly embodied in the Communist Party and various Trotskyist groups outside Labour. Today, especially after the influx of radicalised young people and former trade union militants under Corbyn, anti-imperialism retains a strong voice inside Labour – and its influence stretches way beyond the tiny number of overt Putin apologists. It is a legitimate part of the modern labour movement, represents strongly held beliefs among large parts of the population, including young people, women and minorities, and needs to be persuaded of the new strategy I propose, not coerced.

If the above summary of Labour’s defence traditions is correct, then the Ukraine crisis, and the new period of global superpower rivalry it is part of, will have major implications for each of the factions.

The patriotic militarists will be happy with some increased defence spending, but wil be challenged to think beyond “what does America want” and “what does BAE Systems want”, to ask: what would an independent, Europe oriented defence policy look like; how do we foster new entrants into defence procurement; how do we help the armed forces break out of social ghettoisation and embed themselves fully in the diverse society of the 2020s? While they may never accept that the Iraq war was an act of criminal folly, they will need to make common cause with the majority of Labour’s members who continue to believe this.

The armed pacifists face the same choice Clement Attlee faced in the mid-1930s. When multilateral institutions fail; when peace conferences collapse; when powers emerge that are prepared to enforce brutal dictatorial rule at home and expand their territory by invasion and threats; when far-right dictatorships trigger domestic civil wars and uprisings… at some point you have to re-arm and – more importantly for Labour – make the case for re-armament to an electoral base deeply suspicious of war and militarism.

That’s what the Labour leadership had to do between the bombing of Guernica in 1937 and its entry into government in May 1940. And it was the pacifist centre and parts of the anti-imperialist left – not just the traditional militarist right – which made the running.

It is true that, under Stalin’s orders, the Communist Party adopted the ludicrous and self-destructive position of “a people’s peace” in 1939 – but many lifelong anti-imperialists, including many of the CP members who had fought in Spain, did not take that position. Figures like Tom Wintringham and Fred Copeman, both former commanders of the British/Irish Battalion of the International Brigade adopted the line of “revolutionary patriotism” at the outbreak of war, as did many former ILP anti-imperialists like Orwell, and stalwart Labour anti-imperialists like Nye Bevan and Stafford Cripps.

In 1939 it was the convergence of left anti-imperialism (minus its Stalinist wing) with the traditional militarists and the pacifist centre around the project of a people’s war that allowed Labour to take moral leadership in transforming Britain’s war effort after the fiascos at Dunkirk and Narvik.

Though the parallels are inexact, that is the scale of the opportunity for Labour: to take moral leadership out of the hands of a culpable, compromised Tory elite that has disorganised Britain’s national security and left its armed forces underpowered and mis-designed.

For the Putin proxies on the Labour left there is little doubt how the Ukraine crisis is playing out: badly. They are forced to make the unsustainable claim that the whole crisis is a product of “NATO encirclement” of Russia, and US imperialist aggression. The logical conclusion of arguments advanced by Stop The War’s Andrew Murray is that, should Russia invade Ukraine, anti-war protesters would picket the US embassy to protest America’s culpability.

However, as in rearmament debates of the 1930s, there is a social-democratic position that could unite people of goodwill from all three Labour traditions. There is no space here for a specific and detailed statement of how Labour’s defence policy has to evolve.

Rather what follows is a statement of principles.


Labour’s defence policy beyond Ukraine

The first principle, as already outlined by Labour’s shadow defence secretary John Healey, is that Labour’s commitment to nuclear deterrence is non-negotiable, and its commitment to mulitilateral disarmament total.

If, under the most pacifist leader ever, and with tens of thousands of anti-imperialists active in the party, Labour reiterated its support for Continuous At-Sea Deterrence (CASD) then unilateral nuclear disarmament (UND) should be regarded as off the agenda. UND is, of course, a badge of identity for large numbers of people on the Labour left (both soft and hard), just as the various peace conferences and “collective security” arrangements were in the days of George Lansbury. But when the situation changes you have to be prepared to abandon shibboleths.

At the same time, Labour should actively renew plans to promote multilateral nuclear disarmament, reversing the doctrinal ambiguity adopted by Johnson and pledging “no first use” of nuclear weapons. Labour should announce its intent to cancel the warhead stockpile expansion announced by Johnson (for which there has been no explanation).

The second principle, again already a Labour commitment, is to strengthening NATO as a defensive alliance. Since Trump threatened to pull out of NATO, and while Putin continuously attempts to divide it and sideline it, NATO’s value as a multilateral, defensive alliance has risen. Yes, tragically, it became the vehicle through which Anglo-American imperialism launched its failed nation-building adventure in Afghanistan. But a NATO of equals, with real multilateral collaboration, a realistic strategic concept and a defensive-only posture is exactly what both Trump and Putin wanted to destroy.

Labour should state clearly: Britain’s defence strategy starts at home and in Europe. Our priority – for troops, force design, money and political willpower – is to deter Russian aggression against NATO and its partners in Eastern Europe and the Nordic region. That means Naval bases in the Gulf, jungle training centres in Borneo, gestural deployments of semi-equipped naval carrier groups into the Indo-Pacific, and in fact the whole rhetoric of the “Indo-Pacific Tilt”, should be off the agenda. Like the German social-democratic party, it would be legitimate for Labour to declare its opposition to future out-of area deployments by NATO, and to repudiate the “out of area or out of business” doctrine promulgated by American neoconservatives in the 1990s.

Labour should declare its intent to conduct a full Strategic Defence and Security Review once in office, with the aim of refocusing the armed forces towards the primary task of conventional deterrence in Europe through NATO. It would stand clearly at odds with

Tory policy outlined in the Integrated Review and offer the electorate a genuine choice between fantasy Empire 2.0 building and defence realism, and between sustained multilateralism and sporadic bilateralism.

The third principle is to accept and embrace the multiplier effects of defence spending: to make the case not just for increased defence spending in the short term, but a long-term solution to the defence procurement black hole, in the form of a long-term defence budget expansion. Labour should see an expanded and diversified defence sector as a central component of the industrial strategy it wants to implement, and use state direction and state ownership to create new clusters of skills, research and manufacturing capacity in the UK.

Taking Carter’s 5% of GDP scenario as the starting point, Labour should commission research showing where Britain needs to build new defence industrial capacity – both actual and latent – and how a mixture of state funding and private-sector investment can be mobilised to create it.

A fourth principle should be: Britain’s defence should rely on active collaboration with Europe and the European Union. A medium-sized country cannot operate as a Tier One military power unless it is actively collaborating with similar powers to develop technologies in line with the rapidly evolving threat. In the short term, faced with new threats like the drone warfare demonstrated in the Nagorno Karabakh war, or the possible collapse of the AJAX programme, it may be necessary to buy “off the shelf”.

But in the long term Britain should commit alongside the EU and individual NATO allies to major European multinational defence and space projects, and to the creation of European-scale defence contractors who can make the idea of “strategic autonomy” and “technological sovereignty” a reality. This, too, would be a major differentiator from the Johnson approach, which is to effectively boycott and detach from Europe in the defence industrial sphere, while attempting “MiniMe” projects in space, cyber and drone technologies.

Finally, Labour should signal its dissatisfaction with the current design of the armed forces, and its intent to change things.

The army has been shrunk from 110,000 to 72,000 and, in the process, the commitment to a four-brigade warfighting division was abandoned. Under the Future Soldier concept, the British army has been explicitly redesigned for “global reach” using light infantry and quasi-Special Forces units like the planned Ranger Regiment, while the warfighting division is reduced to three manoeuvre brigades, one of which is entirely reliant on the questionable AJAX platform. The UK has no ground-based missile defence systems; no serious surface-to-surface missile capability; and has opted for carrier-based 5th generation combat aircraft rather than the long-range, land based ones preferred by similar sized powers.

RUSI analysts have argued that Britain, like all medium sized countries, faces a binary choice – between a modernised tank-heavy division, designed to counter-attack any threat to NATO’s eastern flank, and a “fires plus reconnaissance” solution which would use networked technologies, lighter vehicles and longer-range fires to inflict a heavy cost on a potential attacker, without the capability for offensive action. Some have even claimed that, following the success of drone warfare in Nagorno-Karabakh, the tank is dead as a weapon of war.

But as one serving Army officer points out: “Ukraine and the Baltic republics are arguably menaced not by cyber effects, information warfare, or influence operations, but by tanks and artillery of which some Western armies have largely divested themselves”.

The fact remains that, at the height of the Cold War, the UK’s contribution to NATO’s Northern Army Group (NORTHAG) was two fully-fledged armoured divisions, an infantry division on 72-hour standby and a reserve armoured division, together with a spectacularly large logistics, engineering and security apparatus stretching from the East German border to the UK. Given that modern military technology allows significantly more firepower to be generated per combatant, it is at least worth Labour reviving a question nobody wants to ask: what would a two-division British contribution to NATO look like, and how would the air, naval, space, cyber forces and long-term procurement have to change in order to support it? And what would it cost?

As I write, the outcome of the Ukraine crisis is undecided. Even assuming its best-case outcome – demobilisation and a cold peace, with the Donbas republics and Crimea permanently under Russian control – there is a strong argument that Europe’s security will in future rely on massive conventional deterrence and on active counter-hybrid warfare strategies.

If so, social democracy faces a choice: it can leave the design of solutions to the existing military castes, insider think tanks and right-wing politicians – or it can actively engage, linking the transformation of defence capabilities to the wider project of smart reindustrialisation, revived communities, social cohesion and a resilient active democracy. For Labour, doing the latter should be a no-brainer.

Paul Mason is a journalist, writer and broadcaster. His most recent book is How To Stop Fascism: History, Ideology, Resistance (Allen Lane).

Image Credit: vladm