- What are the major economic trends of concern?
- What results might arise from these trends?
- What are the implications for the U.S. Air Force and the future of warfare?
Economic developments, trends, and disputes rarely are the sole cause of wars, but economic conditions can contribute to the risk of war and affect how wars are fought. Medium-term economic trends as of 2018 are raising the risk of war and lowering U.S. ability to win wars decisively, although only modestly. The global trading system is undergoing a period of turbulence, a major competitor—China—is expanding its economic and security reach, and the search for new resources presents a continued uncertainty. At the same time, U.S. and allied economic heft is declining relatively in the world, and with that, U.S. and allied defense industrial bases have consolidated, reducing industry resilience and the ability to replenish arms in times of stress. Furthermore, less economic heft in the world could lessen U.S. ability to attain leverage via sanctions. Despite these trends, the risk that economic conditions or events will spark war by 2030 is small. Nonetheless they add to a background of greater uncertainty of which defense planners need to take account.
There are several risks to the world trading system
- With the World Trade Organization's influence weakening, major liberalization efforts might stall, and trade rules might not adapt to new developments in technology and the economy.
- Real benefits of continued trade liberalization for goods will come from liberalizing the trade of developing countries, and they have proven resistant.
U.S. and allied economic power could face a relative decline
- The overall share of the global economy accounted for by the United States and its alliance partners is likely to continue falling. To the extent that U.S. adversaries can support proportionately larger military budgets, those nations can narrow the gap in defense spending.
- However, the level of development of U.S. challengers is likely to stay well below that of the United States.
One of the most important events in the post–World War II era has been the rise of China as an economic power
- China is becoming more involved in international institutions and multilateral action and with its own institutions.
- The key uncertainties will be how well China maintains its growth, how much support it lends to the institutional foundations of an open world economy, and how open it remains.
Natural resources, particularly oil, have often been an element in interstate wars.
- Control over resources used in the evolving global, technology-based economy could introduce greater international uncertainty.
The defense industrial base underlies the ability to develop, produce, and sustain the quantity and quality of warfighting materiel necessary
- Sustaining the health of domestic and allied defense industrial bases might become increasingly challenging if U.S. and European defense budgets decline and Chinese and Russian defense budgets rise concurrently.
Power of U.S. sanctions might decrease
- As long as the United States is central to the global economy, it will be able to use sanctions as a tool to shape other nations' behavior.
This research was sponsored by the United States Air Force and conducted by the Strategy and Doctrine Program within RAND Project AIR FORCE.
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