5th Week An army marches on its wallet

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Austerity and the British armed forces

An army marches on its wallet

Jul 22nd 2010, 9:55 by The Economist online | LONDON

BRITAIN’S military chiefs have been at daggers-drawn for much of this year. Now they are thinking about cutting into real flesh as they debate the Strategic Defence and Security Review, due in October. This is driven mainly by cost-cutting, “the absolute mother of horrors of a spending review”, as Liam Fox, the defence secretary, put it recently.

According to the whisperings from the Ministry of Defence the army may have to give up whole brigades, armoured formations and artillery units; the air force is considering abandoning maritime surveillance aircraft and retiring its fleet of Tornado strike aircraft and Harrier jump-jets; the navy may be made to give up the Royal Marines and amphibious landing ships; and the submarines carrying the nuclear deterrent may be cut from four to three.

Some central decisions are likely to be taken in the coming days. Ministers first have to decide what kind of power Britain aspires to be: become a more or less insular country minding its own business, or remain some kind of global force able to intervene in far-flung parts of the world?

Civil servants have drawn up three broad categories for the national security council to consider today. At one end is “Vigilant Britain”, which sets itself a smallish set of military tasks to defend the homeland: protect its airspace and national waters, fight terrorists at home, though still retaining the semblance of a world-wide diplomatic network, the ability to stage short, small-scale interventions (usually in “permissive” environments) and a nuclear deterrent.

At the other extreme is “Committed Britain”, with roughly the capabilities it has now: a blue-water navy, and deep strike air force and substantial deployable forces able to wage a major war in distant places. Inevitably, the likeliest option seems to be the middle road, “Adaptable Britain”, though someone will probably think up a snazzier label.

Turning such a choice into brigades, squadrons and naval task forces is the job of a second meeting, this time of the Ministry of Defence, expected at the weekend. This will start trying to reconcile the level of military ambition with the “envelopes” sent by the Treasury to the MoD seeking options for cuts of 10% and 20%.

A logical process would have Britain set out its objectives, then decide the means it requires and then set the level of funding. The political reality pushes in the other direction: the money available determines the level of ambition. So the bureaucratic machine will spin around and around: the government will set a scaled-back ambition because it knows money is short, then the MoD will crunch the numbers and conclude that it cannot be achieved with the funds available. The ambitions will be pared back further and the equipment recalculated, and so on, in an “iterative” process.

One complication is that the three categories confuse as much as they elucidate. A vigilant Britain could be a well-equipped fortress or a demilitarised Iceland (depending on whether it thinks Russia will ever be a threat); a committed Britain has to decide if it only wants to do short, sharp “Day One” operations, or whether it is prepared to stay in hostile places years after the original intervention, as in Afghanistan.

Another complication is that the MoD is not starting with a clean slate. Most of its equipment budget is already taken up with existing programmes, commissioned long ago with bills to be paid for years to come. These include aircraft carriers, Typhoon and Joint Strike Fighters, nuclear submarines that may or may not be relevant to today’s recalibrated needs.

So in parallel to the philosophical discussion about Britain’s place in the world is a grittier process of asking what can be given up with least pain. Each service is being asked to suggest what can be done with cuts of 10% and 20%. Hence the latest round of leaks. This too feeds into the ministerial discussion: regardless of what kind of global posture the government wants to adopt, will it really risk killing off shipyards by eliminating half-built aircraft carriers or submarines?

As always, each service defends its corner: the army says wars of the future will look much like Afghanistan, requiring plenty of “boots on the ground”; the navy emphasises Britain’s history as a maritime trading nation, and the import!ance of securing the sea-lanes; the air force says that without air power soldiers and sailors alike will be dangerous exposed.

There is a grim irony, therefore, about the review’s set-up: each service’s claims are being examined by senior officers of the other two. And in case anyone thought this was not a cost-cutting exercise, officials from the Treasury are sitting in all the key meetings.

FOR THE DOGS

The poor will always be with us, sure. But in times of economic uncertainty, it is a relief to know that plenty of rich people linger in the midst, too. It is especially gratifying to see evidence of the silly rich, the filthy kind, with their jets and diamonds, their $400 facials and $1,000 sandals. When times are tough, it is soothing to know there are still plenty of people living high on the hog. Like all of those creamy Fred and Ginger films during the Great Depression, we thrive on the knowledge that pockets of luxury persist with reckless, decadent abandon. We need the rich: to ogle and envy, to resent and aspire to. Their conspicuous consumption is essential to the natural order of things.

In a time when luxury spending has been curtailed (or it has at least become more discreet, with more money spent on home interiors than on travel and apparel), it is reassuring to learn of a new poll that predicts a considerable increase in luxury spending in 2010. The "Survey of Affluence and Wealth in America"—an online study of 1,900 affluent households by American Express Publishing and Harrison Group—finds that an interest “in luxury is trending up.” More pointedly, wealthy people have reported feeling happier lately, in part because many have realised that they can comfortably live on less, and that it isn’t so bad to spend more time with their families "It's because they didn't know they could survive something this bad," said Jim Taylor, Harrison Group's vice chairman to the Luxury Marketing Council of New York on Wednesday. "Happiness is now the abiding object of affluent American life, not success," he said. "They're really happy with their ability to operate under pressure."

So all of this is good news, both for humanity and luxury retailers. In a similar vein, it was weirdly fortifying to learn what doting dog owners can buy for their pooches at the Neue Galerie, a beautiful little museum on Manhattan’s Upper East Side. In a recent e-mail, the gallery’s staff reminded fans of its collection of early 20th-century German and Austrian art—all those Klimts and Schieles—that its lovely shop of tasteful goods with surprisingly expensive prices has a proper "hund" section. This is where shoppers can buy something described as a Bohemian Glass Bead Evening Collar (priced at $2,400, pictured) for when Fifi is going out for a night on the town (putting on the dog, as they say). There is also something called a “Doggie Weekender” Kit ($795), "a compact, elegant ensemble of unique products all created to keep your dog healthy and happy," all in a rather nice hand-stitched pebbled calfskin travel case.

Earlier this year The Economist published an excellent article on the complicated economics of the so-called American Dream. It posited that unlike people in other rich countries, "Americans tend to accept relatively high levels of income inequality because they believe they may move up over time". (The article then clarified that while America does offer opportunity, it's not nearly as much as its citizens believe.) So it's hard to begrudge the wealthy canine lovers spending thousands of dollars on antique beaded doggie collars. They reveal the inspiring potential to splurge in wonderfully ridiculous ways.