A Note on the NATO-Russia Military-Industrial balance

In reading up on the Russo-Ukrainian conflict I have found myself thinking about the claims some, outside the mainstream media but commanding considerable audiences (to go by the sales of their books, the comment threads on their blog posts, the measure of attention they get in certain corners of the Web), have made along the lines of a deindustrialized U.S. and NATO are weaker, and Russia stronger, in the military-industrial sphere than is generally reported by the conventional metrics, and usually assumed--which seem to have had traction with the war's dragging as it has, reports of massive and disproportionate Ukrainian casualties, and claims about NATO stocks of weaponry being depleted by transfers to Ukraine to help it with what is only a relatively limited conflict. (Indeed, Emmanuel Todd, who has long been a skeptic of the claims regarding U.S. economic strength and the substance of "post-industrial" economies generally, has recently added his voice to those already arguing this position.)

Given my long interest in the failings of the conventional wisdom regarding economic life--which are many and severe--the essential claim got my attention (the more in as I have so recently been attentive to the question of deindustrialization in countries like the U.S. and Britain specifically). And I have since tried to take a systematic look at the available data to check it (which you can find, with all the figures and all the footnotes, here).

Short version: that look persuaded me that some display an exaggerated view of Russia's weaknesses (all too familiar from, and not implausibly an extension of, the disdain that characterized so much writing about Russia in the Cold War era). As the supply shocks of this year remind all, the country's economy is not reducible to a giant "gas station," but a producer of numerous essential commodities of other kinds, not just foodstuffs but manufactured goods as well, among them crucial agricultural inputs like fertilizer, and metals (the country recently the world's second greatest steel exporter, in 2020 putting over 30 million tons on the international market). The country also has its undeniable strengths in some demanding industrial areas, like aerospace and defense generally.

Still, the kinds of goods Russia exports, and the overall numbers regarding Russian production (certainly per capita output numbers), seem to me indicative of a developing country, broadly on a level with Mexico or Turkey, albeit with significant "legacy" strengths from the Soviet era (with aerospace-defense the outstanding example). And sure enough the disparity in resources between NATO and Russia is gigantic--with NATO having an 11 to 1 edge in GDP (that's if we go by PPP-adjusted figures; it's more like 24-to-1 if we don't). Of course, some call out GDP as decreasingly meaningful in today's world (certainly Todd makes his case on these grounds), but going by value added the gap is a no less formidable 24-to-1 in manufacturing output, with an assessment of their consumption of critical inputs suggesting some substance to the figure. NATO's steel use is 5 or 6-to-1 Russia's by tonnage, its machine tool consumption greater by a 12-to-1 margin and its consumption of semiconductors perhaps two hundred times Russia's--while in the latter areas the production gap is greater, with NATO recently outproducing Russia 60-to-1 in machine tools, and Russian semiconductor production so marginal that any quantitative comparison risks exaggerating Russia's strength. (Reportedly Russia's biggest and most advanced producer is now producing 65 nanometer chips--the stuff of 2004-2007.)

One may add that the disparity between Russia and any one NATO country are smaller, but even all by itself the U.S has immense advantages--at least twice Russia's population and four times its GDP by even the most favorable measures, and for all the reality of its deindustrialization, by itself has eleven times Russia's manufacturing output (and far, far more in critical areas like microchip production).

Of course, that said no conflict is wholly and simply reducible to the output of the two sides--this one less than most, given the extensiveness and complexity of international involvement, and the dangers of escalation. But all the same--and again, even acknowledging the trend of economic life in the U.S. and other advanced industrial nations--any notion of the Western economies having so thoroughly hollowed out as to leave them at a disadvantage facing Russia (for that matter, at anything but a considerable advantage to Russia) seems simply unsupportable on the basis of the available information, while those taking that line, if bringing some justified skepticism to the conversation, offer no alternative foundation for their conclusions.