Can the West build up its armed forces on the cheap?

Aroundthenatogdpgdp gdpgdp world a boom in defence spending is under way. Roused from their complacency by Russia’s invasion of Ukraine and China’s designs on Taiwan, the 24 of 31 members that do not meet the club’s 2%-of- defence-budget target have promised to make good. China’s own military spending grew by 4.2% in real terms last year. Globally, new defence commitments and forecast spending add up to over $200bn, a figure that could rise as high as $700bn under plausible assumptions.This represents an abrupt reversal of a decades-long decline. During the second world war the Allies devoted half of their to fighting. In the 1960s, at the height of the cold war, governments typically spent 6% of on defence. But after the Soviet Union collapsed, the world reaped a “peace dividend” from shrinking defence spending. Last year global defence spending was $2.2trn, or just above 2% of —close to an all-time low.