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

Around the 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 nato members that do not meet the club’s 2%-of-gdp 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 gdp to fighting. In the 1960s, at the height of the cold war, governments typically spent 6% of gdp 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 gdp—close to an all-time low.