In today´s post, we would like to announce and recommend the publication of “Violence Containment Spending in the US”, a new report that calculates total U.S. public and private expenditure on containing violence – international & domestic. A Shared Societies Project collaborator, the Institute for Economics and Peace (IEP), has prepared this report.
One of the latest developments of the Shared Societies Project was the launching of the economic argument for social inclusion: “The Economics of Shared Societies” during 2011. The economic argument for building a shared society seems obvious. If sections of society are marginalized they will contribute less to the economy. They will have poorer education and limited skills to contribute and less capital to invest. They may also be less willing to contribute to a society that they feel does not respect them or treat them as full citizens. They may go further and resist the status quo and it may cost the state a good deal of its surplus wealth to maintain it. The state may resort to increased security measures, such as enlarged security forces, enhanced equipment for the security services, larger and stronger prisons. External capital is unlikely to invest in a society if it seems unstable and tension is high. While this type of analysis seems self-evident, it does not seem to have much impact on many current leaders. The Shared Societies Project believes that leaders will make greater efforts to achieve a shared society once they and their communities understand and communicate the economic benefits of building a shared society.
This report “Violence Containment Spending in the US” contributes to this argument significantly, since it provides a new methodology to categorize and account for the economic activity related to violence. Let’s review some of its key findings:
- Violence containment cost the U.S. $2.16 trillion per year, that’s one in every seven dollars.
- If violence containment were an industry it would be the largest industry in the U.S.
- Federal expenditure has expanded in the last ten years, increasing by 15%. Violence–related expenditures four times greater than the Department of Defense budget.
- The size of Violence Containment is equal to the entire UK economy.
- A 5% reduction in Violence Containment spending for 5 years would provide the capital to rebuild the nation’s levees systems, update the energy infrastructure and complete the upgrading of the nations school infrastructure.
The study shows that even small reductions in Violence Containment spending would result in a meaningful stimulation to the U.S. economy’ Steve Killelea.
The study is the first systematic measure to account for all violence-related expenditure in the U.S. economy. It captures government, corporate, and individual expenditure regardless of whether it is related to international affairs, such as offshore military activities, or domestic spending, for instance, dealing with crime and its consequences.
“By defining a new industry as the ‘Violence Containment Industry,’ it is now possible to aggregate all expenditures related to the containment or consequences of violence. Our research indicates that when measured as a percentage of GDP this industry has expanded by 25% in the past ten years,” stated Steve Killelea, Executive Chairman of IEP.
The report shows that if the $2.16 trillion of Violence Containment spending were represented as a discrete industry, it would be the largest industry in the United States economy, larger than construction, real estate, professional services, or manufacturing.
The study accounts for all expenditure that is related to violence, such as medical expenses, incarceration, police, the military, insurance, homeland security, and the private security industry. Expenditure is also divided by local ($154 billion), state ($101 billion), and federal ($1,305 billion) government as well as private spending by corporations, households, and individuals ($602 billion). A 5% reduction in federal government Violence Containment spending for 5 years would provide $326 billion. This would exceed the capital needed to rebuild the nation’s levees systems, update the energy infrastructure, and complete the upgrading of the nation’s school infrastructure. The American Society of Civil Engineers is currently estimating a $134 billion shortfall for the above infrastructure development.
“The study clearly demonstrates that even small reductions in violence and the spending associated with it would result in a meaningful stimulation to the U.S. economy,” concluded Mr. Killelea.