IISS’ Schake on US Defense Strategy, Novel Ways to Prioritize Tradeoffs, Innovation


Kori Schake, PhD, the deputy director general of the International Institute for Strategic Studies, discusses US defense strategy, tradeoffs and priorities, innovation and more with Defense & Aerospace Report Editor Vago Muradian at the Reagan National Defense Forum at the Ronald Reagan Presidential Library in Simi Valley, Calif. Our coverage was sponsored by L3 Technologies and Leonardo DRS.

Dr. Kori Schake

International Institute for Strategic Studies

Reagan National Defense Forum

November 2018

Vago Muradian:  Welcome to the Defense and Aerospace Report.  I’m Vago Muradian here at the Reagan National Defense Forum, one of America’s leading security gatherings each year here in Simi Valley, California at the Ronald Reagan Presidential Library.  Our coverage here is sponsored by Leonardo DRS and L3 Technologies, and our very first interview is with Dr. Kori Schake, first order strategist, defense thinker, who is the Deputy Director General at the International Institute for Strategic Studies in London.  I’m sorry, Kori, that’s got to be one of the best titles ever.

Dr. Kori Schake:  It is a fabulous title.  I agree.

Mr. Muradian:  It’s extraordinary, and you guys do incredible work there.  The military balance is, anybody who’s interested in national security anywhere on the planet should be reading that, and we look forward to talking to James Hackett and the rest of the team when that comes out here in just a couple of months, because I think in February you’ll have your roll-out here in the United States as you do annually.

A lot of big topics here.  Great power competition.  This is something you’ve focused on.  You’ve worked closely with Secretary Mattis as well, in sort of thinking through this and were involved in the National Defense Strategy as well in terms of thinking through some of the big clear issues.

Let’s talk about prioritization and resources.  Now it’s a debate.  The National Defense Strategy Commission has put out this thing, look, you know, the National Defense Strategy is an awesome strategy and it has a lot of bipartisan support but the resources aren’t enough.  That we need to get to a trillion dollars annually on a sustained basis to be able to deliver.

The criticism from the other side of the aisle is look, but the strategy doesn’t really prioritize anything, and in some cases neither did the Commission in terms of where the tradeoffs need to be.

Talk to us a little bit about what are the right ways to think through tradeoffs?  Because we’re really at a hinge point in history where some of the things we’ve been doing for a long time just may not be relevant for the future.

Dr. Schake:  The first thing is I think both the National Security Strategy and the National Defense Strategy actually did prioritize things, which is to say that the most important priority is the return of great power competition, and that a rising China and a declining Russia are how we should focus our defense resources.  And it looks to me like the Pentagon is doing a really good job of the downstream planning of that.

So that’s huge. It’s a big thing to get right. Previous administrations were trending that way, but China’s behavior has made clearer and clearer that we need to move that direction.

The resourcing issue is a hard one because I costed out the Commission’s report at about $900 billion for all of the things they say are priorities.  The Secretary of Defense is going to have to scrape by with $700 billion this coming year.

Mr. Muradian:  Well, $716 if he’s lucky, right?  Split the difference between what Adam Smith is talking about and Jim Inhofe is talking about.

Dr. Schake:  The thing is, though — so the challenge for the United States is that when you’re the hegemon, every adversary is going to play to your weaknesses because your strengths are so predominant.  So we have been fighting counter-insurgencies because countries and organizations did not believe that they could achieve their objectives against us in the center of the conflict spectrum.  What we should be worried about with the return to great power competition is that a rising China in particular grows in confidence, they could defeat us at the middle of the conflict spectrum.

So it’s the right place to push your resources, to push your innovation, to make that a priority. I think they’re right in doing so.

I lost a bet with the Secretary of Defense that he would get the money in 2018 and 2019 that he said he needed, and I have that bet running with him again this year.  I think that all of us who care desperately about the vitality of America’s national defense, all of us need to be evangelizing an entitlement reform and a solid fiscal base for American government operations.  Because in 2023, interest payments are going to overtake what we spend on national defense and we can’t, you can’t get yourself out of that by reforming the Defense Department.  You can’t get yourself out of that by cuts to other discretionary forces.

We actually need to face up to the fact that it is unsustainable to run trillion dollar a year deficits and we need to reform entitlements, we need to talk together as a nation about our tax base and the fairness of our tax base, because that’s the only way you are going to get to the levels of defense spending that the current international security environment requires.

Mr. Muradian:  You mentioned to me what I thought was sort of a very innovative planning tool, which it actually might be good to shape your priorities.  So talk to me about that idea.  Because I actually think it’s a brilliant idea because it forces you to first principles about what’s important and what’s not important.

Dr. Schake:  And that you would do, that strategy just isn’t about if I have 10 percent more money I will do 10 percent more of stuff.  The real strategic challenge is how at different levels of resources would you approach the problem?  What would you have to say I don’t have the money, the bandwidth, the forces to undertake this obligation?  And where would you focus resources?

So one of the things that the National Defense Strategy and the Commission I think did not do well enough is price out alternative approaches.

So I would love to see Congress require the Defense Department to do the National Defense Strategy in $50 billion increments.  If you have $600 billion what can you do, what can you not do?  Where do you place your emphasis?  If you have $700 billion, what changes?  Because if your strategy doesn’t change at those increments of funding then you’re not thinking carefully enough about the priorities and about the tradeoffs.

Mr. Muradian:  How do you build, and I think that actually would be a terrific thing, because it focuses the attention, and you can’t just do things because you’ve always done them or —

Dr. Schake:  Innovation is about what you can stop doing.  So that’s the right discriminator.  If you are innovating, you can say I don’t have to do this anymore because that need went away.  I don’t see any of that going on.

Mr. Muradian:  So talking about innovation, innovation is also what you stop doing, and we’re doing almost everything that we’ve done and more literally since World War II, right?  I mean almost every single thing that we do is the same thing that we’ve done.

Talk to us a little bit about how you use wargaming, how you use the intellectual process, and then how do you build a political constituency?  There are going to be systems that are the buggy whip, that are the battle ship, that are going to have to go out of service, and yet they have very powerful political constituencies.  We’re at this incredible conference.  It would not be made possible without the generosity of a lot of defense contractors that are supporting it.  That’s part of the ecosystem we live in.

So what are the ways to make those decisions?  And then what are the best ways to actually sell those decisions given that we are the hinge point on a lot of technologies and operational concepts for the future.

Dr. Schake:  As the B-52s demonstrate, and the SR-71s demonstrated, that you can use legacy systems in important innovative ways.  They may not be the most cost-effective ways, they may not be the operationally optimal ways, but you need to use what you have.  We are going to have battle ships and aircraft carriers and manned fixed wing fighters for 50 years because we have them in the inventory.

So I think the first thing you do is acknowledge that.  Acknowledge the strength of what we have.  Think about innovative ways to use them.  Think about how to grandfather them towards the future.  And challenge the innovators to make better use of what’s available.

I would love to see us shift the resourcing and the requirements process to something where you challenged combatant commanders, services, and other stakeholders to compete for mission areas.  Right? How would you defend the Taiwan Straits? We’ll fund the top three interesting innovations.

Mr. Muradian:  Kori’s Shark Tank.

Dr. Schake:  [Laughter].

Mr. Muradian:  With cocktails.  I think that decision-making would go a little bit better in that case.

Let me ask you quickly, because the room is filling up and we’re about to lose it.  One of the key worries is, and you’re in London and you talk a lot obviously, and you always have throughout your career, with academics and intellectuals and defense leaders from around the world. But there is this concern that I received — I just came back, we were in the Halifax Forum which was fascinating. In quiet conversations there was this concern about really tectonic divergence between the United States and its allies.  The rhetoric. I was talking to overseas folks, even Canadians.  They’re like, you know, just on the guns issue there’s a divergence.  And the guy I was talking to was one of Canada’s most — was a highly decorated general officer who’s a career soldier.  He was like I was a soldier.  There were a whole series of issues that we talked about where there were gaps forming, and there was a concern that Europe, with European armies is going to go in a different direction.

How do you sense this period that some say is the start of a permanent shift or a temporary shift? How do you see this era?

Dr. Schake:  I actually love that you used the difference in attitudes between the United States and other countries on guns as an example.  It shows, these aren’t new frictions.  These are longstanding frictions.  We are actually different than many of our closest friends on a lot of important issues.

The challenge now is that we have a President of the United States who does not value the solidarity of allies, who does not understand that fundamentally our alliance relationships are our strongest strategic advantage in managing the international order, and that’s what’s scaring people.  It’s not that we don’t have gun control.  That’s been true for a long time.  It’s that the President is causing them to worry that the United States might not be reliable.

I was thinking about this this morning, thinking about the passing of George Herbert Walker Bush.  I was a young staffer in the Joint Staff in J5 at the time of German unification, and because President Bush was a man of such trustworthiness and integrity, we had people in the German government coming to us to talk about how to trap their government into keeping Germany in NATO because the Chancellor was willing to trade it away.  And they trusted us enough that they let us help shape that outcome.

They also trusted President Bush that when Margaret Thatcher and the President of France opposed German unification, they knew that we would stand with them.  And I caused to reflect just how much the integrity of the President is actually a strategic asset for the United States.  That’s what’s missing right now.

Mr. Muradian:  I have to say I worked on the Economic Summit in Houston in 1990 when President Bush every morning came and said hello to all of us who were working on it every day, and humanity and — he was just a very, very special leader who I also, like many of us, had a chance to intersect with over the years.

Let me ask you one last question.  One of the things that the National Defense Strategy Commission said was, you know, did ring a very dire warning.  It’s the latest in a series of warnings that have been building up.  Right?  I mean if you go back and talk to Andy Marshall, he’s been warning about all of this for a very long time.

Do you think the warnings are as dire that the fundamental structure of the rules based global order that’s been the most important mechanism for global peace is in jeopardy and will be in jeopardy, not just because of rhetoric but also investment by the United States?

Dr. Schake:  No.  I do not think it’s in deep jeopardy, although four years from now I may have a different view.

I think that the liberal order is so robust that it can sustain periods even of America, the United States willfully damaging it, as I believe the President is now.  But there are enormous forces holding us together. Not least that the values that we share make it very hard for America’s allies to ally with others against us, and the liberal states — Canada, Mexico, Britain, France, Germany — they have such a strong interest in helping sustain the order that I think what we are seeing is those middle powers cooperating in creative new ways to sustain it, to buy us time.  So Canada, Mexico, Australia, Japan, bringing the Transpacific Trade Partnership into existence despite the United States.  Australia and France cooperating on patrols in the South China Sea.  They’re stepping up.  Where they need to step up an awful lot more is in their own defense efforts.

We at the IISS just did a fabulous piece of research looking at President Macron’s call for strategic autonomy by the European Union.  We actually took them seriously, took their level of ambition, took the possible mission sets, and the IISS identified all of the shortfalls of Europeans to actually be autonomous.

So if you think the liberal order’s genuinely collapsing, you ought to see a lot more defense spending by the Europeans than we’re seeing.

Mr. Muradian:  Kori Schake, the Deputy Director General of the International Institute for Strategic Studies.  Kori, it’s always a pleasure.  Thank you so much for joining us.

Dr. Schake:  It was a great pleasure, my friend.



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