Category Archives: economics

Mass mobilisation for World War Three?

A collage representing the Tri-Services of the...
A collage representing the Tri-Services of the British Armed Forces, including one of the Royal Navy’s Type 45 destroyers, HMS Daring, a British Army, Challenger II main battle tank and a Royal Air Force, Eurofighter Typhoon FGR4. (Photo credit: Wikipedia)

Mass mobilisation for a world war level conflict would need the country to repeat what it did for WW1 & WW2.

Discussion I’ve read on twitter amongst those interested and knowledgable about defence (a mixture of serving officers, military historians and political observers) suggests that Britain has a real problem with the level of defence spending and decaying of capability for mass mobilisation to support a world war level conflict.

Years of small wars on the back of the 1990s ‘peace dividend’ has prevented major equipment changes. The British Army is still using many of the same armoured vehicles that it had in 1989. They’ve had internal upgrades, and improved control systems. The lighter vehicles have fared better because there were urgent operational requirements for Iraq and Afghanistan.

Mass mobilisation for World War 2

Britain was in a similar state to now in the early 30s. After WW1 we didn’t want to go to war again. The army was small and didn’t have any of their kit replaced. With few exceptions in 1933, when Hitler came to power, the British Army was using the same kit that it had ended the world war with in 1918. The recognition of the nazi threat lead to an abandoning of the ten year rule (where we funded our armed forces on the assumption there would be no major war for at least ten years).

Appeasement was a policy not of keeping Hitler happy, but of buying us time to re-equip and expand our armed forces in preparation for mass mobilisation. Through the late thirties a massive programme of expansion and re-equipment went on. In 1938 Britain spent 7.4% of GDP on Defence [1], which is three and a half times what we are spending now. This doubled in 1939 to 15.3% – not all of which was after the declaration of war in September. By 1941 it was above 50% and it stayed there for the duration.

Existential Threat

The nazis were seen as an existential threat, so the public were willing to support mass mobilisation for world war two and accept the sacrifice of additional taxes to pay for the war. Income tax doubled from a basic rate of 25%, which is similar to the current level. I think it would be fair to say that Britain could only afford mass mobilisation for world war three if we could see an existential threat to the country.

Without an existential threat, today we could field one armoured Division with air and naval support. We can’t move it anywhere in a hurry without hiring civilian cargo vessels. Against certain countries that division would be an annoyance, but it certainly wouldn’t stop them doing what they wanted, just impose a stiff price.

Once it was destroyed, we’d be at their mercy. Either that or we’d be strongly considering our nuclear options. That said, anything that caused us to commit the 21st century British Expeditionary Force would almost certainly trigger the NATO mutual defence clauses. So there would be more than just the UK involved.

What does 2% Buy in Defence?

Britain is signed up to the NATO commitment to spend 2% of our GDP on Defence. Through some accounting adjustments we spend almost exactly 2% including some overseas aid. The actual defence budget of £38bn for MoD is likely to be about 1.9% of GDP this year. Almost 40% of that is spent on acquiring equipment, notably the aircraft carriers[2], trident submarines and F-35s. Between these three huge ticket items there isn’t much capital left.

As at 1 April 2016[3], the British Army had a trained strength of 79,750 regular personnel and 23,030 reserves, lower than it has ever been since before the start of the 20th Century. The Royal Navy and RAF both had slightly over 32k each, for a total armed forces trained strength of 168k personnel (very few of whom are reserves).

MOD reported that in 2015-16 it spent the following on each of the services[4]:

Service Operating Costs Equipment Total Share of Budget
Royal Navy £2.5bn £3.3bn £5.8bn 17.3%
Army £6.6bn £1.5bn £8.0bn 24.0%
Royal Air Force £2.5bn £3.6bn £6.1bn 18.1%
Joint Services £1.9bn £2.2bn £4.1bn 12.2%

You’ll notice that the totals don’t add up to the whole Defence budget, but that’s because I’ve left out the civilian elements and the long-term strategic acquisitions.

Mass Mobilisation of Our Armed Forces

There’s two ways to look at this, one is a simple uprating of what we currently have by the amount of extra money we might be able to spend and decide whether that would be effective. The other is to look at what we might need and then see if we can afford it.

For either of these tests you need to have an adversary in mind. When you get into it, quality and will to fight affect the answer. It’s not completely about raw numbers. Maybe someone somewhere has done the work to compare the economic strengths of warring powers and what that tells you about outcomes. I doubt it’s clear cut that the bigger economy always wins, but as a general rule it works.

What could we afford?

Britain is currently the 5th biggest spender on Defence worldwide, and our economy is 5th or 6th dependent on currency fluctuations and Brexit impacts. So there aren’t many countries that ought to be able to scare us, even if we can’t field enough troops to round up their military.

The UK GDP in 2016 is around £1.9 trillion[5]. During WW2 we spent over 50% of GDP on the war effort[1]. We taxed people more, borrowed heavily, and the economy also grew significantly from the war expenditure. I’m not sure that we could quite get to 55% on Defence, we’d still have the welfare state to fund, albeit some of it could be diverted to the war effort. We could also up the total tax share from around 37% (according to Treasury’s analysis the public sector spent £713bn in 2015-16[6]) to match that WW2 55%. That could bring Defence spending to 20% of GDP.

Other sources of funding:

  • The Welfare budget The UK spends about £250bn on welfare[6], over a third of our public expenditure. Most of it is on pensions and disability, neither of which would reduce as a result of a world war. We do spend £3bn of it on unemployment benefits, and another £27bn on Housing Benefit, both of which might come down a little if there was mass mobilisation. We could perhaps squeeze 0.1% of GDP out of the UK welfare budget.
  • The NHS At £162bn annually[6] this is the next largest chunk of public expenditure. At best some of the NHS will become defence medical assets, and the people will transfer to support those we’ve mobilised. Not to mention the inevitable casualties. In practice we’d probably need to spend more on the NHS, or make some really tough choices about priorities.
  • Borrowing – in 2015-16 we spent £45bn[6] on debt interest. If we borrowed enough to capitalise the interest for the duration of the war then we could add this amount to Defence budget.
  • Efficiency Gains If the rest of government was asked to cut around 10% of their budgets then we could perhaps add another 3% of GDP to the war budget.

So where does all this get us to? About twelve times the current defence budget, so we could significantly increase the size of our armed forces. On a straight multiple that would give us about two million all ranks from mass mobilisation. However I expect more of them would go into the army than either the RN or RAF for the simple reason that it will take longer to produce ships and aircraft to support that level of expansion than it would to produce army equipment.

Britain’s approach to World Wars

Historically we have form. Britain doesn’t maintain its armed forces between major wars. We keep a training cadre and enough to cope with the various small wars we get involved in. When the big war happens we do mass mobilisation of reserves and recruit anyone we can find. Typically it takes 18 months for us to form the million plus citizen armies we need to stand alongside our allies.

Many people (especially civilian politicians and voters) probably consider the idea of a major war very unlikely. We felt the same in the 1920s. Further, they probably also consider that if one did start that it would go nuclear (or find a diplomatic peace) well before we could train and equip the recruits to expand our armed forces. During the Cold War this was almost certainly true.

Infrastructure Deficit

The Household Cavalry/RAC had a recruitment st...
A Challenger II tank, the last British built tank. (Photo credit: Wikipedia)

What it means is that we’ve given up on necessary infrastructure to do mass mobilisation. We’ve stopped building military aircraft and tanks in the UK. We’d also struggle with a lot of other equipment, like small arms. Our wider manufacturing base is also shot, so the scope for repurposing factories to scale up production is also limited.

As an example, the British Army writes off small arms on a 10 to 15 year period. That means that normal production will be about a tenth of the current size of the armed forces need. So if everyone needs a rifle then we need 200k rifles for the regular and reserve. Let’s say we have a factory that makes 20k rifles a year, just to replace worn out stocks. When you scale up your armed forces through mass mobilisation to 2 million trained personnel then you suddenly need to build 1.8m extra rifles in under six months, and increase replacement levels to cover expected losses from accidents and combat.

Manufacturing Capacity

We’d also need to find plant, machinery and skilled people to set up factories to produce gun barrels, armour, heavy vehicles, jet engines, aircraft and the complex electronics that make them all work. We’ve got some capacity just now, but it’s all based on small orders delivered over a decade and sharing with other states.

Unlike WW2 the UK doesn’t have broad manufacturing capacity that can be diverted to war production. The UK economy is dominated by service industries, mainly banking. Manufacturing accounts for less than 10% of the UK economy (compared to almost 80% from services).

The extra kit would be a 50% growth in total manufacturing capacity, more like 10-15 times in the specific industries that could produce it. There would also need to be a massive upgrade to chemical & electronics plants to produce military ordnance. It would need to do this almost overnight, we’d need more kit for training people, never mind fighting a war.


There’s room in the British economy for a significant increase in military spending if we faced an existential threat. There’s no political will to spend more than the 2% we’ve committed to via NATO.

The UK doesn’t have the economic base to support significantly increasing manufacturing to equip a scaled up armed force. Nor do we appear to have sufficient spare kit in stock.

Overall, I’d say that we’d need at least a couple of years run up to mass mobilisation. If it ever happens then I hope we get that long. In the meantime, we could do with investing in our manufacturing base. That would make it easier to gear up, and also grow our economy. A strong economy is a better indicator of strength than defence spending.



[1] Broadberry & [xx], Table 1, pg23, [return]
[2] NB the cost of the carriers isn’t just for the carriers, but also all the rest of the ships needed to support and protect them. [return]
[3] MOD Annual Report and Accounts 2015-16, [return]
[4] MOD Annual Report and Accounts 2015-16, pgs.137-8 [return]
[5] Statista, UK GDP at current market prices, [return]
[6] HM Treasury, Public Expenditure Statistical Analyses 2016, [return]

World Building – Towns and Villages

One of the things that I often do when I am writing a story is to sketch a map of the area where the story takes place. This helps me to visualise what the characters will be able to see. The thing is though, you can’t just bang down stuff randomly (well you can, but it isn’t realistic – you want your world to be realistic don’t you?)

How settlements form

Typically people build houses where there is shelter from the elements, adequate supplies of food, water and fuel. They also like to build them in easily accessible places for the most part. All villages and towns grow from farmstead, places a farmer, and his family, decided to settle.

However not all of these farmsteads ends up as a village. There are loads of outlying farms in populated countryside, some of them are ancient or at least built on the remains of an ancient farm. What distinguishes those that get bigger?

There’s an element of luck, but mainly it is because they either have an abundance of some resource or they lie along a convenient route. Trade is the reason most of our towns exist. Certainly this is true of the most ancient ones. There exceptions to this, but these tend to be modern capital cities (Washington DC being an example) or new towns intended to displace people from densely populated inner cities (like Milton Keynes, or Cumbernauld).


Look closely at the next handful of villages you drive through. There is a clear difference between an extended farm

English: Corfe Castle Village Square This is t...
English: Corfe Castle Village Square This is taken in the Square, looking west towards the National Trust shop and the war memorial in the centre of the Square. This is now used as a roundabout for the village traffic as well as a seating area for the tourists (as depicted by the photograph)! The National Trust shop is located in the village as the castle is a National Trust property. (Photo credit: Wikipedia)

with houses for the labourers and a proper village. Villages tend to have a focal point, usually a green space, but sometimes a market square. Modern villages still have them, there will be an open area possibly with a children’s play area. Around this there will be a Church, possibly a pub, a shop or two and often a war memorial. Even if there isn’t an open area there will be a cluster of the Church (with graveyard), a pub, shop and war memorial. These will be surrounded with houses, perhaps along a single linear road. If there is a second cross road this may also have houses along it. The cross roads (sometimes a Y) will often run on two sides of the Church, or the village green if there is one.

Optional extras, depending on the size of the village

  • village hall (needs about 1,000 residents to be viable);
  • school (needs a couple of hundred kids aged 4-11 within five miles to work);
  • more shops and pub (scale up shops per 200 inhabitants, and pubs per thousand);
  • larger villages have more streets, keeping everything within minimum walking distance.

Of course when you are world building for a story you make the village suit the narrative that you are conveying. It doesn’t really matter if the shops, pubs or anything else is economically viable. If you need an internal rivalry then two pubs might be a way to do it. If you need a football team, or a Women’s Institute then write in the Pavilion and pitch, or the village hall or whatever you need.


A key feature of villages is that typically people know who there neighbours are, and in the smaller more settled ones far outside the commuter belt, the lineages of all the residents. Or at least some of the inhabitants know all of that. This can be a feature for interesting stories. The other thing that happens in these sorts of communities is that the smarter kids leave for university and jobs in the big city. Some of the others join the services (including some of the smart ones) and go away that way. Often they reappear later in life, retired in their forties, or professionally qualified as the local GP, district nurse, solicitor, entrepreneur, mechanic. A good way to bring people in without having to make them complete strangers to the rest of your characters.


English: Wigtown market square gardens. The ga...
English: Wigtown market square gardens. The gardens in the market square with the town hall in the background. (Photo credit: Wikipedia)

Towns are a whole different order of magnitude different. They don’t scale into villages, there is a sort of multiplier effect with proper towns. Almost every old town that I have looked at, and I do pay attention on my travels, is based around a market, and very often also a river crossing.

Towns tend to be on the nexus of trade routes, and they draw in people from surrounding villages for markets and also specialised trades. As well as being bigger than villages, especially with the tradespeople, they also have a lot more in the way of amenities. There will be a square, with a town hall of some sort on it, and often also a church. In many modern towns the square has been infilled, usually with parades of shops, descended from the market stalls that once stood in the same place.

Like the villages the towns are often formed around a cross roads, this can be two sides of the main square, or sometimes they join at one end of a widened high street and then split out after the shopping area (Reigate in Surrey does this, the A25 and A217 being the primary routes).

Another key feature of a town, other than being astride a trade route, is that it tends to have an abundance of something useful (or it did have in its early days). This could be something simple like weavers in a sheep farming region, or a watermill in an arable area. There ought to be something. This might not matter to your story though and you don’t need to worry about it much. However it could also be useful as a hook, or a clue.

How I draw maps

Firstly I think of the sort of place that I need for my story, and the key locations I need it to have. Once I’ve listed those out I get myself a blank sheet of paper (although I do sometimes use squared paper).

Pencil usually starts with some outline topographical features (which way is uphill, where are the water courses).

Then I put the focus of the village/town on the map, along with some routes. I see this as growing the town organically.

Next down are the key locations I need relative to each other. I then fill in the gaps between them with the other necessary parts of the village/town. i.e. the pubs, shops and civic amenities. If it is a mediaeval walled town then I add these in now as well. If there is a need for industry I also stick that in too.

Lastly I add in some houses for the people to live in, making sure to put the bigger ones upwind of the town (the richer districts of towns/cities tend to be upwind on prevailing winds because the rich folk can afford to build where the air is sweeter). I try to put in at least one building for every ten inhabitants, in modern times maybe two to three times that much, we live much less densely these days, even though there are more of us.

Counterfeit Game Money

At Chestnut Lodge Wargames Group we design and play a lot of games involving game money. We do this to the extent that we often joke that all you need for a game are CLWG members and some (play) money.  By definition none of this is real, but in game terms it is always genuine. There is never any question that some of it could be fake. For more modern games involving high value government expenditures this is definitely fine, but in some of the games we play it would make for an interesting dynamic if it turned out we couldn’t rely on the value of the coins.


Game money
Game money (Photo credit: James Kemp)


So while my daughter was playing with my stack of play money (see the photo above) I was thinking that I could run a game, probably in a fantasy setting, where the different players had briefings about what they saw as acceptable money.  I thought it would need to be a trading game, perhaps with merchants from different parts of the world with their own coinage, and supplying things to either each other or to city/principality governments. I could brief them about the relative values they had for each of the types of coins, and I could also suggest to some of them that damaged coins, or those where the paint had come off, weren’t worth as much (or were even totally worthless). This would add an interesting dynamic to the game, especially if the briefing wasn’t too widespread. An additional possibility would be to deliberately add in counterfeit currency and have someone try and pass as much of it as they could into circulation.


What do you think, could this be done?




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CLWG July 2013 Game Reports

There were five of us at July’s CLWG meeting, myself, Nick, Mukul, Dave & John. There were three game sessions presented:

  1. I went first with a two part committee game called “The High Ground” about the consequences of cheaper surface to orbit space travel;
  2. Nick presented an economics card game for educating people about markets and the effects of money and credit;
  3. Mukul’s session on the 1914 campaign on the Eastern Front.

Continue reading CLWG July 2013 Game Reports

Economics of New Colonies

I often play in Jim Wallman’s hard SF games set in the universe he’s created. I’ve been thinking about how new colonies get set up and the sort of funding they need.

There is a lot of infrastructure required to build a viable colony on a new system. Firstly you need to survey it to find a good spot with a reasonable confluence of resources, mining sites, farming space, fresh water, building land and a suitable area for your drop zone and spaceport. Once you’ve done that some cheap housing, utilities, early resource processing plants and factories for essentials have to be built. Once you get to that point you might just start exporting valuable things, although you’ll still need to import lots of essentials, not to mention more people.

I reckon that it is a minimum of two years to get to the point where the exports cover the costs of the imports. At that point the colony investors are probably starting to think about seeing a return on their investment. Using the macro campaign rules as a guide a two year subsistence colony has probably racked up about 200 million credits in debt. The tax take of local government is no more that enough to service the interest and provide some basic leadership and policing. The overall economy of the colony is probably only a little bigger than the debt, perhaps 300 million credits a year. There are probably about 150,000 colonists on the planet (maybe more if there are many dependents with the workers).

So in the normal course of things one would expect the economy to grow with migration and in due course the extra tax revenue would pay back the capital and also provide the additional services that the colony’s people required. There may even be pump priming investment in infrastructure to keep things moving. That said, the people might not come, or the govt could make poor decisions, or there could be some natural disaster. If the colony collapses what happens then? In total failures the banks / investors will just need to write off the debt, while perhaps keeping a nominal ownership of the assets left behind in case a subsequent colonisation effort wants to take over.

There might not be a total failure, in which case a restructuring of debt would be required. Although depending on the reasons there might be difficulty getting more money.

Another thing that could happen is a conflict with another colony in the same planet, especially when better developed worlds realise that they would be better off as a large single entity in gaining access to trade agreements with other interstellar groups.

What happens to state debt when another state takes it over?

In the case of a hostile takeover (either a war or a share buyout) there will be an expectation that the structural debt will be taken on by the new management. The banks will insist on this, and if the new management doesn’t agree then they will treat it the same was as defaulting on the loan payments.
Refusing to make payments against a loan has serious consequences and it is to be avoided. If times are difficult it is expected that the colony management will talk to the banks and/or investors to either extend the payback time or raise sufficient funds through other means to ensure that they continue to properly service debt in an agreed fashion.
Any colony that defaults can expect the following to happen:
  • no further lines of credit will be opened, so all capital expenditure will need to be paid for up front, also future interest rates will be higher to represent the increased risk of default
  • imports may not be possible, except perhaps at black market rates for items
  • prices on exports may be lower than expected (and indeed cargoes may be seized in lieu of debt interest and/or capital)
  • Enforcement action may be taken to seize colonial assets, especially movable ones (although a colony with strong armed forces may find this won’t happen)
  • Other colonies in the same system may come under pressure not to co-operate, similarly trade agreements may be suspended or even revoked.
  • In extreme cases an interim management may be installed, possibly by a major polity if the colony is sufficiently well off to have attracted attention.
  • Immigration is likely to slow down, and colonists are more likely to leave the colony



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