They are terribly expensive, but produce extraordinary returns.

Now, think about this for a second. Russia invested overly in military and in particular nuclear weapons. Of all the investments in sovereignty Russia made, the only durable one has been those nuclear weapons.

Any polity with a few nuclear weapons and an armed populace, with stores of RPG’s, Man portable Missile Launchers, and enough artillery to protect lines of invasion, is relatively safe from conquest. So a relatively small number of professional warriors, a sufficiently trained militia, and the cost of military can be below the 3-4% Switzerland, which arguably benefits from the ‘mountainous terrain discount’, only spends 0.8% per year. The additional benefit of being a small nuclear state operating on international markets is that it is very hard for you to create sufficiently international dependencies that you need war to protect them.

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