With an election approaching and at least some Americans upset about irresponsible spending, the president has finally expressed a political interest in cutting something. He says the Pentagon will spend "only" $525 billion next year. That's slightly less than the current $531 billion.

A cut is good, but this will barely dent the deficit. We could save much more if America assumed a military policy designed for defense rather than policing the world.

Presidential candidate Ron Paul gets criticized for advocating that. Paul's opponents, including many of my colleagues, complain about his "isolationist foreign policy."

But shrinking the military's role isn't the same as isolation. America can have a huge impact in the world without deploying our military. We already do. By all means, let our movies and music alarm mullahs. Let our websites and books disseminate ideas that autocrats consider dangerous. Above all, let's trade with everyone.

It's said that when goods don't cross borders, armies will. There's plenty of evidence to support that. A report funded by European governments says armed conflict in Muslim countries is far lower today than it was two decades ago. A reason? Trade.

Richard Cobden, a 19th-century British liberal statesman, said, "The progress of freedom depends more upon the maintenance of peace, the spread of commerce and the diffusion of education than upon the labors of Cabinets or foreign offices."

I agree. American music and consumer goods did more to bring down the Berlin Wall than our military did.

Ron Paul doesn't say that we shouldn't defend ourselves. He supported our retaliation in Afghanistan after 9/11. He says if we are attacked, or clearly threatened with attack, America should fight. That's defense. That's different from policing the world.

Today, America spends more on the military than we did when Russia threatened us with missiles. That's irrational. And we can't afford it.

Still, I am uncomfortable writing about defense. I'm surrounded by smart people who say America needs to spend more on the military. Some studied war for years. I haven't. My instinct is to believe the hawks.

Except, I covered markets. I watched government try to improve on them. Doing that, I learned that government doesn't do anything well. Why would that be different for military policy?

It isn't. In 2004, the U.S. military sent $12 billion in shrink-wrapped $100 bills to Iraq. That money disappeared. We don't know what happened to it. The U.S. official in charge said there was so much cash flying around his office that the staff called the packages "footballs" and threw passes to one another.

There is no cure for military inefficiency any more than there's a cure for waste at the post office. The point is that we should rely on government central planning as little as possible.

Today, some people want the military to contain China, chase terrorists, train foreign militaries to chase terrorists, protect sea lanes, keep oil cheap, stop genocide, protect foreign states from aggression, spread goodwill through humanitarian missions, respond to natural disasters, secure the Internet, police the Mexican border and transform failed states into democracies.

Politicians have a hard time saying no to such noble-sounding goals. But the list is endless, which is part of the problem.

Transforming states—nation-building—is the worst form of central planning.

Running for president 11 years ago, George W. Bush called for a "humble" foreign policy and said, "I don't think that our troops ought to be used for nation-building." Yet four years later, he was nation-building in Iraq and Afghanistan.

Candidate Bush, rather than President Bush, had the right idea. We have tried to build a working democracy in Afghanistan for more than 10 years now. Have we won hearts and minds? No. A recent poll of Afghans found just 43 percent had a favorable impression of the United States, way down from 83 percent in 2005.

Nations are too complex for outsiders to "build." Nations are organic bottom-up things. Saying no to nation-building is not isolationism.

Ron Paul is in good company when he says an interventionist foreign policy makes enemies and provokes danger to ourselves. It's time we stopped confusing defense with policing the world.

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