Archive:Military budget of the Soviet Union

The military budget of the Soviet Union was the portion of the military budget the portion of the overall budget of the USSR government that was allocated for the funding of the Soviet Armed Forces. This military budget financed employee salaries and training costs, the maintenance of equipment and facilities, support of operations, and development and procurement of weapons, equipment, and vehicles. Particularly during the Cold War the level of military spending of the USSR was a matter of dispute and research, since the USSR did not publish reliable figures for its military expenditure. The burden of its military expenditure is believed to have been amongst factors contributing to the fall of the Soviet Union.

History

1922 to 1945

In the mid-1920s the Soviet Union published figures for its military expenditure that were broken down into 9 groups including salaries, administrative expenses, clothing costs, technical supply, cultural and educational expenses, finance of defence industry and others. These 9 groups were further sub-divided such that figures were given for 79 individual entries. However, by the early 1930s only 2 groups of expenditure were presented, and by the early 1940s only a single line-item was given ascribed to the Soviet Department of Defence. As such, Soviet military spending was progressively obfuscated.

With the increasing risk of war after the rise of the Nazis, official expenditure increased substantially. For example, in 1934, military expenditure more than trebled from 1.65bn rubles to 5bn rubles. In 1940, the last full year before the Soviet Union was invaded in Operation Barbarossa, the official state budget was 4.7 billion rubles, or 32.6% of total Soviet state expenditure.Template:Verify source

With the outbreak of war with Germany in 1941, the Soviet state funded the resulting greatly increased military expenditure through a mixture of tax-increases and deficit spending. Official defence spending peaked in nominal terms at 137.7bn rubles in 1944 before declining due to the need to invest in the economy, though as a percentage of state expenditure it peaked in the period 1942–1943 at ~59% as other expenditures were cut.

Cold War

After the end of the second world war official Soviet military spending decreased back to a level similar to that of the 1937, with expenditure stabilising around 18-20% of the total state budget in the years 1947-50. In the wake of the Korean War the budget saw moderate increases to 21.8% in 1951 and 23.9% in 1952. This fell back to 19.9% (10.7bn rubles) in 1955, and in 1956, following a cut in the official strength of the Soviet armed forces of 2,140,000 men, the official level of expenditure fell by ~1 billion rubles to 9.7bn rubles, though by 1957 spending had increased back to its 1955 level and stayed at roughly the same amount (~9.4bn) through out the 1957-1960 period, resulting in armed forces of lower numerical strength than before 1955 but having more in the way of advanced weaponry, including nuclear weapons.

Following the 1961 Berlin Crisis and subsequent increase in east-west tension, the official expenditure in rubles increased to a peak of 13.9bn rubles in 1963, though as a percentage of state expenditure this represented a fall (to 16.1% in 1963). Soviet publications represented this as a cut in expenditure, comparing it to the higher percentages of state expenditure related to defence in "imperialist" countries like the USA, where the military budget was ~77% of state expenditure (albeit from a budget that made up a much smaller amount of national GNP compared to Soviet state spending, which encompassed large parts of the economy which in the US would be in private hands). After decreasing slightly in the years 1964-5, with the coming of the Brezhnev era official military spending increased to 17.7bn rubles in 1969 and stayed at the level of approximately 17-18bn rubles annually all the way to 1983, though western analysts believed the actual expenditure to be much higher than this.

Accuracy of official statistics and alternative estimates

According to Russian academic Ksenia Gonchar writing in 1994, it was a consensus of experts studying Soviet military expenditure that "official figures are notoriously inadequate and need re-estimation", since it did not include many things that would reasonably be included in a figure for defence spending. According to Gonchar, during the 1980's it was doubted whether even the Soviet leadership themselves knew the actual figure, particularly when Mikhail Gorbachev and Eduard Shevardnadze produced figures for military spending that differed to those officially published. Writing in 1964, when the officially-published Soviet defence expenditure was scheduled to be 13.3bn, analyst Timothy Sosnovy of the Ukrainian Free University in Munich calculated that when indirect expenditure on the defence industry, strategic material reserves, scientific research for military purposes, pensions for veterans, and extra-budget/secret expenditure were included as well as the 13.3bn figure for official spending directly on the military, the figure was 31.9bn rubles.

However, attempts at re-estimation of the Soviet military budget, particularly attempts to produce dollar-figure estimates to compare it to the military expenditure of other countries, faced significant problems. This was partly because dollar-figure estimate of Soviet military spending represented what Soviet weapons, forces and military activities would cost if developed, purchased and operated in the United States. As such they did not represent the true burden of expenditure on the Soviet economy.

One method of estimation favoured by the US Central Intelligence Agency used a so-called "building block" (AKA "direct costing") method of estimation whereby the value of individual components/artefacts used by the Soviet military was either obtained from official sources or estimated, and the total cost of all these items summed. The CIA twice made substantial revisions to their estimates, the first time in 1975 where the estimates nearly doubled due to what was believed to be a previous under-stating of the price of Soviet equipment and size of Soviet forces (and thus cost of maintaining them), and the second time in 1983 the CIA produced a downward revision of roughly 2-4% due to lower Soviet economic growth. This method of calculations was criticised by analysts including Steven Rosefielde as understating the speed of growth of Soviet military expenditure due to false assumptions and failing to account for increases in price of Soviet military equipment due to their increasingly advanced nature.

In contrast, Franklyn D. Holzman criticised the CIA's method of estimation as being, in his view, flawed due to their assumption of equivalence between US and Soviet military equipment when US military equipment and personnel was of a higher quality (and hence cost). Holzman focused particularly on the "index number problem", where, in his view, the CIA lacked prices in rubles for specific items and so instead valued them in dollars and then converted them based on the the price of items whose price was known in rubles, which he believed tended to lead to an overstatement of Soviet military spending.

Another method, favour by most other analysts, used the so-called "residual" method whereby Soviet official statistics were used, with parts of civilian expenditure that were believed to be linked to the Soviet military (military R&D, military pensions, spending on the KGB and other quasi-military organs on the state etc.) are reallocated as military expenditure. The above calculation by Sosnovy is an early example of such a calculation, though later ones were produced by analysts including Rosefielde and Holzman. Whilst not suffering from the "index number problem", according to Donald F. Burton, a CIA Soviet analyst, the residual method had the downside of a wide range of error due to problems in determining which civilian expenditure to reallocate.