Military-Economic Estimating: A Positive View


Soviet Military Costs   


prognosticating, seek to communicate the nature of their product anc the care needed in using it.
     The following explanations of the costing methodology, the meaninE of the results, and the way the process is handled in the community should help answer some of the questions raised by Colonel Wooten It does not deal, however, with his doubts about the validity of using ruble costs to get a measure of opportunity cost or economic scarcity in the Soviet Union. The academic detail involved would take up a disproportionate amount of space, and the question has been discussed elsewhere by experts on the Soviet economy.6
Methodology: Ruble-Dollar Ratios   
     First, dollar prices of Soviet equipment are estimated: these are what it would cost the U.S. DoD to procure the Soviet weapons from U.S. manufacturers. The technical specifications of the Soviet weapon are given to the manufacturers in the same way they would be for a proposed U.S. weapon. Some adjustments to the U.S. technical environment may be allowed, for example in standard dimensions of materials or in standard processing techniques the alteration of which to meet Soviet specifications would be expensive without significantly affecting performance. The purpose of the dollar figures is stated, with the necessary caveat, in a recent paper:
 The dollar valuations of Soviet military programs . . . can provide US planners with an appreciation of the physical magnitude of given Soviet programs and also provide a useful basis for comparison with US programs. Because of significant differences in the price structures of the two countries, however, the dollar valuations of Soviet programs do not necessarily provide the most accurate indication of the relative costs of given programs from the Soviet point o£ view.7
     Then it is attempted to cost the Soviet military expenditures in rubles, that is in terms of the Soviet economic environment. Ideally, this will show what portion of Soviet resources are being directed to the military effort and the distribution of this effort among different military programs as seen by the Soviet planners.   How close reality
     6 For example: Value and Plan by Gregory Grossman, University of California Press, 1960; "The Soviet Price System" by Morris Bornsteen in The American Economic Review, 1962; Price Determination in the USSR by Lazar Xloeseyevieh Kantor, JPRS translation no. 34,385, 3 March 1966.
     7Main Trends in Soviet Military Policy, CIA/RR MP 66-1, April 1966.



Posted: May 08, 2007 09:01 AM
Last Updated: May 08, 2007 09:01 AM