and the role of military power in supporting its ambitions. But it also needs to know the economic costs and whether they can be sustained. Domestic opponents and foreign rivals can exploit the same information. If they know the costs and sustainability of a country’s military power, they can second-guess the government’s true intentions and criticize them at home or work to frustrate them abroad. In turn, that becomes the ruler’s reason to lock the information in a secret compartment reserved for a few trusted subordinates.
At this point, the ruler’s problem becomes: whom and how many can I trust? On the most charitable reading of the evidence, for much of the duration of Soviet rule, the size of the military budget was regarded as so sensitive that barely a handful of people could be trusted with it. In Stalin’s time, the fixing of the defense budget in the Politburo was a key moment in the annual cycle of economic policy. By Brezhnev’s time the defense budget was so secret that most Politburo members were excluded. The decision (if it was made at all, an issue raised below) could not be debated anywhere, not even in the hypersecret council of the Politburo.
From the point of view of state capacity, therefore, the subject of this chapter is the damage done by such secrecy. For the sake of keeping a few figures away from domestic critics and foreign adversaries, the Soviet rulers lost their own capacity to decide the balance of resources between military and civilian uses. Whether this had anything to do with the collapse of the Soviet system is debatable, but it is certainly an indicator of the system’s decline.
In this chapter we will see measures of Soviet and US military spending compared. The comparisons were controversial almost entirely because of doubts over whether defense activities were properly costed and whether the costs were properly attributed to defense. Mercifully for the reader, there was hardly any disagreement about how to define “defense activities.” Both sides of the Cold War shared a broadly common conception of what items ought to appear in the military budget. This was the government money allocated to each country’s ministry of the armed forces (the Soviet Ministry of Defense or, in the United States, the Department of Defense). On both sides the ministry was expected to pay for the military means of the country’s external security. So, the main line items of the military budget on both sides should have been the outlays of the armed forces on the pay and maintenance of servicemen and women; the procurement of weapons and other equipment; the construction of military bases and fortifications; the costs of military transportation and operations; and outlays on military research, development, testing, and experimentation (RDTE).
Both sides accepted that there was a grey zone. In the grey zone were military pensions—a legacy cost of military activity in the past rather than in the present.[372] Also in the grey zone were the costs of building or maintaining various capacities that could be switched between civilian and military uses.[373] For one example, the Soviet Union maintained “internal” troops that were charged to the Ministry of the Interior, not the Ministry of Defense, because their primary use was in domestic security operations. But they were fully capable of military action, and in the Soviet-German war, they took part in battles. Another example is the costs of building defense factories: in both countries these were not charged to defense on the grounds that building a new plant adds generally to a country’s productive capacity, not just to its defense capacity. The same applied to industrial mobilization capacities, such as war factories built in excess of the country’s immediate needs for defense goods, which were used in peacetime to produce civilian goods while being kept in readiness for a rapid switchover to munitions when conflict threatened. The costs of keeping them ready for war were paid out of civilian, not military funds. Likewise, both sides excluded outlays on civil defense from the defense budget because equipping and training civilians to deal with emergencies could be just as useful in the case of natural disasters and pandemics as for war contingencies. It is plausible that communist regimes sank more resources into dual purpose capacities than Western governments in the Cold War, relative to the size of their economies. But the grey zones on either side played little part in the issues discussed below.
On that basis, defining and measuring the costs of Soviet defense activities in a way that was roughly comparable to the United States should have been a simple matter. Instead, it became a mare’s nest of equivocation and disinformation.
As a point of departure, Soviet leaders seldom published exact figures that they knew to be false. The Russian archives have confirmed that most economic statistics that were published were the same as those available to government and party officials in secret. While the figures might have been biased by the underlying methods, or distorted by the incentives of those who reported them, the biases and distortions were similar for everyone.[374] In other words, the system did not generally provide for two different sets of accounts: a false set for public consumption, and a true set for the informed elite.[375] For most purposes, the limited information that the public saw was just a highly restricted sample of the mass of data on which the government relied for its secret business.
As the economist Peter Wiles described it, the Soviet authorities followed a rule of “minimal untruthfulness.”[376] When the leaders wanted to conceal the truth of some quantity, they did not usually invent an outright lie. Rather, they preferred to mislead by giving out a half or a quarter of the truth, or else to say nothing at all.
There were exceptions, and the exceptions could concern matters of historic importance. On a few occasions, the Soviet government published figures that amounted to deliberate fabrications. The lies included the size of the Soviet harvest in 1932 (disastrous), the size of the Soviet population in 1939 (decimated by famine and terror), human losses in the Soviet-German war (catastrophic), and property losses in the same war (overstated). In all these cases, the false figure was adopted everywhere, in secret councils as in the public sphere. No secret compartment was set aside where the truth was retained.[377]
Then, there was military spending. In the 1920s the Soviet government’s official figures for its annual outlays on defense were truthful, at least in the sense of a lack of intention to deceive. In 1930, however, the League of Nations opened disarmament negotiations in Geneva among the great powers. The Soviet government decided to take part. At home, rearmament had begun, and the Soviet military budget was growing rapidly. With the aim of supporting their negotiating position in Geneva, Stalin’s Politburo decided to conceal the increase in defense outlays by publishing false figures. The actual and false figures are shown in Table 7.1.
| table 7.1. A deliberate lie: Soviet defense outlays (million rubles), 1928/29 to 1936, as published at the time and found in the archives | |||||
|---|---|---|---|---|---|
| Published at the time | Found in the archives | ||||
| 1928/29 | 880 | 850 | |||
| 1929/30 | 1,046 | 1,046 | |||
| 1930, Q4 | 434 | ||||
| 1931 | 1,288 | 1,790 | |||
| 1932 | 1,296 | 4,308 | |||
| 1933 | 1,421 | 4,739 | |||
| 1934 (plan) | 1,665 | 5,800 | |||
| 1935 | 5,019 | 5,355 | |||
| 1936 | 14,800 | 14,800 | |||
| Note: The planning year 1928/29 ran from October 1928 to September 1929. In 1930 a “special quarter” from October to December was added to 1929/30 to bring the fiscal and planning year into conformity with the calendar year. The figures shown in bold are those that were deliberately understated. | Sources. Davies, “Soviet Military Expenditure,” 580; Davies and Harrison, “The Soviet Military-Economic Effort,” 370. | ||||
373
For these aspects of the grey zone in Soviet history, see Cooper, “Civilian Production”; Cooper, Soviet Defence Industry; Barber et al., “Structure and Development”; Simonov, “Mobpodgotovka”; Markevich, “Planning the Supply of Weapons”; Davies, “Planning for Mobilization.”
374
Wheatcroft and Davies, “Crooked Mirror of Soviet Economic Statistics,” concisely describe the most common biases and distortions.
377
The harvest in 1932 (and, to a lesser extent, in following years): Davies and Wheatcroft, Years of Hunger, 444. The population in 1939: Davies et al., Soviet Economy and the Approach of War, 150-51. Human losses in World War II: Harrison, “Counting the Soviet Union’s War Dead,” 1036. Property losses in the same war: Babichenko, Debit and Credit of War, 167.