On this reading, the motivation for concealment in the 1960s was the same as in the 1930s. At a time when the Soviet Union was determined to rearm, it wanted to encourage others to show restraint and, if possible, bind them into mutually agreed limitations on weaponry. To do both openly would appear inconsistent. Disclosure of the real dimensions of Soviet defense outlays would undercut the Soviet foreign-policy position on arms reductions. The only way to square these objectives was to pursue rearmament in secret, and this required deceptive budget figures.
Although they did not say it explicitly, Mashukov and Glubokov left the reader to suppose that an important moment in the emergence of the budgetary deception was 1963, the year in which the Soviet Union (with the United States and the United Kingdom) signed a treaty banning atmospheric and underwater nuclear weapon tests. Closer inspection suggests that this could not have been the start. Table 7.7 shows that that large-scale deception was already taking place in i960: it did not begin in 1963. So, it began earlier, but we still do not know exactly when.
Second, the methodology of reconstruction. Mashukov and Glubokov indicated that deception took the form of reporting one element of defense costs, the outlays on the maintenance of the troops, military construction, and pensions, as if it were the whole. To reconstruct the whole, it was necessary to look for the missing outlays. Their location in the budget accounts is described as follows:
The finance of [military] RDTE and provision for procurement of armament and military equipment was conducted, until 1989, under the national economic plans confirmed annually by decrees of the party Central Committee and Soviet government and budgetary allocations assigned to the defense ministries for RDTE, and [the finance] was entered under the item of outlays on the national economy of the country.[435]
Taking these words at face value, Mashukov and Glubokov started from the published defense outlays and then added direct budgetary support of military research and equipment (“the finance of RDTE and provision for procurement”). As discussed above, this cannot fully account for all forms of support of the defense sector, which benefited not only from direct subsidies but also from indirect subsidies at earlier stages of the supply chain. Of course, it is possible that Masliukov and Glubokov simplified the explanation of their work for the general reader, but the lack of mention of indirect subsidies is likely to mean that this part of the work was not done or even considered.
A related problem is to understand how the government was able to phase in the start of the deception. Mashukov and Glubokov maintained that the deception mainly took the form of reassigning defense outlays on procurement and RDTE from the reported defense total to other budget headings, and that this began in the early 1960s. But these missing items were already large relative to military maintenance in the 1930s, let alone the 1950s. If there existed some end point of budgetary truthfulness in the late fifties, it is not easy to understand how the items to be concealed could have been subtracted from the published series without causing a noticeable break.
Finally, which series should be preferred? Masliukov and Glubokov noted that their historical series on the 1989 basis, like the 1989 defense budget itself, fell consistently below those of the CIA (among others), but they maintained that this was entirely defensible: the CIA was wrong.
To support their case, they offered two arguments. First, the only way to find a higher GNP share of Soviet defense was to include items from the grey zone adjacent to defense activity. For 1989 this could add another 1.4 percent of GNP to the 8.6 percent already found, making 10 percent in total.[436] This was still far short of the CIA estimate for the same year. In any case, they pointed out, grey outlays would not be counted in the defense budget proper “in the USSR, as in other countries.” In other words, these items were not in dispute in the first place, so they could not contribute to a reconciliation.
What else could account for the gap? Masliukov and Glubokov then accused the CIA of adopting a methodology that unreasonably inflated its estimate of the Soviet military burden. This (they claimed) was the use of American salaries to value the services of Soviet military personnel and of American prices to value Soviet weapons, hugely overstating their costs in rubles.[437] As already mentioned, dollar valuation was one stage of the CIA’s “building block” methodology. The aim of that stage was to compare Soviet and American military spending at comparable prices. But when the aim was to value the Soviet defense burden in terms of Soviet GNP, the next stage of the CIA methodology converted dollars to rubles at purchasing power parity. If done properly, the conversion eliminated the bias of which Masliukov and Glubokov complained. In short, Masliukov and Glubokov misrepresented the CIA methodology and were not able to account for the gap otherwise.
Summing up, the credibility of the historical series introduced by Masliukov and Glubokov pivots on two things: the revised defense budget total announced by Gorbachev in 1989 and the methodology that worked the defense budget totals backward from 1989 to i960. The documentary evidence suggests strongly that Gorbachev’s 1989 figure was crafted for political expediency, not accounting veracity. It did not fully close the statistical gap or the credibility gap. Working backward from 1989, Glubokov and Masliukov improved on the deceptive figures of the past, but that was a low bar. At best, they made a first approximation to a more convincing series. As for what remains to be done, most obvious is a correction for the indirect subsidies of the defense sector arising from systematically distorted Soviet prices. Is that omission large enough to explain the remaining gap? We still do not know.
Finally, through the decades of deception of the public, did the top Soviet leaders (if not the full Politburo) retain private access to a secret figure that gave them meaningful or substantial control over defense outlays? The evidence-based answer must be no. For, if such a figure existed anywhere, it is hard or impossible to explain why months and years of specialist research were required to reconstruct it, not in the disorderly 1990s that followed the Soviet collapse, but before then, in 1988 and 1989, when the Soviet regime was still in place and exactly that figure was urgently required.
A British government report (concerning intelligence on weapons of mass destruction in the Iraq war) offers a conventional distinction between intelligence secrets and intelligence mysteries:
In principle, intelligence can be expected to uncover secrets. The enemy’s order of battle may not be known, but it is knowable. The enemy’s intentions may not be known, but they too are knowable. But mysteries are essentially unknowable: what a leader truly believes, or what his reaction would be in certain circumstances, cannot be known, but can only be judged.[438]
For much of the Cold War, Western intelligence worked on the assumption that Soviet defense costs were a secret. With hindsight, they look more like a mystery. When the time came to disclose them, no one could lay their hands on a figure. Three years went by before a figure could be identified for disclosure. At best, one may believe what was said or implied by Akhromeev and Mashukov. On that basis, the figure that was disclosed in 1989 was an incomplete approximation to the reality. At worst, placing more weight on Beliakov’s call for an “artificial formulation,” one might conclude that the 1989 figure was concocted out of thin air. Either way, even if Soviet defense costs were intrinsically knowable, for much of the Cold War they were practically unknowable, which must come close.
436
Masliukov and Glubokov, “Planirovanie i finansirovanie voennoi promyshlennosti,” 106. Specifically, “outlays on the organs of state administration on the organization of the defense complex .. . a number of tasks undertaken by institutes of the Academy of Sciences and the Higher School out of their own budgetary allocations and [funding of] dual-purpose projects . .. the part of capital investments directed toward the development of the defense complex, minus depreciation costs included in the prices of military products ... outlays incurred for the maintenance of necessary mobilization inventories.”
437
Mashukov and Glubokov, Planirovanie i finansirovanie voennoi promysh- lennosti,” 106-107. “In an annual report to Congress in 1989, [US Secretary of Defense] Carlucci gives the distribution of US defense outlays by items, where outlays on salaries are 44 percent of the total ($131.5 billion). Given that the structure of Soviet outlays was similar, and setting the average annual salary in the USSR (3,168 rubles in industry in 1989) equal to the average annual salary in the USA ($25,600, or 15,560 rubles at the official rate), then outlays on defense in the USSR would be 152 billion rubles (16.6 percent of GNP), which matches the estimates of American specialists on Soviet military outlays, based on the cost of production in American values.” For an earlier argument on similar lines, see Holzman, “Are the Soviets Really Outspending the U.S.?”