The arms spending gap

By FRED WEIR

As Fiscal Year 1977 approached, the CIA struck its
usual committee to undertake the annual ritual of
estimating Soviet military spending. That group, later to
be known as ** Team A’’, concluded that there had been
no significant change in Soviet military spending pat-
terns, and that defence exenditure in the USSR remained
stable — as they had since the close of World War II —at
around 7% of Gross National Product (GNP). ;

Inexplicably, then-CIA Director George Bush re-
jected the findings of Team A, and appointed a new
committee to re-evaluate the picture. This group —
“Team B’’ — was brought in from outside the CIA, and
its membership reads like a Who’s Who of the current
Reagan administration: Richard Pipes, Soviet ‘‘expert”’
and today a top Reagan adviser; Paul Nitze, a founder of

the right-wing Committee on the Present Danger, and .

presently leader of the U.S. negotiating team at the
Geneva Talks: Lieut. General Daniel O. Graham, U.S.
Army (Ret.), one of the most vociferous proponents of
re-armament; and Dr. William Van Cleave of the
University of Southern California, a close Reagan friend
and consultant.

Team B argued that there had been serious metho-
dological flaws in the report of Team A. They concluded
that military effort actually absorbed nearly 14% of the
Soviet GNP — twice what Team A had estimated.

It is important to note here that even Team B did not
propose that the Soviet Union had actually doubled its
output of hardware and forces. The real quantity of
Soviet effort remained stable. It seemed to Team B,
however, that the same amount was costing the Soviet
Union twice as much as the CIA‘had previously esti-
mated. In Team B’s final report, we read:

““The new estimate of the share of defence in the

Soviet GNP is almost twice as high as previously esti-
mated. This does not mean that the impact of defence
programs on the Soviet economy has changed — only
that our appreciation of that impact has changed.’’ In
other words, if you break a yardstick in half, and call
each part ‘‘one yard’’, all distances — as measured in
yards — are bound to double.
Team B’s findings were adopted by CIA Director
_ Bush, and by the U.S. government. The results of that
report were deliberately ‘‘leaked”’ to the press, creating
the impression* that Soviet military output had
“‘doubled’’ within the space of a few years.

“‘New CIA Estimate Finds Soviet Seeks Superiority in
Arms” (Dec. 26, 1976), “‘U.S. General Fears Soviets Have
Won Military Superiority’’ (Jan. 3, 1977), “World Military
Situation Confronting Carter Shows Changes Have Favored
Soviets’’ (Jan. 4, 1977), ‘‘Pentagon Chief Bids U.S. Reverse
Trend Toward Soviet Superiority’? (Jan 11, 1977),
“Pentagon Officials Say Billions in New Strategic Weapons
are Needed’ (Feb. 2, 1977), ‘“Group Warns on Soviet Ex-
pansion’” (April 4, 1977), ‘Soviet Arms Buildup Seen by
CIA Chief’ (April 7, 1977). -
— Sample headlines from New York Times, after ‘“‘leak’’
of CIA report on Soviet military spending. ~ :

_ Since then, this piece of nonsense has attained the
status of a Gospel Truth. Millions of people have been
convinced that Soviet military spending has doubled,
and that America is lagging behind. The assertion is still
___ being made, and it underlies many of the other ‘‘Soviet
_ threat’’ formulations that we encounter.

Arthur Macy Cox, himself a former CIA analyst,
writes:

““Congress recently authorized the largest U.S. de-
fence budget in history, because most members of Con-
gress have come to believe that the Soviets have doubled
their defence spending during the decade of the 1970s.
But the facts are very different. At no time has the Soviet

defence budget been increased by more than 3% a year.”
_ CIA estimates of Soviet military spending, moreover,
are always rendered in U.S. dollars. The method that the
CIA has adopted for making these “‘dollar equivalent”’
estimates is a remarkable one. CIA andlyite shiaslly
add up a total of Soviet hardware, forces and other
military output, and then try to figure out what they
would have to pay to acquire these things in the United
States from private industry. In this scenario, the Soviet
conscript soldier is paid on the scale of a U.S. volunteer;
hardware, construction, administrative ser-

transport,
vices — all are estimated at inflated U.S. levels. A built-
in feature of this method is that Soviet defence outlays —
_as calculated by the CIA — are bound to skyrocket along
with the cost overruns of American business.
A clear example of this is the so-called Soviet ‘‘civil
defence’ effort. The CIA decided it was worth ‘‘the

PACIFIC TRIBUNE—FEB. 26, 1982—Page 10

FEATURE

equivalent of $2.8-billion in 1980°’. Now, the CIA admits
that the bulk of this sum is absorbed by ‘‘labor costs’’. It
happens that a big portion of the Soviet Army is com-
prised of construction troops (The Military Balance 1980
tells us there are 800,000 construction troops in the Red
Army). They do a variety of military, semi-military and
even non-military tasks, such as repairing public build-

- ings, roads, rail lines, and so on. Almost any of this can

be construed as ‘“‘civil defence’’. By Soviet figures, a
conscript private is paid six roubles monthly — less than
$10. The CIA, however, assigns him the wages of an
American construction worker, and calculates the
“‘value’’ of Soviet civil defence accordingly. Can this
have: any meaning whatsoever?

The true meaning of these CIA estimates becomes

“Since 1970, the Soviet Union has invested $300-billion
more in, military forces than we have.’’

— President Ronald Reagan, February, 1981

“In 1976 the CIA estimates of Russian military spending
for 1970-1975 were doubled overnight as errors were disco-
vered and corrected ... When the first concrete steps toward
arms control were taken, American presidents were being
supplied by the CIA with figures on Russian military spend-
ing that were only half of what the agency later decided
spending had been. Thanks, in part, to this intelligence
blunder we will find ourself looking down the nuclear barrel
in the mid’1980s.’’

— Richard M. Nixon, in The Real War, Warner Books,
1980. :

apparent at budget time. The concocted ‘‘dollar equiva-
lent’’ statistics for Soviet military spending are touted to
Congress along with appeals for the United States to

- “match’’ the Soviet effort. In the field of civil defence,

for instance, the Reagan administration has used the
supposed Soviet program to justify the adoption of its
own civil defence effort. The difference is that the
American program will actually cost in excess of $2-bil-
lion annually.

It hardly seems coincidental that the CIA “‘estimated’”’
Soviet defence spending for 1980 at $170-billion, and
then the U.S. Department of Defence promptly-went
before Congress to demand a fiscal 1981 budget of —
$170-billion! When the Reagan administration came to
power, it gratuitiously raised the amount to $185-billion.

To get any kind of reasonable appreciation of the
relation between Soviet and American military spend-
ing, we must turn to non-governmental sources.

Before we do, it is worth noting that the official Soviet
account of their defence spending in 1980 was 17.1 billion

roubles, or about $27.4 billion at the official exchange

rate.

However, if we don ’t wish to accept this at face value,
there are other estimates. The most objective agency in
the Western world is generally considered to be SIPRI —
the Stockholm International Peace Research Insti-
tute.* SIPRI does its own calculations of Soviet and
American military spending. Its findings are unequivoc-

MILITARY SPENDING
(Billions of US Dollars)

150

-— 100

r— 50

Stockholm International
Peace Research Institute

Official US Government

Source: World Military and Social Expenditures 1980,
World Priorities

——

outspent the USSR in military effort by a wide margiN. -
If NATO is compared to the Warsaw Treaty Org:

zation, the gap grows considerably. NA TO accounts for

more than 44% of the total.world military expenditures

the Warsaw Treaty absorbs about 26% of the world

total.

*The most authoritative agency is the International Institute fol
Strategic Studies (IISS) in London, which has a definite pro-NATY
bias. IISS declines to supply its own estimate of Soviet militat)
spending, confining itself to the somewhat understated observ
tion that ‘(the CIA method) tends to overstate the Soviet defence?
effort relative to that of the USA.”

“Itis time that the American public understands that the!
quotes about being outspent by the USSR are just plait
inaccurate. They are nonsense, balderdash, phony, fake ant
I might add, untrue.’”’

— Senator William Proxmire, on the floor of U.S. Senalt
August 26, 1980.

a

MAIN REFERENCES:

COX, Arthur: “The CIA's Tragic Error’
New York Review of Books, November 6, 1980

GERVASI, Tom: The Arsenal of Democracy 1!
Grove Press, New York, 1981 _~

WWTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES: The
Military Balance 1979-1980 4
liSS, London, 1980

KAPLAN, Fred: Dubious Specter: A Second Look at the ‘Sovie!
Threat’
Institute for Policy Studies, Washington, D.C. 1977

NIXON, Richard M: The Real War
Warner Books, New York, 1980

STOCKHOLM INTERNATIONAL PEACE RESEARCH INSTITUTE: :
Yearbook, 1981 :
Almavist & Wiksell, Stockholm, 1981.

ne
Fred Weir, author of the 1980 pamphlet, The Arms

Menace, is a history graduate who has travelled widely
in eastern and western Europe and the Middle East. —

al: throughout the 1970s the United States consistently =
SIPRI Yearbook 1981
World military expenditure summary, in constant price figures
Figures are in US $ mn, at 1978 prices and 1978 exchange-rates. Totals may not add up due to rounding. lf

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

USA 120655 121105° 114976 113666 110229 104261 108537 109247 109861 4111236
Other NATO 66 469 69 994 71 286 73 200 75 272 76642 .78134 80 468 81 942 82 674
Total NATO 187124 191099 186261 186866 18550) 180903 18667! 189715 191803 193 910
USSR 93 900 95 400 96 900 98 300 99800 ~-101300 102700 304200 105700 107300 |
Other WTO 8 853 9 040 9 541 10 003 10 624 iH 103 11.444 11 574 1] 943 12.250
Total WTO 102753 104440 106441 108303 110424 112403 114144. 115774 117643 119550
Other Europe 8814 9 374 9 537 10 204 10 598 11 325 11 064 11.192 11 587 11821 |
Middle East 11 189 12 569 18 943 25 007 30 350 33 033 32 451 33 283 33 445 37900.
South Asia 3955 4 269 3853 3 680 4065 4 642 4 549 4731 4 882 4902
Far East 13 267 14 254 14 757 14 694 16 193 17 427 19 058 21916 24 260 25 767 all
China 39 000 33 200 35 100 35 100 37 100 38000 ~ 37100 38 000 4000G 40.000 ©
Oceania 2 839 2797 2871 3 106 3203 3 193 3 204 3 203 3218 3 369 ,
Africa 5679 6 064 6 259 7750 9 138 9 796 9859 9577 10 037 9859
Central America 953 975 1030 1093 1223 1526 1 786 1912 1969 2186
South America 3942 3 906 4121 “4765 $175 5 867 5 980 5 953 $953 6050
World total 379515 382946 389174 400569 412970 417914 425866 435256 444798 455311