1976-1980 Resource Burden of the Soviet Space Program-part 2
[The Soviet space resources burden and the Soviet command economy were based on its allocation of its resources in the form of tons of material, equipment, personnel, and personnel human power as its barter currency for each Soviet “Five Year Plan” fiscal planning during the Cold War. -CPV]
Resource Burden of the Soviet Space Program*
SOVIET SPACE SPENDING
PRIORITY OF SPACE ALLOCATIONS
*Prepared by John P. Hardt and George D. Holliday. Dr. Hardt is Senior Specialist in Soviet Economics and Dr. Holliday is Specialist in International Trade and Finance, Economics Division, CRS. This chapter is based on a similar chapter appearing on Soviet Space Programs 1971-75, vol. II, pp. 85-98. Some modest updating to provide insights in the alternatives of the 1980's has been added.
In 1975, former CIA Director William Colby testified in congressional hearings that Soviet defense and space spending had grown at a rate of about 3 percent per annum in the period 1960-73. As the overall Gross National Product (GNP) grew more rapidly, the share of GNP represented by defense and space fell from 10 percent to between 7 and 8 percent during that time period. (10)
CIA analysts viewed the Soviet space program as dominated by military objectives and unified in administration. They found that space expenditures rose from about 2 percent of total military expenditures in 1960 to over 11 percent by 1974 of total military space accounting for most of the increase. Based on these estimates (7 to 8 percent of GNP to defense and over 11 percent of defense in space expenditures), one could assume the CIA estimate of space to be just under 1 percent of GNP. (11)
The CIA estimates of Soviet defense and space spending were contested by intelligence analysts in the Defense Department. (12) They cited evidence that these activities were more likely to account for 10 to 20 percent of Soviet GNP. (13) These revisions appear to have been accepted by the CIA. One might have asked, in reference to the earlier estimates, how the Soviet Union did so much in defense and space with the estimated expenditures. Or how they were able to outspend the United States in most categories of defense and space with a comparable share of a GNP half the size of ours. An answer may be found in the method of costing Soviet programs and converting them to dollar values, allowance for variations in ruble-dollar conversions resulting from Soviet preferential pricing policy for defense and space, and possible understatement of full costs for defense-space programs such as adjustments might raise the defense share to 10 to 20 percent of their GNP. (14) If one accepts this higher estimate, the share devoted to the space program could be between 1 and 2 percent of current Soviet GNP.
The estimate of 1 to 2 percent of Soviet GNP, if correct, implies a space budget of $7 to $14 billion in 1974, and $14 to $28 billion in 1980. That estimate suggests a level of expenditures that is considerably larger than the present U.S. program and probably approximates (for 1974 in real terms) the U.S. space effort at its peak in the 1960's.
Later testimony by representatives of the intelligence community indicates that the proportion of the Soviet defense budget devoted to expenditures on space grew during the 1970's. Adm. Stansfield
Turner, CIA Director during the Carter administration, testified in 1979:
“We have closely monitored Soviet activities at weapons production and design bureaus, and today, we see no evidence that these economic difficulties have altered their momentum. They have about the same number of major weapon systems in production now that they have had each year since 1970. The mix is somewhat different. There seems to be more emphasis on space systems and systems incorporating advanced technology.
This is a gross number that indicates how many missile programs—not their value, their cost or amount of labor or anything else—but how many missiles we know are under the development, how many aircraft, and so on.
And as just a gross measure, we see it staying about the same.
Senator PROXMIRE. What is the third category? You have missiles, aircraft, I can't read that next.
Admiral TURNER. Space systems, ships, and submarines, et cetera.
Senator PROXMIRE. Space systems are military applications of space?
Admiral TURNER. Yes. That is primarily satellite systems and so on.
These consistently high levels of activity have an important implication for growth in defense spending because new weapons systems like this always tend to be more costly than their predecessors, and particularly, as we move into very sophisticated areas like space and missiles. (15)
The official Soviet budget adds little to our knowledge of Soviet space and military expenditures. Soviet budget categories are probably incomplete, undoubtedly reflect preferential pricing for the space and military sectors, and, in any case, do not provide sufficient detail to separate space spending from other outlays. However, the general trend in the "science' and "defense" categories of the budget—which probably include most Soviet space expenditures—support the notion of a steadily growing space program. From 1955, 2 years before the first Soviet satellite, to 1965, the Soviet science budget grew more than fivefold (from 808 million rubles to 4.3 billion rubles). (16) It has continued to increase, though at a less spectacular rate, since 1965. (Since 1971, the science and education budgets have been combined. Consequently no separate totals are available.) The officially announced defense budget increased steadily in the 1960's and leveled off in the 1970's.
UNIFICATION OF MILITARY AND CIVILIAN SPACE
According to John Paisley, formerly of ClA's Office of Strategic Research, it is very difficult to separate Soviet military from civilian space expenditures. Still, he claimed, there is reason to believe that the military part dominates the Soviet program:
We doubt that they have a program that splits the military and civilian. Most of the activities that we know appear to be carried out at military facilities. . .
We think the most dynamic aspect of their program is the military at the present time. (17)
In response to Senator William Proxmire, in hearings before the Joint Economic Committee, former CIA Director Colby further explained the military domination of the Soviet space program on grounds of efficiency as well as priority:
Mr. COLBY Now you know, they have had a terrible time in their civilian space program and they have had some very bad, bad experiences. I mean, a whole string of them have not worked. They lost the astronauts and they put things on various planets that have not worked, and all the rest of it. And we think, as a conclusion, that they put primary effort in the military arena, although their civilian space programs are given high public visibility.
Chairman PROXMIRE. In other words, they are including all of their effort in here, and 2 or 11 percent increase, you think is very largely a military increase.
Mr. COLBY. Yes, but a lot of it was construction of facilities that have dual purposes, and it is difficult to separate launch pads and things like that into military and civilian facilities. (18)
Dr. Malcomb R. Currie, when Director of Defense Research and Engineering of the Department of Defense, provided additional views on March 11, 1975.
In recent years the Soviet Union has maintained an aggressive space program with its major emphasis on support of military operations. While definitive numerical comparisons of their expenditures with our own are difficult to make, we believe that the resources which the Soviets have put into their military space programs over the past three years are much greater than our own commitments. (19)
During the 1970's, U.S. military space programs accounted for approximately 30 to 40 percent of total U.S. space spending Curie’s testimony and comparison of the ratios or military to civilian satellite launchings suggest that the Soviet Union devotes a much larger proportion of its space budget to military applications than the United States.
THREAT OF AMERICAN INFERIORITY
The implications of the higher Soviet commitments and different space objectives were found by Dr. Currie to be a threat of American military inferiority within a decade.
I believe that the Soviet effort right down the line in space has as its primary objective a superior military directed capability. Space is becoming a very pervasive part, as I mentioned, of our national security, and of our military capabilities and its transitioning right now from providing support strictly in a strategic sense to support also in a tactical sense. I would look forward a decade from now to the time when man m orbit will be able to enhance considerably our military capability and when satellite survivability must be given prime consideration in our programs certainly the demonstrations last year [deleted] show also that they are really proceeding down an independent path of research and development. They are no longer merely reacting to our demonstrations. (20)
Moreover, the programs in which the United States still retains leadership, such as the Space Shuttle with its rendezvous and docking capability, will become increasingly more vulnerable to Soviet military space capability in the Defense Department view. As the Soyuz-Apollo linkup may improve the Soviet capability to make our satellites more vulnerable, Dr. Currie implied the exchange program might further contribute to our vulnerability. (21) However he did not argue that large military satellites would be less vulnerable than the Space Shuttle. The argument for the Space Shuttle is economy without a necessary increase in vulnerability.
BURDEN AND OPPORTUNITY COSTS OF THE SOVIET SPACE PROGRAM DEFINITION OF BURDEN AND OPPORTUNITY COSTS
Perhaps the truest measure of the economic burden of Soviet space spending is a determination of the Soviet perception of opportunity costs. In other words, how much do Soviet decision makers value accomplishments in space compared to alternative economic goals that must be foregone? In order to maintain a large space program scarce resources—materials, machinery, scientists and technicians—must be diverted from other sectors of the economy. How important are those other sectors and how are resource allocation decisions made? Andrew Marshall Director of Net Assessment in the Defense Department, has noted this problem in assessing the burden of Soviet defense spending.
What is critical is a better understanding of how that opportunity cost is perceived by Soviet leadership and society ... To understand the burden of defense in any useful sense we need to know much more about how such conflicting and re-enforcing views work themselves out in the Soviet system. The answer to this sort of question depends upon an understanding of the internal bureaucratic and organizational politics of the decision process which determine the allocation of resources . . . the perceived burden of defense may be increasing over time even though defense takes but a constant or declining share of GNP. Therefore, it is impossible to address the problem of the burden, or the Soviet perception of the burden, without knowing how strongly the Soviet leadership in general, or subgroups of it, are attached to some alternative goals that could be obtained by diverting resources from defense even if the efficiency of the shift of resources is low. Until much more progress is made in these broader dimensions of the burden issue, statements to the effect that the burden of defense upon the Soviets is great or small will not be persuasive. (22)
Thus, in estimating the economic burden of the Soviet space program, simple dollar estimates are insufficient. Unfortunately, we cannot determine Soviet perceptions of opportunity costs with great precision. However, our knowledge of Soviet "internal and bureaucratic and organizational politics" does provide a basis for determining whose perceptions of opportunity costs are most important. Moreover, various policy statements and official economic plans give some insights, if not hard evidence, of what priorities are attached to competing economic goals.
PARTY PRIMACY IN SPACE POLICY
Who decides or rules in the Soviet Union? In priority objectives, such as military and space programs, the dominant role is clearly played by the Politburo of the party's Central Committee and particularly by the General Secretary, Leonid Brezhnev. However, given the size and complexity of the Soviet scientific research effort in these areas, party leaders undoubtedly rely heavily on scientists for advice on funding priorities. In a speech to the Soviet Academy of Sciences, on the occasion of its 250th anniversary, Brezhnev described the interaction of the party leadership and Soviet scientists in planning and carrying out scientific programs:
Scientists and specialists in the various branches of the natural sciences, technology and the social sciences have given and are continuing to give the Party enormous help in accomplishing all these tasks and in working out plans and implementing them. For this, the Party gives them all heartfelt thanks.
However, comrades, in the future you will have to work even more, more persistently and more effectively. We have no intention of dictating to you the details of research topics and the ways and means of research—that is a matter for the scientists themselves. But the main directions of the development of science, the main tasks that life poses, will be determined jointly. (23)
Brezhnev's reference to "jointly" determining the directions of scientific research may be a euphemistic reassertion of the party's preeminent role in this realm. Yet, this moderate formulation probably reflects a growing role for the professional scientist in Soviet science administration. This development represents a gradual departure from the scientists' past subordination to the authoritarian demands or arbitrary whims of the party leadership.
The significance of an enhanced role for Soviet scientists is that their perception of opportunity costs must have some influence on party decision makers who establish economic priorities. Their preferences are weighed against those of other institutional groups, such as the military, industrial managers, and economic planners, by the party leadership, which makes the final decision on the broad allocation of resources.
How do Soviet scientists view the burden of the space program? While this question is not openly discussed in the Soviet press, there is evidence that there are highly divergent views. Some dissident Soviet scientists, like Andrey Sakharov, while not singling out the space program, have publicly opposed the general party line on resource allocations. Perhaps a more common view among Soviet scientists is that a disproportionate share of science funds are devoted to space. Soviet space scientists, Leonid I. Sedov, writing in 1971, supported large expenditures on space, while complaining that:
One runs into the point of view that space research is a luxury and that the heavy allocations spent on it should be applied in the satisfying of the critical needs on Earth—the fight against hunger and disease, the development of education, agriculture, and so forth. (24)
This and other references to critics of the space program suggest that Soviet scientists have been active in asserting their views. However, the rising space budget is evidence that scientists who support the space effort have been most influential on the party leadership. Little has happened in recent years to suggest that party leaders currently differ from former Prime Minister Alexey Kosygin's assessment in 1965:
We don't have any contradictions in the Soviet Union between appropriations for space research and for the needs of the population, or education and such. They are a negligible part of overall expenditure. Space expenses do not detract from the needs of the population. (25)
Thus budget-cutters have not had the same impact on Soviet space expenditures as in the United States. To some extent, however, the shape and content of the Soviet space program may reflect the various competing demands for the investment ruble. There has, for example, been an emphasis on minimizing the most expensive space activities, such as the U.S. Apollo program and manned flight in general. There has also been a concerted effort to emphasize programs with practical economic applications, though the Soviets appear to have been less successful than the United States in this effort.26 Finally, there has been a strong preference for military space missions, suggesting that the priority assigned to space spending has in large part reflected the party leadership's perception of the military-strategic benefits of the space program.
AN ONEROUS OR TOLERABLE BURDEN OF MILITARY SPACE
Various observers of Soviet behavior have made widely differing assessments of the political utility to the Soviet leadership of expanding military-space strategic systems. Two widely differing assessments, which might be characterized as the "Soviet superiority school and the "diminishing marginal political utility" school, illustrate the range of options open to the Soviet leadership. The Soviet superiority" school contends that:
The Soviet Union has the capacity to expand military-space strategic systems to a level which assures strategic superiority over the United States in the near future. Such strategic superiority can be translated in Soviet political hegemony in various important geographical areas, including West Europe, Asia, and the Mediterranean thus, large military-space expenditures may promise such great political benefits that they will be unconstrained by the demands of hard-pressed civilian sectors of the Soviet economy.
The "diminishing marginal political utility" school contends that: The increment al costs of new military and space programs have become so high and the political utility so low that stabilization or reduction of those priority programs is now considered desirable. In this context the tradeoff between new programs in military space and new civilian investment programs may even favor the latter. At least they would be considered as serious alternatives.
To be sure, these views are oversimplified to suggest the range in official U.S. political and intelligence assessments of Soviet leadership perceptions. The former school of thought, for example, approximates the views of some Department of Defense observers. A Defense Intelligence Agency document asserted for example:
The expansion of Soviet strategic capabilities, combined with the limited value Western strategists generally accorded marginal advantages, has permitted the Soviets to achieve a nuclear force stature that canceled out long-held U S numerical superiority.
The considerable momentum of Soviet nuclear weapons programs holds the promise of attaining a politically meaningful strategic edge. (27)
The "diminishing marginal political utility" school, on the other hand, comes close to former Secretary Kissinger's contention that, both we and the Soviet Union have begun to find that each increment of power does not necessarily represent an increment of usable political strength. (28)
If the "Soviet superiority" view were deemed accurate, the notion of burden, opportunity costs or tradeoffs between military-space programs and civilian investment would not seem very relevant. If military superiority were attainable and its fruits could be translated in meaningful political shifts in power relationships, the Soviet leadership priorities would probably be clearly in favor of the traditional "guns" or military-space programs. However, if the latter perception of rising cost-diminishing utility is accurate, a reduction of relative military-space claims on resources is eminently logical.
Unfortunately, we do not have sufficient knowledge of the Soviet leadership's motivations to determine which of these views is closest to Soviet perceptions. Moreover, we might accept the absolute preference for military-space on quite different ground, that is, the Soviet leaders may consider themselves inferior and required to press ahead to attain their version of parity. Paradoxically, their view of their inferiority may be assessed in our military planning councils as superiority. This possible Soviet exaggeration of a need for defense against attack from the air may be re-enforced by the Soviet concern about China which converted their traditional European ground invasion phobia through Germany into a revived two front threat.
References:
A. SOVIET SPACE PROGRAMS: 1976-80, SUPPORTING VEHICLES AND LAUNCH VEHICLES, POLITICAL GOALS AND PURPOSES, INTERNATIONAL COOPERATION IN SPACE, ADMINISTRATION, RE-SOURCE BURDEN, FUTURE OUTLOOK PREPARED AT THE REQUEST OF HON. BOB PACKWOOD, Chairman, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, UNITED STATES SENATE, Part 1, Dec. 1982.
10. Testimony of William Colby. U.S. Congress Joint Economic Committee, Subcommittee on Priorities and Economy in Government, Allocation of Resources in the Soviet Union and China—1975, Hearings, 93d Cong., 2d sess., Apr. 12, 1974, pp. 27-28. (Hereafter, Allocation,
11. Ibid., p. 28.
12. Testimony of Lt. Gen. Daniel 0. Graham, Director, Defense Intelligence Agency, in Allocation, 1975, pp.93-94.
13. Ibid., pp. 163-164.
14. For a discussion of the problems associated with estimating Soviet defense expenditures, see Rainer W. Rupp. Assessing Soviet Military Expenditure: A Complex and Controversial Task. NATO Review, vol. 29, Oct. 1981; pp. 23-28.
15. U.S. Congress. Joint Economic Committee. Subcommittee on Priorities and Economy in Government. Allocations of Resources in the Soviet Union and China—1979. Hearings, 96 th, Cong., 1st sess., June 26 and July 9, 1979, p. 14.
16. SSSR. Ministerstvo Finansov. Gosudarstvennyy byudzhet SSSR i biudzhety soyuznykh respublik; statisticheskiy sbornik. (State Budget of the USSR and Budgets of the Union Republics, Statistical Digest), Moscow, 1966, p. 21.
17. Allocation, 1974, pp. 39, 28.
18. Ibid., p. 28.
19. U. S. Congress, Senate Committee on Aeronautical and Space Sciences. Authorization for Fiscal Year 1076 and the transition period, Hearings, 94 th Cong., 1 st. February and March 1975, pt. 1, p. 475. (Hereafter, NASA Fiscal Year 1976 hearings.)
20. NASA Fiscal Year 1976 hearings, pp. 501-502
21. Ibid., p. 502.
22. Allocation, 1975, pp. 164-165.
23. Pravda, Oct. 8, 1975.
24. Novoe Vremia (New Times), February 1971.
25. Interview with James Reston, New York Times, Dec. 8, 1965, p. 20.
26. CF H. Kissinger "The defense establishment we have today is the product of decisions ttaken 10-15 years ago”, speech before World Affairs Council at Southern Methodist University Mar. 22, 1976 entitled "Foreign Policy and National Security."
27. Detente in Soviet Strategy." Statement released by the Defense Intelligence Agency
28. Kissinger briefing to congressional leaders. Congressional Record, June 19, 1972, p. S9600.
