The Cold War – Financial Cost

By MSW Add a Comment 14 Min Read

TSR-2 219 transit flight lo

“All modern aircraft have four dimensions: span, length, height and politics. TSR-2 simply got the first three right.”

The TSR-2 was planned to replace the Canberra light bomber from 1965. Although explicitly not intended to replace the V-bomber, the TSR-2 was designed to be capable of long-range penetration of enemy territory, as well as of a short-range strike/reconnaissance role, and, like the Canberra, it would have nuclear capability. The TSR-2 was a very advanced aircraft and so expensive as to be an obvious target for the Treasury. Estimates of the research and development costs rose from about £90 million in September 1960 to between £175 million and £200 million in May 1963, and to between £240 million and £260 million twelve months later. When Healey became defence minister in October 1964, he discovered that TSR-2, which had begun its flight trials only the previous month, required at least three years’ more development before it could be operational. He persuaded the Air Staff to forgo TSR-2 by promising to purchase the contemporary American F-111 tactical strike aircraft in its place, but pressure to reduce defence expenditure in the wake of sterling devaluation led to the cancellation of the F-111 order in 1968.47 The RAF continued to operate the obsolescent Canberra into the 1980s.

The Avro Canada CF-105 Arrow was a delta-winged interceptor aircraft, designed and built by Avro Canada as the culmination of a design study that began in 1953. The Arrow is considered to have been an advanced technical and aerodynamic achievement for the Canadian aviation industry. The CF-105 (Mark 2) held the promise of near-Mach 2 speeds at altitudes of 50,000 feet (15,000 m) and was intended to serve as the Royal Canadian Air Force’s primary interceptor in the 1960s and beyond.

If actual physical combat never broke out, there were nevertheless some real battlegrounds on which the Cold War was fought, among them those of equipment and of technology. But these depended upon the resources made available to finance them, and the management systems which controlled them. Indeed, there are good grounds for believing that NATO eventually priced the Warsaw Pact, and in particular the Soviet Union, out of business.

EQUIPMENT

All nations expended a substantial proportion of their defence budgets on equipment, and the Cold War was a ‘happy time’ for military men on both sides of the Iron Curtain, even though they constantly complained that they were short of money and starved of resources. The fact was that public funds had never been so generously lavished on military forces in peacetime, and many of the shortages were more apparent than real.

The naval, general and air staffs and the government procurement agencies alike faced many challenges, of which the most fundamental was that, in the worst case, the Third World War might have broken out very suddenly and then been both extremely violent and very short. This would have been quite unlike the First and Second World Wars, where there had been time to mobilize national industries, to develop new equipment, and to produce it all in sufficient quantities. But, whereas those wars had lasted four and six years respectively, the indications were that, in the worst case, the Third World War would have been over in a matter of months, perhaps even of weeks. Such a conflict would therefore have been fought with whatever was available at the time – a ‘come as you are’ war, as it was described at the time. In consequence, armed forces had to be constantly maintained at a state of high readiness, with their weapons, ammunition and equipment to hand – a process which proved difficult to sustain for forty years. A second problem was that the accelerating pace of science and technology, coupled with the lengthy development time for new equipment, meant that many weapons systems were obsolescent before they had even entered service.

Inside their respective pacts, the two superpowers enjoyed many advantages: their financial and industrial resources were huge in comparison to those of their allies, and their own forces were so large that they guaranteed a major domestic market for any equipment that was selected. They thus dominated their partners, and it proved a struggle for their European allies on either side of the Inner German Border to avoid being overwhelmed.

Even for the USA, however, military procurement was by no means smooth sailing. Enormous amounts of money were expended on systems which, for one reason or another, were cancelled before they reached service. One prime example was the effort devoted by the US air force to finding a successor to the Boeing B-52, to maintain its manned strategic bomber force. First there was the XB-70 Valkyrie hypersonic aircraft, which was followed by the B-1, the B-1A (which was virtually a new aircraft) and then the B-2. The sums expended on these aircraft for what was, in the end, very little return are almost incalculable. Further, quite what purpose such aircraft would have served in a nuclear war, apart from dropping H-bombs in gaps left by ICBMs and SLBMs, is not clear. The US army had some dramatic failures, too, such as the Sergeant York divisional air-defence system and the MBT-70 tank.

The US forces were certainly not alone in having problems. The Canadians, who had little enough money for defence, undertook three massive projects, which many contemporary observers warned were over-ambitious. The first was the all-Canadian Arrow fighter of the late 1950s, which reached the prototype stage before cancellation. The second, in the 1980s, was the submarine project which grew from three replacement diesel-electric submarines to twelve nuclear-propelled attack submarines; this reached an advanced stage, though short of orders being placed, before it was cancelled. The third, in the 1990s, was an order for over fifty Westland helicopters to replace ageing anti-submarine and general-purpose helicopters; this was summarily cancelled by a new government, and large compensation payments had to be made. These three projects incurred expenditure totalling hundreds of millions of dollars, but, in the end, there was not a single aircraft, submarine or helicopter to show for any of them.

The British suffered from two problems. The first was projects reaching an advanced stage and then being cancelled. This affected numerous aircraft, such as the Nimrod AWACS, the Vickers-Supermarine Swift fighter and the TSR-2 strike aircraft, while the navy suffered a similar fate with the CVA-01 aircraft carrier, as did the army with the SP70 self-propelled gun and the Blue Water battlefield missile. In addition, some of the projects that did reach service did so only after many years in development and the expenditure of great sums of money, when a viable foreign alternative was readily available at much lower cost.

This is not to deny that some excellent equipment was produced. In the USA, the Los Angeles-class SSNs and aircraft such as the B-52 bomber, F-86 Sabre, F-4 Phantom, F-15 Eagle and F-16 Fighting Falcon were world leaders in their day. Among British successes were the Canberra and Vulcan bombers, the Hunter fighter and the Harrier V/STOL aircraft, the Leander-class frigates and the Centurion tank. The Germans bought most of their aircraft from abroad, but on land their Leopard 1 and Leopard 2 tanks were outstandingly successful. The French produced some outstanding fighter aircraft in the Mirage series, which sold around the world.

Indeed, some European equipment was so good that it even found a market in the United States. The US air force, for example, purchased the British Canberra bomber, while the Marines ordered hundreds of Harrier V/STOL aircraft. In the 1980s the US army bought its most important communications system, RITA, from France, while its tank guns came first from the UK (105 mm) and subsequently from Germany (120 mm).

MANAGEMENT

All equipment-producing countries knew that their procurement processes were slow, overbureaucratic and inefficient, but, while all tried a considerable number of alternative methods, none of them ever found a real solution. Projects conducted with extreme speed and then rushed into production, such as the US army’s M47 and M48 tanks and the US air force’s F-100 Supersabre fighter in the 1950s, tended to result in equipment which was simply not ready for operational use and which required years of additional work to sort out the problems. On the other hand, projects which were conducted with extreme care could take over a decade to complete, by which time the technology was out of date, and the time taken ensured that they were very expensive.

Some observers advocated an escape from this by using an incremental approach, whereby a new weapons system was created by bringing together various in-service components. Using this approach, the Soviet army achieved a major success with its ZSU-23–4 air-defence gun, but when the US army tried to do the same thing with the Sergeant York system it proved to be a time-consuming and costly failure.

It should not, however, be thought that the USSR had a better system. Because of the secrecy which was inherent in Soviet equipment procurement, the West only ever saw the equipment which had passed through the development system and had been put into service, where it could no longer be hidden. There were, however, many projects which, despite considerable expenditure, never reached service status.

DEFENCE COSTS

The true costs of defence equipment were virtually impossible to calculate. First, the budgeting systems were complex and the costs of various elements of a programme were spread over so many individual budgets that it was difficult (as legislators in many countries discovered) to track them all down. Second, the declared cost of getting a weapons system into service was seldom the real cost of the project, since early production models frequently either fell well short of performance criteria or only just met them, as a result of which much effort had to be devoted to resolving the problems. Third, belated admissions showed that even in the most democratic of countries, such as the USA and the UK, large hidden programmes had been undertaken without any authority from the legislature.

The original British A-bomb programme and the early part of the Chevaline warhead development were hidden from Parliament for many years, and numerous ‘black’ air-force programmes, such as the F-117 ‘stealth’ fighter, were concealed from Congress in the United States. In addition, governments used differing methods and conventions for arriving at defence costs, thus making it virtually impossible to compare like with like. Some governments also had defence commitments outside the European area, the costs of which were difficult to extract from Cold War costs.

On the Soviet side, it is doubtful that even the Soviet government had any real idea of just how much its defence programmes cost, and estimates made in the West were essentially best guesses. What was certain, however, as judged by the eventual collapse of the USSR, was that the cost proved to be unaffordable.

By MSW
Forschungsmitarbeiter Mitch Williamson is a technical writer with an interest in military and naval affairs. He has published articles in Cross & Cockade International and Wartime magazines. He was research associate for the Bio-history Cross in the Sky, a book about Charles ‘Moth’ Eaton’s career, in collaboration with the flier’s son, Dr Charles S. Eaton. He also assisted in picture research for John Burton’s Fortnight of Infamy. Mitch is now publishing on the WWW various specialist websites combined with custom website design work. He enjoys working and supporting his local C3 Church. “Curate and Compile“
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