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The Soviet Union's military budget: secrets, lies and half-truths

In the mid-1980s, Soviet leaders began to regret the price they were paying in the international arena for extreme secrecy in military affairs. Mark Harrison examines new evidence on their decision to release more information about defence spending – and the difficult process of revealing the truth.

In 1930, faced with disarmament negotiations, Stalin’s Politburo decided to lie about the Soviet military budget. For a few years, the published figure was below the true one by a wide margin. In 1935, given the collapse of disarmament hopes and the rise of Nazism and Japanese militarism, it was decided that there was nothing to lose from resuming truthful publication. This was done the following year.

Half a century later, entering talks to limit strategic and theatre nuclear weapons, the Soviet Union faced the same problem. Its official statistics had lied for at least two decades about the true size of the Soviet military budget. The figure the Soviet Union reported – around 20 billion roubles in the mid-1980s – was only a fraction of the truth.

The real figure was a much-analysed mystery in the West. A new Soviet leader, Gorbachev, was trying to persuade the West that the Soviet Union was neither a strategic threat nor a growing one. In that context, the lie was undermining Soviet credibility.

Without the constraints of political and economic competition, Soviet secretiveness became a monster that devoured the system

What happened next? The Hoover Archive at Stanford University holds the papers of a senior Soviet arms control official, Vitalii Kataev. These papers show how the Soviet leaders came to let go of one of their most valued secrets – one that Western agencies had devoted huge efforts to guessing or uncovering over many years.

In 1986, Gorbachev’s Politburo resolved to move towards greater openness in military matters, including the defence budget. The reason given was that otherwise they could not get past Western suspicions of the "Soviet threat." That this was a genuine determination is suggested by the delays and foot-dragging that followed.

The first problem the Kremlin leaders encountered was identifying the true figure. Only a handful of people thought they had access to the true figure. But it is also possible that nobody knew it.

The truth had to be compiled from many different government departments and accounts. There were many sources and subsidies, including some that were indirect – for example, budget and off-budget subsidies to the engineering industry. So it was unclear how thoroughly to sweep the general budget accounts for direct and indirect defence costs.

There was also resistance. A coalition of resisters, led by Marshal Sergei Akhromeev, chief of the general staff, offered both strategic and commercial grounds for delay.

The strategic considerations were that the Soviet Union was trying to negotiate an arms control treaty with the United States from a position of strategic partnership, as one global superpower with another. In this context, the emerging rouble figure was going to look "too low." If the Soviet Union was not spending a figure comparable to United States’ dollar spending on defence, how could it claim strategic parity?

A related issue with commercial implications was that the new figure would make Soviet military hardware look "too cheap." This information would undercut the profitable prices that Soviet exporters were currently charging to foreign purchasers of armaments.

Some figure would have to found that would yield a compromise between Soviet economic facts and strategic objectives. For the time being, Gorbachev temporised. In 1987, he told the world only that the previously published budget figure was incomplete. The Soviet Union, he said, would have to undertake internal accounting and price reforms before publishing its true military budget by 1989 or 1990.

This episode throws light less on the supposed burdens of military spending than on the burdens of secrecy

There matters stood for two years. In the absence of further reforms, internal and external pressures for disclosure built up. In 1989, Gorbachev announced a new figure for defence outlays: 77 billion roubles for 1989, nearly four times the previously reported figure. The new figure was much discussed at the time. Most likely it was still an underestimate. But it was now a two-thirds truth, rather than a deliberate lie. The Soviet military-industrial complex was gradually being forced out into the light of day.

What are the implications of this story? One is that Soviet leaders had no basis to believe that their economy was being crippled by defence costs.

According to one document, Akhromeev urged continued concealment to allow Soviet leaders to go on blaming the poor state of the economy on the defence burden, despite believing this to be untrue. There may have been some illusion here, but even corrected figures would probably show a defence burden that was still relatively modest and shrinking, not increasing, when the economy collapsed.

In my view, the bigger story is the costs not of defence but of secrecy. Market economies thrive on political accountability, freedom of expression and low-cost information. Where secrecy is based on legitimate commercial or military concerns, an environment of political and economic competition generally prevents it from getting out of hand. Lacking these constraints, Soviet secretiveness became a monster that devoured the system.

Publication details

Secrets, Lies, and Half Truths: The Decision to Disclose Soviet Defense Outlays, by Mark Harrison, is available as Working Paper No. 55 in the Political Economy Research in Soviet Archives (PERSA) series. An abridged version is published as A No-Longer-Useful Lie in The Hoover Digest 2009, No. 1.

The author

Mark Harrison is professor of economics at the University of Warwick, senior research fellow of the Centre for Russian & East European Studies, University of Birmingham, and W. Glenn Campbell and Rita Ricardo-Campbell National Fellow of the Hoover Institution on War, Revolution, and Peace, Stanford University.