Boris Altshuler
FOOTNOTE: * Chapter from
the "Evolution
of A.D.Sakharov's Views on the Global Threats by the Soviet Military-Industry
Complex: from the "Reflections on Progress, Coexistence,
and Intellectual Freedom" (1968) to the book "My Country
and the World" (1975)":
Report by B. Altshuler at the Conference 30 Years of Andrei Sakharov's
''Reflections...'' , Moscow, The Andrei Sakharov Museum and Public
Center, May 19-20, 1998. Published in the Proceedings of the Conference:
Prava Cheloveka Publ., Moscow, 1998.
Glossary of Terms
MIC - Military-industrial complex.
NI - National Income (so called Produced National Income) which by definition is equal to annual GNP (Gross National Product) minus the cost of all used materials, energy, transportation, amortization etc. Thus NI includes the cost of the annual consumption (personal - by all the population of the country and by the Government) and the cost of the capital investments targeted for new construction (so called development).
ME - Military expenditures.
USSR - Soviet
Union
1. Evolution of Sakharov's Views.
Before performing the unthinkable
for super-secret Soviet Academician: namely handing over to the
Samizdat of his famous Reflections... [1], which were after
all published in the West in 20 millions copies and which actually
shook the world, Andrei Sakharov more than once approached the
Communist Party top people with proposals for improving Soviet
society. At that time he still believed in the highest values
of socialism and communism, considered United States a potential
aggressor and did his best to create Soviet nuclear shield capable
to prevent the disaster. In Vietnam reactionaries violate all
possible legal and moral norms, sacrificing the whole nation for
the supposed task to stop the communist flood; History demonstrated
that in defending our Motherland, defending its great social and
cultural achievements Soviet people and Soviet Military Forces
are one and invincible [1]. It is very interesting to compare
these words of Sakharov written in Reflections... in 1968 with
some theses of the 1975 book My Country and the World where
he writes about Soviet expansion all over the World, about super-militarization
of the Soviet economics, about disconnection of the West and
its essential weakness and disorganization in the face of totalitarian
challenge. And more of that: Sakharov directly warns that Nixon-Brezhnev
agreement on the limited antimissile defense may give to Soviet
bureaucrats a free hand to begin the thermonuclear war: A terrible
suspicion creeps into the soul against one's will, a scheme becomes
patterned in one's mind that with such a system of defense the
major part of the territory and of the population of the country
is sacrificed to the temptation of obtaining a decisive advantage
of the first nuclear missile attack with the relative safety of
the Moscow officials. I suppose that Russian people of the older
generation are capable to appraise the personal courage and also
the courage of thought which possessed Sakharov who pronounced
in 1975 such words about the first country of victorious socialism.
Evolution of Sakharov's views from 1968 to 1975 is evident. Working
inside Soviet military-industrial complex (MIC, in Russian - VPK:
Voenno-Promyshlennyi Komplex), being during many years a part
of it, Sakharov gradually understood its leading role in defining
the whole politics of the State, understood that real disarmament
will be a blow to privileges of the Soviet political elite. That
is why he writes in [2] about
the dangers of the unilateral disarmament of the West stupefied
with detente. It is impossible to understand the public activity
of Andrei Sakharov out of the context of Soviet MIC and of the
Soviet global military threat.
2. Rhinoceros in a Boat.
The
aggregate of the military-industrial enterprises even if very
large cannot be called military-industrial complex in the sense
of Dwight Eisenhower who first introduced this term speaking about
the American military industry. The phenomenon of MIC appears
only in case MIC leadership begins to influence the political
decision making of the State. The Communist Party, KGB and Soviet
Army were traditionally considered as three main forces of the
Soviet political structure. I must note immediately that Army
itself was always under plural control of Party and of KGB. At
the same time few could guess the special role of the captains
of Soviet military industry - because of their top secrecy and
also because it was not easy to comprehend that in this super-centralized
system somebody (SOMETHING) could permit anything but implicit
obedience. Sakharov was one who guessed it long ago:
Ustinov spoke so softly I
couldn't make out everything he said; he seemed to be talking
directly to Khrushchev, whose expression remained inscrutable,
although it was evident that he was listening with attention.
Ustinov appeared to have in mind some higher purpose that transcended
the conventional concerns of an official, even of one who stood
at the pinnacle of the apparatus. Ustinov shunned the spotlight,
leaving that to Khrushchev and others, but I knew he had a central
role in the research, development, and production of armements,
and I thought to myself: That's OUR military-industrial complex...
I had a similar reaction when I met Leonid Smirnov, another top
defense industrial official... (this is Sakharov's comment to
the 1959 meeting in Kremlin, [3], pp. 211-212). Leonid Smirnov
during many years up to 1986 chaired the most influencial, super-secret,
never mentioned in the open documents Body called Military-Industrial
Commission under Presidium of the Council of Ministres of the
USSR. I remember well how in the late 60s somebody of those who
knows the situation from inside whispered to me: Smirnov, not
Brezhnev, is the real master of the country...
The idea of existence in the
USSR of MIC, like in the USA - however much more influential,
I first heard in 1967 from my friend Pavel Wasilewsky. Real figures
of Soviet military expenditures were always top State secret.
Michael Gorbachev remembered that being in 1983 a Member of Politbureau
sometimes even chairing the meetings of this Highest Body of Soviet
nomenklatura he had no admission to real figures of State budget,
in particular - to the figures of its military expenditures (Pravda,
December 10, 1990). As we shall see below military expenditures
(without taking into account of the allocations directed to the
military building) made up 40%-50% of the total National Income
of the USSR in 1969 (cf. correspondingly 11% in the USA). (NI
should not be confused with GNP - see Abbreviations).
After 1990 there were
many publications which qualified Soviet military industry as
monster, rhinoceros in a boat etc. About 80% of Russian industry,
70% of Russia's population, 12 millions of the most skilled scientific,
technical, management, workers and other personnel are still tied
up, directly or indirectly, to the MIC, - quoted from the Editorial
Difficult Alliance with Military Industry, Finansovye Izvestiya
(Financial News), April 19, 1994, page 4. Authors of the Article
[4] published in 1997 say that in 1989 total military expenditures
of the USSR reached an astounding level... 73.1% of the Produced
National Income. Unfortunately these publications just name the
figures without adducing sufficiently convincing arguments, we
shall try to heal this decease below.
Contrary to the epoch of Glasnost',
in mid 80s, not to mention 25 years ago, everything was in darkness.
The most anti-Soviet, unbridled (as Pravda put it) Western
estimations put Soviet military expenditures at 19% of the Soviet
national income which was considered an unbelievably large figure
to compare with the 11% of the USA. Actually West was incapable
to comprehend unprecedented Russian possibilities and this was
of course very dangerous.
3. Distribution of the National Income of the USSR.
In 1968-1971 we - Pavel Wasilewsky
and Boris Altshuler - wrote two brochures for SAMIZDAT: Time
does not Wait [5] and Distribution of the National Income of
the USSR [6]; many ideas of these articles were inspired by Pavel's
father, top specialist in the economical geography Leonid Wasilewsky
(1904-1984).
In [5] we wrote about nomenklatura
as a real ruling class in the Soviet society, about exploitation
without capitalists, about expansion of communism as a main goal
of Soviet nomenklatura. (My father, Lev Altshuler, an atomic scientists,
brought [5] to Sakharov in 1969 soon after Sakharov was banished
from Nuclear Center Arxamas-16 for his Reflections; to this
visit dates rather funny remark by Sakharov who asked my father
to refrain from discussing State-secret nuclear topics in Sakharov's
Moscow apartment because as Sakharov put it: I have clearance
for secret information. You do too. But the people who are bugging
our conversation now do not have such a clearance. Let us better
speak about something else [7]).
I shall speak here in more
detail about paper [6] where all calculations were done for the
test case of the 1969 year. Our main result was as follows: the
Soviet military expenditures (ME), however not including the cost
of military construction which we were unable to estimate, - made
up 40-50% of the Produced National Income (NI); Soviet NI itself
in 1969 was $130-$190 billions (17-25% from the NI of the USA).
The essential novelty of the paper consisted in demonstrating
the possibility of making realistic estimates by using just the
officially published Soviet statistics as input, with no reference
to any classified information. I believe that this method was
especially interesting to Sakharov to whom I gave the paper in
December 1971. I shall try to describe our method of calculation.
Perhaps it can be of some interest even today, because our estimates
of Soviet ME, performed more than 25 years ago, drastically differed
from the estimates of Western sovietologists as well as the CIA
figures of that time - figures that have since been sharply revised
upwards, in our direction; and because discussions about the real
cost of Soviet military machine are still going on, even now.
(In the Report to the US Congress written in 1989-1990, Igor Birman,
a renowned Soviet economist who emigrated to the USA in 1974,
broadly depicts the spectrum of different opinions on the issue.
In particular he writes that up to 1976 CIA flatly believed Soviet
official figures: less than 9% of ME in the NI; Dr. Birman himself
estimates this ME at about 25% of the NI but emphasizes the monstrous
complexity of the problem of calculation of Soviet ME - see [8]).
The calculations in [6] were
performed in two steps: (1) Calculation of the distribution of
the Soviet NI in rubles; (2) Conversion of these figures into
dollars:
(1) Calculation of the
distribution of the Soviet NI in rubles:
We used the data of the periodical
statistical abstract National Economy of the USSR.1969 which
says that out of the general figure of NI (256.6 billions rubles),
69.1 billions rubles were spent for Capital Investments (development)
and 187.5 billions rubles was the cost of consumption. Consumption
includes: (a) personal consumption (salaries paid during the year
plus state expenditures for free medicine, education etc.);
(b) expenditures for defense, civil service, culture, science,
foreign aid. The most important subdivision of the annual consumption
to that personal consumption and to other expenses was greatly
distorted by the Soviet official statistics (e.g. the huge sales
tax - so called turnover tax - included in the state-fixed prices
of retail goods was not subtracted by official statistics from
the personal consumption). We managed however to correct the distortion
by directly summing up of all the official data of the population's
annual income (we summed up total earnings during a year in different
branches of the economics etc.) and than subtracting the fictitious
part of these incomes (direct income taxes and the sales taxes,
various compulsory payments, annual growth of individual deposits
into the state-owned saving banks...). After that we saw that
the real personal consumption was in 1969: 100 billion rubles,
whereas the government could use for its purposes 187.5 - 100
= 87 billion rubles. Most of this sum (about 80 billion rubles)
were expenses for defense (cf. official 1969 figure accepted by
the CIA: 17.7 billion rubles). Supposedly the major part of the
80 billion rubles of this ME was spent as a state subsidies to
the innumerable YASCHIKs (secret military and scientific enterprises
which comprised the bulk of Soviet military industry; most of
these were hidden under the umbrella of various seemingly peaceful
ministries and departments). Of course not a small part of the
69.1 billion rubles of the development money was directed for
the military building; but we found no way to calculate it. Thus
Soviet ME calculated in rubles made up 80:256.6 = approximately
30% of the NI. However, this figure is evidently less than a real
one because of the artificial difference in prices in Soviet industry
and in the personal consumption sector. Of course, this difference
of prices automatically distorted all official statistical data
used in our calculations.
(2) Conversion of rubles
into dollars and calculation of the absolute values of Soviet
NI and ME:
Contrary to the Western countries
where prices of the goods are established by the competitive market,
in the USSR prices were appointed by the State, and it is well
known that wholesale prices in the heavy industry (so called
Group A) were artificially understated in comparison with the
prices in the light industry targeted for personal consumption
(Group B). Because of this artificial distortion, official statistics
showed the USSR as a more agricultural country than it was in
reality. Rural economy proved to be a marvelous clue which permitted
to correct the wholesale prices of the Groups A and B and
hence - to calculate Soviet NI and ME in dollars. The idea is
rather simple:
a) Estimation
in USD of the value of the agricultural part of the Soviet NI.
Part of the USA NI produced in the rural sector was in 1969 -
$23 billion. Official Soviet statistics stated that Soviet rural
NI made up 85% from the American one. However, it was known that
Soviet economists took into consideration the estimations of the
harvest in the fields - before harvesting. Thus taking into account
the enormous losses of Soviet harvest during harvesting we changed
the above mentioned 85% to 75% and hence estimated the rural
part of the Soviet NI: $23 billion times 0.75 = $17 billion.
b) The
crucial figure now is the percentage of this rural part in the
Soviet NI; officially
it is 19.4%, which gives a ridiculously small value of the Soviet
NI = $17 billion: 0.194 = $88 billion (less than that of
Japan; 11% of the NI of the USA). This is caused by the above-mentioned
overestimation of the agricultural nature of the Soviet economics
inevitable in the official statistics which relies upon the official
Soviet prices - made artificially low for everything necessary
for defense. Perhaps our main methodological result was to find
out the possibility of the independent estimation of the percentage
of agriculture in Soviet economics. We proceeded from the well-known
demographic figure of the percentage of those occupied in agriculture
in the total number of workforce which was 29% in the USSR in
1969. We compared the UN statistics of about 70 countries in different
areas of the world and found the following empirical rule: the
share of agriculture in the NI of a country tends to be approximately
proportional to the share of those who are employed in the agriculture
in the total workforce, with limited deviations upwards and
downwards. Applying this rule to USSR's known share of agricultural
workforce (29%) we estimated the unknown share of the real Soviet
agricultural output; thus we concluded that the true percentage
of the agriculture in the Soviet NI was not the official 19.4%
but from 9% to 13%. This yielded the value of the 1969
Soviet NI in US dollars between $130 billion (for a 13% share
of agriculture) to $190 billion (for a 9% share of agriculture).
This important result was plausible in itself because in 1969
USSR was an industrial-agrarian country like Italy or Japan (whose
share of the rural economics in the NI was correspondingly 13%
and 12%); but it was incomparably less industrial than the USA,
Britain or Germany (part of the agriculture in the NI: 3%, 3%,
4%).
Thus we established that
real percentage of agriculture in the Soviet 1969 NI was 9%-13%;
and the Soviet NI itself equaled, in 1969, between $130 billion
to $190 billion, that is between 17% - 25% of that of the USA.
To reach these more or less real lower and upper bounds of the
Soviet NI from the apparently meaningless official statistics,
distorted by the state-prescribed prices we performed the necessary
relative correction of the average prices of Groups A and B
with coefficients correspondingly: 2 and 3.6. Finally we received
the distribution of the Soviet NI in dollars, and in particular
received the absolute value of the Soviet military expenditures
in 1969 ($54 - $97 billion) and their portion in Soviet NI (41%
- 51%). As stated above, these figures do not include expenditures
for the military construction which was an unknown portion from
$34 - $50 billion of the Capital Investments. The following table
from [6] permits to compare the level of militarization of the
national economics of different countries and to see that USSR
was far ahead and absolutely unique:
Table: Military expenditures
(ME) of a number of countries in 1969 and their portion in the
Produced National Income (NI); last column permits to compare
living standards of the given countries.
| Country | Portion of the
ME in the NI, % | Absolute value
of the ME, Billion USD | Annual consumption
per capita, USD |
| USSR | 41-51
plus share of the unknown expenditures for the military construction | 54-97
plus unknown expenditures for the military construction | 170 |
| USA | 10.7 | 81.45** | 2240* |
| West Germany | 5.1 | 5.83 | 980* |
| Britain | 6.5 | 5.45 | 880* |
| France | 5.5 | 5.76 | 1210* |
| Italy | 3.3 | 2.26 | 700* |
| Belgium | 3.6 | 0.63 | 1100* |
| Spain | 2.4* | 0.525* | 490* |
| Japan | 0.9 | 1.16 | 620* |
| Israel | 17* | 0.54* | 830* |
| India | 3.4* | 1.3* | 50- 60 |
| China*** | 10-20 | 5-12 | 30 - 50 |
* Data for 1968.
** From them US military expenditures in Europe - $12 billions, and in Vietnam - $30 billions.
*** According to publications
in Western newspapers.
4. A Dangerous Game.
Now I quote from [6]:
CONCLUSIONS: 1969
is a rather typical year. Capability of the country to maintain
permanently, in peace time, such a share of the current military
expenditures IS A PHENOMENON UNPRECEDENTED IN THE WORLD HISTORY.
Such a mobilizing economics must obviously exhaust the country,
and makes sense only if it is being used to achieve some rapid
political-strategic results. Soviet political leaders evidently
try to escape the disastrous global conflict, but they strive
to be ready for it as soon as possible. Such a game possesses
its own logic, not sufficiently well studied, and the outcome
is not easy to predict. In the USA, there are plenty of discussions
about the dangers of the American Military-Industrial Complex
which influences economical, political and spiritual life of the
American society. However, in the USA its influence is greatly
outweighted by the much more influential Consumption-Industrial
Complex which is interested in reduction of taxes. The American
public is concerned with the dangers of the growth of the military-industrial
complex. Now we ask the reader, as a thought experiment, to imagine
the share of the ME in the NI increased from American 11% to the
Soviet 50%, to decrease correspondingly the level of consumption,
and contemplate about the consequences. [6].
I brought a copy of the Article
[6] to Sakharov - to his and Elena Bonner's apartment at Chkalova
street, I believe it was in December 1971. A couple of days later
when we met at the scientific seminar at the P.N.Lebedev Institute
of Physics Sakharov, commenting on the Article, said: I am glad
for you. Of course this was the highest appraisal, which meant
that Sakharov considered our Article useful. Although the connection
between some theses of of our Article and of Sakharov's My Country
and the World is evident, I am sure that Sakharov guessed much
without our studies. He, more than anybody else, realized the
real scale of the Soviet military-industrial complex, he was aware
of the real ways of the strategic-military decision-making, he
knew special type of people participating in these decisions and
had no illusions about them. The evolution of Sakharov's views
has evidently been quite a complicated internal process, influenced
by many factors, by communication with many people, first of all
- with Elena Bonner.
I am grateful to Pavel
Wasilewsky for critical reading, correcting and editing of the
Article.
References
[1] Andrei Sakharov, Reflections on Progress, Coexistence, and Intellectual Freedom, 1968.
[2] Andrei Sakharov, My Country and the World, 1975.
[3] Andrei Sakharov, Memoirs. Alfred A. Knopf, New York,1990.
[4] I.V.Bystrova and G.E.Ryabov, Military-Industry Complex of the USSR. (Published in the Collection Soviet Society, Vol. 2, page 206. Publ. Russian State Humanitarian University, Moscow, 1997.
[5] S. Zorin and N. Alexeev (B. Altshuler and P. Wasilewsky), Time Do not Wait, 1969. (Munich, Archives of SAMIZDAT, #368).
[6] A. Gol'tsov and S. Ozerov (B. Altshuler and P. Wasilewsky), Distribution of the National Income of the USSR, 1971. (Munich, Archives of SAMIZDAT, #1411).
[7] Lev Altshuler, Next to Sakharov. Published in: "Andrei Sakharov. Facets of a Life". Eds.: B.L.Altshuler, B.M.Bolotovsky, I.M.Dremin, V.Ya.Fainberg, L.V.Keldysh. Editions Frontieres, P.N.Lebedev Physics Institute. 1991. p.p. 44-52.
Internet: www.aip.org/history/sakharov/biblio.htm
[8] Igor Birman, Soviet Military Expenditures. Stockholm Institute of Soviet and East European Economics. Working Paper #21, 1991.