And BTW, “their military spending in the 1960s & 1970s bankrupted them” doesn’t particularly make a lot of sense either; it’s got a real underpants gnomes problem. The USSR didn’t pay for all that military spending in borrowed money it suddenly had to repay; how did it end up forcing the collapse of the system later?
That’s easy. If you keep siphoning money out of the civilian economy it will collapse.
What’s the definition of “keep siphoning?” A constant % of income spending that’s too high, an increasing % of income, a raw dollar level of spending that’s too high…?
This is a serious question, because I’ve never heard a military-spending driven economic argument for the soviet collapse that got beyond hand-waving.
I don’t think any analysis of the Soviet economy can truly be quantatative. They very much encouraged inaccurate record-keeping.
From a qualatative point of view it is necessary to re-invest productivity in infrastructure so you can continue to produce as much as you have been. If you requisition too much for military spending (or dachas for the People’s Champions) then you cannot maintain production. Like interest on a debt your productivity falls lower but the extra-economic needs do not and your system implodes.
So the claim now is that the USSR was not investing to keep up its capital stock? What’s the supporting evidence for that? Furthermore, what’s the evidence this decrease in capital stock was due to military spending?
Seriously, some vague evidence would be nice, or someone quoting vague evidence. I’m seeing a lot of “my personal theories say this must be true, so I’m extrapolating.”
They managed to make it 70 years, and they started with a capital stock of near zero.
I guess I believe the argument that the US outspent the Soviets into submission. I’m not sure why McCullough seems to be playing clueless here… I guess he’s just hoping for more information. I’ll explain the basic theory, unfortunately for him I don’t have anything more than that…
Military stockpiling is an economic luxury. It has some economic value in terms of threats, but no country to date has made effective use of them in that way that I’ve seen. If you create missiles and they sit there doing nothing, that’s like creating a sandwich and then not eating it. Its ultimately a waste, at least in economic terms.
If all you do is make sandwiches you never eat, you’re eventually going to starve to death. Both sides essentially “wasted” money in the Cold War, but the Soviets blinked first. They could have kept it up for a while longer, but they decided not to. They eventually would have starved to death, or so they may have concluded.
Tangentially related (the Alaska system is much less mature and its mission a lot harder), SM-3 is now five for six.
US government spending on defence initiatives = bolster the economy = a good thing.
USSR government spending on defence initiatives = ruin the economy = a bad thing.
Wow, that’s a pretty good illustration of the difference between capitalism and communism.