Resource Allocation and Defense Planning in Retrospect and Prospect

by Charles Wolf, Jr.


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A retrospective view of resource allocation and defense planning is presented as a review of a landmark book written nearly twenty years ago: The Economics of Defense in the Nuclear Age, by Charles Hitch and Roland McKean, 1960. Although Hitch — McKean have met remarkably well the test of time, omissions and commissions are discussed from the vantage point of the present. Several topics are addressed: increasing competition for public sector resources; possibly increasing real costs in defense industry in the midst of an inflation-prone economy; the growing relevance of energy policy in defense planning; the new importance of foreign exchange markets and exchange rate uncertainty in the planning and deployment of forward based forces; and new opportunities provided by technological developments for capital — labor substitutions in the planning of defense forces. Finally, the paper suggests that implementation analysis will and should receive greater attention in future defense planning studies.

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