Guns, Butter and Tools

Tradeoffs in Soviet Resource Allocation

by Abraham S. Becker


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An "overview" of three papers in the area of Soviet military economics. One of the three papers is concerned with the tradeoffs between defense and GNP or consumption. The second focuses on tradeoffs between military and nonmilitary uses of machinery production, while the third is directed to Soviet leadership choices between defense and investment. It appears that cutting back on military expenditure growth is not a panacea for the Soviet economic dilemma in the short run. Yet the military budget does impose a burden on the economy and the leadership may not be able to ignore that reality indefinitely. Nevertheless, the case for scepticism with respect to the likelihood of a change in Soviet resource allocation policy still seems strong, as sharp decreases in the military budget would threaten the cherished beliefs and fundamental interests of the most powerful groups in the society. If their opposition is to be overcome, it will probably require a much bleaker economic picture than is presently visible and a new set of leaders in the Kremlin.

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