An agency of the EU

Putting numbers on capabilities: defence inflation vs. cost escalation

Brief - No27 - 24 July 2015

Katharina Wolf

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Imagine a world without weapons: no battle tanks, no combat helicopters, no nuclear submarines – a world at peace, presumably. This world might soon come true if we believe what US aerospace businessman Norman R. Augustine famously predicted in 1983, namely that “in the year 2054, the entire [US] defence budget will purchase just one aircraft”.

Very little has changed since then: costs for defence equipment are still skyrocketing while, in parallel, our defence budgets have largely slid into a downward spiral. The world, however, has hardly become more peaceful – especially in Europe’s neighbourhood. As a result, a better understanding by policymakers of the relation between (cripplingly) expensive capabilities and complex security challenges appears to be much in need.