p Direct military expenditures, as mentioned earlier, are government outlays for maintaining and increasing a country’s military power and military-economic potential in time of peace and for military operations in time of war. Direct military expenditures may be divided into two groups according to their functional purpose: one for maintaining existing military power, the other, for augmenting that power.

p The first varies in size with the strength of the armed forces, the conditions and nature of their activity: flying time quotas for Air Force personnel, repair time for various types of military equipment, the frequency of exercises and manoeuvres and the troop strength and amount of military equipment involved. The second is largely contingent on military policy and the aims of military activity. At the same time, expenditure for augmenting existing military power entails an increase in maintenance spending connected with an increment in forces, and hence in the first group of expenditure.

p The classification of expenditure and the structure of the federal budget show the total of direct military expenditures, though the budget contains no data on their respective shares in maintaining and augmenting military power. These data are indispensable for analysing the financial aspect of augmenting military power and for estimating the effectiveness of military expenditures.

p Delimitation and estimation of military outlays on this principle is a complicated yet feasible problem. One has to analyse all types of direct military expenditures for their 103 functional purpose to establish what shares of expenditure under a particular budget heading go to maintain and to augment military power.

Let us examine from this aspect Defence Department expenditure on military procurement and on research and development. The increasingly rapid obsolescence of military equipment results in a shortening of its average service life. A special survey conducted in the United States in 1955 showed that it took an average of fourteen years to replace completely the equipment of the armed forces to maintain them in full combat readiness. In 1959 a similar survey indicated that the average service life of military equipment had shortened to ten years, i.e., an average ten per cent of it was to be replaced every year. Provided the average service life is ten years (allowing for the wear and tear and obsolescence) and ten per cent of this equipment is replaced every year, it is possible to establish the respective shares of procurement for augmenting and for maintaining military power. For example, in 1962, the combined value of military equipment in possession of the Defence Department was estimated at 67,600 million dollars.  [103•1  One-tenth of this value (6,800 million dollars), i.e., equipment needing replacement on account of wear and tear, represented about forty per cent of the Defence Department’s total procurement expenditure in 1962/63. The remaining sixty per cent went to increase the quantity of equipment in possession of the US armed forces. Needless to say, this is a rough estimate of shares in procurement expenditure. What is more, because of changes in total procurement, they may vary from year to year. The Pentagon’s entire expenditure on R&D, however, goes to increase US military power. This analysis of all budgetary items will show in rough outline the size and share of each group of military expenditure.