Economics is almost always a factor in warfare; in the case of advanced air power it is an imperative.


A 100 million-dollar baby: an RAAF F-35A

100 million-dollar baby: An RAAF F-35A

In the one hundred years since air power was first applied systematically, only a small number of countries have been able to construct balanced, high-quality air forces. Not the least of the reasons is that it is a very expensive business. It is no coincidence that advanced air power has been the province of first world nations such as the US, the UK, Germany, France, Australia, Japan, and so on, or of large command economies such as the USSR and China.

Nor is it a coincidence that when third world nations or entities have managed to apply air power successfully their chosen models have been cheap, asymmetric, and specific (as opposed to balanced). During the French and American wars in Vietnam, for example, Viet Minh and Viet Cong forces regularly gained localized control of the air through the astute use of heavy machine guns and AAA, or by ambushing landing strips and helipads, or by attacking air bases. And on September 11, 2001, a handful of al-Qaeda operatives were able to assert control of the air overhead continental US through subterfuge and make one of the most stunning air strikes in history, having been trained to fly airliners to minimal standards and at minimal cost in simulators.

But that “minimalist”, asymmetric approach is not broadly useful. The al-Qaeda model, for example, is unsustainable; and the Vietnam model was purpose-designed to counter an invading force that was not supported by the majority of the occupied nation. Both would have been useless in different, more general settings, such as World War II, Korea, and the Arab-Israeli wars.

Taking the latter conflicts as an example, the development of the Israeli Air Force provides an instructive template against which to consider the economics of advanced air power.

Israel was established as an independent nation in the former British mandate of Palestine in 1948, and by 1980 it had become a first world country. Unlike its Arab enemies (primarily Egypt, Syria, Jordan, Iraq, and the Palestine Liberation Organisation), Israel was a successful democracy with a strong economy, including impressive research and development and industrial sectors, and an extensive, high-quality education system. GDP/capita was $6095, compared to $545 in Egypt and $1695 in Syria; while the respective literacy rates were 92 per cent, 44 per cent, and 56 per cent.

But having been in a continual state of war since its inception, Israel faced intense budgetary challenges.

The Israeli Air Force evolved into a world-class organisation between 1960 and the early-1980s. Precisely how much of Israel’s GDP was spent on defence during that period is difficult to establish. Estimates can vary wildly depending on the parameters used; furthermore, defence spending is subject to more secrecy than most other government outlays. Thus, numbers cited for Israel can range from around five per cent of GDP to twenty per cent. But even though that is a big discrepancy, in the context of this discussion it does not matter. Regardless of which end of the spectrum is applied, both sums are immense, and both imply an unsustainable military posture in general and air power model in particular – unless there is external economic help.

In Israel’s case, most of that help came from the US. Between 1973 and 1982, for example, the US gave Israel $6.05 billion in military grants and $7.88 billion in loans. Over the same period Israel’s average GNP was $13.78 billion, meaning that, in effect, the US contributed an additional 12 per cent to Israel’s annual national income, all of which was spent on defence. The significance of that amount can be placed in perspective when compared to a selection of defence spending as a percentage of GNP from other first world countries for the same period, as follows: France 2.2, UK 2.2, Australia 1.8, Germany 1.2, and Canada 1.0.

In short, notwithstanding the exceptional quality of the IAF’s people, thinking and technology, without external economic aid it could not have achieved its level of excellence without placing extreme stress on other sectors of the Israeli economy.

Plainly the same logic applies to Israel’s enemies, who in the same period received massive amounts of aid from the USSR.

The general point being made here is not about Israel, or Egypt, or Syria, or any other particular country, it is about the cost of advanced air power, and it applies to almost everyone, including Australia.

The RAAF is one of the world’s very best air forces, and Australia pays a fair price for everything it gets from the US. Nevertheless, ultimately, we are entirely reliant on the US’s peerless technology, research and development, logistics support, and, it has to be said, wealth. That’s not a criticism or a judgment, it’s a simple statement of fact.

Economics is almost always a factor in warfare; in the case of advanced air power it is an imperative.

This post draws on Alan Stephens, “Modeling Airpower: The Arab-Israeli Wars of the 20th Century”, in John Andreas Olsen (ed.), Airpower Applied: US, NATO and Israel (Washington: Naval Institute Press, forthcoming, May 2017).

Dr Alan Stephens is a Fellow of the Sir Richard Williams Foundation