21 thoughts on “NATO air forces proposal revised”

1. Other interesting areas worth considering are:

   Officer to troop ratio; most armies these days have too many officers, command structure, and promotion structure (no more careerists)
   How much flight hours are these aircraft/pilots going to spend
   Coordination with ground forces (especially CAS), and combined arms (ex: with Navy too)
   Another issue is that the truth is, most armed forces today are very 2nd generation in their orientation, when they really need to be 3rd generation; that is going to need a change in thinking
   Probably nationalizing the defense industries (goes against neoliberal ideology, but when we look at the appalling cost overruns and other issues of for-profit defense companies, it’s probably necessary)
   The types of enemies (insurgency vs state warfare, which seems more likely)

   I think that the interesting thing is, when you look at it this way, the current air forces came about due to the way military leaders think, combined with the defense industry.

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   1. “- Officer to troop ratio; most armies these days have too many officers, command structure, and promotion structure (no more careerists)”

      US military is the especially big offender due to its “up or out” policy, which breeds careerism. In the Royal Navy AFAIK, officers can stay at their posts as long as they like and lack of advancement in the ranks is not seen as something negative.

      “- Probably nationalizing the defense industries (goes against neoliberal ideology, but when we look at the appalling cost overruns and other issues of for-profit defense companies, it’s probably necessary)”

      It would be ideal. My personal ideal would be:
      – private ownership of small business (family business, basically)
      – collective ownership of large business
      – state ownership of strategically important business (arms industry etc.) with possibility of privately and collectively owned firms (so there will always be a state-owned small arms factory, for example, but nothing will prevent privately-owned factory from submitting its own designs for a competition)

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      1. “It would be ideal. My personal ideal would be:
         – private ownership of small business (family business, basically)
         – collective ownership of large business
         – state ownership of strategically important business (arms industry etc.) with possibility of privately and collectively owned firms (so there will always be a state-owned small arms factory, for example, but nothing will prevent privately-owned factory from submitting its own designs for a competition)”

         That would probably be the best solution and in fact it was the solution that existed in the United States and all capitalist countries France, UK etc prior to WWII. There were private firms that built everything from, small arms, to battleships, passing through tanks and aircraft, but there were also state owned arsenals that handled small arms and tanks, and navy owned shipyards (Brooklyn Navy Yard in US for example) and the Admiralty yards in UK that handled ship building. Also for ships in the US the design was handled by the Department of the Navy through Bureau of Ships and Bureau of Weapons, that started and manged projects and only outsourced specific parts of the work to private entities.

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      2. Yes, going into either extreme is not good.

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      3. If you think about it, that is effectively what the East Asians have. You may disagree with the 3rd point – state ownership, but in practice, in nations like Japan, the Ministry of Finance has a lot of control as does METI. So in effect, they do get to run their own independent day to day decisions, but the state heavily controls their long term directions.

         That’s how the Japanese, Koreans, Taiwanese and a few others got rapid growth. That’s how China is doing it too. Note of course in China, the relatively recent re-emergence of the SOEs (State Owned Enterprises) after years of retreat.

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2. Aircraft unit flyaway costs in FY-2013 USD
   F-35A: 184 million

   This again? I thought I corrected this misconception/misinformation.

   CURRENT FLYAWAY COST: $112.86 million

   USAF Budget Statement – https://www.bga-aeroweb.com/Defense/Budget-Data/FY2015/F-35-USAF-PROC-FY2015.pdf (See Page 3 and add up everything under Recurring Flyaway Costs for FY 2014 and divide by 19)

   FINAL FLYAWAY COST: $84.6 million (2019 dollars) or about $75 million (2014 dollars).

   GAO Report 2014 – (Assumes that no further domestic or international order cuts take place)

   This may go contradict your predictions regarding cost but figures are there for you to see. You’re not being honest with your readers by quoting a blatantly false $182 million RUFC figure.

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   1. Click to access F-35-USAF-PROC-FY2015.pdf

      Your own document gives it as 145 million USD for F-35A, but when you account for its creative accounting (a.k.a. lying), F-35As unit flyaway cost turns out to be 185.400.000 USD.

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      1. ^^
         ‘(The following Resource Summary rows are for informational purposes only. The corresponding budget requests are documented elsewhere.)’

         Look at the actual budget section on page 3. Specifically ‘Non recurring flyaway costs’. Total the figures under unit cost column. $120 million for 2014. $112 million for 2015.

         Its a COMPLETE breakdown of the costs involved covering each heading: airframe, electronics, engine and ‘engineering change orders’.

         ‘when you account for its creative accounting (a.k.a. lying)’

         And how did YOU calculate that exactly $40,400,000 per aircraft of ‘fraud’ was committed? ‘Creative accounting’ can be used to justify greater funding for the same work, not lower funding (as in this case).

         Fact is, the $180M figure was the PROCUREMENT cost and that is well documented in budget statements. It includes initial spares as well as support expenditure such as for ground support equipment, training equipment, full mission simulators etc.

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3. Forgot the GAO Report link – http://www.gao.gov/assets/670/661842.pdf (See Page 14)

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4. It would be ideal. My personal ideal would be:
   – private ownership of small business (family business, basically)
   – collective ownership of large business
   – state ownership of strategically important business (arms industry etc.) with possibility of privately and collectively owned firms (so there will always be a state-owned small arms factory, for example, but nothing will prevent privately-owned factory from submitting its own designs for a competition)

   We had something similar in India (pre 1991 reforms). Didn’t work out too well for us. (Though dealing with crony capitalism now isn’t pleasant either.)

   Small businesses will have low incentive to grow beyond a point with the threat of nationalisation looming at the end. Leads to stagnation.
   Collective ownership of large business – inefficient administration. With no significant shareholders appointing a board of directors.to oversee the company is mug’s game. Plus small shares made the less likely to be traded on the market – less interest from investors. Eventually the company’s workers will come to be only ownership block. Good for the workers over the short term, bad for the company’s prospects over the long term.
   State ownership of strategic businesses – still that way in India. Govt’s biased towards state companies who as a consequence operate quite inefficiently (no profit motive, no bankruptcy fear), while the private sector gets squeezed and eventually quits the industry.

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   1. The issue here is that you need good government that is long-term oriented. Japan had it in the rapid growth period. Taiwan and South Korea, although authoritarian, had very long term and well planned governments.

      Note that China too has a very authoritarian regime, but it’s better managed than most nations. That’s why I think China has managed to avoid some of the difficulties that India has faced. Also note that since the 1980s, SOEs (state owned enterprises withdrew), then they began to re-emerge around 2005 and are now a potent force within.

      It’s heavily dependent on having a good long term government I think more than anything else.

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      1. “We had something similar in India (pre 1991 reforms). ”
         Stop right there. Giving India as an example of why a system might not work is wrong, as India has very bad management at all levels. Only in the last year (2013) just in the military there have been severe shortcomings, with several ships catching fire, development programs that fail to achieve their goals, western industry that is not convinced that India industry can handle license production of complex western designs (Rafale), Russian industry that is also not convinced that Indian industry can handle complex Russian designs (submarines, maintenance for warships etc.) etc. The fact that the system outlined by picard hasn’t worked in India has nothing to do with the system itself, as it’s working today in China, Taiwan, South Korea, is working with no sign of being stopped in Japan for the past century and a half since Japan has entered the industrial age and was working perfectly fine prior to WWII in the western world for more the a century. No the system didn’t work in India because of inherent problems of India society and economy, mainly rampant corruption, which transcends economic systems as you yourself point out when you say “. (Though dealing with crony capitalism now isn’t pleasant either.)”

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      2. Andrei,

         Oh save it. I more than well acquainted with Britain’s experience with nationalization as well. ‘Sick man of Europe’ for most of the 70s.

         As for ‘THIS system’ working out in China, Taiwan, South Korea and Japan, pray tell (aside from the railways many decades ago) which industry/company was nationalized in these countries?

         Mitsubishi. Kawasaki. IHI. Fuji HI. Hyundai. Daewoo. Samsung Techwin. KAI. All defence contractors. State owned?

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      3. Chris,

         In the early years, you had just as good government in India under Nehru as Taiwan and South Korea (Japan was already an industrialized state so I wouldn’t include it). Better probably. And more idealistic. But eventually the lofty ideals of Fabian socialism ran to into reality… in about the same time-frame as they did in the UK.

         China’s SOEs do have a behemothian character but the ‘China story’, as it were, has been driven overwhelmingly by the private sector. And the latter’s true for Taiwan, South Korea and Japan as well. That the SOEs have emerged as huge entities is a result of China’s growth not a cause. (Also they haven’t reduced China’s income equality either. Its Gini Index rivals the US and growing.)

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      4. “In the early years, you had just as good government in India under Nehru as Taiwan and South Korea (Japan was already an industrialized state so I wouldn’t include it). Better probably. And more idealistic. But eventually the lofty ideals of Fabian socialism ran to into reality… in about the same time-frame as they did in the UK.”

         Interesting. You won’t compare Japan because it was already “industrialized”, but you bring the UK to support your argument. Talk about selective usage of facts.

         On the contrary, the UK made a series of serious missteps throughout the 1960s and 1970s. I think Thatcher, although she did solve some things – made things far worse in other areas, such as financial de-regulation and essentially being a nail in the coffin for what was then an already declining UK manufacturing sector. It could be argued that many of the decisions made by the Thatcher government have set things in motion for the UK’s fall during the financial crisis, and its stagnant economy today.

         I don’t think you quite understand how the East Asian economies work. Although privately owned, the state has a lot of influence over their long term direction. A lot more than in most nations in the Western world. The government may not decide day to day operations, but they do work very closely with the major corporations. Judging by what you are saying, you don’t seem to pay a lot of attention to China either. As indicated, the state owned companies have been re-emerging.

         Also, note that they are not as profit-oriented (ex: shareholder above all else) as Western corporations. Even in the 1980s, most Japanese corporations were not very profitable. That said, there are exceptions. At the moment, Samsung seems to be quite profitable, but that may be ephemeral.

         There’s flaws in both models – a Soviet style command economy and an American style free market economy. Witness the current difficulties the US is facing. Many of them are because of a blind ideological adherence to free markets.

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      5. ‘Interesting. You won’t compare Japan because it was already “industrialized”, but you bring the UK to support your argument. Talk about selective usage of facts.’

         Won’t compare? Those weren’t MY words. I said won’t INCLUDE it in the list of countries that were better governed at the time.

         ‘On the contrary, the UK made a series of serious missteps throughout the 1960s and 1970s. I think Thatcher, although she did solve some things – made things far worse in other areas, such as financial de-regulation and essentially being a nail in the coffin for what was then an already declining UK manufacturing sector. It could be argued that many of the decisions made by the Thatcher government have set things in motion for the UK’s fall during the financial crisis, and its stagnant economy today.’

         ‘Series of misteps’ – that’s sounds like a glossing over of the reasons behind the mess that Thatcher inherited. We’re talking about the absolute nadir of the British economy unsurpassed by even the Great Depression or the 2008 recession.

         As for ‘UK’s fall and stagnant economy’ its hardly in much worse condition than (non-Thatcher) France. Inequality is only slight worse (32.3 to 31.1 on the Gini Index), GDP (PPP) per capita is higher, economic growth is MUCH higher and unemployment is FAR lower than France (6.8% vs 10.4%).

         ‘I don’t think you quite understand how the East Asian economies work. Although privately owned, the state has a lot of influence over their long term direction. A lot more than in most nations in the Western world. The government may not decide day to day operations, but they do work very closely with the major corporations.’

         I’m aware of how they work. And the prescription from the above (assuming its adopted as a model) would logically be that western govts should work more closely with its large corporations rather than identify private ownership of corporations as the core problem.

         ‘Judging by what you are saying, you don’t seem to pay a lot of attention to China either. As indicated, the state owned companies have been re-emerging.’

         Are these reemerging companies innovative? Are they market leaders? Are they more efficient at managing capital than the private sector? Or are they emerging in non-competitive sectors, with government funding, subsidies and regulatory privileges and posting far higher percentage of losses making units than the private sector?

         ‘Also, note that they are not as profit-oriented (ex: shareholder above all else) as Western corporations. Even in the 1980s, most Japanese corporations were not very profitable. That said, there are exceptions. At the moment, Samsung seems to be quite profitable, but that may be ephemeral.’

         Japanese corporate profits have been fairly low over the last two decades primarily because growth has been low. Even in the 80s it was around 4%, not radically lower than the 5% averaged by US corporations (can also be partially explained as a result of lower investment/expansion rate for the latter).

         ‘There’s flaws in both models – a Soviet style command economy and an American style free market economy. Witness the current difficulties the US is facing. Many of them are because of a blind ideological adherence to free markets.’

         Far be it from me to suggest that the US capitalist model is issue free. MY assertion is that this simplistic alternative model proposed here (private->collective->state ownership) is NOT the hoped for easy solution to the problems faced by western economies today.

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   2. “- Small businesses will have low incentive to grow beyond a point with the threat of nationalisation looming at the end. Leads to stagnation.”

      You’re mixing things up here. Nationalization is when state takes over the business, but collective ownership is not nationalization.

      “- Collective ownership of large business – inefficient administration.”

      Considering that private ownership oftentimes leads to administration that is quite inefficient in everything except layoffs, that is not a good argument. Unregulated private ownership led (amoong other things) to the Great Depression, devastated South American economies…

      “- State ownership of strategic businesses – still that way in India. Govt’s biased towards state companies who as a consequence operate quite inefficiently (no profit motive, no bankruptcy fear), while the private sector gets squeezed and eventually quits the industry.”

      State ownership does not mean that state should just loan money to company if it is inefficient.

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      1. ‘You’re mixing things up here. Nationalization is when state takes over the business, but collective ownership is not nationalization.’

         Small private business grows to become big business. How do you propose to de-privatise it without nationalization?

         ‘Considering that private ownership oftentimes leads to administration that is quite inefficient in everything except layoffs, that is not a good argument. Unregulated private ownership led (amoong other things) to the Great Depression, devastated South American economies…’

         Well.. this argument stops just short of advocating (partial?) communism. Private ownership may have caused the Great Depression and recessions in South America but it also led to 60 years of wealth addition and a massive fall in global poverty.

         ‘State ownership does not mean that state should just loan money to company if it is inefficient.’

         What is a state owned company’s basic incentive to operate efficiently?

         If its providing a (fundamentally unprofitable) public service (like railways or roads), its one thing.But since the govt does not rely on profits from SOEs to make ends meet, in all other sectors, oversight will never be as effective as that by a board of directors appointed by shareholders. And the govt WILL continue to loan money to inefficient entities because the govt (being the primary shareholder) will be forced to write off that capital, if the company goes belly-up.

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      2. “Small private business grows to become big business. How do you propose to de-privatise it without nationalization?”

         Buyout. Either state can buy it and then allow workers to buy it from the state, or workers pay in sums and once total paid reaches value of the company, ownership is transferred.

         “but it also led to 60 years of wealth addition and a massive fall in global poverty.”

         Private ownership, whenever not heavily regulated, always led to massive rise in poverty and concentration of wealth in hands of very few. See Latin American “experiment” (led by Friedman’s students, no less) and US for examples.

         “And the govt WILL continue to loan money to inefficient entities because the govt (being the primary shareholder) will be forced to write off that capital, if the company goes belly-up.”

         Not necessarily. Number one, inefficient private firms often get just as many loans as inefficient state-owned firms simply because it is better to have some production than massive unemployment – state is at loss either way, but former means that some services still exist. Number two, private firms loan money from banks if they’re in trouble, and banks themselves are propped up by taxpayers’ money, so in the end it comes down to the same thing.

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5. “‘Series of misteps’ – that’s sounds like a glossing over of the reasons behind the mess that Thatcher inherited. We’re talking about the absolute nadir of the British economy unsurpassed by even the Great Depression or the 2008 recession. ”

   The UK was already a nation in decline in the aftermath of WWII, losing what remained of its empire, and was widely viewed as a declining power.

   But at home, one must look at the domestic situation. Manufacturing in particular was in rapid decline after around the 1960s. Thatcher if anything, accelerated the decline. Northern England has never recovered from the magnitude of the decline.

   As far as Thatcher’s policies, I stand by what I said. Although there were some necessary changes she made, she did not fix the most serious long term problems. Instead, she accelerated the decline of the UK’s manufacturing, de-regulated the banking sector and set things in motion for the current crisis. I would hardly consider her “victory” over the Falklands Islands to be substantial (how many people in the Uk would even be able to find that place on a map of the world off the top of their heads?).

   Regarding France, I did not say that France was the shining beacon for the world to follow. Germany, and some of the Scandinavian nations would be closer (although again imperfect) to what I consider ideals worthy of emulation.

   “I’m aware of how they work. And the prescription from the above (assuming its adopted as a model) would logically be that western govts should work more closely with its large corporations rather than identify private ownership of corporations as the core problem.”

   I fail to see why this would not be a bad thing.

   In the long run, it would ironically benefit such corporations. The economy would grow at a faster rate. Corporate revenues in turn would also grow.

   “Are these reemerging companies innovative? Are they market leaders? Are they more efficient at managing capital than the private sector? Or are they emerging in non-competitive sectors, with government funding, subsidies and regulatory privileges and posting far higher percentage of losses making units than the private sector?”

   It depends on what you define as market leader. At the moment, China is not a market leader in technology (although a case could be made that certain areas, China is beginning to punch above its weight – look at the Beijing Genomics Institute for example is a state owned enterprise that has made some noteworthy achievements in genome sequencing). However, they are leaders in volume.

   Off the top of my head, in the service industry, a case could be made that Singapore Airlines is a world leader in well quality of aircraft service. It’s interesting to note that lately, many of the challengers from the Arabic world like Emirates are also state owned or have heavy state investments.

   “Japanese corporate profits have been fairly low over the last two decades primarily because growth has been low. Even in the 80s it was around 4%, not radically lower than the 5% averaged by US corporations (can also be partially explained as a result of lower investment/expansion rate for the latter).”

   That’s the thing. Capitalism measures corporate progress by its profits. Only a small percentage of any population is going to own stock – all the more so since pensions are becoming tighter or in some areas, non-existent altogether.

   A better measure would be the contributions of any corporation to their home nation and their ability to provide productive, well-paying career opportunities to a nation. Note that profits are only a by-product of this.

   An example of contributions could be R&D. In the case of Japan, it has one of the world’s highest, bested only be South Korea and Israel. In truth, this probably underestimates South Korea and Japan. Israel probably spends the bulk of its R&D on military spending, not say, advanced manufacturing prowess. Similar thoughts about the US, but also certain things like “website design” are counted often.

   “Far be it from me to suggest that the US capitalist model is issue free. MY assertion is that this simplistic alternative model proposed here (private->collective->state ownership) is NOT the hoped for easy solution to the problems faced by western economies today.”

   I did not say “state ownership” in a Soviet sense. I said it in a East Asian sense.

   Day to day decisions are made by the company, and by executives
   Companies serve the country. No questions. Nothing like American corporations who claim they are “global”
   The state has considerable control over the long term direction of the company
   Strong emphasis on private-public partnerships, with very high spending on R&D, infrastructure, and other capital investments
   Partnerships with unions, with both sides legitimately protecting each others long term interests
   Profits are merely the byproduct – aim is to break even, but maximizing profits at all costs is not the top priority
   Company is very long-term oriented and willing to sacrifice short-term profits/goals to achieve long term objectives

   It is not a perfect model. There are for example East Asian companies that struggle. Sony is an example. In China, there are many non-performing loans that have been lent out – so many that some speculate a banking crisis could someday occur.

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