The “Fast Transients” of Defense Spending and the Hurst Exponent: Evidence from the War and Navy Departments 1792-1957

Abstract

Employing a measurement known as the “Hurst exponent,” I show that the U.S. War and Navy Departments displayed a strong trend towards “persistence”: that is, a tendency for each year’s budget to replicate the previous year’s over the period 1792-1957. Such a tendency, however, may not be beneficial for a nation: inertia is deadly in war, while overspending on defense may have contributed to the death of the Soviet Union by sinking resources into nonproductive uses. By analyzing budgets according to Hurst’s method, it may be possible to quantify how closely a military budget serves its twin purposes of averting disaster while not bankrupting a state.

Keywords: Harold Hurst, War Department, U.S. Navy, budgeting, complexity, Soviet Union