The arms race has two characteristic features: One is the multiplication and proliferation of primarily non-nuclear, tactical armaments. The other takes the form of a very rapid rate of product innovation and improvement and a constant search for new environments in which weapons can be used. At first sight it would seem that the effort to improve the quality of armaments, or to defend against them, follows a logical series of steps in which a new weapon or weapon-system is devised, then a counter-weapon to neutralize the new weapon, and then a counter-counter-weapon. But these steps neither usually nor necessarily occur in a rational time sequence. Those who design improvements in weapons are as a rule the same people who envisage the further steps to be taken. They do not wait for a potential enemy to react before they themselves react against their own creations. Before a new weapon is brought into service, the military designer is, as a rule, already designing a new model which – he hopes – will not only be more effective in performance, but also less vulnerable to defences which the other side might introduce in response to the new threat. Thus obsolescence becomes characteristic of the technological arms race. These features of the arms race show up very clearly in the field of long-range nuclear weapons. First there was a rapid change in the means of delivery, starting with the switch from manned bombers to liquid-fuelled ballistic missiles, beginning with intermediate and moving on to rockets of intercontinental range. Solid-fuelled missiles soon followed, deployed in concrete silos, in order to protect them from attack. In parallel, submarine-launched ballistic missiles were developed and deployed.
It does not necessarily follow that the process of action and reaction which characterizes the arms race, certainly the arms race in sophisticated weapons, means that security is increased as more is spent on armaments. Indeed in the field of nuclear weaponry the reverse appears to be the case. Each new step in the elaboration of such armaments usually ushers in a more perilous stage of uncertainty and insecurity. Furthermore, every new generation of weapons and weapon systems inevitably demands more and more resources which could be used for different economic and social purposes. By encouraging the development of certain areas of technology, and by providing resources for basic fields of science which might bear upon the development of sophisticated weapons, the arms race also inevitably affects the direction and tempo of a country's scientific and technological development. Its effect has been to encourage work in certain fields of knowledge and to retard progress in others. It stimulates a demand for certain classes of specialist and for certain kinds of specialized information, without which desired military projects could not be achieved. Short of powerful political decision in a contrary direction, this process, particularly so far as it concerns sophisticated modern weapons, could go on indefinitely.
The arms race has in fact become noticeably a technological race, the achievements of one side spurring the other to improve on the technological advances which it might have made itself. Sometimes the spur comes not from some clearly defined threat but from an imagined technical advance made by the other side. Secrecy in military affairs makes it inevitable that a potential enemy will usually be suspected of being stronger than he actually is. Consequently both sides strive continuously to improve the quantity and quality of their arms. So it is that the arms race becomes based on the 'hypothesis of the worst case', that is to say, one of two sides designs its programme of development on the assumption that its rival could, if it so decided, be the stronger.
Military expenditures not only divert resources from other uses, but also tend to disturb and destabilize the economy in general. Increased taxation or borrowing needed to raise money for arms (in developed market economies) slows the growth in personal consumption or private investment. If taxes are not raised, spending on such programmes as welfare services or education may be reduced, thus dislocating long-term social policies. Inflationary processes may be generated. In centrally planned economies, military expenditures limit the flexibility with which the economy can be planned, and the problem of preserving a proper balance between supply and demand for various industries and sectors becomes more difficult. In developing countries where the tax-base is limited, the pay of civil servants and the cost of military forces often take up much of the government's revenue. Revenues that might go into development are used instead for military purposes. In addition, military spending often puts a heavy burden on the balance of payments due to the purchase of arms from abroad.
The arms race is an important factor in limiting the expansion of international exchanges. Military considerations limit trade in so-called strategic commodities and products of advanced technology, and have led to creation of rival trade groupings. Strategic considerations inhibit technological and scientific exchanges between countries. Also, protectionist policies to favour domestic industry or agriculture are often defended on the grounds of maintaining the supply of vital commodities in time of war. This argument could not be advanced to justify trade barriers in a disarmed world. Trade between centrally planned economic and developed market countries has clearly been affected by the arms race and by the tensions between the two systems. This trade accounts for only 5% of world trade. It would rise significantly the faster the arms race came to a halt. As for the developing countries, the scarce foreign exchange resources used to obtain armaments could be applied to growth-producing purposes. In a world progressively disarmed, the level of trade could well be higher simply because of a higher level of world output.
Numerical counts of weapons alone are an inadequate measure because of the major trend to product improvement which makes, for example, a new combat fighter a very different weapons system from one built 10 years previously. In addition, national inventories of stocks of armaments are never published, but some figures are available which reflect these various qualitative changes; at the outset of the 1960s no intercontinental ballistic missiles (ICBMs) had yet been deployed. By the end of the decade the estimated numbers were 2,150. In the late 1960s and early 1970s the USA tripled the number of its nuclear weapons with the introduction of multiple independently targeted reentry vehicles (MIRVs), and the USSR "MIRVed" their missiles during the next decade.
In 1960 the deployment of submarine-launched ballistic missiles was negligible. By the end of the decade, some 55 nuclear-missile submarines were operational, comprising about 800 missiles, capable of delivering about 1,800 warheads. The number has since doubled. From 1960 to 1968 the world stock of fighting vessels is estimated to have increased from 4,550 to 4,900. This relatively small increase in numbers masks the much larger increase in the value of this stock (at 1968 prices, the value of the stock in 1960 was about $34,000 million, as compared with $60,000 million in 1968, a 75% rise). In 1960 the world stock of supersonic fighters was estimated at 6,000. By 1970 it had doubled. In 1960 there were 15 production programmes for supersonic aircraft; by 1970 these too had doubled. Doubling is a feature that continues and weapons proliferate in geometrical progression by number or power.
In July 1983 the superpowers were said to have reached a point of rough equivalency, the USA usually leading the way in new quantitative and qualitative technological changes, most recently with the Cruise missile, with the USSR never far behind and occasionally leading the way (as with very large missiles). Between 1983 and 1987 the USA is expected to spend more than US$ 1,600 billion, including a planned 3,900 aircraft (fighters, bombers and transport planes) and 8,800 tanks and cannon-carrying vehicles; and between 1983 and 1993, to produce 14,000 more strategic and tactical nuclear bombs and missiles. A future rate of real increase in military spending worldwide was estimated at a minimum of 2 to 3% annually. The latest escalation has been to extend the arms race beyond the earth's atmosphere in the so-called "Star Wars" defence programme.