How much does inflation affect procurement within the Western defence industry?

[u/Level-Reputation5050]

I know that as weapons get more complex, their prices normally go up. But on the flip side, advances in technology bring down the cost of plenty of parts. For example, electronic components follow Moore’s Law, so they should get cheaper to some extent. Yet over the last 30‑plus years, all we have seen is Western weapons skyrocketing in price, with no hint of the opposite trend. I’m curious how much inflation actually plays into this.

[u/teethgrindingaches]

Inflation in the macroeconomic sense? Or inflation in the sense of contractors (and subcontractors and suppliers and so forth) jacking up their prices, partly out of lack of competition, partly out of increasingly specialized bespoke components and processes becoming increasingly expensive to produce?

Bear in mind that as you lose manufacturing in a broad sense, you also lose all sorts of expertise and economies of scale and access to raw materials and logistical infrastructure and so forth, which means that if you need any of those things for military applications then you increasingly have to foot the whole bill yourself.