The cost argument compares peacetime deterrence with the much larger expense of war. Britain had the fiscal and industrial capacity to spend heavily on the Royal Navy when policy makers considered it necessary. A simplified example contrasts two pounds spent on deterrence with twelve pounds spent fighting, then extends the comparison across several days. War would probably require borrowing, leaving interest and repayment costs after the fighting ended. The numbers illustrate the logic rather than reproduce a historical budget. Saving on the peacetime fleet can leave the country with a far larger bill if deterrence fails.
Chapter · 34:48-36:36
Deterrence financing and the cost of war
The Royal Navy's large prewar budget frames deterrence as an insurance expense that may avoid the much greater costs and borrowing created by war.