In 1984, Norman Augustine, former Under Secretary of the Army, and CEO of aerospace company Martin Marietta, published a set of “laws” about military procurement, David Hambling explains (in Swarm Troopers):
His most celebrated pearl of wisdom is Augustine’s Law 16, which says that the cost of each new generation of military aircraft rises exponentially.
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Although intended facetiously, Augustine’s Law 16 has been remarkably accurate. The North American P-51 Mustang was one of the most important US fighters of WWII. Over fifteen thousand were built, at a cost of around $50,000 each in 1945 dollars ($655,000 in 2014). It was succeeded in the 1950s by the jet-powered F-100 Super Sabre at a cost of $700,000 ($6 million in 2014), ten times as expensive in real terms. The McDonnell-Douglas F-4 Phantom, which first flew in 1960, broke the million-dollar barrier, costing $2.4 million apiece in 1965 ($18 million in 2014), tripling the cost of its predecessor. Even allowing for inflation, the upwards curve is steep.
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The USAF’s new F-15 Eagle, also from McDonnell Douglas, was set to replace the F-4. The Eagle was a superb aircraft, but it had reached a new high, costing in excess of $20 million ($45 million in 2014), almost tripling again the cost of its predecessor.
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Extensive flying exercises found that the big twin-engine F-15 was only slightly superior to the small, cheap fighters fielded by the Russians in a dogfight. If it came to a war, the small band of F-15s would be overwhelmed by swarms of Russian MiGs. Certainly, the F-15s would be able to knock out plenty of the Russians at long range, but when the survivors closed with them, the contest would be bloody and one-sided.
The Air Force decided to go for a “high-low” mix, supplementing the elite F-15s with a large number of cheaper aircraft known as lightweight fighters. The aircraft selected for the lightweight fighter role was the single-engine F-16 Fighting Falcon, two-thirds the size of the F-15. It was to be the embodiment of a concept by fighter guru John Boyd for an austere aircraft with extreme agility that could beat anything in a dogfight. Being less complex, it would be so cheap it could be acquired in vast numbers. The F-15 with its powerful radar was the champion at long-range combat; the agile F-16 was to be the champion in the “furball” of dogfighting.
During the development process, the purity of the F-16 was slowly corrupted. It became heavier, less agile, and more expensive as more and more capabilities were added.
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At $15 million in 1998 dollars ($22 million in 2014), the F-16 was cheaper than the F-15, but more expensive than anything in the previous generation, including the big F-4.
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The US Navy went through a parallel experience. They also replaced the F-4 Phantom, and chose the F-14 Tomcat, a $ 38 million (1998 dollars, $ 55 million in 2014) carrier-based fighter. Like the F-15 it had a big radar and impressive long-range capabilities.
Again the F-14 was too pricey to acquire in large quantities, and the Navy took up the idea of bolstering numbers with a smaller, cheaper aircraft. They chose the F-18 Hornet, originally a failed competitor in the Air Force’s lightweight fighter competition. The F-18s costs grew from a planned $5 million to around $29 million (2003 = $37 million in 2014).