UPI/CORBIS-BETTMANN
By David R. Jardini
David R. Jardini completed his history dissertation, Out of the Blue Yonder: The RAND Corporation's Diversification into Social Welfare Research, 1946-1968, at Carnegie Mellon University in 1996. The dissertation, excerpts of which appear below, is the "only attempt to set out major portions of the full RAND story, warts and all," according to Gustave Shubert, director of the RAND History Project, an effort begun under former RAND President Donald Rice to have an independent history written about the institution. Originally supported by the Alfred P. Sloan Foundation, Jardini has been awarded a National Science Foundation grant to round out his study of RAND and publish it in book form. The working title of the book, scheduled for publication in the year 2000, is Thinking Through the Cold War: The RAND Corporation in War and Peace, 1946-1973. The primary aim is to spread knowledge of RAND among other centers of science and policy analysis to help guide their work beyond RAND's first 50 years.The story of RAND's diversification beyond military research into social welfare research during the 1960s illustrates the little-known linkages between defense and domestic policymaking in cold war America. RAND was formed at the conclusion of World War II as a means by which America's finest intellectual talent could be harnessed to national security research and policymaking in peacetime. Under a cloak of secrecy, the corporation hosted remarkable advances in such diverse fields as computer and software design, applied mathematics, space systems, and, especially, social science methodologies such as systems analysis. Yet, on July 14, 1966, RAND's board of trustees decided to terminate the exclusive focus on military research and diversify into social welfare research. RAND quickly secured support from a wide range of public and private institutions, and by 1972 its research and methods had become central to many new social welfare initiatives. This meant that, ironically, the sophisticated methodologies developed at RAND to contemplate nuclear war became some of the nation's fundamental weapons against social injustice.
During the early 1960s, a constellation of forces--including the gradual migration of military concerns away from global nuclear warfare toward regional issues more contingent on social conditions; the reorientation of national policy priorities away from foreign and toward domestic problems; and the divisions introduced by the worsening Vietnam conflict--contributed to the decision to diversify. However, RAND alumni and methodologies already had become intrinsic to President Lyndon Johnson's social welfare initiatives by 1966. The decision to diversify, therefore, demonstrates more than a reaction to external forces. The decision demonstrates the complex interaction between national security and social welfare policymaking in cold war America. And it was the nonprofit research agencies like RAND, representing the most important institutional innovation in post-World War II policymaking, that both shaped the course of intellectual development and served as a conduit of expertise and methods between the defense and social welfare establishments.
During the late 1940s and 1950s, RAND mathematicians and mathematical economists made critical advances in game theory, linear and dynamic programming, network theory, modeling and simulation, cost analysis, and Monte Carlo methods in a quest to address military decision problems mathematically. All these mathematical developments contributed to RAND's signature methodological innovation: systems analysis. RAND researchers envisioned systems analysis as a rigorous, "rational" means of comparing the expected costs, benefits, and risks of alternative future systems--such as weapons systems--characterized by complex environments, large degrees of freedom, and considerable uncertainty. Originally created to evaluate nuclear weapons scenarios, RAND's systems analysis techniques are quintessential of modern social science, incorporating quantitative methods, especially mathematical modeling, with qualitative analysis involving a diversity of disciplines. Systems analysis became the basis for social policy analysis across such disparate areas as housing, poverty, health care, education, and the efficient operation of municipal services, such as police protection and firefighting.
In the early years, RAND's primary objective was to create a "science of war" through systems analysis. For example, researchers sought to calculate the efficiency of weapons systems as a function of time, and game theorists sought to mathematize conflict in two-person, zero-sum games. But the outcomes often were flawed because of the assumptions made to keep the mathematical problems manageable. For example, a 1950 report to the Air Force suggested three potential criteria to compare offensive weapons systems: ratio of system cost to damage inflicted, ratio of pounds of aircraft lost to damage inflicted, and number of aircrews lost per damage inflicted. Of these, the basis of comparison became the ratio of system cost to damage inflicted, largely because it was most easily calculated. Critics within the Air Force, virtually all of whom were former aircrew members, questioned RAND's apparent reduction of human life to a quantifiable factor that was given, at best, equal weighting with machinery. Some analyses of strategic bombing systems and air defense systems in the early 1950s also were derided by many top Air Force leaders, and RAND ultimately failed to achieve a comprehensive science of war.
Systems analysis itself, however, was far from dead, because its component analyses had found receptive audiences within the Air Force and aircraft industry. After 1952, RAND concentrated on more narrowly defined problems, and a consistent argument emerged from the corporation's economists: Concentrate strictly on cost-effectiveness. For Air Force officers, the pared-down cost-benefit analyses provided "scientific" justification for their budget requests. For aircraft manufacturers, the "flexibility" of the technique permitted each firm to demonstrate the superiority of its product. And for RAND researchers, the cost-benefit analyses fed directly into the development of yet another pioneering methodology: the Planning, Programming, and Budgeting System (PPBS).
RAND designed the PPBS to help the Air Force manage the enormous costs of modern military technologies and weapons systems. This three-phased budget process consisted of planning and reviewing requirements, formulating and reviewing multiyear programs, and developing the annual budget estimates--hence the name Planning, Programming, and Budgeting System. Thus, by the late 1950s, despite the failure of early efforts to achieve a comprehensive science of war, RAND had succeeded in defining and codifying systems analysis, in the abbreviated form of cost-benefit analysis, as a "scientific" method of planning and decisionmaking. And it was the combination of systems analysis with program budgeting that led to the diffusion of RAND's military methods into the larger arena of American public policymaking. In 1961 the PPBS methodology became one of the cornerstones of the "McNamara Revolution" in the Department of Defense, and in 1965 President Johnson mandated its use across the federal bureaucratic structure.
Championed as scientific means of policymaking--in contrast to the sloppy, politics-driven methods of earlier years--systems analysis and program budgeting fundamentally altered the nature of public policymaking in the United States. These analytical and management methods had distinct consequences for policymaking wherever they were adopted: They created an environment of centralized, top-down decisionmaking; they replaced political bargaining with technocratic expertise as the primary means of policy formulation; and they gave rise to a vast market for policy-oriented social science research.
John F. Kennedy's election to the presidency in November 1960 and his selection of Robert McNamara as secretary of defense opened the door to great influence for RAND. McNamara saw centralized control in the hands of a very few expert managers to be the most effective way to pursue optimal efficiency. The core of the McNamara revolution was a complex administrative system that combined program-based management control with rational decisionmaking through systems analysis. Three of McNamara's most powerful subordinates were former RAND analysts, his staff was pervaded by RAND personnel, and the two methodologies critical to his revolution--program budgeting and systems analysis--were largely RAND products.
Military leaders, however, quickly recognized the PPBS for what it had become: a mechanism for achieving centralized control of the defense administration. Because the PPBS transcended service divisions, it pulled policymaking out of the individual services and relocated it in the civilian Office of the Secretary of Defense (OSD). The extensive role played by RAND methods and personnel in the McNamara revolution understandably dismayed leaders of the U.S. Air Force, RAND's original client. It was painfully obvious that, through RAND, the Air Force had forged the weapons of its own oppressors. Air Force leaders responded on September 22, 1961, by issuing the so-called Zuckert Directive, named for Secretary of the Air Force Eugene Zuckert. The directive prohibited RAND from contracting with other government agencies without Air Force approval. The directive sent shock waves through RAND's senior research staff, for it threatened to nullify the watchword of RAND's organizational culture: independence.
The events of late 1961 placed RAND in a perilous situation between its traditional commitment to the Air Force and its budding relationship with OSD. As a special committee of RAND's board of trustees struggled to find a solution, they received succor from a not-unexpected source--OSD--with the belated completion of the Bell Committee report in April 1962. Congressional pressure for a review of government relations with nonprofit organizations like RAND had led President Kennedy to create a committee to study the issues and develop policies. The Bell Committee, named for Bureau of the Budget Director David Bell, issued findings uniformly favorable to RAND. The report specifically contradicted the Zuckert Directive and endorsed both RAND's independence and its freedom to contract with multiple clients.
Between 1959 and 1964, Air Force support declined from more than 90 percent of RAND's budget to about two-thirds. By 1965, work for the Department of Defense and NASA, neither of which had been RAND clients before 1958, represented one-fourth of the corporation's effort. RAND's board of trustees saw clearly that excellent opportunities for growth and influence lay outside the Air Force and with the civilian agencies of the defense establishment.
It was the defense establishment itself, however, that became a major point of contention within RAND, as the corporation began to feel deeply the insidious effects of the Vietnam conflict. Just as Vietnam began to cut grievously into the American social fabric, intense personal and ideological differences threatened to shatter the collegial environment within RAND. One project--the Viet Cong Motivation and Morale Studies--nearly tore apart the research staff.
In 1964, researchers Joseph Zasloff and John Donnell set up operations in Saigon and conducted hundreds of interviews throughout South Vietnam with prisoners and Viet Cong defectors to discover what motivated them. A pattern soon emerged. The Viet Cong, especially long-term veterans, saw themselves as patriots fighting U.S. imperialists and their South Vietnamese puppets. The principal Viet Cong objectives were the redistribution of land and the expulsion of the foreign imperialists. For Zasloff, Donnell, and their Vietnamese assistants, this came as a shocking revelation. They had expected to find the Viet Cong populated by apathetic peasants who had been kidnapped and indoctrinated by communist agitators. Instead, the RAND staff found the Viet Cong to be zealous, committed, and sincere and their struggle to be fundamentally class-based.
By the time the RAND researchers briefed their findings to the top American leadership in South Vietnam and throughout the Pentagon, however, the corrupt and chaotic South Vietnamese regime appeared to be crumbling, and President Johnson and Secretary of Defense McNamara decided that large-scale U.S. intervention would be implemented to prevent its collapse. The president could not countenance the "loss" of South Vietnam with an election only months away. Despite their startling content, therefore, the Zasloff-Donnell briefings did not reach the pinnacle of American policymaking and had no impact upon the disastrous U.S. decision to escalate. After March 1965, the desire in both the White House and the Pentagon to understand the complex social and political forces at work in Vietnam faded and became replaced by the overarching imperative to win.
At RAND, the Viet Cong Motivation and Morale Studies led to the polarization among researchers into prowar and antiwar factions that reflected national divisions concerning American involvement in Vietnam. On one hand, the preponderance of the research staff were veteran "cold warriors" who believed in the "domino theory"--that a failure by the United States to resist communist aggression would lead to catastrophic consequences--and who thus supported American efforts to hold the line in Vietnam. "Dovish" staff members like Zasloff, on the other hand, worried about the moral implications raised by the Vietnam research. Throughout the 1950s, RAND's research community had flourished in the secure belief that its work was essential to the defense of freedom against an implacable and godless foe. Alliance with a corrupt regime and the brutalization of unarmed peasants, however, severely eroded that sense of righteous purpose, and a steadily growing fraction of the RAND staff found the corporation's work in Southeast Asia to be repugnant. More and more RAND staff members became disenchanted with the corporation's virtually exclusive commitment to military research. As RAND moved further into the 1960s, it found its military focus and reputation to be an increasing liability in the recruitment of young researchers, and this growing unattractiveness coincided with dramatic increases in the salaries being offered by universities--RAND's primary competitor in recruiting.
U.S. soldiers struggle in South Vietnam during Operation Junction City, 1967. Disagreements produced by the Vietnam conflict contributed to the decision by RAND to diversify into social welfare research.
Concurrently, by mid-1964, there were potentially rich sources of support for social welfare research under President Johnson's "Great Society" programs. Previously, money for nonmilitary social welfare research had been restricted to a few private foundations and the relatively penurious social agencies of the federal and state governments. The Great Society changed all that. The transfer of scientific analysis methodologies from the Air Force to the Pentagon and then into the social welfare programs of the Great Society would, by 1966, point to the new direction for which RAND was searching.
The late 1950s and early 1960s saw a shift in the nature of U.S.-Soviet confrontation. American policymakers worried that widespread social ills such as disease, poverty, racism, and unequal wealth distribution throughout Africa, South Asia, and Latin America easily could be converted by clever communist propagandists into powerful destabilizing forces. U.S. leaders also could see emerging patterns of social instability at home, and the Department of Defense was concerned that the same social ills that provided a breeding ground for rebellion in Southeast Asia might also be found in urban America. Connections between national security and social welfare provided some of the strongest arguments in favor of diversifying RAND's research agenda beyond overtly military matters. Adam Yarmolinsky, who went from being special assistant to the secretary of defense to being deputy director of the President's Task Force on Poverty in 1964, even described the "war on poverty" as "one of our most effective tools in the war against communism."
The Great Society almost veered in a completely different direction, however, when poverty warriors involved with the Community Action Programs threatened to mobilize residents and introduce real democracy to federal social welfare policymaking--an outcome anathema to the cold warriors of the Johnson administration. The empowerment of the poor threatened to destabilize existing social and institutional structures and thus ran contrary to what this dissertation argues was a primary objective of the Great Society: the stabilization of American society. By early 1965, top-level economists at the federal Bureau of the Budget were looking to reassert centralized control over the new social welfare programs, and their search quickly took them to the Pentagon.
The Planning, Programming, and Budgeting System rapidly gained currency as a possible solution. In June 1965, Charles Schultze became director of the Bureau of the Budget and began work to transfer the PPBS from the Pentagon to the social welfare agencies. Schultze assigned Henry Rowen, a RAND whiz kid, to lay the groundwork. Schultze and Rowen presented their design to Joseph Califano, the president's newly appointed special assistant for domestic programs, whose previous experience also had been primarily in defense. According to the design, each civilian department would draw up multiyear programs establishing goals and objectives and create a systems analysis office to evaluate the programs. The system would function similarly to the defense PPBS arrangement. At a cabinet meeting on August 25, 1965, President Johnson directed the implementation of PPBS and the creation of systems analysis offices across the federal bureaucratic structure. Those agencies most closely associated with the Great Society programs--the Department of Health, Education and Welfare, the Office of Economic Opportunity, and the Bureau of the Budget--became headed by RAND expatriates recruited from either the Pentagon or Santa Monica.
Rowen's aggressive moves were short-circuited, however, by Califano, who, in 1967, adopted many of Rowen's ideas and created the Urban Institute under the auspices of the Department of Housing and Urban Development. Despite this setback, Rowen and New York Mayor John Lindsay announced, on January 8, 1968, four contracts for studies of New York's Police Department, Fire Department, Housing and Development Administration, and Health Services Administration. Through 1971, the New York City-RAND Institute was the source of almost half of RAND's domestic social research efforts and the cornerstone of its diversification into social welfare research.
It was in its work with the Fire Department that RAND developed its most famous research product in the New York effort: slippery water. RAND persuaded New York fire chiefs to explore the usefulness of polymer additives in water, and the results were spectacular. By reducing the friction of water passing through the fire hoses, polymer additives increased by 50 to 80 percent the amount of water discharged without any increase in pumping pressure. RAND research also played a central role in the city's sweeping rent control reforms of June 1970, in cleaning up Jamaica Bay, and in screening more than 87,000 children for lead poisoning, uncovering 1,600 cases in time for effective treatment.
Until the last contracts of the New York City-RAND Institute expired in 1975, the city gained substantial benefits, and RAND received invaluable experience in social welfare policy analysis--experience that proved to be the foundation for subsequent work in nonmilitary areas. From that foundation, RAND's research programs in health care systems, environmental policy, communications and broadcasting, and education slowly got under way. RAND's eight-year experiment in New York City provided a critical source of stable social welfare research funding, a venue for training social policy analysts, and a springboard for successful diversification into social welfare research in the long run.
