The Last Warrior

by Andrew F. Krepinevich

  Today, when such scientific marvels as the Large Hadron Collider particle accelerator outside Geneva have taken nuclear physics to a whole new level, it is difficult to imagine how much of the success in this field in the late 1940s required a certain amount of craftsmanship as well as theoretical brilliance. It had been less than five years since Fermi had achieved the first nuclear chain reaction using an “atomic pile” (nuclear reactor) made of uranium and graphite blocks stacked beneath the abandoned stands on a racket court at the school’s Alonzo Stagg football stadium.

  It was clear to Marshall that the cyclotron Groetzinger was trying to resuscitate had been very badly designed. Working together they were able to get the device back in working order. Marshall’s contribution to the effort was hardly insignificant; he redesigned and fabricated the cyclotron’s reflector, which alone enabled an order-of-magnitude improvement in performance.

  Marshall’s studies fed his growing skepticism regarding the ability of economic theory to describe, let alone predict, how economic systems really work. These doubts emerged in Marshall’s master’s thesis, which examined the ability of a linear mathematical model to capture the workings of the US economy. His thesis focused on the extent to which the macroeconomic predictions of Lawrence Klein’s Model III of the US economy matched the actual data for the postwar years 1946 and 1947. Marshall discovered that whereas four of the model’s twelve linear equations “fit very well over the two-year period,” and three others fit “as well as could have been expected,” three equations “fit very badly” and the remaining two “were rejected for the year 1947.”5 Klein’s model, in short, failed to capture economic reality.

  Marshall’s experiences as a graduate student in economics at the University of Chicago had two far-reaching consequences for his subsequent career and intellectual development. First, it reinforced his inherent reluctance to assume human behavior was rational, and strengthened his appreciation of the limits of abstract models of reality. If he had ever wondered whether any major economy’s performance could be reduced to a set of linear equations, his work on his master’s thesis had put that question to rest.

  Second, the field of economics appeared to Marshall to be headed in the wrong direction, toward a greater emphasis on abstract work. There was, he felt, a corresponding decline in the applied side of the discipline: how economies really worked. More broadly, he was also put off by an increasing number of economists who, having lost faith in market capitalism as a consequence of the Great Depression, appeared to assume that other ways of organizing a country’s economy, including top-down management by central economic planners along socialist or communist lines, would be more successful.

  Marshall saw evidence of this trend for himself during a visit to the University of Chicago by celebrated Austrian economist Friedrich Hayek. Hayek—who later shared the Nobel Prize in economics for his work on monetary theory, economic fluctuations, and the interdependence of economic, social, and institutional phenomena—came to Chicago to speak at a political economics club that Marshall frequented. Hayek’s arguments against centralized economic planning were greeted with skepticism even by some of the emerging Chicago School crowd who were decidedly in favor of free-market economics. Not for the last time Marshall saw bright people who were willing, even eager, to ignore Hayek’s contention that the extended order created by market economies could call up and utilize “widely dispersed information that no central planning agency, let alone any individual, could know as a whole, possess or control.”6 Years later, Marshall would recall thinking of many of the economists who denigrated Hayek as being “like weathermen who never look out the window.”7

  His faith in market capitalism, and his corresponding aversion to what Hayek termed the “fatal conceit” that central economic planners might possess all the information needed to run an economy efficiently, would shape the course of Marshall’s life. He had completed his studies and written his thesis. But although he was graduating with a master’s degree in economics from one of the country’s most prestigious graduate schools, Marshall had come to the conclusion that he did not want to pursue a PhD in the discipline.

  Instead Marshall now sought a new direction for his insatiable interests and curiosity about the world. Among the courses he had taken while at Chicago was one in statistics, conducted by W. Allen Wallis, in which he had done well. Marshall had originally rejected the idea of pursuing a degree in mathematics out of concern that he could not make a decent living in that field. But now he concluded he could, and determined that he would, pursue his doctorate in statistics.

  At the time, however, the University of Chicago did not offer a PhD in statistics. So once again Marshall decided to defer his formal education. He would instead look for a job while he made up his mind about where to go for further education. This time, though, he wouldn’t need to seek work as a machinist; his performance at the University of Chicago had earned him a growing network of admirers, including the very professor who had interested him in statistics in the first place.

  Wallis, who had taken a liking to Marshall, tried to help out. He told Marshall of a US government office in downtown Chicago that might be hiring statisticians. But there was another possibility. A new kind of institute called RAND was being organized out in California. Part of its work involved statistical analysis. An acquaintance of Wallis’s, a sociologist named Herbert Goldhamer, was embarking on a project to determine whether the occurrence of psychosis was rising in the US draft-age male population. He had asked Wallis for help in finding someone who could do the necessary statistical analysis.

  Marshall expressed interest in the position at RAND, and Wallis arranged for him to interview with Goldhamer, who was in charge of the project. Goldhamer came away from the meeting impressed, and offered Marshall a job at a salary roughly 50 percent higher than what the government position in Chicago paid. It did not take a graduate degree in economics for Marshall to decide to opt for RAND, and he was soon on his way to the new think tank’s Washington, DC, office.

  * Knight made his reputation with his 1921 Risk, Uncertainty, and Profit. For Knight, risk referred to situations in which the probability of an outcome could be determined, whereas uncertainty referred to events whose probabilities could not be known.

  * General equilibrium economic theory seeks to demonstrate that the multiple, interrelated sectors of an economy, when viewed together, rather than individually, bring supply, demand, and prices into a state of total (or general) equilibrium over the long term.

  † The institute was renamed the Enrico Fermi Institute for Nuclear Studies in 1955, and renamed once again in 1968 as the Enrico Fermi Institute. Aside from Fermi, other notable members of the institute included James Cronin, Yoichiro Nambu, and Harold Urey, all of whom were awarded the Nobel Prize.

  2

  EARLY RAND YEARS 1949–1960

  There’s only so much stupidity one man can prevent.

  —ANDREW MARSHALL

  For most Americans the 1950s were an era of confidence, affluence, and anxiety. The Allies had triumphed over Nazi Germany and Imperial Japan in World War II, and the United States had long since recovered from the Great Depression. After the war many US business and political elites perceived virtually no limits to what American ingenuity, hard work, and leadership could accomplish, either domestically or internationally. The nation was enjoying the greatest economic boom in its history and its citizens unprecedented material prosperity. By 1950 the United States’ economic output accounted for over 25 percent of the world’s goods and services even though the country held only 6 percent of the world’s population.1

  The citizens of the nation that had successfully met the challenges of World War II were, understandably, less interested in military preparedness than in new homes, new cars, and new technological marvels such as television. But as the postwar era took shape, it became clear that challenges to US national security were by no means over. The United States and its close allies w
ere soon confronted by a new foe, the Union of Soviet Socialist Republics (USSR). In the closing days of World War II Soviet forces had occupied Eastern Europe; and by 1949 the Kremlin had installed puppet governments in Bulgaria, Czechoslovakia, Hungary, Poland, and Romania, and would shortly do the same in its sector of occupied Germany. The growing rivalry between Washington and Moscow was already transforming the post–World War II security environment into a “cold war” that would last over four decades.

  In April 1948 the first major crisis between the two emerging superpowers erupted when the Soviets began restricting ground traffic between the city of Berlin and the American, British, and French zones in occupied Germany. Berlin had been divided among the four victors of World War II, yet the city lay some 90 miles inside the Soviet occupation zone. In late June 1948 the Soviets cut off all surface traffic to Berlin.

  Seeking to avoid war, the United States responded by organizing and leading an airlift to resupply the three western sectors of the city. This benevolent gesture carried as well a tacit yet pointed message to the Soviets regarding Western resolve.2 Foreshadowing the atomic diplomacy of later US-Soviet crises, in July 1948 the United States deployed ninety B-29 bombers to England. Although none was a Silverplate B-29 modified to carry atomic bombs (and indeed no such bombs were deployed overseas), most observers and historians, then and later, assumed the B-29s’ deployment was meant to signal President Harry Truman’s willingness to use atomic weapons in the event of war.3

  The airlift’s success and the backlash of West European public opinion against the Soviet Union led Joseph Stalin to end the blockade on May 12, 1949. Far from fracturing Western solidarity as he had intended, Stalin’s gambit had actually brought the United States, the countries of Western Europe, and other wartime allies closer together. During the airlift pilots from Great Britain, Australia, Canada, New Zealand, and South Africa had flown supply missions into Berlin alongside their American counterparts, who flew three quarters of the sorties. The perception of a common Soviet threat also led the United States to abandon its long-standing peacetime policy of semi-isolation. On April 4, 1949, in Washington, DC, eleven nations, including Great Britain, Canada, France and Italy, joined with the United States in establishing the North Atlantic Treaty Organization (NATO). Crucially, Article 5 of the North Atlantic Treaty stated that its twelve founding members would consider an armed attack against one or more of them an attack against them all. In ratifying this treaty, the United States finally broke decisively with the admonitions of George Washington and Thomas Jefferson a century and a half earlier to avoid “entangling alliances.”

  The Berlin airlift and the creation of NATO occurred within the broader context of the Truman administration’s adoption of policies aimed at containing the threats to US security stemming from the USSR’s hostile intentions, formidable power and the very nature of the Soviet system. Only weeks after his victory over Thomas Dewey in the 1948 presidential election, Truman approved National Security Council (NSC) 20/4, “Report by the National Security Council on US Objectives with Respect to the USSR to Counter Soviet Threats to U.S. Security.” The State Department’s Policy Planning Staff under George Kennan was heavily involved in drafting NSC 20/4.4 The document reflected Kennan’s assessment that, for the foreseeable future, the main element of US policy toward the Soviet Union “must be that of a long-term, patient but firm and vigilant containment of Russian expansionist tendencies.”5 Kennan had first articulated this diagnosis of the nature of the Soviet state in his famous “Long Telegram” from the US embassy in Moscow in February 1946. Although NSC 20/4 did not use the word containment, it is considered the initial formulation of the policy that would come to bear this name. Truman approved NSC 20/4 some seven months into the 1948–1949 Berlin crisis.

  In September 1949 US concerns about Soviet expansionist tendencies were reinforced when air samples collected by a US reconnaissance aircraft revealed the Soviet Union had successfully tested its first atomic weapon in August, just as Communist forces under Mao Zedong were gaining control of the Chinese mainland. While the defeat of Chiang Kai-shek’s Chinese Nationalist forces had been anticipated for some time in Washington, the USSR’s breaking of the US atomic monopoly had occurred years earlier than expected, in no small part due to highly successful Soviet espionage. The USSR’s first atomic bomb, RDS-1 (code-named “First Lightning” by the Soviets and labeled “Joe-1” by the West), copied the design of the American plutonium implosion bomb dropped on Nagasaki in August 1945.6 The USSR’s crossing the nuclear threshold prompted Truman to initiate the development of a “super,” or hydrogen bomb in January 1950. Although Truman did not know it, Stalin had ordered his scientists to do the same a year and a half earlier.7

  The race was on to develop thermonuclear weapons, whose destructive potential was practically unlimited. These events accelerated US-Soviet competition in nuclear arms. Eventually each superpower would amass a stockpile totaling tens of thousands of nuclear weapons.

  NSC 20/4 was followed in April 1950 by NSC 68. Drafted primarily by Paul Nitze, then head of the State Department’s Policy Planning Staff, NSC 68 emphasized building up US conventional military capabilities to deter Soviet aggression.8 But neither Truman nor his defense secretary, Louis Johnson, was inclined spend the money to do so.9 They wanted to cut US defense spending, not increase it, in order to bring projected federal budget expenditures into rough balance with projected revenues. However, North Korea’s invasion of South Korea in June 1950 and the US-led United Nations’ armed response made further cuts impossible. Instead, US defense spending quadrupled by fiscal year 1952. Even so, when the conflict ended in a ceasefire between the Soviet-backed communist forces of North Korea and China, and the US-led United Nations (UN) forces in July 1953 neither side gained appreciable territory. The demilitarized zone established by the armistice ran not far from the 38th parallel that had separated North and South Korea before the war.

  These developments inevitably fueled American fears and anxieties. As the Soviet nuclear arsenal grew, Americans built fallout shelters and schoolchildren across the country were drilled to hide under their desks in the event of a Soviet attack. Nevil Shute’s 1957 postapocalyptic novel On the Beach, in which nuclear war had devastated the Northern Hemisphere and radiation was slowly poisoning the rest of the planet, voiced for many the anxieties of the early nuclear age.

  By the late 1950s RAND had become one of the leading sources of nuclear strategy for America’s evolving competition with the Soviet Union. RAND, however, had been founded before it became commonplace to refer to the ideological competition between the United States and the Soviet Union as the Cold War—or the “peace that is no peace” to use George Orwell’s telling phrase.10 Over a decade before the publication of Shute’s On the Beach, several years before the Soviets had the bomb, and while the embers of World War II still smoldered, the US Army Air Forces had established Project RAND—“RAND” being an acronym for “Research ANd Development.” RAND’s principal purpose was to help America’s air arm understand how best to cope with the terrible new instruments of destruction that now confronted mankind, as well as those that might be lurking on the horizon.

  The historical impetus for RAND’s creation was the US government’s unprecedented success in drawing on the talents of scientists and industrialists during World War II to develop new weapons and other military capabilities. World War II was the first war in human history whose outcome was decisively affected by weapons unknown at the outbreak of hostilities.11 These new weapons were developed under the leadership of Vannevar Bush, an electrical engineer, inventor, and science administrator who headed the country’s wartime Office of Scientific Research and Development (OSRD). As head of OSRD, Bush reported directly to President Franklin Roosevelt and had both the funding and authority to initiate research and development contracts to support the war effort. In addition to having held senior administrative positions at the Massachusetts Institute of Technology (MIT), B
ush had founded the company now known as Raytheon in 1922, and within five years he developed an analog computer with some digital elements. In 1938 he became president of the Carnegie Institution, and was serving in that position when war came to America. Among OSRD’s wartime innovations were the airborne radars developed at MIT’s Radiation Laboratory, computerized fire-direction systems, proximity fuzes, and the atomic bomb.12

  Even before the war was over, visionary leaders, such the US Army Air Forces’ wartime chief, General H. H. “Hap” Arnold, understood that if the US military was to keep up technologically it would need to continue the wartime collaboration among university researchers, defense firms, and the military. But how could this done? While OSRD’s scientists had willingly supported the war effort, they had also chafed under the military’s restrictions and administrative red tape. With the war over, most of them wanted to return to their universities and laboratories.13 The civil service could neither attract nor hold the kind of talent necessary to continue the research and development needed to keep the United States on the cutting edge of advances in military-related technologies.

  This conundrum prompted Arnold, at a September 1945 Pentagon meeting only days after Japan’s formal surrender, to initiate steps to institutionalize the wartime collaboration with academia and industry. He directed Douglas Aircraft’s Frank Collbohm, who was at the meeting, to drop everything and fly back to Santa Monica to determine, together with Douglas Aircraft’s founder, Donald Douglas Sr., what facilities, men, and money would be needed to establish the first-rate “think tank” Arnold desired. A few days later, on October 1, they all met at Hamilton Field in California and set up Project RAND under a special contract to Douglas Aircraft.