As analysts who believe that economics and quantitative analysis ought to occupy a central role in defense planning, we would like to respond to Matthew Fay’s recent War on the Rocks article, “Rationalizing McNamara’s Legacy.”
Fay criticizes Robert McNamara’s economic approach to managing the Department of Defense as running “afoul of political reality.” In fact, McNamara’s approach was necessary to sustain peacetime defense spending and its tools served McNamara’s political purposes.
The author also goes too far in suggesting that there are no useful ways to measure peacetime military efficiency and that McNamara’s economic tools “ironically” left defense decision-making “less efficient” than McNamara found it. There are many ways to measure military efficiency and little ground on which to claim McNamara’s tools left the military less efficient.
Defense Planning is Both a Political and Economic Problem
Fay argues that “national security problems are not best understood as economic problems. They are political problems.” In fact, issues of defense planning and budgeting are both. Each is equally important.
As an economic problem, the Planning, Programming and Budgeting System (PPBS) that Fay criticizes was necessary to moderate the “feast or famine” cycles of defense spending that the United States has endured since its founding. Sustained, long-term defense spending in peacetime was necessary during the Cold War. PPBS provided a systematic venue for doing that. It also moderated the individual services’ tendency to pursue weapons of dubious usefulness and strategic purpose.
Fay implies that McNamara was naïve about politics. In fact, he saw PPBS as a means of exercising central civilian control of the Department of Defense —certainly a political goal. RAND analysts Alain Enthoven and K. Wayne Smith lamented that decentralized control of defense resources and decisions made purely on “military judgment” undermined civilian control of the military. PPBS was not only a means of linking budgets to strategy, but it was also a way of reigning in McNamara’s generals and admirals. Defense problems are not just political, they are also economic. Both are important.
Economic Tools…Make Things Less Economical?
The author also claims that by “ignoring the political nature of decision-making though, the economic tools ironically left the system less efficient” than McNamara found it. This is inconsistent with the author’s earlier statement that “the problem with McNamara’s pursuit of greater efficiency is the lack of an objective output against which efficiency can be measured.” Fay is making two inconsistent claims — that efficiency at the Defense Department (at least in peacetime) cannot be measured and that McNamara’s economic tools left the Defense Department less efficient.
There are a variety of ways to measure efficiency in a peacetime military. On the tactical level, aircrews can measure their hits and misses during training and soldiers can assess their performance at instrumented training areas and through after action reviews. At the operational level, modeling specific engagements and missions can provide insights otherwise hidden from view. These methods are imperfect, but to discard all measures of military merit is to abandon resource allocation decisions to parochial bargaining and the arbitrary divisions of budgets.
Fay’s conceptual argument that McNamara’s economic, quantitative analysis of military problems left the military less efficient also misses the mark. For evidence, Fay offers Arnold Kanter’s 1979 book Defense Politics: A Budgetary Perspective. While Kanter correctly points out that PPBS is sometimes maddeningly slow, its deliberative nature enabled McNamara to control the budget through systems analysis. Kanter does not, however, provide evidence that systems analysis or the PPBS process actually degraded the military’s ultimate effectiveness.
The Role of Economics in National Security Problems
The study of national security problems does not solely belong to economics or quantitative methods in general. But there is a place for rigorous, quantitative tools to address national security issues. We agree with Fay that much of McNamara’s legacy concerns his introduction of economic frameworks to national security problems. It has changed the way practitioners think and talk about national security issues.
But we disagree with Fay’s argument that things have changed for the worse because of this. Considering the tendency for military services to needlessly duplicate capabilities even today, we wonder how much worse off the Pentagon would be without the mitigating effects of PPBS and its analytical descendants. We also disagree with Fay’s argument that McNamara was methodologically sophisticated, but politically naïve. In fact, McNamara astutely used PPBS to move the balance of power toward the Office of the Secretary of Defense and away from the military services.
Rather than characterize Robert McNamara’s legacy as one of inefficiency, his actions should be portrayed as an innovative, if flawed, first adoption of more sophisticated methods for defense analysis.
John Speed Meyers is an assistant policy analyst at the nonprofit, nonpartisan RAND Corporation and a doctoral fellow at the Pardee RAND Graduate School.
Jonathan Wong is an assistant policy analyst at RAND and recently earned a doctorate in policy analysis from the Pardee RAND Graduate School. He served as a Marine Corps infantryman from 2001 to 2011.