Strategy (28 page)

As one of the first textbooks on operations research noted, work of this sort required an “impersonal curiosity concerning new subjects,” rejection of “unsupported statements,” and a desire to rest “decisions on some quantitative basis, even if the basis is only a rough estimate.” Although this approach started with a focus on problems of national defense, its most far-reaching impact was elsewhere. Because in the military, particularly the nuclear sphere, there were practical and consequential decisions to be taken, the research and analysis had to remain grounded in evidence even when it was conceptually innovative.

When faced with the possibility of nuclear war, an event for which there could be neither precedent nor experiment and which in its enormity
challenged imagination, only simulation was possible. In areas which seemed to be wholly unique (“How many nuclear wars have you fought, general?”), experience counted for less than a sharp and disciplined intellect. When in 1961, Hedley Bull, a young Australian with a skeptical but discerning eye, considered the state of strategic thought, he observed how much of it assumed the “rational action” of a kind of “strategic man.” This man, Bull observed, “on further acquaintance reveals himself as a university professor of unusual intellectual subtlety.”
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The reason for the ascent of strategic man, he suggested, was nuclear weapons. Strategy could no longer be solely concerned with how to fight war as an instrument of policy but also had to understand how to threaten war. Studies of actual violence had to be supplemented by discussions of deterrence and the manipulation of risk. It was because of this that strategic thinking was no longer a military preserve. Civilian experts, Bull noted, overwhelmed the military with their publications and were the obvious people to consult on questions of deterrence and arms control. Now that John F. Kennedy had become president, civilian strategists had “entered the citadels of power and have prevailed over military advisers in major issues of policy.” Neither the military nor the civilians had any experience of the conduct of a nuclear war, so inevitably much strategic thinking was of an “abstract and speculative character,” which suited the civilians. They demonstrated “sophistication and high technical quality” in their work.
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The key people in this new approach had largely come from RAND. They were led at the Pentagon by a secretary of defense, Robert McNamara, who had pioneered the use of quantitative analysis while at the Ford Motor Company. He challenged the armed services to justify their budgets and programs in the face of intensive questioning. His agents in this were young analysts gathered in the Office of Systems Analysis. They were smart, brash, confident, and dismissive of the faltering attempts of military officers to block their ascent. McNamara's right-hand man in the Pentagon, Charles Hitch, who was recruited from RAND, had observed with a colleague in 1960: “Essentially we regard all military problems as, in one of their aspects, economic problems in the efficient allocation and use of resources.”
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McNamara demanded data and insisted on quantitative analysis as the best way to assess the costs and benefits of alternative programs. Disregarding the preferences of the armed services, McNamara canceled favored programs and challenged cherished beliefs.

It became a truism that McNamara's methods were inappropriate for fighting a war, especially one as politically complex as Vietnam, and failure here sullied his reputation forever. Yet for the first part of his tenure in the Pentagon, McNamara was considered to be the most gifted and effective
member of the cabinets of Kennedy and then Lyndon Johnson. The military floundered in his presence, looking amateurish even when discussing operational issues. McNamara was described as an “IBM on legs.” Decisive and articulate, he was the epitome of the rational strategic man in his mastery of the evidence and analytical techniques.
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The mythology surrounding McNamara, and the opposition he faced, exaggerated the difference his methods had made. The military had not dominated Eisenhower's budgetary process, nor had the civilians controlled Kennedy's as much as was claimed. Nonetheless, senior officers viewed with alarm the civilians who lacked combat experience yet pontificated on military tasks. The arrogance that the civilians had nurtured at RAND, never doubting their intellectual superiority over their military paymasters, had left resentments that were now aggravated as programs and budgets were put at risk. One tirade, from a former chief of the air staff, was joyously quoted in a book by two members of McNamara's staff against whom it was directed. General White complained about the “pipe-smoking, tree-full-of-owls” types, doubting that “these overconfident, sometimes arrogant young professors, mathematicians and other theorists have sufficient wordliness or motivation to stand up to the sort of enemy we face.”
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While Bull defended the new strategists against various charges of being uncritical, amoral, or pseudoscientific, he noted a conceit. Many were of the view that previously “military affairs escaped scientific study and received only the haphazard attention of second-rate minds.” He also noted an aspiration among the civilians to turn strategy into a science by “eliminating antiquated methods and replacing them with up-to-date ones.” If only, as some hoped, these new methods could get closer to economics they could help “rationalize our choices and increase our control over our environment.” Brodie also doubted the exaggerated ambition. Though White's comments confirmed the stereotype of a narrow-minded and prejudiced military, Brodie also found the new analysts and their methods a mixed blessing. They improved decision-making in the Pentagon on such matters as the procurement of new weapons, but there remained limits to what could be achieved by applying economics to strategy. Economists tended to be insensitive to and intolerant of political considerations that got in the way of their theories. More worrying than their weakness in diplomatic or military history, and in contemporary politics, was their lack of awareness of “how important a deficiency this is for strategic insight.” The quality of the theoretical structures adopted by economists led to a disdain for other social sciences as “primitive in their techniques and intellectually unworthy.”
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The presumed signature methodology of the new strategy was game theory. As
Chapter 13
demonstrates, the actual influence on nuclear strategy was slight. Nonetheless, game theory represented a way of thinking about strategic issues that was abstract and formal. Its influence on the social sciences eventually became significant. It emerged as the result of collaboration between two European émigrés working at Princeton during the war. From Hungary came John von Neumann. As a child he could astound with feats of memory and computation, and he was soon recognized as one of the mathematical geniuses of his age. He had developed the basic principle of game theory in the 1920s by contemplating poker. When Oskar Morgenstern, an economist from Vienna, got to know von Neumann at Princeton he saw the broader significance of his ideas and helped give them structure. Their formidable joint work,
The Theory of Games and Economic Behavior
, was published in 1944.

Why poker and not chess, which had always been seen as the strategist's game? The scientist Jacob Bronowski records von Neumann's reply:

“No, no,” he said. “Chess is not a game. Chess is a well-defined form of computation. You may not be able to work out all the answers, but in theory there must be a solution, a right procedure in any position. Now real games,” he said, “are not like that at all. Real life is not like that. Real life consists of bluffing, of little tactics of deception, of asking yourself what is the other man going to think I mean to do. And that is what games are about in my theory.”
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In chess both sides are working with exactly the same, perfect information, besides what is going on in the head of the opponent. Chance is a factor in poker, but the game is not pure chance. It is possible to apply probabilities to assess the likely hands of other players. As there will always be a degree of uncertainty, the same hand can be played in different ways according to judgments about whether other players are bidding out of strength or weakness. It is possible to outthink the competition. Game theory was therefore about intelligent strategies in inherently uncertain situations.

Von Neumann watched how in poker all the players encouraged uncertainty about the quality of their cards. Bluff was essential and unpredictability in their play helpful. He identified the optimum outcome for one rational poker player playing against another as the “minimax” solution, the best of the worst outcomes. His 1928 proof of this solution gave game theory its mathematical credibility, moving it away from a representation of how a game might be played to a suggestion of how it should be played. By showing how
to proceed rationally in an irrational situation, game theory demonstrated why it might be logical to bluff for both offensive and defensive purposes, and how the occasional random move could make it difficult for an opponent to discern a pattern of play, thereby adding to his uncertainty.
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The book von Neumann co-authored with Morgenstern was described as “one of the most influential and least-read books of the twentieth century.” At 641 pages of dense mathematics, it barely sold four thousand copies in its first five years in print.
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After extensive but mixed reviews, and though some enthusiasts began to spread the word, the economics profession gave every impression of being underwhelmed. Where it initially took root was in the operations research community, to the point that it was described in an early postwar survey as a branch of mathematics special to this field. Here von Neumann appears to have been particularly influential. As one of the government's top scientific advisers until his premature death from cancer in 1959, he encouraged all means, including linear programming and the increased use of computers, of raising the quality of the scientific input. He saw RAND as an institution that could showcase the new techniques.
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Von Neumann and Morgenstern also found their popularizer. John McDonald's
Strategy in Poker, Business and War
is curiously neglected in the histories of game theory. In 1949, McDonald came across von Neumann and Morgenstern when researching an article on poker for
Fortune Magazine
. Then McDonald wrote another article on game theory for the same magazine, before turning both articles into a book. The reason for the neglect of McDonald's book may be that it did not take the theory forward and was geared to a popular exposition. But the author had extensive conversations with the academics and provided a clear statement of what they thought they might achieve. McDonald acknowledged that the mathematical proofs would challenge any lay reader, but he promised that the underlying concepts could be readily grasped. Game theory offered insights not just into military strategy but strategy in general. It was relevant whenever relationships involved conflict, imperfect information, and incentives to deceive. Because the theory was “formal and neutral, non-ideological,” it was “as good for one man as for another.” It would not help with assessing values and ethics, but “it may be able to tell what one can get and how one can get it.”

In terms of the shift in strategic thinking prompted by game theory, the critical insight was that acting strategically depended on expectations about the likely actions of others over whom one has no control. The players in a game of strategy do not cooperate, yet their actions are interdependent. In such restrained circumstances the rational strategy was not to attempt to maximize gain but instead to accept an optimal outcome. Minimax, McDonald observed, was “one of the most talked about novelties in learned
circles today.” When he moved on to consider its applications, paying particular attention to the importance of coalitions, he saw a number of possibilities. “War is chance,” he concluded, “and minimax must be its modern philosophy.” Yet he also described this as a theory with “imagination but no magic.” It involved “an act of logic with an unusual twist, which can be followed to the borderline of mathematical computation.”
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The presumption behind the pioneering work on game theory, enthusiastically encouraged at RAND, was the conviction that there could be a scientific basis for strategy. Past endeavors to put these matters on a properly scientific basis had supposedly faltered because the analytical tools were not available. Specialists in military strategy lacked the mathematics, and the mathematics lacked the concepts and computational capacity. Now that these were available true breakthroughs could be made. Game theory was exciting because it directly addressed the problems posed by the fact that there was more than one decision-maker and then offered mathematical solutions. It was soon generating its own literature and conferences.

In 1954, the sociologist Jessie Bernard made an early attempt to consider the broader relevance of game theory for the softer social sciences. She also worried about an inherent amorality, “a modernized, streamlined, mathematical version of Machiavellianism.” It implied a “low concept of human nature,” expecting “nothing generous, nothing noble, nothing idealistic. It expects people to bluff, to deceive, to feint, to withhold information, to play their advantages to the utmost, to make the most of their opponent's weaknesses.” Although Bernard acknowledged the focus on rational decision, she misunderstood the theory, presenting it as a mathematical means of testing rather than of generating strategies. The misunderstanding was perhaps not unreasonable for she assumed that different qualities were required to come up with strategies: “Imagination, insight, intuition, ability to put one's self in another person's position, understanding of the wellsprings of human motivation—good as well as evil—these are required for the thinking up of policies or strategies.”
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For this reason, the “hardest work, so far as the social scientist is concerned, is probably already completed by the time the theory of games takes over.” In her grasp of the theory's claim, she missed the point, though in her appreciation of the theory's limits she was ahead of her time. The theory assumed rationality, but on the basis of preferences and values that the players brought with them to the game.