RAND Corporation (RAND)

Background

RAND Corporation was founded on 14 May 1948 as the institutional successor to Project RAND — the 1946 contract under which the Douglas Aircraft Company conducted research for the US Army Air Forces on long-range intercontinental warfare and the broader implications of post-war technological developments for US strategic posture. Project RAND had been initiated in October 1945 by Air Forces Commanding General Henry "Hap" Arnold under the institutional thesis that the post-war US Air Force would require a sustained civilian-research capability comparable in scope to the wartime Manhattan Project's institutional architecture, but operating in peacetime under non-military civilian institutional control. The 1948 reorganisation, under which RAND was separated from Douglas Aircraft and reconstituted as an independent non-profit corporation under the joint sponsorship of the US Air Force and a $1 million Ford Foundation grant, established the institutional template for the federally funded research and development centre.¹

The original RAND mandate was the application of analytical and scientific methodology to questions of US Air Force strategy, procurement, and force structure. The institutional thesis — that the application of operations research, cost-benefit analysis, game theory, and decision theory to military-strategic questions would produce substantially more rigorous and defensible analytical conclusions than the narrative-judgement methodology that had previously been the Air Force's analytical norm — was substantially derived from the wartime experience of the Office of Strategic Services Research and Analysis Branch, the Operations Research groups at the US Navy and US Army Air Forces, and the parallel British Operational Research work under P. M. S. Blackett.²

Principal contributions

Across the post-1948 period RAND's institutional contribution to the US national-security apparatus has operated principally through four substantively distinct lines of work.

Systems analysis

The application of operations research, cost-benefit analysis, and decision theory to military-procurement and strategic-planning questions was the institutional methodology RAND substantively invented across the 1948–1961 period and which Robert S. McNamara, on his appointment as Secretary of Defense in January 1961, adopted as the official analytical methodology of the Department of Defense. The McNamara Whiz Kids — including Charles J. Hitch (RAND's Chief Economist 1948–61, McNamara's Comptroller of the Defense Department 1961–65), Alain Enthoven (RAND 1956–60, Assistant Secretary of Defense 1961–69), and a substantial subset of RAND's analytical staff — moved from RAND to senior positions at the Pentagon across the 1961–1962 period and substantively rebuilt the Department's analytical apparatus around the systems-analysis methodology RAND had developed.³

Strategic-nuclear theory

RAND was the principal civilian institutional home of the post-war strategic-nuclear theory work that produced the doctrinal framework — counter-force, counter-value, second-strike capability, mutual assured destruction, the stability of deterrence — within which US strategic-nuclear policy operated across the Cold War. The principal RAND figures in this work were Bernard Brodie (whose 1946 The Absolute Weapon was the founding text of post-Hiroshima strategic-nuclear theory and who joined RAND in 1951), Albert Wohlstetter (RAND 1951–63, whose 1959 Foreign Affairs essay "The Delicate Balance of Terror" substantially shaped the post-Sputnik US strategic posture), Herman Kahn (RAND 1947–61, whose 1960 On Thermonuclear War was the principal popular-market exposition of the RAND framework), and Andrew Marshall (RAND 1949–69, who subsequently moved to the Office of Net Assessment at the Pentagon, which he directed from 1973 to 2015).⁴

Game theory

RAND was a principal early institutional patron of the post-war development of game theory as an analytical methodology, with substantial work by John Nash, Lloyd Shapley, Martin Shubik, John von Neumann (as a periodic consultant), and Kenneth Arrow. The RAND game-theoretic work substantially shaped the methodological framework of subsequent academic economics, decision theory, and political science — the 1990 Nobel Prize in Economics to Harry Markowitz (RAND 1952–60) for portfolio theory and the 1994 Nobel Prize to Nash, Reinhard Selten, and John Harsanyi for non-cooperative game theory both derived substantively from RAND-period work.⁵

Vietnam War analytical work

RAND's institutional work for the US Air Force and the broader Department of Defense across the 1965–1975 Vietnam War period included the Hamlet Evaluation System, the Strategic Hamlet Program analytical support, the 1966 RAND Viet Cong Motivation and Morale Study (the principal RAND field-work programme on the Vietnamese-side perspective on the war), and the substantive RAND contribution to the Pentagon Papers — the 1967–69 Department of Defense classified history of US decision-making in Vietnam, which Daniel Ellsberg (RAND 1959–64 and 1967–70) leaked to The New York Times in March 1971. The Pentagon Papers leak and the subsequent prosecution of Ellsberg under the Espionage Act produced substantial subsequent attention on RAND's institutional role in the Vietnam-period analytical work, with a 1972 break-in at the Beverly Hills office of Ellsberg's psychiatrist by the Nixon White House Plumbers and the consequent 1973 dismissal of the Ellsberg prosecution on grounds of governmental misconduct.⁶

Institutional alumni

RAND's institutional alumni — analysts who held positions at the firm at substantive points in their careers and subsequently moved to senior national-security positions in the federal government — include a substantial subset of the principal post-war US strategic-policy figures:

• James R. Schlesinger — RAND Director of Strategic Studies 1967, subsequently Atomic Energy Commission Chairman, Director of Central Intelligence, Secretary of Defense, Secretary of Energy.
• Daniel Ellsberg — RAND analyst across two periods, Pentagon Papers leaker.
• Andrew Marshall — RAND 1949–69, Director of the Office of Net Assessment at the Pentagon 1973–2015.
• Albert Wohlstetter — RAND 1951–63, subsequently University of Chicago, principal post-war strategic-nuclear theorist; substantial post-RAND influence on neoconservative national-security policy.
• Herman Kahn — RAND 1947–61, subsequently founder of the Hudson Institute.
• Donald Rumsfeld — RAND consultant (multiple periods); twice Secretary of Defense (1975–77, 2001–06).
• Condoleezza Rice — RAND consultant (1980s, while at Stanford), subsequently National Security Adviser, Secretary of State.
• Francis Fukuyama — RAND analyst 1979–80 and 1983–89, subsequently State Department Policy Planning Staff and Stanford University.⁷

The substantive question of whether the institutional concentration of subsequent national-security policy figures at RAND across their formative careers reflects (a) RAND's institutional success at identifying and developing future national-security talent, or (b) RAND's institutional success at shaping a particular analytical and policy framework that those alumni subsequently brought to government, has been the subject of recurring scholarship. The principal scholarly treatment is Alex Abella, Soldiers of Reason: The RAND Corporation and the Rise of the American Empire (Harcourt, 2008).⁸

Post-Cold War institutional trajectory

RAND across the post-1991 period has substantially diversified beyond its original Air Force–focused mandate. The firm now operates research divisions in health, education, labour, the criminal-justice system, and a substantial international portfolio (RAND Europe, established 1992 in Cambridge, UK). Federal national-security work — the original RAND mandate — remains the largest single client portfolio but no longer the dominant proportion of the firm's revenue. The firm's revenue across the post-2010 period has been in the $300–400 million range; it employs approximately 1,900 personnel across its Santa Monica headquarters and offices in Washington (Pittsburgh and the Arlington area), Boston, Cambridge (UK), and Brussels.⁹

Sources and further reading

1. Alex Abella, Soldiers of Reason: The RAND Corporation and the Rise of the American Empire (Harcourt, 2008); Bruce L. R. Smith, The RAND Corporation: Case Study of a Nonprofit Advisory Corporation (Harvard University Press, 1966).
2. Smith, RAND Corporation, op. cit.; Fred Kaplan, The Wizards of Armageddon (Simon & Schuster, 1983).
3. Kaplan, Wizards of Armageddon, op. cit.; Charles J. Hitch and Roland N. McKean, The Economics of Defense in the Nuclear Age (Harvard University Press, 1960); Alain C. Enthoven and K. Wayne Smith, How Much Is Enough? Shaping the Defense Program, 1961–1969 (Harper & Row, 1971).
4. Bernard Brodie, The Absolute Weapon (Harcourt, Brace, 1946); Albert Wohlstetter, "The Delicate Balance of Terror," Foreign Affairs, January 1959; Herman Kahn, On Thermonuclear War (Princeton University Press, 1960); Andrew W. Marshall personal papers, Hoover Institution archives.
5. Sylvia Nasar, A Beautiful Mind: A Biography of John Forbes Nash, Jr. (Simon & Schuster, 1998); Robert J. Leonard, Von Neumann, Morgenstern, and the Creation of Game Theory (Cambridge University Press, 2010); Nobel Prize biographical citations on Markowitz (1990) and Nash, Selten, Harsanyi (1994).
6. Daniel Ellsberg, Secrets: A Memoir of Vietnam and the Pentagon Papers (Viking, 2002); the Pentagon Papers — United States–Vietnam Relations, 1945–1967 — partial declassification of the original Department of Defense classified history; Tom Wells, Wild Man: The Life and Times of Daniel Ellsberg (Palgrave Macmillan, 2001).
7. RAND alumni biographical record; RAND Corporation history page; subsequent biographical literature on the named alumni.
8. Abella, Soldiers of Reason, op. cit.; David Hounshell, The Cold War, RAND, and the Generation of Knowledge, 1946–1962 (RAND, 1997).
9. RAND Corporation annual reports, 2010–2024; RAND Corporation 2024 Annual Report.