Net Assessment: Beyond Systems Analysis

Andrew Marshall has served every Secretary of Defense since James Schlesinger during President Richard Nixon’s second term. However, Marshall came to Washington earlier to work for then-National Security Advisor Henry Kissinger on the reform of the intelligence community. Marshall had been working for RAND, the premier think tank dealing with defense issues, where Schlesinger (a young economics professor at the University of Virginia) had been assigned to his staff. It was out of the intel reform effort that the Office of Net Assessment (ONA) was born and which Marshall would direct for the next four decades.

Marshall essentially invented “net assessment” as a way to move beyond the “systems analysis” approach that Defense Secretary Robert McNamara had brought to the Pentagon from the business world. McNamara’s focus on finding the least cost method of meeting defense requirements produced such boondoggles as the TFX fighter-bomber project and, of course, the disaster of Vietnam where American power was constrained and no decisive strategy was ever formulated. Costs went up without producing victory. Limited war, gradual escalation, and body counts meant little to the communist regime in Hanoi which had an unlimited ambition to conquer the south and a willingness to pay any cost to achieve it.

Marshall believed policy needed to be based on a deeper look into the balance of power, including an attempt to determine what the enemy was thinking. As Marshall put it, “Not everything that can be counted counts, and not everything that counts can be counted.” As the authors of this intellectual biography of Marshall (both of whom worked at ONA) describe it, “net assessment is very much about identifying and exploiting favorable asymmetries in key areas of the competition, and finding ways to mitigate the effects of those asymmetries that work in the enemy’s favor.”

Defense Secretary Harold Brown had no hesitation about keeping Marshall at ONA when Jimmy Carter brought the White House into Democratic hands. Brown and Marshall worked closely together, even if their recommendations fell on deaf ears in the Oval Office. An example is Marshall’s recommendation that the U.S. continue the B-1 strategic bomber program. His thinking was that it cost the Soviets far more to defend against long-range bombers than it cost the U.S. to maintain the capability. However, Carter ended the program after only half the planned bombers had been built. He thought it was more cost effective to arm the aging B-52 bombers fleet – that could no longer penetrate Soviet defenses, with cruise missiles. While this decision extended the life of the B-52, it was not a substitute for the B-1. Carter was trying to cut U.S. costs while Marshall was trying to increase the costs to the USSR. President Bill Clinton would make the same mistake in canceling the B-2 stealth bomber after only 20 were built. He also thought he was saving money in the post-Cold War world, not realizing (as Marshall did) that new threats would arise.

Bringing Down the Soviet Union

Economics was the key to Marshall’s thinking about how to prevail in a “competitive strategy” with the Soviets. As early as 1967 while at RAND, Marshall determined that the American economic advantage over the USSR was much larger than was commonly thought. In the long run, this would be decisive. Most economists thought the Soviet economy was about half the size of the U.S. and that Moscow was devoting about 14% of GDP to the military, a sustainable effort. Marshall’s estimates were closer to what post-Cold War analysis based on access to Russia has shown. The Soviet economy was less than a third the size of the U.S. and Moscow was devoting 25% or more of it to the military. This was an unsustainable effort, especially if the U.S. accelerated the arms race. Communism could not “bury” capitalism as Nikita Khrushchev once claimed; it would be the other way around.

The authors sum up Marshall’s approach, “It was simple. The United States should actually compete with the Soviet Union, using its strength to good effect while exploiting Soviet weaknesses.” This was, of course, the approach President Ronald Reagan would use to win the Cold War. However, Reagan and Marshall developed this concept independently. Marshall by research and analysis of the Soviet economy; Reagan by his understanding that communism was an inferior system compared to capitalism and so was inherently weaker.

Marshall supported Reagan’s desire to rebuild the military after it has been “hollowed out” by Carter. But he did not work very closely with Defense Secretary Casper Weinberger. He did influence policy through other people in the administration, such as Richard Pipes and Fred Ikle. Reagan feared a nuclear war. The Soviet missile force was an equalizer, only a nuclear strike could destroy America’s superior economy and social system.

The Proud Prophet wargame conducted in 1983, based on prevailing U.S. doctrine, ended in a massive nuclear exchange. This was despite the aim of policy being deterrence. U.S. and NATO were still using a strategy born from the austere Eisenhower era when it was thought that nuclear weapons gave more “back for the buck” and were cheaper than ground troops. NATO would deter an invasion of Western Europe by the larger Red Army and Warsaw Pact by threatening an early jump to nukes. But the attempt to fight a “limited” nuclear war failed even when Weinberger was playing the role of president in the game (a fact that was kept secret given the outcome of the exercise).

This led Marshall to urge an expansion of U.S. and NATO conventional forces so the Soviets could be stopped without bringing on Armageddon. And this was done, though it brought on other debates over how much larger a ground force was needed, how to compare the higher quality Western forces against higher Eastern quantity, whether the Soviets could counter Western aerial superiority (perhaps with a massive surprise missile attack on European airfields) and which alliance could stand the strain of another European war and mobilization. By the late 1980s it was generally held that the Soviet bloc could not blitz through Germany, thus deterring war at a lower level.

Another way to deter a Soviet nuclear first strike was the Strategic Defense Initiative (SDI). Reagan pushed this idea because he thought it was foolish to leave America open to attack (as it is). Marshall did deeper research to support the program, including looking into Soviet fears about such a defense. Critics of SDI claimed it was too expensive and would not work, setting the standard for working at 90% which even then would mean millions of deaths. Marshall, however, concluded that even a 15% interception rate would so confound Soviet planners that they could not with confidence launch an attack. The Soviets (and now Russia) made stopping any missile defense their top priority.

SDI and the arms race did exhaust the USSR. Attempts to reform the communist system to better compete led to its collapse instead.

Facing a Rising China

Yet, the end of the Cold War was not the end of history. As early as 1987, Marshal was warning that the People’s Republic of China would be the next challenger. Yet, as the authors note:

The lure of China as a vast untapped market led many in the United States, both during the 1990s and the early 2000s, to dismiss the possibility of the PRC emerging as a major military competitor to the United States even within East Asia.

Marshall’s inclination, by contrast, has been to concentrate on what the Chinese were actually thinking and doing, ignoring the “popular wisdom” of the time.

Michael Pillsbury, fluent in Mandarin, took the lead in actually reading what the Chinese military was thinking, bringing books and documents out of the country which outsiders were never meant to see. Historian Aaron Friedberg looked at the dynamics of coping with rising powers to gain insight on what the U.S. might do. Marshall has often said his main contribution has been to attract and support great minds. This biography is filled with familiar names who attended “St. Andrew’s Prep.”

Beijing has devoted a substantial share of its rapid economic growth to improving its military capabilities, especially in the air and at sea in ways that explicitly threaten U.S. forces and allied territory. Marshall has expressed concern that American airpower depends too heavily on short-range fighters that need to operate from land bases or aircraft carriers within range of Chinese missiles. The authors credit Marshall’s early arguments for the current shifts of more military might to Asia and for the Navy and Air Force cooperating in a new Air-Sea Battle strategy.

Unfortunately, the authors do not go further and discuss “competitive strategy” towards China in the same way as they did in the case of the USSR. Rather than place strains on Beijing’s economic advance, U.S. trade policy has allowed American firms to build Chinese capability, transferring capital, technology and know-how to a strategic rival for decades. This policy is continuing even after Beijing has shown its fangs both in Asia and around the world. State capitalism has already given China a larger economy than the Soviets had. At what point will American policy shift to slow China’s rise?

This is a fascinating book, but not an easy read. This is not because Krepinevich and Watts are not good writers. Just the contrary. It is that they have filled every page with an abundance of information. This is not just a book about Marshall. It traces the entire history of American strategic thought and policy since the Eisenhower administration; naming names, citing documents and presenting data. It is a testament to their skill that they could cover so much ground in one volume. It is thus highly recommended.

William R. Hawkins, a former economics professor and Congressional staffer, is a consultant specializing in international economics and national security issues. He is a contributor to SFPPR News & Analysis.