History of RAND

All this week, TTLA runs an interview with Michael D. Rich. Rich is the executive vice president at the Santa Monica-based RAND Corporation, the region's preeminent public policy institute.

Friday: An Introduction

TTLA: Could you take us back to the earliest days of RAND?

MR: I'll give you kind of a thumbnail history. Like a lot of R&D organizations or scientific organizations "? a lot of laboratories and various places "? RAND has its roots in World War II. It goes back to a single individual who had the idea, although he required other people to pull it off. But this guy's name was Arnold, Hap Arnold. You know Hap Arnold? That's amazing, because before I came to RAND, I never heard of Hap Arnold. He was a major military hero in the United States.

There was no 'Air Force' in World War II "? the Air Corps was part of the Army. And Arnold realized that during World War II there had been a tremendous sort of leap forward by air power as an instrument of national influence. And he was pretty perceptive. He realized that a lot of technologies didn't come from sort of career military folks. They were civilians who were either conscripted, or more commonly, the scientists and engineers volunteered for military service during World War II.

So as the war was coming to an end, Arnold kind of faced a paradox. On the one hand, the United States was more and more dependent on air power. Air power was kind of dependent on these technological contributions. And on the other hand, the civilians who made it possible were going to leave at the end of the war, naturally. He wasn't as much worried about them going to industry as he was about them going back to academia "? those that came from academia "? because there were restrictions on doing classified research and so on. So he tried to think of an arrangement that could preserve a stream of contributions for the senior leadership of what was then the Army Air Corps "? from civilians, mainly scientists and engineers. The idea he came up with was called Project RAND. RAND doesn't stand for anything; it's not named after anybody, just a contraction of "research" and "development." So when you shorten it to R&D, it's RAND. I guess it could have been "Rind" or something, but anyway, we're happy with RAND.

So Arnold housed it initially at the Douglas Aircraft Company. And there were some, as I understand it, some sort of personal connections that made that the best solution. But also it was plausible because Douglas at the time was like the Lockheed Martin of its era. It was by far the largest defense contractor. And so that's where RAND started, in 1946.

The project had one client "? it was actually a contract relationship "? the Army, Douglas was operating project RAND. And within a year, people realized, "mistake." You know: Good concept, bad execution. Having it in a commercial company, if it didn't pose actual conflicts of interest, it ran the risk of posing the appearance of a conflict of interest.

And it really wasn't a popular arrangement almost with anybody because it had begun to acquire a reputation early as telling the facts as the researchers saw them. And so people in Douglas apparently were upset that it was making the customer unhappy, because it was giving the bad news. But you know, people outside, in North America, in Lockheed, worried that this gave Douglas an edge in the competitions. And I think in the Air Force, people realized, "Boy, this is pretty valuable." But how long can they stay independent, if you will, when they're in a commercial company competing for awards, all that sort of thing?

So in 1948, Project RAND split off of Douglas, severed all ties. It became a separate non-profit corporation in California, so there was no interlocking directors, no shared employees, no shared facility "? a complete and total split. The original capital for that move didn't come from the government. It originally came from the Ford Foundation. And so the Ford Foundation provided, I think it was, a one million dollar loan for working capital purposes. The Air Force novated the contracts and sort of transferred the contract to this new entity.

The Air Force was created in '47, so by the time this had been done the Air Force was around. RAND was launched that way, with one contract. And I think in those days if anybody had said, you know, well, RAND would be in Santa Monica longer than Douglas, people would think they were crazy. And if you said that RAND would be around longer than the Douglas Aircraft Company, it'd be preposterous. But you know, both things happened.

TTLA: How does RAND begin to move towards what it is today, from how it was born?

The first, I would say, ten years, we were working almost exclusively for the Air Force. But the important point is, we're a contract research organization "? from the very beginning. And so we have a client, we're doing research.

The Air Force sponsored some things at RAND that you'd kind of expect them to related to space travel "? fuels and navigation and communication, sort of human factors of flight. But there were a lot of things the Air Force did that it's remarkable now in retrospect that they asked RAND to do.

It was far broader than just one military branch. So a lot of the early work on what came to be known as Kremlinology, or Sovietology, was done here. A lot of translation and interpretation, people here kind of perfected the technique of finding émigrés, winning their trust, they went and talked to government employees, or they might talk to researchers about who's in the Politburo and how do they make decisions? And how is the military organized and the economy controlled? And dealings with the Warsaw Pact? All of that was kind of a mystery and there was very little information flowing out of the Soviet Union.

Also, there was a lot of early work on computers. Just to do some of the work, they had to build computers here "? design, you know, simulation languages; a lot of accomplishments in the early days in that realm.

And what a lot of people know us for is analytic methods. So in the research community, things like dynamic programming, game theory and so on, either were invented or had significant advances or adaptations made here at RAND.

Then in the late `50s, we made what at the time was a major diversification decision. And the decision was to work beyond the Air Force and begin working for the Office of the Secretary of Defense, the civilian leadership of the Defense Department.

Today, I think if you'd walk down the hall and you talk about the Air Force and the Secretary of Defense, people would say, Pentagon, what's the difference? But in those days, it was a big deal because we were moving from a uniform military client to a political appointee, and people were worried this might harm our reputation, or might hurt objectivity. But it was done very carefully and it was the Eisenhower administration and then the Kennedy administration. And we were able to kind of maintain the non-partisan perspective and so on.

Then another major diversification happened in the middle 1960s, when people realized all the techniques that we were using to study national security problems were just as applicable to social and economic problems.

So in those years, '63, '64, aided by a mayor in New York, John Lindsay, who wanted his own think tank, we were able to launch programs in housing, health care, education, telecommunications, education, crime "? I'm probably missing some "? a whole wide variety of others. And that grew very rapidly.

So when I got to RAND, middle 1970s, as a law student, it was 50/50. Half of the work was for the Pentagon, essentially. The other half was for federal agencies, primarily outside of the national security realm. So health, in those years. Health, Education and Welfare. The Department of Labor. The Department of Education. Energy. And so on and so forth.

TTLA: But still 100% government contracts?

MR: Basically a hundred. I mean, it might have been 95. We might have been doing some private foundation work, but almost entirely government. And doing virtually no fund raising. Although we are non-profit all this time, there really wasn't much fund raising. The original Ford Foundation loan was later forgiven. So it became our first gift. But there wasn't really much in the way of fund raising.

So then really the rest of the period is just more diversification. We created a graduate school; we now have a big PhD program here. We added state and local government contracts along the way. Some international organizations, foreign governments. And we do a very small amount of work, maybe three to four percent, for the private sector. We don't do proprietary work, but we will do work if we can publish the results. And almost all of that is in the health field.

And so anyway, that's a sort of a very quick tour. I'll also give you a few of the basics. So the very simple mission statement is to help improve policy and decision making through research and analysis. It's a simple mission. But what it means for us is that we, I think, have a different orientation at least than some organizations that call themselves think tanks. Because for us, just working on an important problem, even doing great work, it's good, but not sufficient. Because if our goal is to improve something, a policy or a practice, we've got to get things to people who can make a difference. So it's quite actually a lot of effort aimed here at figuring out who's got the levers to take these findings and improve somebody's life.

Sometimes it's pretty easy. We're working on a new policy for the Air Force on supply management. And there's a general in charge of that. You reach him, you're done, basically. You convince him, you're done. But for education, you know, there are 16,000 school districts. Or health care "? decisions are made in every household. Or savings decisions. I mean, there it's pretty complex. So the second kind of challenge is getting the findings and recommendations to people who matter. When we do that well, great. We're not happy, not satisfied, though. Because the ultimate goal is to see a change in policy or a practice that comes at least in part from something that we've done.

And so the other kind of I think key thing about RAND is the desire to be above the political or partisan debate. Be non-partisan, strictly non-partisan, in the work. And then when we disseminate, be actively bipartisan and not favor one side or another. And if you look at the trustees or the leadership of RAND, there are Republicans and Democrats "? people who have government service from both parties' administrations.

Continuing Tuesday: Is RAND a Think Tank?

Photo: RAND HQ in Santa Monica. Photo copyright and courtesy Brett Van Ort, 2008