Rand: Research, Development and Informality : Think-Tank Specialists Reverse Q&A; Format in Probing Wide-Ranging Issues

Times Staff Writer

The rise of Mikhail S. Gorbachev to leadership of the Communist Party, following the death last week of Konstantin Chernenko, was an event long expected by foreign observers, including Kremlinologists at Rand Corp. Analyzing and anticipating Soviet moves is only one of many disciplines and functions at the Santa Monica-based think tank. Here is a look inside Rand:

"A large part of our effort," says Donald B. Rice, president of Rand Corp., "is to turn answers into questions. The object is to make sure that we are dealing with the problem that needs to be solved."

Quiet, reflective and inquiring by nature, Rice, 45, is a muscular 6-footer who heads a staff of 1,000, including mathematicians, scientists, criminologists, lawyers, physicians, economists, engineers, educators, architects, sociologists and others.

Wide Range

The questions they deal with range from national security issues to domestic problems: What specific measures can be taken to combat terrorists and protect American citizens around the world? How strong is the Soviet economy? In addition to Mikhail Gorbachev, which members of the Soviet Politburo wield the most influence and how will their attitudes affect the United States? On the United States' domestic front, are the right moves being made to combat career criminals in American cities? How can health-care costs be kept under control without diminishing the quality of health care? How does the medical system deal with older people? Are the best-qualified schoolteachers quitting their jobs? Are juries handing out excessive awards in civil lawsuits?

These questions, and many more, are tackled day after day by Rand professionals. Their global concerns are occasionally lightened by irreverent humor. A treasured "collector's item" out of Rand's past is a series of maxims put together by physicist Amrom H. Katz, a retired specialist on arms control and reconnaissance. He advised his Rand colleagues to keep certain guideposts in mind amid dealings with the Defense Department, which ranks as the think tank's largest client. Among the maxims:

"Where are the calculations that go with the calculated risk?"

"Every organization is self-perpetuating. Don't ever ask an outfit to justify itself, or you'll be covered with fact, figures and fancy. The criterion should rather be, 'What will happen if the outfit stops doing what it's doing?' The value of an organization is easier determined this way."

"Try to find out who's doing the work, not who's writing about it, controlling it or summarizing it."

'Real Tense'

"Try to find out the real tense of the report you are reading. Was it done, is it being done, or is it something to be done? Reports are now written in four tenses: past tense, present tense, future tense and pretense. Watch for novel uses of congram (contractor grammar), defined by the imperfect past, the insufficient present and the absolutely perfect future."

Not much is sacred at Rand, beyond its serious effort to tackle problems. Rand depends upon fees from sponsors to meet its $50-million annual budget, yet sponsors are often told, in effect: "You've begun with the wrong premise and therefore you are asking the wrong question. The right question is. . . ."

Headquartered in a sprawling complex of coral-colored buildings diagonally across from the Santa Monica Pier, Rand's staffers work in an informal atmosphere. Many ride bicycles to the office, and they dress as they please: loafers, sweat shirts, denims, sport jackets.

Every day at noon, a Rand group holds a volleyball game on the beach. Others keep tanned and fit by year-round jogging on the sand along the ocean front, or on nearby streets. One frequent jogger is Brian Jenkins, a rugged ex-Green Beret who specializes in studies of worldwide terrorism, and he is often accompanied on his trek through the streets by Arthur Alexander, a wiry marathon runner who specializes in Soviet economics, research and development.

Rand's informality, however, does not get in the way of its search for the right question--a process once described by Rice as "standing a problem on its head, to find ways of making it more solvable."

The relentless search began immediately after World War II when the Air Force created Rand (an acronym for research and development) to work entirely on defense and survival problems. One of Rand's first major projects was a study of the feasibility, design and military utility of an earth-circling satellite; Rand delivered a preliminary design in 1946, 11 years before the Soviets launched Sputnik One.

In that pre-Sputnik era when little national attention was given to the global military potential of Russia and China, Rand economists began taking long hard looks, in an effort to keep current on such questions as: How strong are they? How fast are they growing? How formidable will they be? What are their goals?

'Wrong Question'

When the Air Force first developed strategic bombers, it asked Rand to devise a plan for the most efficient locations for overseas bases. "It was the wrong question," said Rand Senior Vice President Gus Shubert, a decorated former Air Force pilot who holds a master's degree in English literature.

The question was wrong, said Shubert, because early in the atomic age the Air Force had not factored the vulnerability of overseas locations into its thinking. The bases belonged in the United States, where the bombers would be safer, maintained better at less cost, and serve as a deterrent to enemy attack. If and when the bombers were needed for retaliatory action, they could be refueled in mid-air to reach long-range targets.

In the 1950s Rand strategists recommended--and the Pentagon adopted--an additional series of then-innovative steps to beef up national security: hardening of silos to protect missiles, a 15-minute warning system to launch planes after an alert, a "fail safe" procedure to recall loaded bombers in the event of false alarms.

But global problems of defense, along with strategic, economic and foreign policy issues, are not the only subjects at Rand. The think tank has gradually expanded to encompass a broad range of complex social issues, and Rice, a management-trained analyst who became Rand's third president 13 years ago, has brought strong emphasis to the challenge of domestic problems.

Embarrassing Episode

Rice, then a 32-year-old assistant director of the U.S. Office of Management and Budget with a reputation for being exceptionally bright, was hired by Rand's trustees in 1972 in the wake of a deeply embarrassing episode that made headlines around the world. Disenchanted with the Vietnam War, Daniel Ellsberg, a Rand researcher who had helped prepare a secret history of the war, leaked the document--known as the Pentagon Papers--to the press.

Rand's reputation for discretion suffered a stunning blow. The Air Force, openly skeptical about Rand's ability to handle classified data, assigned an officer to take up special duty at Rand, monitoring all access to secret documents.

Staff morale sank. Rand President Henry Rowen, a distinguished scholar who had personally hired Ellsberg, resigned.

Rice approached the presidency of Rand "with my eyes wide open. I suspected--correctly as it turned out--that Rand's reputation for discretion would be restored in the normal course of events. We simply had to demonstrate that we took our security responsibilities seriously. And a couple of years later the Air Force did withdraw its special security officer."

Under Attack

But that was not the end of Rand's troubles. The organization on occasion has found itself under attack from critics.

Peace groups picketed during the Vietnam War, and in one tense period a rumor surfaced that Rand had been commissioned by the Nixon Administration to study the feasibility of canceling the 1972 national election in the event of civil strife. Rand issued a flat denial.

During the 1984 election campaign, Rand itself became an issue in the nuclear freeze controversy, when an initiative on the Santa Monica city ballot called for a local ban on nuclear weapons research and development. Supporters of the freeze took to TV, stood on street corners and outside supermarkets, where they collected signatures on petitions, and handed out circulars denouncing Rand for its involvement with nuclear research.

The heat grew intense, and in an internal memo to the staff, Rice wrote: "We may have to consider whether Rand should stay in Santa Monica." But Rand also fought back. It bulk-mailed circulars to Santa Monica residents, asserting its confidence that--if passed--the proposed initiative would be found unconstitutional, on grounds that it violated not only the First Amendment (i.e., Rand's right to think) but the federal government's prerogative to conduct the national defense.

The initiative was defeated handily. But Rand's work is seldom free from controversy. "Our research and findings," Rice told an interviewer, "sometimes get caught in the middle of disagreements between clients, perhaps between the executive branch and Congress, or within various departments in the executive branch, or within city or state governments, or in any number of places."

One of the places where the Rand approach was felt was New York City, which called on the think tank during the administration of Mayor John Lindsay to recommend ways of dealing with a series of municipal headaches in the Big Apple.

Eighty Rand staffers were assigned to the task of probing and poking into police and fire services, the housing shortage, health and welfare services, water pollution.

After an intensive study combining on-the-scene interviews and observations with extensive data analyses, Rand's investigators jolted the city's administrative bosses with a series of surprising conclusions.

Bigger Budgets

New York's police commission, for example, had been confident that it could make a serious dent in curbing crime, provided the budget for detectives was increased, and it asked Rand to calculate by increments the improved volume of solved crimes that could reasonably be expected to result from bigger budgets for detectives.

"But what we found," said Rand's senior vice president Shubert in an interview, "was that the detective budget was actually irrelevant because the detective force had only minuscule effectiveness in the solution of crimes."

A careful data analysis by Rand showed three main sources--none attributable to detective work--in the solving of New York's crimes: when a patrolman on the scene found evidence; when a victim identified an offender; when an offender, apprehended for a different crime, admitted to previous crimes.

New York's fire commission, said Shubert, citing another example of the wrong question, "asked what could be done to correct a dreadful problem--its people were having a terrible time responding effectively to fire alarms, even though the department viewed its firefighting equipment as appropriate to the task."

After Rand studied the situation, Shubert added: "We found flaws in the premise of the basic question. We asked the fire commission, 'What makes you think you are responding with appropriate equipment, and what makes you think you are responding to fires?' "

Shubert's point was that the fire department lacked sufficient data to calculate probabilities and also lacked a method of verifying alarms, while Rand's researchers found that 40% to 50% of alarms were false. The fire department had further failed to set up an information system whereby appropriate equipment could be dispatched to fight fires; every alarm, including a burning wastebasket or a bonfire in a vacant lot, brought a standard response of "three and two," meaning three pumps and two ladders. Rand later established a data base and an information system for the city's use in coping with fires.

New York's housing commission, faced with a perennial housing shortage, decided that new construction was the answer, and asked Rand to suggest ways of expediting such construction.

Rand's researchers looked into the problem carefully and then, as Shubert put it, Rand advised the housing commission: "You are starting with the wrong answer and you are asking the wrong question. If you depend on new construction to solve the housing shortage, you will still be working unsuccessfully on the problem at the turn of the century.

'Real Opportunity'

"But you do have a real opportunity to deal with the shortage by using the existing stock of housing. So the correct question is: What's happening to the existing stock?

"Our calculations," Shubert continued, "demonstrated conclusively that excessively stringent rent control had resulted in sharply reduced maintenance or outright abandonment of existing housing. It followed that the existing stock of housing would be increased if landlords were given the incentive to stay with their properties. As a result of our findings, New York City went to Albany and got the law changed to bring a fairer rate of return to landlords."

Other cities posed problems. Cleveland, for example, found that its smokestack industries were buffeted by ups and downs in the nation's economy, and in 1981 Cleveland's city fathers decided to pursue growth in the service sector. Question to Rand: What steps should Cleveland take to attract service companies and meantime shift away from its dependence on heavy industry?

Answer: You asked the wrong question. Stay with what you do best, i.e., manufacturing, but look for new products to make.

From the moment he came aboard, Don Rice encouraged Rand's Domestic Research Division to embrace a broad range of social problems. Among its current projects:

--A study of career criminals and criminal careers. One objective, said Rice, was "to find out if a small proportion of offenders commit a very large proportion of crimes, meaning in some instances hundreds of felonies a year by the same individual. And on the other side of the coin, whether a great many criminals are relatively inactive.

'New Source of Data'

"Our analysts and researchers pioneered a whole new source of data. By interviewing prisoners and by developing highly structured questionnaires, containing a series of internal checks for reliability, and by cross-checking all this against prisoners' own records, and other sources, the data has turned out to have surprisingly high validity.

"Rand's preliminary finding, based on questionnaires and interviews with 2,400 prisoners in three states, calls attention to the high-rate offenders and points to an important policy alternative--'selective incapacitation,' which has become the buzzword in the justice community.

"It means that if we can identify high-rate offenders, lock 'em up and throw away the key, and at the same time put lesser-rate offenders on probation, then the crime rate can be reduced without any increase in the prison population.

"There are handicaps to identifying increasing numbers of career criminals," Rice conceded. "Many offenders begin as juveniles, but juvenile records are sealed and non-admissible to adult proceedings. Two other items have a high correlation with crime: drug use and bad employment records. There are, however, continuing differences among judges and among lawyers as to whether a person's drug use or employment record can properly be used to achieve 'selective incapacitation.' But our research is going forward."

Underworld Finance

--An analysis of the economics of organized crime, including illegal gambling, to gain insights into the underground world of finance and its effects on the nation's economy. Rand's investigators have noted that organized crime is making use of computers to increase its efficiency.

--A number of studies in the field of health sciences. "A fundamental policy issue facing the country," said Rice, "is: How do we keep health-care costs under control without diminishing the quality of care?" To get at some answers, Rand is conducting large-scale, controlled experiments in various cities. This includes a procedure whereby Rand collects data by providing a variety of health insurance plans--with premiums paid by the federal government--to participants in those cities; the goal is to see how the insurance is used and to measure the effects on individuals' health.

--A continuing probe of geriatrics, exploring such questions as: Precisely how does the medical system deal with older people? Do they receive less care or more care in ratio to their numbers? Rand's researchers know from previous studies that not nearly enough physicians are specializing in geriatric care to accommodate the growing older population.

--An ongoing survey of the quality of public education. In one recent study Rand social scientist Linda Darling-Hammond found that recruits to teaching "are less academically qualified than those who are leaving" for higher-paying jobs, and the number of entrants "is insufficient to meet the coming demand." The coming shortage is so critical, said Darling-Hammond, that unless reforms are made, the least qualified will become "the tenured teaching force for the next two generations of American schoolchildren."

--A continuing study of civil justice, including a probe of monetary awards by juries, where Rand encountered claims that awards were skyrocketing, and counter-claims that awards were reasonable. For Rand it became a quintessential exercise of turning answers into questions, said Shubert. "Our researchers began asking, 'Where did you get your information?' It turned out the claimants on both sides lacked sources. Our people went out and developed a data base covering thousands of cases over a 20-year period from 1960 to 1979.

'Lots of Noise'

"They found that some high-stakes cases--involving product liability, professional malpractice, breach of contract--had made lots of noise and drawn lots of attention, but in fact the median award for run-of-the-mill cases, as expressed in constant dollars, had been essentially flat for 20 years."

At the same time Rand found some extraordinary inequities: People hurt at work or by defective products or medical malpractice received up to four times as much money in successful lawsuits as those who suffered similar injuries in traffic accidents, a finding leading to the suspicion that juries merely assumed "deep pocket" defendants--such as corporations and doctors--were more able to pay.

Rand's principal client remains the federal government's defense establishment (national security research accounts for 70% of Rand's work, with the remaining 30% devoted to civilian projects).

One frequently debated issue among military strategists has involved complex questions of European air defense, including heated discussions of the relative effectiveness of various weapons systems at shooting down enemy aircraft. Rand was asked to examine the problem. Rand Vice President Stephen Drezner, who holds degrees in mathematics, industrial engineering and quantitative analysis, summed up the situation to an interviewer: "We found that most previous studies were concerned with the wrong effectiveness, like the number of aircraft shot down. The right focus is, which weapons system helps most to win the war? Not the air war but the ground war. The classic example of confusing the two issues was Vietnam, where we controlled the air but lost the ground war."

Valued by Washington

Rand's skill at performing interdisciplinary assessments is valued by official Washington. Secretary of State George Shultz, for example, recently spent two days at Rand's headquarters for briefings by Kremlinologists and weapons experts, prior to entering into disarmament talks with Soviet officials in Geneva. The briefings also covered ramifications of the Strategic Defense Initiative (SDI), the "Star Wars" program proposed by President Reagan.

Another measure of the breadth of Rand's interests is underscored by two current projects. Rand has its own accredited educational arm, the Rand Graduate Institute, which trains researchers in Rand's techniques and grants advanced degrees. Recently, in an innovative partnership with UCLA, Rand set up two special academic programs leading to doctoral degrees, one in health policy studies and the other, for aspiring Kremlinologists, in Soviet international behavior.

Rand President Rice said that no matter what is done there, one constant holds true: Someone is always watching.

"And I believe we do well because our staff knows from the outset that there is no way we can hide." Rand's work, whether top secret or open to public inspection, "is reviewed and questioned by others. It isn't just ivory tower stuff that goes into a file drawer, to be forgotten. It's all part of an active communicative process dealing with specific policy problems, and in one form or another most of it is going to be published.

"I think that's good for all of us," said Rice, "because sunlight is the best disinfectant."

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