The revolutionary manner in which McNamara made his decisions… transformed the “expert” career bureaucrat into the “novice” and the “inexperienced” political appointee into the “professional.” By demanding that decisions be made through a cost-effectiveness analysis, McNamara freed himself from the Secretary’s usual dependence on the experience and knowledge of the military officer and the career civil servant. By demanding something that only he and his small personal staff possessed the experience and competence to do, McNamara declared insufficient or invalid, or both, the customary criteria for making decisions and the traditional grounds for justifying them.
That was Robert J Art, author of The TFX Decision, quoted in Clark Murdock’s classic Defense Policy Formulation. Art argued that McNamara used systems analyses and PPBS in order to centralize DoD and “end the evils attributed to service autonomy.”
But it was a false efficiency, as Oskar Morgenstern argued. Morgenstern was a famed economist and created game theory. He also supported John von Neumann in evaluating defense programs, including the first submarine launched ballistic missile the Polaris. Here is Morgernstern:
The cost-effectiveness concept is less useful when it comes to choosing between systems with broadly dissimilar outputs and this is precisely why, unless employed with intelligent regard for its necessary shortcomings, it may act as too sharp a break on the innovating process that is concerned with radically new ideas. One might well ask whether the POLARIS system would have been developed if cost-effectiveness notions has been applied then as they are today…. The authors have grave doubts.
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