Description
This paper demonstrates the profound political consequences accounting can have by examining the emergence of
Planning, Programming and Budgeting (PPB) in the United States as an ostensibly value-free tool for allocating
defense resources during the 1960s. The research shows how PPBassisted with normalizing the preparation for nuclear
war by converting the ‘‘unthinkable’’ into a technical and mundane resource allocation problem, as well as the internal
inconsistencies generated by placing an economically rational frame of representation on a dialectical and political
process. In addition, the paper demonstrates how this accounting technique was strategically deployed by the Secretary
of Defense to centralized decisions over resource allocations within his office
Taming the untamable: planning, programming
and budgeting and the normalization of war
Michele Chwastiak
University of New Mexico, Anderson School of Management, Albuquerque, NM 87131, USA
Abstract
This paper demonstrates the profound political consequences accounting can have by examining the emergence of
Planning, Programming and Budgeting (PPB) in the United States as an ostensibly value-free tool for allocating
defense resources during the 1960s. The research shows how PPB assisted with normalizing the preparation for nuclear
war by converting the ‘‘unthinkable’’ into a technical and mundane resource allocation problem, as well as the internal
inconsistencies generated by placing an economically rational frame of representation on a dialectical and political
process. In addition, the paper demonstrates how this accounting technique was strategically deployed by the Secretary
of Defense to centralized decisions over resource allocations within his o?ce. # 2001 Elsevier Science Ltd. All rights
reserved.
This paper examines the role accounting played
in normalizing nuclear war by transforming it
from a horri?c potentiality to a series of problems
to be solved. It also documents how accounting
was intentionally deployed to shift the balance of
power in the US Department of Defense (DOD)
from the periphery (e.g. the armed services) to the
center (e.g. the O?ce of the Secretary of Defense).
The paper does so by examining the introduction
of Planning, Programming and Budgeting (PPB)
into the DOD by Robert S. McNamara, Secretary
of Defense from 1961 to 1968.
The research shows that McNamara used PPB
to rede?ne the normative and cognitive facets of
the defense political process in such a way that
military expertise (something McNamara lacked)
was discredited while quantitative rationality (a
trait McNamara excelled at) was elevated to the
status of authority and legitimacy. This allowed
McNamara to gain control of the defense acquisition
process by ?rst, sti?ing the Armed Forces’ ability
to use asymmetric information gained through
military experience as a source of power and second,
by forcing the Services to substantiate their require-
ments using his technically rational articulation of
how to best meet defense needs. The research also
demonstrates that PPB assisted with transforming
war from a horrendous occurrence to a series of
problems to be solved by subjecting weapon system
choices to rigorous cost-bene?t analysis. This
caused the economics of defense to be elevated to
a position of supremacy, transforming the planning
for war into a routine resource allocation exercise,
rather than an insane preparation for genocide.
Thus, the paper contributes to the growing body
of literature which views budgeting as a social,
rather than technical process, by demonstrating
how an accounting technique can have profound
political consequences (Burchell, Clubb, Hopwood,
Hughes, & Nahapiet, 1980; Covaleski & Dirsmith,
1986, 1988, 1995; Hopwood, 1985; Miller &
O’Leary, 1987; Preston, Cooper, & Coombs, 1992;
0361-3682/01/$ - see front matter # 2001 Elsevier Science Ltd. All rights reserved.
PI I : S0361- 3682( 01) 00010- 1
Accounting, Organizations and Society 26 (2001) 501–519
www.elsevier.com/locate/aos
Rose, 1991; Wildavsky, 1967, 1978). The research
proceeds as follows. The ?rst section discusses
how discourse shapes our understanding of the
world and hence our actions, demonstrating how
McNamara could enact political changes by
introducing PPB and altering the perspective
through which defense was examined. Second, the
historical conditions under which PPB was intro-
duced and the impact it had on the presentation
and politics of war is presented. Lastly, the con-
sequences of placing a rational, technical frame of
representation on a dialectical, political process
like war is addressed.
1. Representation as a political act
Accounting is a form of representation. Repre-
sentation is, itself, a political act in that descrip-
tions determine our collective social understanding
of a situation and thus, what behaviors are
deemed appropriate and which are not (Eagleton,
1990; Edwards, 1996; Hall, 1982). For instance, at
present, e?ciency is one of the primary means by
which actions are evaluated in a corporation. This
form of assessment validates certain acts (e.g.
expending extra energy on the job) while dis-
couraging others (e.g. socializing during working
hours). However, business entities have not always
been spaces where e?ciency reigned supreme.
According to Miller and O’Leary (1987), the
introduction of standard costing and budgeting in
the early 1900s as a method for describing and
evaluating the performance of inputs was integral
for normalizing corporate e?ciency as a socially
desirable goal and directing workers behavior
towards acts that sustained this normalcy. Thus,
accounting representations can transform the
world we live in by creating new ways of seeing
and norms for social behavior.
If the meanings humans attribute to events are
socially and historically determined, then these
meanings will re?ect the value system necessary to
reproduce the distribution of power in society for,
as Eagleton (1990, p. 37) notes, ‘‘Power succeeds
by persuading us to desire and collude with it. . .’’.
Further, Hall (1982, p.81) illustrates how the
description of a problem frequently contains the
resolution preferred by the dominant race, class,
sex, etc. through reference to the debate concern-
ing black immigrants to Britain as a problem
‘about numbers.’ He notes how entering the
debate on these terms was tantamount to giving
credibility to the white position that racial tension
was the result of having too many black people in
the country, not the result of white racialism.
Hence, it is around the representation of a pro-
blem that the ?ercest debates should occur,
because the possible outcomes will be severely
restricted by the way in which the situation is
described (Chomsky, 1987; Edwards, 1996; Hall,
1982; Latour, 1987).
Further, in order for a particular representation
of a phenomena to gain dominance, alternatives
must be downgraded and marginalized. Once a
particular representation becomes dominant and
issues are debated within the acceptable terms, the
underlying assumptions become instilled as sacred
truths, rather than human constructs (Chomsky,
1987; Edwards, 1996; Hall, 1982; Latour, 1987).
For instance, quanti?ed representations, such as
budgets, cost-bene?t analysis, etc. presuppose an
unequal distribution of wealth in society. Hence,
the more issues of resource allocations, equity, etc.
are addressed through these quantitative techni-
ques, the more existing power relations are ratio-
nalized by making the unequal distribution of
wealth which sustains them appear to be inevitable,
and hence, beyond the realm of possible change.
However, rationalizing existing power relations
is only one consequence of quanti?ed representa-
tions. Budgets, cost-bene?t analysis, etc. have also
succeeded in transforming the political into a tech-
nical zone of control and calculation by forcing
many issues to be discussed in an abstract, scien-
ti?c discourse ostensibly devoid of subjective con-
tent. This has bene?ted the politician, in particular
the bureaucrat, by making the decision-making
process appear to be an objective mechanism
beyond the in?uence of individual human beings
(Covaleski & Dirsmith, 1988; Porter, 1995; Rose,
1991). As Porter notes:
The appeal of numbers is especially compel-
ling to bureaucratic o?cials who lack the
mandate of a popular election or divine right.
502 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
Arbitrariness and bias are the most usual
grounds upon which such o?cials are criti-
cized. A decision made by numbers (or by
explicit rules of some other sort) has at least
the appearance of being fair and impersonal.
. . .Quanti?cation is a way of making deci-
sions without seeming to decide. Objectivity
lends authority to o?cials who have very lit-
tle of their own (1995, p. 8).
In addition, by representing a phenomena
through numbers, knowledge can be lifted up and
separated from its local context, equating diverse
occurrences of similar events and thus, minimizing
the need for intimate knowledge of each situation
(Porter, 1995). As a result, commodities can be
bought and sold by traders who have no knowl-
edge of agriculture, production processes can be
managed by people who have never physically
engaged in the activity, and weapon decisions can
be made by people with minimal knowledge of
war. However, not only do numbers allow admin-
istrators, bureaucrats, traders, etc. to equate and
manage disparate events from great distance, they
also simultaneously create new things (Porter,
1994, 1995); for quantitative techniques work best
if the world they aim to describe can be remade in
their image (Porter, 1995). Thus, statistics can
describe our social reality, in part, because statis-
tics help to create it (Porter, 1994).
In sum, discourses help shape behavior by lim-
iting visibilities and therefore, the range of possi-
ble actions. Hence, a transformation in how a
phenomenon is represented can drastically alter
the phenomenon itself. The remainder of this
paper demonstrates how McNamara was able to
enact profound political changes in the defense
arena and normalize the preparation for nuclear
war by enforcing PPB as the only acceptable
means for discussing the acquisition process.
2. McNamara appointed as Secretary of Defense
When John F. Kennedy was elected President of
the United States in 1960 there was strong poli-
tical clamour for a Secretary of Defense who
would be able to realize the unity amongst the
Armed Forces that the creation of the DOD in
1947 was supposed to, but failed to achieve. Ken-
nedy believed that he found such a person in
Robert S. McNamara (Stubbing, 1986). McNa-
mara, the ?rst non-family member to become pre-
sident of the Ford Motor Company, came from a
new breed of corporate executives that rose to
power during the 1950s. As Halberstam describes
them, they were:
. . . men who had not grown up in the busi-
ness, who were not part of the family but who
were modern, well educated, technicians who
prided themselves that they were not tied to
the past but brought the most progressive
analytical devices to modern business, who
used computers to understand the customers
and statistics to break down costs and pro-
duction (1992, pp. 231–232).
In other words, men who had mastered the art
of isolating the end oriented actions of business
from (by de?nition) irrational norms such as tra-
dition, family loyalty, etc. by assessing business
performance through the use of quanti?able mea-
sures which masked the impact of their decisions
on others and thus, increased their e?cacy by
preventing them from confronting the ethical
implications of their acts (Bauman, 1989).
There were several reasons why the position of
Secretary of Defense needed to be ?lled by a tech-
nocrat at this point in time. First, the Eisenhower
Administration had relied exclusively upon the
doctrine of ‘‘massive retaliation’’ to ostensibly
deter communist aggression. In order to make the
threat of massive retaliation viable, the Eisen-
hower Administration engaged in a huge build-up
of nuclear weapons (Bottome, 1986; Kaplan, 1983;
Raskin, 1970, 1979). Second, while Eisenhower
imposed limits on how much the Services could
spend by establishing budget ceilings, once the
funds were allocated, the Services were virtually
free to spend the money in anyway they chose
(Kaufmann, 1964; Raskin, 1979). The combina-
tion of an exclusive reliance on nuclear weapons
for defense and a laissez-faire management style
resulted in the Armed Forces vigorously compet-
ing with one another to get a larger portion of the
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 503
strategic mission (Kaufmann, 1964; Murdock,
1974). This arms race amongst the Armed Forces
in the USA produced a proliferation of weapon
systems and a dramatic shift of all the services to
high-tech weaponry (Armacost, 1969; Canan,
1975; Markusen & Yudken, 1992). However, the
human beings who were supposedly in charge of
the technological transformations taking place in
weaponry during this time period could not keep
pace with the rapid rate of change. Reasons, ratio-
nales and strategies were lagging behind technolo-
gical innovations (Canan, 1975). According to Dr.
Wiesner, Special Assistant to the President for
Science and Technology from 1961 to 1964:
The dizzying pace of change [during the
1950s] was very disorienting both for the
professional strategists and for the civilian
leadership in the Executive Branch of the
government and the Congress. Even the aca-
demic panelists who studied strategic pro-
blems and journalists interested in national
security a?airs could not keep up with the
rapidly evolving situation (quoted in Canan,
1975, pp. 221–222).
Thus, in sum, by the end of the 1950s, techno-
logical innovations in nuclear warfare were out-
stripping human control and creating an extremely
dangerous and volatile situation. Further, by 1959,
64% of Americans considered nuclear war to be
the nation’s most urgent problem (Boyer, 1985, p.
355). This fear of nuclear war was fuelled by a
series of historical events. In September, 1949, the
Soviet Union exploded their ?rst atomic bomb,
destroying the US’s atomic monopoly. This was
followed by the executive decision to develop and
produce the hydrogen bomb, making the potential
to destroy the world an actuality. In addition,
intercontinental ballistic missiles and the digital
computer became operational realities during the
1950s, creating the conditions that made it possible
to kill millions by simply pushing a button. Feed-
ing the nuclear anxieties was a heavy govern-
mental emphasis on civil defense, while the
atmospheric testing of nuclear weapons created a
fallout scare (Boyer, 1984, 1985; Canan, 1975;
Tyler May, 1989). Further, as Boyer notes:
. . . the cultural ethos of the 1950s and early
1960s, held that the nuclear arms race was a
fundamentally irrational, unstable, and
highly dangerous process that might at any
time escape from control through human
error, technical malfunction (the Fail-Safe
syndrome), or a fateful escalation by a
nuclear power facing defeat in a non-nuclear
con?ict (1984, p. 842).
Hence, the extreme dangers associated with fal-
lible human beings possessing an infallible weapon
were the primary emphasis in cultural and social
representations of nuclear weapons during the
1950s. Given the deadliness of nuclear weapons
and the populations’ profound fear of them, a
situation in which technological innovations were
outstripping human control could not be tolerated
for long. If the Cold War was to maintain a sense
of legitimacy, an administrative structure that lent
an air of rationality and logic to the weapons
acquisition process and hence, gave the appear-
ance that the arms race could be managed and in
so doing made less dangerous and more sane was
essential. Thus, when Kennedy looked for a
Secretary of Defense he did not seek an individual
who managed by instincts, but rather one who
could impose organizational rationality on
‘‘nuclear weapons, thermonuclear weapons,
napalm, millions of men, ri?es, chemical weapons,
pencils, missiles, promotions, counterforce, air-
craft carriers, anthrax virus and counter-insur-
gency’’ (Raskin, 1970, p. 66). In other words, he
sought ‘‘a supreme accountant’’ and found one in
Robert S. McNamara (Halberstam, 1992, p. 227).
3. McNamara meets the RAND Corporation
One of the preconditions McNamara set before
accepting the o?er from Kennedy was that he
could choose his own subordinates (McNamara,
1996). In his search for someone to ful?ll the
position of Pentagon Comptroller, several people
mentioned Charles Hitch, the director of the eco-
nomics division at RAND. RAND, a private
think tank composed predominantly of civilian
military strategists, was created shortly after
504 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
World War II to help the Armed Forces incorpo-
rate nuclear weapons into their tactical plans
(Kaplan, 1983).
Nuclear weapons not only changed the destruc-
tiveness of war, but the very nature of war itself.
Previous inventions were limited enough in scope
to allow for timely adaptations by opponents.
However, if atom bombs were used in a war, the
destruction would be so immediate that there
would be no time to adjust (Herkin, 1987; Kaplan,
1983). Thus, nuclear weapons minimized the value
of combat experience for planning future war
?ghting scenarios and for the ?rst time in US his-
tory the ?eld of military strategy was opened to
non-soldiers (Trachtenberg, 1991). As a result, a
new breed of military planners — civilian strate-
gists who were better versed in economics and
mathematics than military expertise — engaged in
inventing a new type of warfare — an intellectual,
paper war (Kaufmann, 1964). Given that nuclear
war was unencumbered by empirics, these strate-
gists did not have to conform their thinking with
reality but could instead help shape the new reality
of living with the bomb (Sherwin, 1983).
Hence, it was two RAND scientists, Merrill
Flood and Melvin Dresher, who with the aid of
Von Neumann and Morgentern’s theory of games,
devised a game entitled the Prisoner’s Dilemma,
which became the primary vehicle by which the
nuclear arms race between the United States and
the Soviet Union was rationalized (Kaplan, 1983;
Poundstone, 1992). The Prisoner’s Dilemma
showed that both the USA and the USSR would
be better o? if they agreed to a treaty to stop
building nuclear armaments. However, this move
required trust and because the enemy might
cheat — build more weapons and go onto win —
continuing to compete was the only solution
(Kaplan, 1983).
Thus, game theory helped to rationalize and
normalize the Cold War by elevating distrust and
the fostering of international tensions to truisms,
making the arms race appear to be an inevitable
consequence of human nature. Further, game the-
ory assisted with providing the abstract discourse
by which ‘‘thinking about the unthinkable’’
became possible. Game theory accomplished this
by transforming nuclear war into a problem of
arithmetic, calculus and probability, which made
the danger seem so theoretical and abstruse as to
become almost non-existent (Boyer, 1984; Kaplan,
1983). Plus, in game theory, the weapons them-
selves are the primary referent point (Cohn, 1987;
Schell, 1982). This is illustrated below in Congres-
sional testimony by RAND analyst Dr. Albert
Wohlstetter regarding the Anti-Ballistic Missile
System (ABM), in which his only concern was
whether or not the ABM would protect the pri-
mary land based ballistic missile at the time, the
MINUTEMAN:
My remarks, however, center, so far as the
second strike function of ABM is concerned,
on the problem of protecting MINUTE-
MAN.. . .I have tried with some e?ort to
reconstruct various numerical proofs recently
presented or distributed to the Congress that
purport to show our MINUTEMAN will be
quite safe without extra protection.. . . This
seems to me a sound way to supplement the
protection of the MINUTEMAN in a period
when we can expect it to be endangered.
. . .(Wohlstetter, 1969, pp. 668–670).
Hence, as Schell (1982, p. 32) states, ‘‘. . . strate-
gic theory seems to have taken on a weird life of
its own, in which the weapons are pictured as
having their own quarrel to settle, irrespective of
mere human purposes.’’ By making the weapons
the focus of attention, the war planners were able
to elevate themselves to a position of user and
actor, not victim, enhancing their ability to think
about the unthinkable (Cohn, 1987; Nash, 1980).
Thus, during the 1950s, as a result of the success
of game theory, the RAND strategists gained
considerable credibility as experts on strategic
issues.
In order to decide whether or not to o?er Hitch
the position of Pentagon Controller, McNamara
read Hitch and McKean’s book, The Economics of
Defense in the Nuclear Age, and became immedi-
ately enamoured with Hitch’s ideas (Kaplan,
1983). According to Kaplan:
Here was someone who was doing the same
sort of thing that McNamara had done
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 505
during the war — applying principles of
microeconomics, operations research and
statistical analysis to defense issues — but
doing it on a much broader scale, covering
the whole gamut of national security, includ-
ing comparing and choosing weapons
systems, restructuring the defense budget,
formulating military strategy (1983, p. 252).
RAND had been employing the techniques of
systems analysis for nearly a decade in its e?orts
to relate the Air Force’s military needs to budget
constraints (Hitch, 1969; Novick, 1969; Sanders,
1973).
1
As early as 1949, the analysts at RAND
recognized the economic implications of the Cold
War and as a result believed that the traditional
military characteristics for measuring a weapon
system’s e?ectiveness (e.g. for aircraft, higher, fas-
ter, more payload) were no longer adequate.
Rather, the drain a weapon system placed on the
US economy as well as the enemy’s reaction to it
had to be considered when assessing the desir-
ability of additional armament (Novick, 1969).
Thus, systems analysis elevated the economics of
defense to a position of primacy in the weapon
acquisition process and as a result, was a method
for rede?ning the defense problem in such a way
that the criteria of rational economic choice,
rather than professional military judgement,
applied.
McNamara o?ered Hitch the job of Pentagon
Comptroller and Hitch accepted. Hitch brought
with him to the Pentagon several RAND analysts
including Alain Enthoven, who would become the
?rst Assistant Secretary of Defense for Systems
Analysis in 1964, and Henry Rowan, who became
Deputy Assistant Secretary of Defense for Inter-
national A?airs (Digby, 1989). The marriage of
the RAND Corporation to the O?ce of the
Secretary of Defense (OSD) insured that a
‘‘rational organizational discourse’’ would prevail
over decision making in the civilian sector of the
DOD (Murdock, 1974). The problem faced by
McNamara was how to thrust this discourse on
the Armed Forces, and budgeting became the
strategic tool by which he would accomplish this.
4. Planning, programming and budgeting
McNamara believed that there were two styles
to management, a passive method in which the
chief administrator played a judiciary role and an
active approach in which the chief administrator
provided e?ective leadership (Kaufmann, 1964;
Stubbing, 1986). McNamara concluded that in
order to achieve the goal set for him by President
Kennedy — ‘‘security for the nation at the lowest
possible cost’’ — he would have to employ the
latter strategy in managing the DOD (McNamara,
1996, p. 23). Upon assuming his responsibilities as
Secretary of Defense, McNamara immediately
recognized the power inherent in dominating the
budget process and quickly moved to establish
himself as ‘‘czar’’ in this arena by operationalizing
PPB (Sanders, 1973; Schelling, 1971; Stubbing,
1986). As Schelling (1971, p. 386) notes,
Some people have more instinct than others,
or better training than others, for using the
purse strings as a technique of management
and a source of authority; but almost anyone
concerned with administration sooner or later
discovers that control of budgetary requests
and disbursements is a powerful source of
more general control.
Prior to McNamara, the military planning and
budgeting processes were performed separately
with plans expressed in terms of outputs (e.g.
missions, weapon systems, forces, etc.) and bud-
gets expressed in terms of inputs (e.g. personnel,
operations, maintenance, construction, etc.;
Enthoven, 1963; Murdock, 1974). Because the
budgeting and planning processes were separated,
management did not have the information needed
to determine the ?nancial consequences of alter-
native plans, and hence, could not conclude which
weapon systems, forces, etc. would provide the
1
According to Murdock (1974), systems analysis is a ?ve-
step process which includes de?ning objectives, describing
alternative ways of achieving the objectives, determining the
costs associated with each alternative, creating a mathematical
model of the decision situation with the assumptions clearly
stated, and clarifying the criterion by which the preferred
alternative will be chosen.
506 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
most e?cient means of carrying out a particular
mission (Testimony of Hitch, US Senate, 1961).
PPB overcame this problem by restating the bud-
get in terms of outputs and therefore, allowed the
costs of alternative methods of accomplishing
various tasks (e.g. di?erent combinations of
weapons systems and forces) to be compared
(Testimony of Hitch, US Senate, 1961). According
to Enthoven:
The key to the Programming System is deci-
sion making by program elements and major
programs; this is, by the outputs of the
Department rather than by the inputs. A
program element is an integrated activity
combining men, equipment, and installations
whose e?ectiveness can be related to our
national security policy objectives. The list
included B-52 wings, infantry battalions, and
combatant ships, taken together with all the
equipment, men, installations, and supplies
required to make them an e?ective military
force. The program elements are assembled
into major programs which contain inter-
related elements which closely complement
each other or are close substitutes for each
other and which must therefore be considered
together in arriving at top-level decisions
(1963, pp. 416–417).
For example, on June 1, 1961 the program
package for the Central War O?ensive Forces (e.g.
strategic forces), whose mission was to deter
Soviet aggression through the threat of nuclear
war, contained the following program elements:
Aircraft forces (e.g. B-52, B-58, etc.); Missile for-
ces, land-based (e.g. ATLAS, MINUTEMAN,
etc.); Missiles, sea-based (e.g. Polaris Submarines,
FBM submarines); Command, control and com-
munication; Headquarters and command support
(Testimony of Hitch, US Senate, 1961, p. 1039).
Because the alternative missile basing systems are,
to a certain degree, substitutes for one another,
according to the logic of PPB, the number of B-
52s acquired should depend upon the number of
Polaris submarines purchased, as well as the
number of MINUTEMAN procured, with the
greatest emphasis placed on the weapon system
which accomplished the strategic mission in the
most cost-e?ective manner (Testimony of McNa-
mara, US Senate, 1961). Hence, PPB rationalized
the weapons acquisition process by articulating
missions for the DOD, proposing alternative force
structures for these missions, and choosing among
the alternatives based on a speci?ed objective —
cost-e?ectiveness. The Armed Services were
required to prepare their budget requests using
PPB beginning with the 1963 ?scal year defense
budget and each year thereafter.
5. Analysis versus military expertise
As stated previously, all knowledge is socially
and historically determined. Hence, in order for
one representation of an event to be regularly
used, other signi?cations must be marginalized
and downgraded. PPB privileged rationality and
analysis over military expertise as a means for
knowing defense and in so doing, made a radical
break from the past. Kaufmann relates the limita-
tions the Secretary of Defense labored under prior
to McNamara and PPB as follows:
Under the postwar organization of the mili-
tary establishment the Secretary of Defense
presumably had the authority to establish a
strategic concept and require agreement on
force size and composition. But he labored
under several severe handicaps. He lacked
any independent basis on which to assess
what the Services were demanding. And, in
the American tradition, he tended to assume
that it was impossible for him to understand,
much less learn, the art of military planning.
That was a mystery that could only be per-
formed by the military sta?s themselves. To
argue with veteran commanders in these
circumstances seemed presumptuous and
dangerous. Military judgement was sacro-
sanct (1964, pp. 19–20).
In order for McNamara to privilege his way of
knowing defense (PPB) over the military’s, the
system analysts had to discredit the preconceived
notion that military experience alone provided the
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 507
backround for understanding security matters. In
order to do so, the systems analysts argued that
because the Cold War required the threatened use
of a weapon for which there was no combat
experience, Cold War preparedness problems
could only be addressed by employing abstract,
analytical models, and it was the systems analysts,
not the military, that maintained the expertise in
this realm (Enthoven & Smith, 1980; Kaplan,
1983). Further, given that the purpose of inno-
vations in military technologies was to deter wars
by rendering the opponent’s weaponry obsolete,
war was increasingly becoming a process of man-
aging technological change. The system analysts
argued that technological change could be more
e?ectively managed by the careful analysis inher-
ent in PPB rather than the heuristic judgement
of the military commanders (Enthoven & Smith,
1980; Palmer, 1978).
In addition, the system analysts elevated ration-
ality and analysis over military expertise by
arguing that decisions based on authority, experi-
ence or simple intuition lacked rigour and preci-
sion because the precepts underlying the choice
were unexamined and the process by which the
data was linked to the decision was not explicated
(Palmer, 1978). Thus, governmental actions pre-
dicated on authority and intuition were classi?ed
by the systems analysts as ‘‘uninformed, arbitrary,
and based on unenlightened opinion’’ (Rowen,
1969, p. 613). On the other hand, the systems
analysts used the scienti?c method to arrive at
conclusions. The bene?ts of the scienti?c method
were explicated by Enthoven while testifying
before the US Senate as follows:
First, the method of science is an open, expli-
cit, veri?able, self-correcting process. It com-
bines logic and empirical evidence. The
method and tradition of science require that
scienti?c results be openly arrived at in such a
way that any other scientist can retrace the
same steps and get the same result. Applying
this to weapon systems and to strategy would
require that all calculations, assumptions,
empirical data, and judgements be described
in the analysis in such a way that they can be
subject to checking, testing, criticism, debate,
discussion, and possible refutation. . . . Sec-
ond, scienti?c method is objective. Although
personalities doubtless play an important part
in the life of the Physics profession, the science
itself does not depend upon personalities or
vested interest (Enthoven, 1969, p. 567).
The systems analysts further discredited military
expertise by arguing that the Services were incap-
able of creating an e?cient defense establishment
because their decisions were biased by par-
ochialism. Given that the systems analysts were
not bound by a particular service tradition, they
perceived themselves as possessing the objectivity
needed to perform the analysis that would lead to
a cost-e?ective defense (Enthoven & Smith, 1980;
Hitch & McKean, 1963).
In sum, the system analysts, having come from
RAND, were aware of how a new class of civilian
strategists had been empowered by creating a new
type of warfare based on abstract, analytical
games. The system analysts attempted to repro-
duce this power within the DOD itself by elevating
their way of knowing defense (e.g. abstract analy-
sis) to a position of privilege. By changing the
discourse, the system analysts changed visibilities
in defense in such a way that their approach
appeared to be unquestionably reasonable and
sound. Thus, initially Congress overwhelmingly
approved of PPB, bestowing compliments on
McNamara such as follows:
The Chairman: Mr. Secretary, I want to
complement you again for your splendid
statement. You have made such an out-
standing statement, so logical, so clear . . .
(House of Representatives, 1962, p. 3185) Mr.
Philbin: First, I would like to complement
you very much on that ?ne statement that
you made. . . . I think it is really unprece-
dented. I have never seen one quite like it.
Both in scope and quality it was really superb
(House of Representatives, 1962, p. 3190–
3191). Mr. Price: Mr. Secretary, I not only
want to join my colleagues in complimenting
you on your ?ne presentation made here, but
I also want to compliment you and commend
you for the forthright and commendable
508 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
manner in which you have answered your
questions this morning, indicating an amazing
grasp of this Defense Establishment setup, in
just the period of 1 year. In my opinion, you
must be some kind of a human IBM machine.
I don’t know how you do it (US House of
Representatives, 1962a, p. 3195).
However, once the political rami?cations of
PPB, as discussed in the following section, became
apparent, Congress’s praise was converted into
apprehension. For example, during the Senate
hearings on PPB in 1967, Senator Jackson
debunked the ostensible objectivity of systems ana-
lysis by stating, ‘‘Cost-utility analysis can be used
as easily to justify a decision as to make a sensible
choice. It can be employed as a weapon to try to
overwhelm and beat down other viewpoints’’ (US
Senate, 1967b, p. 220). Further, the fact that the
data and analysis used by McNamara to make
decisions was considered proprietary information,
and therefore not accessible to Congress, became
an issue of concern. The Initial Memorandum for
the Senate hearings on PPB stated:
Congress, too, may not welcome all the
implications of PPBS. The experience to date
does not suggest that the Department of
Defense is likely to place before Congres-
sional committees the analyses of costs and
bene?ts of competing policies and programs
on which the Department based its own
choices. Without such comparisons, however,
Congress will be in the dark about the rea-
sons for selecting this policy over that (US
Senate, 1967a, pp. 15–16).
Given that Congress did not have access to
the data used by McNamara to make decisions,
it was di?cult for members to argue with the
immanently rational results of PPB. As illustrated
by the following dialogue, which took place
between Representative Sikes and McNamara,
regarding the MINUTEMAN versus the
POLARIS, the logical forcefulness of PPB lent
an air of scienti?c certainty to McNamara’s
choices, making it problematic for others to
challenge him:
Mr. Sikes. You recommend substantially more
MINUTEMAN and comparatively fewer
POLARIS submarines. . . .What were the
guidelines that caused you to use this level?
Secretary McNamara. The factors determin-
ing the mix of POLARIS and MINUTEMAN
were: (a) the requirements for an invulnerable
force and the quantity of such a force required
to achieve certain units of target destruction;
and (b) the relative costs of achieving that
force. Now POLARIS is a bit more expensive
than the MINUTEMAN. Mr. Sikes. Is cost
the basic di?erence?. . . Is that the principal
reason for selecting the MINUTEMAN?
Secretary McNamara. No. If there were no
cost di?erential then I think we would prob-
ably select more POLARIS because it is prob-
ably at least in the short run more invulnerable
than MINUTEMAN. But there is a cost dif-
ference and therefore it seems wise to select as
many MINUTEMAN as possible in relation
to the requirement for invulnerability and
for a force of a given size, and that was
the sequence of logic through which we
went and it eventually resulted in these
conclusions (US House of Representatives,
1962b, pp. 24–25).
In addition, the Armed Forces greatly resented
the intrusion of systems analysts into military
planning (Kaplan, 1983; Murdock, 1974; Sanders,
1973). For instance, in the US Naval Institute
Proceedings of 1964, an active duty naval
o?cer felt compelled to express his concerns
regarding the systems analysts rise to power as
follows:
Young civilian intellectuals, with little or no
experience in war or leading men, with no sig-
ni?cant non-academic accomplishments in any
area, with no ?rst-hand knowledge of what
ships, aircraft and armies (along with their
associated weapons and support) are like,
with no real appreciation of the operational
environment, are largely replacing profes-
sional military o?cers as the primary source
of advice on the great defense decisions
(quoted in Sanders, 1973, p. 150).
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 509
Hence, even though the Kennedy Administra-
tion greatly increased the defense budget, this did
little to appease the military’s resentment at being
stripped of the power to allocate their own funds.
Thus, the service’s evasion of OSD policy
remained a distinct possibility throughout the
1960s and was taken into consideration by the
systems analysts when making recommendations
(Murdock, 1974; Schlesinger, 1974).
2
5.1. PPB and the centralization of power
As stated previously, prior to McNamara, the
military planning and budgeting processes were
performed separately and as a result, the informa-
tion needed to determine the ?nancial con-
sequences of alternative plans was not available.
PPB overcame this problem by combining plan-
ning with budgeting. While the integration of
planning and budgeting was immanently reason-
able, it moved the con?ict between military need
and budgetary constraint from Congressional
committee to the DOD, itself (Joseph, 1981; Pal-
mer, 1978). This exacerbated the trend that had
started with the establishment of the National
Security State in 1947 towards centralizing power
within the executive branch of the government and
led one scholar to express the fear that PPB con-
tained a ‘‘contempt for democratic values and
processes’’ (Mosher, 1969, p. 590).
3
However, shifting power away from Congress
towards the executive branch of the government
was not the only political rami?cation of PPB, it
also in?uenced the balance of power in the DOD
itself (Joseph, 1981; Mosher, 1968; Murdock,
1974; Palmer, 1978; Sanders, 1973; Schelling,
1971). Under PPB military requests were eval-
uated in terms of function, rather than the Armed
Service putting forth the appeal, allowing similar
purpose weapon systems to be compared (Con-
gress and the Nation, 1969). As Hitch explained:
A new program, like the POLARIS in the
strategic o?ensive area, would be submitted
by the service in the strategic o?ensive pack-
age. In the review it would tend to be com-
peting directly not with other Navy programs,
but with the other means of carrying out the
strategic o?ensive mission. It would not be
compared with the antisubmarine warfare
activities of the Navy; rather it would be
compared with other strategic systems such as
Air Force bombers and land-based missiles
(US Senate, 1961, p. 1013).
Because decision making under PPB was based
on comparisons which spanned traditional service
lines, the ?nal budget could only be put together
by the Secretary of Defense (Kaufmann, 1964;
Wildavsky, 1967). Thus, as Wildavsky (1967, p.
390) notes, in relation to PPB, ‘‘A more useful tool
for increasing (a chief executive’s) power to con-
trol decisions vis-a` -vis his subordinates would be
hard to ?nd.’’ Given that PPB shifted power over
resource allocations to the highest level in the
organization, it allowed McNamara to gain control
over the Armed Forces through funding decisions.
However, while centralization of power was
endemic to the techniques of PPB, PPB also
changed the balance of power between the Armed
Services and the OSD by in?uencing the organi-
zational discourse. McNamara insisted that the
Armed Services base their force structure planning
on systematic analysis. Not only did he withhold
the ultimate yes or no decision from the military,
but in addition, he dictated to the Armed Services
the type of information that would serve as the
basis for his decision (Murdock, 1974). Thus,
McNamara forced the military to argue their case
on his terms, with his language and his style of
decision making (Sanders, 1973). As a result,
throughout the 1960s, defense debates increasingly
became clothed in the language and style of
2
Murdock (1974) relates how Enthoven could have intel-
lectually defended a ‘‘thin’’ anti-ballistic missile defense system
(ABM). However, he did not believe that the OSD could pre-
vent the services from expanding it if approved and thus,
recommended that no ABM be built.
3
The National Security State, composed of the National
Security Council, the Central Intelligence Agency, the Atomic
Energy Commission, and the Department of Defense, was
established to manage the Cold War and was given discretion
to function above the laws of the USA and protected from
democratic control by being accountable to no one but the
executive branch of the government (Raskin, 1991; Udall,
1994).
510 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
system analysis (Business Week, 1969; Gross,
1971: Sanders, 1973; Wildavsky, 1967). As Art
notes:
The revolutionary manner in which McNa-
mara made his decisions (revolutionary,
that is for the Defense Department), trans-
formed the ‘‘expert’’ career bureaucrat into
the ‘‘novice’’ and the ‘‘inexperienced’’ poli-
tical appointee into the ‘‘professional.’’ By
demanding that decisions be made through a
cost-e?ectiveness analysis, McNamara freed
himself from the secretary’s usual dependence
on the experience and knowledge of the mili-
tary o?cer and the career civil servant. By
demanding something that only he and his
small personal sta? possessed the experience
and competence to do, McNamara declared
insu?cient or invalid, or both, the customary
criteria for making decisions and the tradi-
tional grounds for justifying them (1968,
pp. 161–162).
As noted previously, outcomes will be restricted
by the way in which the situation is described. By
forcing the services to defend their budget requests
through cost-bene?t analysis, McNamara ensured
that his preferred solution, the most analytically
cost-e?ective, would prevail. Thus, through intro-
ducing PPB, McNamara was able to prescribe the
acceptable discourse for defense decision making
and in so doing dictate the decisions.
The centralizing tendency of PPB was one of the
major concerns voiced by Congress during the
PPB hearings in 1967. For example, the Initial
Memorandum for the hearings stated:
A major goal of PPB, according to Charles
Hitch, was to enable the Secretary of Defense
to run his Department on a uni?ed basis, and
PPB has meant a greater centralization of
decision-making and control. A consequence,
whether intended or not, is that it may be
more di?cult for voices of doubt and dissent
at lower levels to make themselves heard at
high levels. It means, among other things, less
bargaining between OSD and the service
departments and the services. This in turn
makes it easier for OSD to ignore or simply
not to hear things it would rather not hear —
other beliefs about technological change, dif-
ferent estimates of costs and gains, con?icting
views of the contingencies and uncertainties.
Defense programs may therefore be more
nearly tailored to one estimate of the future
and to one cost-bene?t calculus than in a
period when decision making was less cen-
tralized (US Senate, 1967a, p. 12).
The way in which PPB did sti?e dissent and
ignore con?icting points of view was evident, for
example, in McNamara’s decision to forego a
nuclear-powered aircraft carrier in favor of an oil-
fueled one. McNamara rationalized his decision
by arguing that a nuclear powered carrier would
cost one third to one half more to construct and
operate than a conventionally powered carrier and
that the operational bene?ts derived from nuclear
power did not justify the higher costs (House of
Representatives, 1962b, p. 67). However, the sys-
tems analysis upon which McNamara based his
decision relied only upon variables that could be
quanti?ed. As the following Congressional testi-
mony by Vice Admiral H.G. Rickover illustrates,
it is frequently the non-quanti?able variables that
are the most important:
In the cost-e?ectiveness studies performed by
the analysts, they compute numerical values
for the e?ectiveness of nuclear power. How-
ever, before they make the calculation, they
make certain simplifying assumptions in
order to be able to do the arithmetic. These
assumptions just happen to eliminate from
consideration the principal military reasons
for wanting nuclear power in the ?rst place.
The analysts generally start their calculations
with the assumptions that oil for the conven-
tional ships is readily available whenever and
where-ever it is needed, and that the logistic
support forces will not be subject to attack.
Now, if the Navy could be assured that they
would not be asked to perform missions
where it would be di?cult to get oil to our
ships, there would be less need for nuclear
propulsion. However, the Navy cannot a?ord
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 511
to count on such a euphoric situation, since
the history of war is replete with examples of
major military defeats that were brought
about by the inability of military forces to
maintain a supply of propulsion fuel to the
forces in combat (Rickover, 1969, p. 601).
In sum, PPB radically changed the discourse of
defense acquisition and in so doing changed the
process itself. Prior to McNamara, defense acqui-
sitions were justi?ed based on military necessity.
PPB completely disabled this rationalization and
thus, sti?ed the Armed Forces’ ability to use their
asymmetric information gained through experi-
ence as a source of power. By forcing the services
to justify their requests using a technique which
only McNamara and his sta? of systems analysts
possessed the expertise to employ, McNamara was
able to de?ne what was relevant and important in
such a way that he gained the information advan-
tage and hence, control of the process.
6. Taming the untamable
As stated previously, by the end of the 1950s
technological developments in nuclear weapons
were outstripping human control. The innovative
process needed to be slowed down if the arms race
with the Soviet Union was to retain its legitimacy.
PPB provided a mechanism by which this could be
accomplished in that its ostensible purpose was to
rationalize defense expenditures by aligning tech-
nological developments with stated military needs.
Hence, only advancements in weaponry that sen-
sibly ?t into the missions of the DOD would be
pursued. However, rejecting weapon systems that
did not logically ?t into a mission was not the only
way PPB slowed down nuclear developments.
According to Hitch (1969, p. 578), ‘‘The function
of systems analysis is to get dollars into the calcu-
lations at an earlier stage — into the planning
process, into the evaluation of alternative ways
of achieving a military objective.’’ Getting costs
into the analysis at an early stage was a powerful
tool for decelerating the arms race, for once the
need, cost and e?ectiveness of each proposed
weapon system was carefully examined and
compared with alternatives, certain technologies
would not make it through (Murdock, 1974;
Sanders, 1973).
However, forcing dollars to be considered at an
early point in the decision-making process not
only decelerated the arms race, it also elevated the
economics of defense to a position of superiority.
This was a radical change for the DOD, because
prior to McNamara military o?cers had suc-
ceeded in arguing that dollars did not matter when
the survival of the nation was at stake. Their
appeals to Congress for funding were primarily
emotive with their justi?cations relying purely on
military necessity (Fitzgerald, 1972; Kaufmann,
1964; Sanders, 1973; Sapolsky, 1972). However,
an acquisition process guided by con?ict and bar-
gaining showed the extent to which interested
human beings participated in decision making.
According to the logic of game theory, the arms
race was not controlled by fallible human beings
but by technical, non-partisan forces inherent in
nature. The acquisition process had to be made
to appear to be guided by these same impartial
forces in order for the physical preparation for
Armageddon to be sustained by the game theore-
tic justi?cation.
By elevating the economics of defense to a posi-
tion of superiority, PPB ensured that the acquisi-
tion process would be discussed within the
rhetoric of rational economic choice. In rational
economic choice models, the structural features of
an economy (e.g. supply and demand) are
endowed with life. Thus, within this perspective, it
is the characteristics of an economy, not
humans, that determine what will be produced
and what will not. Hence, PPB made humans
appear to be super?uous to the weapons acquisi-
tion process by fetishizing policy objectives (e.g.
Mutually Assured Destruction), making it seem as
if weapon systems were chosen by national goals,
not interested human beings. The extent to which
PPB fetishized policy objectives and made the
arms race appear to be free from human inter-
est is illustrated in the following Congressional
testimony by Enthoven in which he laid out the
‘‘objective’’ criteria by which US strategic forces
were established:
512 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
Our basic policy objectives and Soviet strate-
gic nuclear capabilities are the main factors
that determine the size and kind of forces we
should have. Many criteria are available for
measuring the ability of our forces to meet
the need established by these two factors. We
could use megatonnage, payload, or simply
numbers of delivery systems. However, these
are input measures which tell us what we
have, not what we can do. We prefer to con-
centrate on outputs to measure e?ectiveness.
To determine how well our strategic o?ensive
forces will achieve their objectives, we must
know their ability to destroy particular kinds
of targets. We then relate this target destruc-
tion capability to our basic objectives in order
to measure the adequacy of our forces (US
Senate, 1968a, p. 120).
Thus, PPB made it appear as if defense ques-
tions could be subsumed under an all-purpose
military science in which the choice variables were
given by nature and the e?ects of alternatives
could be stated with certainty. Thus, choosing the
appropriate nuclear weapons became a matter of
routine calculation. This allowed McNamara to
discuss nuclear weapons in a discourse that was
free of emotions or human concerns. Thus, just as
game theory converted nuclear war into a problem
of arithmetic, calculus and probability, PPB con-
verted the choice of nuclear weapons into the
same. This is illustrated by McNamara’s cool and
calculated description of how strategic retaliatory
forces were chosen:
In contrast to most other military require-
ments, the requirement for strategic retalia-
tory forces lends itself rather well to
reasonably precise calculation. A major mis-
sion of these forces is to deter war by their
capability to destroy the enemy’s warmaking
capabilities [deleted]. With the kinds of
weapons available to us, this task presents a
problem of reasonably ?nite dimensions,
which are measurable in terms of the number
and type of targets or aiming points which
must be destroyed and the number and types
of weapon delivery systems required to do the
job under various sets of conditions. The ?rst
step in such a calculation is to determine the
number, types and locations of the aiming
points in the target system. The second step is
to determine the numbers and explosive yields
of weapons which must be delivered on the
aiming points to insure the destruction or
substantial destruction of the target system.
The third step involves a determination of the
size and character of the forces best suited to
deliver these weapons . . . Clearly, each of
these crucial factors involves various degrees
of uncertainty. But these uncertainties are not
completely unmanageable. By postulating
various sets of assumptions, ranging from
optimistic to pessimistic, it is possible to
introduce into our calculations reasonable
allowances for these uncertainties (House of
Representatives, 1962a, pp. 3171–3172).
In the USA, the fear of nuclear weapons culmi-
nated during the Cuban Missile Crisis of 1962 and
started ebbing thereafter, remaining fairly dor-
mant until the 1980s. Several reasons have been
suggested as to why this occurred including the
Limited Test Ban Treaty of 1963, which literally
took nuclear weapons underground and out of
sight, the promotion and acceptance of the
‘‘peaceful atom’’, and the eruption of a hot war in
Vietnam. However, the ebbing of fear has also
been attributed to the gradual adaptation of the
world to nuclear weapons, as well as the sense that
the matter was being taken care of by reliable
experts (Boyer, 1984; Lifton & Markusen, 1990).
The abstract, technically rational discourse of PPB
contributed to the latter.
7. Discussion
While PPB contributed to normalizing nuclear
war by converting the arms race into a routine and
mundane resource allocation problem, such a
frame of reference distorted visibilities and created
even more internal inconsistencies in the logic of
national defense. PPB presupposed and therefore,
eliminated from critical appraisal, the assumption
that security could be achieved by perfecting the
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 513
art of killing. However, this occurred at exactly
the same time that the Cuban Missile Crisis and
the Bay of Pigs demonstrated that military might
was not a successful means for achieving geopoli-
tical goals (Barnet, 1972; Lifton & Falk, 1982).
Thus, PPB assisted with lending militarism cred-
ibility at a point in time when its ine?ectiveness
was becoming apparent and hence, should have
been deeply questioned.
Further, PPB assumed that the ine?cient allo-
cation of resources was the primary problem pla-
guing the defense establishment. However, given
the fact that by 1961 the USA possessed enough
nuclear weapons to destroy the world several
times over, it is questionable how improving e?-
ciency would bene?t humankind. As Frederick
Scherer, one of the ?rst academicians to do an
analysis of weapons acquisition process, stated
with respect to the goal of e?ciency:
I am troubled by a basic policy premise of
this book: that e?ciency is a desirable objec-
tive in the conduct of advanced weapons
development and production programs. It is
by no means certain that this is true. The
weapons acquisition process may be too e?-
cient already. To be sure, there are gross
ine?ciencies. But despite them, the process
has given mankind all too much power for its
own annihilation. One might justify e?ciency
measures in the hope that freed resources
could be devoted to education, exploration of
the universe, technical aid to emerging
nations, urban redevelopment, etc. Given the
pervasive pressures for added arms spending,
however, it seems likely that e?ciency gains
would lead more to increases in our already
formidable arsenal than to the reallocation of
resources into applications yielding greater
social bene?t (1964, p. ix).
In addition, PPB’s emphasis on e?ciency dis-
tracted attention away from other possible goals
for the DOD (Knorr, 1969; Murdock, 1974;
Schlesinger, 1974). As one concerned scholar
would ask, could not the minimization of military
con?ict or the loss of human life in the event of
con?ict be as important objectives as e?ciency for
defense (Knorr, 1969, p. 582). Further, given that
cost-e?ectiveness studies required all variables to
be quanti?ed, stress was placed on the tangible
characteristics of a weapon system (e.g. ?repower,
vulnerability, survivability, etc.) when performing
the analysis (Knorr, 1969; Murdock, 1974; Pal-
mer, 1978; Schlesinger, 1974). As a result, intangi-
ble factors, such as the way human beings are
impacted by or impact the system, were ignored.
Unfortunately, in the case of the M-16 ri?e used in
the Vietnam War, PPB’s narrow focus on e?-
ciency and quanti?cation actually led to an
increase in the loss of human life (Gibson, 1986).
As Senator Mundt explained the M-16 disaster:
As I understand it, the ?ap [about the M-16]
developed from the fact that after we got the
new ri?e and found we had a lot of cartridges
that wouldn’t ?t into the ri?e, and we had a
lot of powder that hadn’t been used from
another war, we would put the powder in
these bullets, and save a lot of money, which
was a perfect example of how a cost analysis
system would save a lot of money. There was
only one thing, that something in the powder
was too sticky and it clogged up the ri?e, until
they got a new ri?e cleaning system. Many
lives were lost, of course. But here is a case
where a cost analysis could go wrong,
whereas, perhaps, cranking in a lot more
human elements, we should have said, ‘Per-
haps these ri?es would be all right, but let’s
try them on the ?ring range at home with this
old powder and see how they work.’ (US
Senate, 1968b, p. 353).
Further, in order to employ systems analysis to
determine the most cost-e?ective defense, a parti-
cular con?ict situation (e.g. guerrilla war, conven-
tional war, nuclear war, etc.) had to be assumed.
Yet, as Schlesinger (1974, p. 65) notes, ‘‘The typi-
cal fare of the present world struggle is not the
expected wars, but rather the crises that erupt at
times and in places where they are not anticipated.
In Vietnam, US forces have been deployed to deal
with con?ict situations other than those for which
they were optimized.’’ For instance, when select-
ing aircraft for the Air Force, the systems analysts
514 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
presupposed the use of nuclear weapons in a
major con?ict. This meant that the bombers in
inventory during the 1960s were designed for
nuclear delivery and therefore, very expensive.
Given that nuclear war would require few sorties,
the anticipated losses due to attrition were bear-
able in terms of the cost of the bombers and the
drain on the aircraft inventory. Hence, when the
USA engaged itself in Vietnam, it needed to rely on
expensive and vulnerable aircraft to ?y repeated
sorties against heavy ground ?re. Attrition was
higher than planned, resulting in greater costs and
inventory drainage (Schlesinger, 1974). In other
words, the most cost-e?ective weapons for the
planned war were the least cost-e?ective for the
actual war. Thus, in many situations, PPB failed
to provide the best defense for the least cost.
Lastly, the instrumental rationality of systems
analysis and PPB made Enthoven’s equation of the
economics of nuclear war with that of a multi-pro-
duct ?rm appear reasonable. Using the thesis of
diminishing marginal returns, Enthoven devised a
cost-e?ective way to destroy the Soviet Union with
nuclear weapons (Enthoven, 1963). His analysis for
a cost-e?ective nuclear war proceeded as follows.
First, it was determined that the Soviet Union would
be su?ciently devastated if 30% of the population
was killed and half of the industrial capacity
demolished. Second, it was ascertained that this
could be accomplished by destroying all the major
cities in the USSR. Lastly, the precise amount of
megatons necessary to accomplish this task was
calculated, 400 megatons would su?ce. Because
the remaining cities and economic sites in the
USSR were dispersed, to kill an additional 25% of
the population would require 10 times as many
bombs. In other words, if the megatons were
doubled to 800, Soviet fatalities would only rise by
10 percentage points and industrial capacity
destroyed would only increase by three percentage
points (Fallows, 1981; Kaplan, 1983; Testimony of
Enthoven, US Senate, 1968a). Clearly, there were
diminishing marginal returns to nuclear war and a
cost-e?ective method for ?ghting them.
However, what was vastly ignored in this for-
mulation is the fact that once nuclear war began
no one would be concerned about e?ciency and it
is highly unlikely that the dictates of rational eco-
nomic choice models would be guiding human
behavior. Rather, in the advent of nuclear war,
chaos and insanity would most likely reign
supreme. As Schell notes:
. . . the outbreak of nuclear hostilities in itself
assumes the collapse of every usual restraint
of reason and humanity. Once the mass kill-
ing of a nuclear holocaust had begun, the
scruples, and even the reckonings of self-
interest, that normally keep the actions of
nations within certain bounds would by de?-
nition have been trampled down, and would
probably o?er little further protection for
anybody. In the unimaginable mental and
spiritual climate of the world at that point it
is hard to imagine what force could be coun-
ted on to hold the world back from all-out
destruction (1982, p.32).
Further, the problem with nuclear weapons is
that they keep throwing up surprises. For
instance, it took scientists more than a decade to
realize why electrical equipment at atomic bomb
test sites failed: nuclear weapons create an elec-
tromagnetic pulse which damages solid state cir-
cuitry (Schell, 1982). The implications of such a
?nding for the ability to command and control a
nuclear war are devastating. As few as one to ?ve
high-altitude nuclear explosions could trigger an
electromagnetic pulse strong enough to ruin the
circuitry underlying the command and control
system in the USA, destroying the country’s
capacity to launch a counter-attack. This com-
mand vulnerability has been one of the most sig-
ni?cant problems to plague strategic thought, yet
because it is not quanti?able it does not ?t neatly
into standard measures of the strategic balance
(e.g. delivery vehicles, equivalent megatonnage,
hard target potential, etc.) and therefore has been
ignored (Lifton & Falk, 1982; Ravetz, 1990;
Steinbruner, 1981–1982).
Further, it was not until the beginning of the
1980s, that scientists started recognizing the
possibility of a nuclear winter following nuclear
war. Nuclear explosions would create ?res which
would release enormous amounts of smoke par-
ticles into the earth’s atmosphere. These smoke
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 515
particles would prevent the sun’s rays from reach-
ing the earth, cooling a large fraction of the
northern hemisphere’s land surfaces by more than
10
C if nuclear war occurred in summer. In addi-
tion, it was estimated that 100 megatons may be
su?cient to produce severe climatic e?ects, if the
100 megatons consisted of 1000 individual 100-
kiloton (about eight times the size of the Hir-
oshima bomb) bombs aimed at the 1000 largest
cities in the Northern Hemisphere. However,
nuclear winter could be caused by even less than
100 megatons if the bombs were predominantly
aimed at oil re?neries, because of the huge amount
of sooty smoke this would produce (Birks & Ehr-
lich, 1990). Hence, by the 1980s, scienti?c evidence
demonstrated that Enthoven’s cost-e?ective 400-
megaton nuclear war, if conducted properly, could
have destroyed the whole world, not just the
Soviet Union.
8. Conclusion
In 1965, President Johnson ordered all depart-
ments within the Executive branch of the govern-
ment to adopt PPB by ?scal year 1968 (Johnson,
1969). However, within a brief period of time PPB
proved to be a complete failure (Jablonsky & Dir-
smith, 1978; Wildavsky, 1978). In a paper examin-
ing the reasons for PPB rejection, Jablonsky and
Dirsmith (1978) concluded that noticeably absent
from their research was a discussion as to why a
system so bound for failure was introduced to
begin with. Calling PPB a toxic agent, they query,
‘‘Maybe there is a valid reason why this type of
toxic agent was found in the corpse in the ?rst
place’’ (Jablonsky & Dirsmith, 1978, p. 224).
This paper attempted to provide an answer to
this question by demonstrating that the political
rami?cations from an accounting technique can
far exceed any ostensible gains in e?ciency from
the implementation. First, the research demon-
strated that McNamara used PPB to gain control
of the Armed Forces by centralizing decision
making in the OSD and by forcing the services to
justify their budget requests using cost-bene?t
analysis. By prescribing the acceptable discourse
for defense decision making, McNamara ensured
that his preferred solution, the most analytically
cost-e?ective, would prevail.
Second, the paper showed that PPB assisted
with rationalizing and normalizing the arms race
by converting it into a series of problems to be
solved. This contributed to masking the horren-
dous death and destruction that a nuclear war
would create and thus made the preparations
appear to be ‘‘the normal motions of normal men,
not the mass compulsions of people bent on total
death’’ (Mumford, 1946, p. 5). Further, the scien-
ti?c discourse of PPB gave the impression that the
acquisition process was under the control of
experts and this helped to alleviate the US popu-
lations fear of nuclear war.
Hence, while the accounting technique of PPB
did disappear, the economically rational discourse
it introduced to defense continued to be a useful
tool for later politicians. For instance, in March
1983, when President Reagan sought support for
his $290 billion defense budget, he stated in a
televised address:
What seems to have been lost in all this
debate is the simple truth of how a defense
budget is arrived at. It isn’t done by deciding
to spend a certain number of dollars. Those
loud voices that are occasionally heard char-
ging that the Government is trying to solve a
security problem by throwing money at it are
nothing more than noise based on ignorance.
We start by considering what must be done to
maintain peace and review all the possible
threats against our security. Then a strategy
for strengthening peace must be agreed upon.
And ?nally our defense establishment must be
evaluated to see what is necessary to protect
against any and all of the potential threats.
The cost of achieving these ends is totaled up
and the result is the budget for national
defense (quoted in Stubbing, 1986, p. 55).
Thus, even though PPB failed, it did introduce a
rhetoric which lent rational support to a highly
irrational act. By masking the human and social
costs of war, PPB turned the preparation for vio-
lence into a process free from emotions and moral
judgements and hence contributed to masking the
516 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
increasing barbarity of the twentieth century
(Bauman, 1989; Hobsbawm, 1994). If the twenty-
?rst century is to be a century of peace, then the
masks must be removed and war must be recog-
nized for what it is; death, destruction and the
normalization of insanity.
Acknowledgements
The author would like to thank Tony Tinker,
Joni Young and Alistair Preston and the anony-
mous reviewers for their helpful comments.
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doc_817586645.pdf
This paper demonstrates the profound political consequences accounting can have by examining the emergence of
Planning, Programming and Budgeting (PPB) in the United States as an ostensibly value-free tool for allocating
defense resources during the 1960s. The research shows how PPBassisted with normalizing the preparation for nuclear
war by converting the ‘‘unthinkable’’ into a technical and mundane resource allocation problem, as well as the internal
inconsistencies generated by placing an economically rational frame of representation on a dialectical and political
process. In addition, the paper demonstrates how this accounting technique was strategically deployed by the Secretary
of Defense to centralized decisions over resource allocations within his office
Taming the untamable: planning, programming
and budgeting and the normalization of war
Michele Chwastiak
University of New Mexico, Anderson School of Management, Albuquerque, NM 87131, USA
Abstract
This paper demonstrates the profound political consequences accounting can have by examining the emergence of
Planning, Programming and Budgeting (PPB) in the United States as an ostensibly value-free tool for allocating
defense resources during the 1960s. The research shows how PPB assisted with normalizing the preparation for nuclear
war by converting the ‘‘unthinkable’’ into a technical and mundane resource allocation problem, as well as the internal
inconsistencies generated by placing an economically rational frame of representation on a dialectical and political
process. In addition, the paper demonstrates how this accounting technique was strategically deployed by the Secretary
of Defense to centralized decisions over resource allocations within his o?ce. # 2001 Elsevier Science Ltd. All rights
reserved.
This paper examines the role accounting played
in normalizing nuclear war by transforming it
from a horri?c potentiality to a series of problems
to be solved. It also documents how accounting
was intentionally deployed to shift the balance of
power in the US Department of Defense (DOD)
from the periphery (e.g. the armed services) to the
center (e.g. the O?ce of the Secretary of Defense).
The paper does so by examining the introduction
of Planning, Programming and Budgeting (PPB)
into the DOD by Robert S. McNamara, Secretary
of Defense from 1961 to 1968.
The research shows that McNamara used PPB
to rede?ne the normative and cognitive facets of
the defense political process in such a way that
military expertise (something McNamara lacked)
was discredited while quantitative rationality (a
trait McNamara excelled at) was elevated to the
status of authority and legitimacy. This allowed
McNamara to gain control of the defense acquisition
process by ?rst, sti?ing the Armed Forces’ ability
to use asymmetric information gained through
military experience as a source of power and second,
by forcing the Services to substantiate their require-
ments using his technically rational articulation of
how to best meet defense needs. The research also
demonstrates that PPB assisted with transforming
war from a horrendous occurrence to a series of
problems to be solved by subjecting weapon system
choices to rigorous cost-bene?t analysis. This
caused the economics of defense to be elevated to
a position of supremacy, transforming the planning
for war into a routine resource allocation exercise,
rather than an insane preparation for genocide.
Thus, the paper contributes to the growing body
of literature which views budgeting as a social,
rather than technical process, by demonstrating
how an accounting technique can have profound
political consequences (Burchell, Clubb, Hopwood,
Hughes, & Nahapiet, 1980; Covaleski & Dirsmith,
1986, 1988, 1995; Hopwood, 1985; Miller &
O’Leary, 1987; Preston, Cooper, & Coombs, 1992;
0361-3682/01/$ - see front matter # 2001 Elsevier Science Ltd. All rights reserved.
PI I : S0361- 3682( 01) 00010- 1
Accounting, Organizations and Society 26 (2001) 501–519
www.elsevier.com/locate/aos
Rose, 1991; Wildavsky, 1967, 1978). The research
proceeds as follows. The ?rst section discusses
how discourse shapes our understanding of the
world and hence our actions, demonstrating how
McNamara could enact political changes by
introducing PPB and altering the perspective
through which defense was examined. Second, the
historical conditions under which PPB was intro-
duced and the impact it had on the presentation
and politics of war is presented. Lastly, the con-
sequences of placing a rational, technical frame of
representation on a dialectical, political process
like war is addressed.
1. Representation as a political act
Accounting is a form of representation. Repre-
sentation is, itself, a political act in that descrip-
tions determine our collective social understanding
of a situation and thus, what behaviors are
deemed appropriate and which are not (Eagleton,
1990; Edwards, 1996; Hall, 1982). For instance, at
present, e?ciency is one of the primary means by
which actions are evaluated in a corporation. This
form of assessment validates certain acts (e.g.
expending extra energy on the job) while dis-
couraging others (e.g. socializing during working
hours). However, business entities have not always
been spaces where e?ciency reigned supreme.
According to Miller and O’Leary (1987), the
introduction of standard costing and budgeting in
the early 1900s as a method for describing and
evaluating the performance of inputs was integral
for normalizing corporate e?ciency as a socially
desirable goal and directing workers behavior
towards acts that sustained this normalcy. Thus,
accounting representations can transform the
world we live in by creating new ways of seeing
and norms for social behavior.
If the meanings humans attribute to events are
socially and historically determined, then these
meanings will re?ect the value system necessary to
reproduce the distribution of power in society for,
as Eagleton (1990, p. 37) notes, ‘‘Power succeeds
by persuading us to desire and collude with it. . .’’.
Further, Hall (1982, p.81) illustrates how the
description of a problem frequently contains the
resolution preferred by the dominant race, class,
sex, etc. through reference to the debate concern-
ing black immigrants to Britain as a problem
‘about numbers.’ He notes how entering the
debate on these terms was tantamount to giving
credibility to the white position that racial tension
was the result of having too many black people in
the country, not the result of white racialism.
Hence, it is around the representation of a pro-
blem that the ?ercest debates should occur,
because the possible outcomes will be severely
restricted by the way in which the situation is
described (Chomsky, 1987; Edwards, 1996; Hall,
1982; Latour, 1987).
Further, in order for a particular representation
of a phenomena to gain dominance, alternatives
must be downgraded and marginalized. Once a
particular representation becomes dominant and
issues are debated within the acceptable terms, the
underlying assumptions become instilled as sacred
truths, rather than human constructs (Chomsky,
1987; Edwards, 1996; Hall, 1982; Latour, 1987).
For instance, quanti?ed representations, such as
budgets, cost-bene?t analysis, etc. presuppose an
unequal distribution of wealth in society. Hence,
the more issues of resource allocations, equity, etc.
are addressed through these quantitative techni-
ques, the more existing power relations are ratio-
nalized by making the unequal distribution of
wealth which sustains them appear to be inevitable,
and hence, beyond the realm of possible change.
However, rationalizing existing power relations
is only one consequence of quanti?ed representa-
tions. Budgets, cost-bene?t analysis, etc. have also
succeeded in transforming the political into a tech-
nical zone of control and calculation by forcing
many issues to be discussed in an abstract, scien-
ti?c discourse ostensibly devoid of subjective con-
tent. This has bene?ted the politician, in particular
the bureaucrat, by making the decision-making
process appear to be an objective mechanism
beyond the in?uence of individual human beings
(Covaleski & Dirsmith, 1988; Porter, 1995; Rose,
1991). As Porter notes:
The appeal of numbers is especially compel-
ling to bureaucratic o?cials who lack the
mandate of a popular election or divine right.
502 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
Arbitrariness and bias are the most usual
grounds upon which such o?cials are criti-
cized. A decision made by numbers (or by
explicit rules of some other sort) has at least
the appearance of being fair and impersonal.
. . .Quanti?cation is a way of making deci-
sions without seeming to decide. Objectivity
lends authority to o?cials who have very lit-
tle of their own (1995, p. 8).
In addition, by representing a phenomena
through numbers, knowledge can be lifted up and
separated from its local context, equating diverse
occurrences of similar events and thus, minimizing
the need for intimate knowledge of each situation
(Porter, 1995). As a result, commodities can be
bought and sold by traders who have no knowl-
edge of agriculture, production processes can be
managed by people who have never physically
engaged in the activity, and weapon decisions can
be made by people with minimal knowledge of
war. However, not only do numbers allow admin-
istrators, bureaucrats, traders, etc. to equate and
manage disparate events from great distance, they
also simultaneously create new things (Porter,
1994, 1995); for quantitative techniques work best
if the world they aim to describe can be remade in
their image (Porter, 1995). Thus, statistics can
describe our social reality, in part, because statis-
tics help to create it (Porter, 1994).
In sum, discourses help shape behavior by lim-
iting visibilities and therefore, the range of possi-
ble actions. Hence, a transformation in how a
phenomenon is represented can drastically alter
the phenomenon itself. The remainder of this
paper demonstrates how McNamara was able to
enact profound political changes in the defense
arena and normalize the preparation for nuclear
war by enforcing PPB as the only acceptable
means for discussing the acquisition process.
2. McNamara appointed as Secretary of Defense
When John F. Kennedy was elected President of
the United States in 1960 there was strong poli-
tical clamour for a Secretary of Defense who
would be able to realize the unity amongst the
Armed Forces that the creation of the DOD in
1947 was supposed to, but failed to achieve. Ken-
nedy believed that he found such a person in
Robert S. McNamara (Stubbing, 1986). McNa-
mara, the ?rst non-family member to become pre-
sident of the Ford Motor Company, came from a
new breed of corporate executives that rose to
power during the 1950s. As Halberstam describes
them, they were:
. . . men who had not grown up in the busi-
ness, who were not part of the family but who
were modern, well educated, technicians who
prided themselves that they were not tied to
the past but brought the most progressive
analytical devices to modern business, who
used computers to understand the customers
and statistics to break down costs and pro-
duction (1992, pp. 231–232).
In other words, men who had mastered the art
of isolating the end oriented actions of business
from (by de?nition) irrational norms such as tra-
dition, family loyalty, etc. by assessing business
performance through the use of quanti?able mea-
sures which masked the impact of their decisions
on others and thus, increased their e?cacy by
preventing them from confronting the ethical
implications of their acts (Bauman, 1989).
There were several reasons why the position of
Secretary of Defense needed to be ?lled by a tech-
nocrat at this point in time. First, the Eisenhower
Administration had relied exclusively upon the
doctrine of ‘‘massive retaliation’’ to ostensibly
deter communist aggression. In order to make the
threat of massive retaliation viable, the Eisen-
hower Administration engaged in a huge build-up
of nuclear weapons (Bottome, 1986; Kaplan, 1983;
Raskin, 1970, 1979). Second, while Eisenhower
imposed limits on how much the Services could
spend by establishing budget ceilings, once the
funds were allocated, the Services were virtually
free to spend the money in anyway they chose
(Kaufmann, 1964; Raskin, 1979). The combina-
tion of an exclusive reliance on nuclear weapons
for defense and a laissez-faire management style
resulted in the Armed Forces vigorously compet-
ing with one another to get a larger portion of the
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 503
strategic mission (Kaufmann, 1964; Murdock,
1974). This arms race amongst the Armed Forces
in the USA produced a proliferation of weapon
systems and a dramatic shift of all the services to
high-tech weaponry (Armacost, 1969; Canan,
1975; Markusen & Yudken, 1992). However, the
human beings who were supposedly in charge of
the technological transformations taking place in
weaponry during this time period could not keep
pace with the rapid rate of change. Reasons, ratio-
nales and strategies were lagging behind technolo-
gical innovations (Canan, 1975). According to Dr.
Wiesner, Special Assistant to the President for
Science and Technology from 1961 to 1964:
The dizzying pace of change [during the
1950s] was very disorienting both for the
professional strategists and for the civilian
leadership in the Executive Branch of the
government and the Congress. Even the aca-
demic panelists who studied strategic pro-
blems and journalists interested in national
security a?airs could not keep up with the
rapidly evolving situation (quoted in Canan,
1975, pp. 221–222).
Thus, in sum, by the end of the 1950s, techno-
logical innovations in nuclear warfare were out-
stripping human control and creating an extremely
dangerous and volatile situation. Further, by 1959,
64% of Americans considered nuclear war to be
the nation’s most urgent problem (Boyer, 1985, p.
355). This fear of nuclear war was fuelled by a
series of historical events. In September, 1949, the
Soviet Union exploded their ?rst atomic bomb,
destroying the US’s atomic monopoly. This was
followed by the executive decision to develop and
produce the hydrogen bomb, making the potential
to destroy the world an actuality. In addition,
intercontinental ballistic missiles and the digital
computer became operational realities during the
1950s, creating the conditions that made it possible
to kill millions by simply pushing a button. Feed-
ing the nuclear anxieties was a heavy govern-
mental emphasis on civil defense, while the
atmospheric testing of nuclear weapons created a
fallout scare (Boyer, 1984, 1985; Canan, 1975;
Tyler May, 1989). Further, as Boyer notes:
. . . the cultural ethos of the 1950s and early
1960s, held that the nuclear arms race was a
fundamentally irrational, unstable, and
highly dangerous process that might at any
time escape from control through human
error, technical malfunction (the Fail-Safe
syndrome), or a fateful escalation by a
nuclear power facing defeat in a non-nuclear
con?ict (1984, p. 842).
Hence, the extreme dangers associated with fal-
lible human beings possessing an infallible weapon
were the primary emphasis in cultural and social
representations of nuclear weapons during the
1950s. Given the deadliness of nuclear weapons
and the populations’ profound fear of them, a
situation in which technological innovations were
outstripping human control could not be tolerated
for long. If the Cold War was to maintain a sense
of legitimacy, an administrative structure that lent
an air of rationality and logic to the weapons
acquisition process and hence, gave the appear-
ance that the arms race could be managed and in
so doing made less dangerous and more sane was
essential. Thus, when Kennedy looked for a
Secretary of Defense he did not seek an individual
who managed by instincts, but rather one who
could impose organizational rationality on
‘‘nuclear weapons, thermonuclear weapons,
napalm, millions of men, ri?es, chemical weapons,
pencils, missiles, promotions, counterforce, air-
craft carriers, anthrax virus and counter-insur-
gency’’ (Raskin, 1970, p. 66). In other words, he
sought ‘‘a supreme accountant’’ and found one in
Robert S. McNamara (Halberstam, 1992, p. 227).
3. McNamara meets the RAND Corporation
One of the preconditions McNamara set before
accepting the o?er from Kennedy was that he
could choose his own subordinates (McNamara,
1996). In his search for someone to ful?ll the
position of Pentagon Comptroller, several people
mentioned Charles Hitch, the director of the eco-
nomics division at RAND. RAND, a private
think tank composed predominantly of civilian
military strategists, was created shortly after
504 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
World War II to help the Armed Forces incorpo-
rate nuclear weapons into their tactical plans
(Kaplan, 1983).
Nuclear weapons not only changed the destruc-
tiveness of war, but the very nature of war itself.
Previous inventions were limited enough in scope
to allow for timely adaptations by opponents.
However, if atom bombs were used in a war, the
destruction would be so immediate that there
would be no time to adjust (Herkin, 1987; Kaplan,
1983). Thus, nuclear weapons minimized the value
of combat experience for planning future war
?ghting scenarios and for the ?rst time in US his-
tory the ?eld of military strategy was opened to
non-soldiers (Trachtenberg, 1991). As a result, a
new breed of military planners — civilian strate-
gists who were better versed in economics and
mathematics than military expertise — engaged in
inventing a new type of warfare — an intellectual,
paper war (Kaufmann, 1964). Given that nuclear
war was unencumbered by empirics, these strate-
gists did not have to conform their thinking with
reality but could instead help shape the new reality
of living with the bomb (Sherwin, 1983).
Hence, it was two RAND scientists, Merrill
Flood and Melvin Dresher, who with the aid of
Von Neumann and Morgentern’s theory of games,
devised a game entitled the Prisoner’s Dilemma,
which became the primary vehicle by which the
nuclear arms race between the United States and
the Soviet Union was rationalized (Kaplan, 1983;
Poundstone, 1992). The Prisoner’s Dilemma
showed that both the USA and the USSR would
be better o? if they agreed to a treaty to stop
building nuclear armaments. However, this move
required trust and because the enemy might
cheat — build more weapons and go onto win —
continuing to compete was the only solution
(Kaplan, 1983).
Thus, game theory helped to rationalize and
normalize the Cold War by elevating distrust and
the fostering of international tensions to truisms,
making the arms race appear to be an inevitable
consequence of human nature. Further, game the-
ory assisted with providing the abstract discourse
by which ‘‘thinking about the unthinkable’’
became possible. Game theory accomplished this
by transforming nuclear war into a problem of
arithmetic, calculus and probability, which made
the danger seem so theoretical and abstruse as to
become almost non-existent (Boyer, 1984; Kaplan,
1983). Plus, in game theory, the weapons them-
selves are the primary referent point (Cohn, 1987;
Schell, 1982). This is illustrated below in Congres-
sional testimony by RAND analyst Dr. Albert
Wohlstetter regarding the Anti-Ballistic Missile
System (ABM), in which his only concern was
whether or not the ABM would protect the pri-
mary land based ballistic missile at the time, the
MINUTEMAN:
My remarks, however, center, so far as the
second strike function of ABM is concerned,
on the problem of protecting MINUTE-
MAN.. . .I have tried with some e?ort to
reconstruct various numerical proofs recently
presented or distributed to the Congress that
purport to show our MINUTEMAN will be
quite safe without extra protection.. . . This
seems to me a sound way to supplement the
protection of the MINUTEMAN in a period
when we can expect it to be endangered.
. . .(Wohlstetter, 1969, pp. 668–670).
Hence, as Schell (1982, p. 32) states, ‘‘. . . strate-
gic theory seems to have taken on a weird life of
its own, in which the weapons are pictured as
having their own quarrel to settle, irrespective of
mere human purposes.’’ By making the weapons
the focus of attention, the war planners were able
to elevate themselves to a position of user and
actor, not victim, enhancing their ability to think
about the unthinkable (Cohn, 1987; Nash, 1980).
Thus, during the 1950s, as a result of the success
of game theory, the RAND strategists gained
considerable credibility as experts on strategic
issues.
In order to decide whether or not to o?er Hitch
the position of Pentagon Controller, McNamara
read Hitch and McKean’s book, The Economics of
Defense in the Nuclear Age, and became immedi-
ately enamoured with Hitch’s ideas (Kaplan,
1983). According to Kaplan:
Here was someone who was doing the same
sort of thing that McNamara had done
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 505
during the war — applying principles of
microeconomics, operations research and
statistical analysis to defense issues — but
doing it on a much broader scale, covering
the whole gamut of national security, includ-
ing comparing and choosing weapons
systems, restructuring the defense budget,
formulating military strategy (1983, p. 252).
RAND had been employing the techniques of
systems analysis for nearly a decade in its e?orts
to relate the Air Force’s military needs to budget
constraints (Hitch, 1969; Novick, 1969; Sanders,
1973).
1
As early as 1949, the analysts at RAND
recognized the economic implications of the Cold
War and as a result believed that the traditional
military characteristics for measuring a weapon
system’s e?ectiveness (e.g. for aircraft, higher, fas-
ter, more payload) were no longer adequate.
Rather, the drain a weapon system placed on the
US economy as well as the enemy’s reaction to it
had to be considered when assessing the desir-
ability of additional armament (Novick, 1969).
Thus, systems analysis elevated the economics of
defense to a position of primacy in the weapon
acquisition process and as a result, was a method
for rede?ning the defense problem in such a way
that the criteria of rational economic choice,
rather than professional military judgement,
applied.
McNamara o?ered Hitch the job of Pentagon
Comptroller and Hitch accepted. Hitch brought
with him to the Pentagon several RAND analysts
including Alain Enthoven, who would become the
?rst Assistant Secretary of Defense for Systems
Analysis in 1964, and Henry Rowan, who became
Deputy Assistant Secretary of Defense for Inter-
national A?airs (Digby, 1989). The marriage of
the RAND Corporation to the O?ce of the
Secretary of Defense (OSD) insured that a
‘‘rational organizational discourse’’ would prevail
over decision making in the civilian sector of the
DOD (Murdock, 1974). The problem faced by
McNamara was how to thrust this discourse on
the Armed Forces, and budgeting became the
strategic tool by which he would accomplish this.
4. Planning, programming and budgeting
McNamara believed that there were two styles
to management, a passive method in which the
chief administrator played a judiciary role and an
active approach in which the chief administrator
provided e?ective leadership (Kaufmann, 1964;
Stubbing, 1986). McNamara concluded that in
order to achieve the goal set for him by President
Kennedy — ‘‘security for the nation at the lowest
possible cost’’ — he would have to employ the
latter strategy in managing the DOD (McNamara,
1996, p. 23). Upon assuming his responsibilities as
Secretary of Defense, McNamara immediately
recognized the power inherent in dominating the
budget process and quickly moved to establish
himself as ‘‘czar’’ in this arena by operationalizing
PPB (Sanders, 1973; Schelling, 1971; Stubbing,
1986). As Schelling (1971, p. 386) notes,
Some people have more instinct than others,
or better training than others, for using the
purse strings as a technique of management
and a source of authority; but almost anyone
concerned with administration sooner or later
discovers that control of budgetary requests
and disbursements is a powerful source of
more general control.
Prior to McNamara, the military planning and
budgeting processes were performed separately
with plans expressed in terms of outputs (e.g.
missions, weapon systems, forces, etc.) and bud-
gets expressed in terms of inputs (e.g. personnel,
operations, maintenance, construction, etc.;
Enthoven, 1963; Murdock, 1974). Because the
budgeting and planning processes were separated,
management did not have the information needed
to determine the ?nancial consequences of alter-
native plans, and hence, could not conclude which
weapon systems, forces, etc. would provide the
1
According to Murdock (1974), systems analysis is a ?ve-
step process which includes de?ning objectives, describing
alternative ways of achieving the objectives, determining the
costs associated with each alternative, creating a mathematical
model of the decision situation with the assumptions clearly
stated, and clarifying the criterion by which the preferred
alternative will be chosen.
506 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
most e?cient means of carrying out a particular
mission (Testimony of Hitch, US Senate, 1961).
PPB overcame this problem by restating the bud-
get in terms of outputs and therefore, allowed the
costs of alternative methods of accomplishing
various tasks (e.g. di?erent combinations of
weapons systems and forces) to be compared
(Testimony of Hitch, US Senate, 1961). According
to Enthoven:
The key to the Programming System is deci-
sion making by program elements and major
programs; this is, by the outputs of the
Department rather than by the inputs. A
program element is an integrated activity
combining men, equipment, and installations
whose e?ectiveness can be related to our
national security policy objectives. The list
included B-52 wings, infantry battalions, and
combatant ships, taken together with all the
equipment, men, installations, and supplies
required to make them an e?ective military
force. The program elements are assembled
into major programs which contain inter-
related elements which closely complement
each other or are close substitutes for each
other and which must therefore be considered
together in arriving at top-level decisions
(1963, pp. 416–417).
For example, on June 1, 1961 the program
package for the Central War O?ensive Forces (e.g.
strategic forces), whose mission was to deter
Soviet aggression through the threat of nuclear
war, contained the following program elements:
Aircraft forces (e.g. B-52, B-58, etc.); Missile for-
ces, land-based (e.g. ATLAS, MINUTEMAN,
etc.); Missiles, sea-based (e.g. Polaris Submarines,
FBM submarines); Command, control and com-
munication; Headquarters and command support
(Testimony of Hitch, US Senate, 1961, p. 1039).
Because the alternative missile basing systems are,
to a certain degree, substitutes for one another,
according to the logic of PPB, the number of B-
52s acquired should depend upon the number of
Polaris submarines purchased, as well as the
number of MINUTEMAN procured, with the
greatest emphasis placed on the weapon system
which accomplished the strategic mission in the
most cost-e?ective manner (Testimony of McNa-
mara, US Senate, 1961). Hence, PPB rationalized
the weapons acquisition process by articulating
missions for the DOD, proposing alternative force
structures for these missions, and choosing among
the alternatives based on a speci?ed objective —
cost-e?ectiveness. The Armed Services were
required to prepare their budget requests using
PPB beginning with the 1963 ?scal year defense
budget and each year thereafter.
5. Analysis versus military expertise
As stated previously, all knowledge is socially
and historically determined. Hence, in order for
one representation of an event to be regularly
used, other signi?cations must be marginalized
and downgraded. PPB privileged rationality and
analysis over military expertise as a means for
knowing defense and in so doing, made a radical
break from the past. Kaufmann relates the limita-
tions the Secretary of Defense labored under prior
to McNamara and PPB as follows:
Under the postwar organization of the mili-
tary establishment the Secretary of Defense
presumably had the authority to establish a
strategic concept and require agreement on
force size and composition. But he labored
under several severe handicaps. He lacked
any independent basis on which to assess
what the Services were demanding. And, in
the American tradition, he tended to assume
that it was impossible for him to understand,
much less learn, the art of military planning.
That was a mystery that could only be per-
formed by the military sta?s themselves. To
argue with veteran commanders in these
circumstances seemed presumptuous and
dangerous. Military judgement was sacro-
sanct (1964, pp. 19–20).
In order for McNamara to privilege his way of
knowing defense (PPB) over the military’s, the
system analysts had to discredit the preconceived
notion that military experience alone provided the
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 507
backround for understanding security matters. In
order to do so, the systems analysts argued that
because the Cold War required the threatened use
of a weapon for which there was no combat
experience, Cold War preparedness problems
could only be addressed by employing abstract,
analytical models, and it was the systems analysts,
not the military, that maintained the expertise in
this realm (Enthoven & Smith, 1980; Kaplan,
1983). Further, given that the purpose of inno-
vations in military technologies was to deter wars
by rendering the opponent’s weaponry obsolete,
war was increasingly becoming a process of man-
aging technological change. The system analysts
argued that technological change could be more
e?ectively managed by the careful analysis inher-
ent in PPB rather than the heuristic judgement
of the military commanders (Enthoven & Smith,
1980; Palmer, 1978).
In addition, the system analysts elevated ration-
ality and analysis over military expertise by
arguing that decisions based on authority, experi-
ence or simple intuition lacked rigour and preci-
sion because the precepts underlying the choice
were unexamined and the process by which the
data was linked to the decision was not explicated
(Palmer, 1978). Thus, governmental actions pre-
dicated on authority and intuition were classi?ed
by the systems analysts as ‘‘uninformed, arbitrary,
and based on unenlightened opinion’’ (Rowen,
1969, p. 613). On the other hand, the systems
analysts used the scienti?c method to arrive at
conclusions. The bene?ts of the scienti?c method
were explicated by Enthoven while testifying
before the US Senate as follows:
First, the method of science is an open, expli-
cit, veri?able, self-correcting process. It com-
bines logic and empirical evidence. The
method and tradition of science require that
scienti?c results be openly arrived at in such a
way that any other scientist can retrace the
same steps and get the same result. Applying
this to weapon systems and to strategy would
require that all calculations, assumptions,
empirical data, and judgements be described
in the analysis in such a way that they can be
subject to checking, testing, criticism, debate,
discussion, and possible refutation. . . . Sec-
ond, scienti?c method is objective. Although
personalities doubtless play an important part
in the life of the Physics profession, the science
itself does not depend upon personalities or
vested interest (Enthoven, 1969, p. 567).
The systems analysts further discredited military
expertise by arguing that the Services were incap-
able of creating an e?cient defense establishment
because their decisions were biased by par-
ochialism. Given that the systems analysts were
not bound by a particular service tradition, they
perceived themselves as possessing the objectivity
needed to perform the analysis that would lead to
a cost-e?ective defense (Enthoven & Smith, 1980;
Hitch & McKean, 1963).
In sum, the system analysts, having come from
RAND, were aware of how a new class of civilian
strategists had been empowered by creating a new
type of warfare based on abstract, analytical
games. The system analysts attempted to repro-
duce this power within the DOD itself by elevating
their way of knowing defense (e.g. abstract analy-
sis) to a position of privilege. By changing the
discourse, the system analysts changed visibilities
in defense in such a way that their approach
appeared to be unquestionably reasonable and
sound. Thus, initially Congress overwhelmingly
approved of PPB, bestowing compliments on
McNamara such as follows:
The Chairman: Mr. Secretary, I want to
complement you again for your splendid
statement. You have made such an out-
standing statement, so logical, so clear . . .
(House of Representatives, 1962, p. 3185) Mr.
Philbin: First, I would like to complement
you very much on that ?ne statement that
you made. . . . I think it is really unprece-
dented. I have never seen one quite like it.
Both in scope and quality it was really superb
(House of Representatives, 1962, p. 3190–
3191). Mr. Price: Mr. Secretary, I not only
want to join my colleagues in complimenting
you on your ?ne presentation made here, but
I also want to compliment you and commend
you for the forthright and commendable
508 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
manner in which you have answered your
questions this morning, indicating an amazing
grasp of this Defense Establishment setup, in
just the period of 1 year. In my opinion, you
must be some kind of a human IBM machine.
I don’t know how you do it (US House of
Representatives, 1962a, p. 3195).
However, once the political rami?cations of
PPB, as discussed in the following section, became
apparent, Congress’s praise was converted into
apprehension. For example, during the Senate
hearings on PPB in 1967, Senator Jackson
debunked the ostensible objectivity of systems ana-
lysis by stating, ‘‘Cost-utility analysis can be used
as easily to justify a decision as to make a sensible
choice. It can be employed as a weapon to try to
overwhelm and beat down other viewpoints’’ (US
Senate, 1967b, p. 220). Further, the fact that the
data and analysis used by McNamara to make
decisions was considered proprietary information,
and therefore not accessible to Congress, became
an issue of concern. The Initial Memorandum for
the Senate hearings on PPB stated:
Congress, too, may not welcome all the
implications of PPBS. The experience to date
does not suggest that the Department of
Defense is likely to place before Congres-
sional committees the analyses of costs and
bene?ts of competing policies and programs
on which the Department based its own
choices. Without such comparisons, however,
Congress will be in the dark about the rea-
sons for selecting this policy over that (US
Senate, 1967a, pp. 15–16).
Given that Congress did not have access to
the data used by McNamara to make decisions,
it was di?cult for members to argue with the
immanently rational results of PPB. As illustrated
by the following dialogue, which took place
between Representative Sikes and McNamara,
regarding the MINUTEMAN versus the
POLARIS, the logical forcefulness of PPB lent
an air of scienti?c certainty to McNamara’s
choices, making it problematic for others to
challenge him:
Mr. Sikes. You recommend substantially more
MINUTEMAN and comparatively fewer
POLARIS submarines. . . .What were the
guidelines that caused you to use this level?
Secretary McNamara. The factors determin-
ing the mix of POLARIS and MINUTEMAN
were: (a) the requirements for an invulnerable
force and the quantity of such a force required
to achieve certain units of target destruction;
and (b) the relative costs of achieving that
force. Now POLARIS is a bit more expensive
than the MINUTEMAN. Mr. Sikes. Is cost
the basic di?erence?. . . Is that the principal
reason for selecting the MINUTEMAN?
Secretary McNamara. No. If there were no
cost di?erential then I think we would prob-
ably select more POLARIS because it is prob-
ably at least in the short run more invulnerable
than MINUTEMAN. But there is a cost dif-
ference and therefore it seems wise to select as
many MINUTEMAN as possible in relation
to the requirement for invulnerability and
for a force of a given size, and that was
the sequence of logic through which we
went and it eventually resulted in these
conclusions (US House of Representatives,
1962b, pp. 24–25).
In addition, the Armed Forces greatly resented
the intrusion of systems analysts into military
planning (Kaplan, 1983; Murdock, 1974; Sanders,
1973). For instance, in the US Naval Institute
Proceedings of 1964, an active duty naval
o?cer felt compelled to express his concerns
regarding the systems analysts rise to power as
follows:
Young civilian intellectuals, with little or no
experience in war or leading men, with no sig-
ni?cant non-academic accomplishments in any
area, with no ?rst-hand knowledge of what
ships, aircraft and armies (along with their
associated weapons and support) are like,
with no real appreciation of the operational
environment, are largely replacing profes-
sional military o?cers as the primary source
of advice on the great defense decisions
(quoted in Sanders, 1973, p. 150).
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 509
Hence, even though the Kennedy Administra-
tion greatly increased the defense budget, this did
little to appease the military’s resentment at being
stripped of the power to allocate their own funds.
Thus, the service’s evasion of OSD policy
remained a distinct possibility throughout the
1960s and was taken into consideration by the
systems analysts when making recommendations
(Murdock, 1974; Schlesinger, 1974).
2
5.1. PPB and the centralization of power
As stated previously, prior to McNamara, the
military planning and budgeting processes were
performed separately and as a result, the informa-
tion needed to determine the ?nancial con-
sequences of alternative plans was not available.
PPB overcame this problem by combining plan-
ning with budgeting. While the integration of
planning and budgeting was immanently reason-
able, it moved the con?ict between military need
and budgetary constraint from Congressional
committee to the DOD, itself (Joseph, 1981; Pal-
mer, 1978). This exacerbated the trend that had
started with the establishment of the National
Security State in 1947 towards centralizing power
within the executive branch of the government and
led one scholar to express the fear that PPB con-
tained a ‘‘contempt for democratic values and
processes’’ (Mosher, 1969, p. 590).
3
However, shifting power away from Congress
towards the executive branch of the government
was not the only political rami?cation of PPB, it
also in?uenced the balance of power in the DOD
itself (Joseph, 1981; Mosher, 1968; Murdock,
1974; Palmer, 1978; Sanders, 1973; Schelling,
1971). Under PPB military requests were eval-
uated in terms of function, rather than the Armed
Service putting forth the appeal, allowing similar
purpose weapon systems to be compared (Con-
gress and the Nation, 1969). As Hitch explained:
A new program, like the POLARIS in the
strategic o?ensive area, would be submitted
by the service in the strategic o?ensive pack-
age. In the review it would tend to be com-
peting directly not with other Navy programs,
but with the other means of carrying out the
strategic o?ensive mission. It would not be
compared with the antisubmarine warfare
activities of the Navy; rather it would be
compared with other strategic systems such as
Air Force bombers and land-based missiles
(US Senate, 1961, p. 1013).
Because decision making under PPB was based
on comparisons which spanned traditional service
lines, the ?nal budget could only be put together
by the Secretary of Defense (Kaufmann, 1964;
Wildavsky, 1967). Thus, as Wildavsky (1967, p.
390) notes, in relation to PPB, ‘‘A more useful tool
for increasing (a chief executive’s) power to con-
trol decisions vis-a` -vis his subordinates would be
hard to ?nd.’’ Given that PPB shifted power over
resource allocations to the highest level in the
organization, it allowed McNamara to gain control
over the Armed Forces through funding decisions.
However, while centralization of power was
endemic to the techniques of PPB, PPB also
changed the balance of power between the Armed
Services and the OSD by in?uencing the organi-
zational discourse. McNamara insisted that the
Armed Services base their force structure planning
on systematic analysis. Not only did he withhold
the ultimate yes or no decision from the military,
but in addition, he dictated to the Armed Services
the type of information that would serve as the
basis for his decision (Murdock, 1974). Thus,
McNamara forced the military to argue their case
on his terms, with his language and his style of
decision making (Sanders, 1973). As a result,
throughout the 1960s, defense debates increasingly
became clothed in the language and style of
2
Murdock (1974) relates how Enthoven could have intel-
lectually defended a ‘‘thin’’ anti-ballistic missile defense system
(ABM). However, he did not believe that the OSD could pre-
vent the services from expanding it if approved and thus,
recommended that no ABM be built.
3
The National Security State, composed of the National
Security Council, the Central Intelligence Agency, the Atomic
Energy Commission, and the Department of Defense, was
established to manage the Cold War and was given discretion
to function above the laws of the USA and protected from
democratic control by being accountable to no one but the
executive branch of the government (Raskin, 1991; Udall,
1994).
510 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
system analysis (Business Week, 1969; Gross,
1971: Sanders, 1973; Wildavsky, 1967). As Art
notes:
The revolutionary manner in which McNa-
mara made his decisions (revolutionary,
that is for the Defense Department), trans-
formed the ‘‘expert’’ career bureaucrat into
the ‘‘novice’’ and the ‘‘inexperienced’’ poli-
tical appointee into the ‘‘professional.’’ By
demanding that decisions be made through a
cost-e?ectiveness analysis, McNamara freed
himself from the secretary’s usual dependence
on the experience and knowledge of the mili-
tary o?cer and the career civil servant. By
demanding something that only he and his
small personal sta? possessed the experience
and competence to do, McNamara declared
insu?cient or invalid, or both, the customary
criteria for making decisions and the tradi-
tional grounds for justifying them (1968,
pp. 161–162).
As noted previously, outcomes will be restricted
by the way in which the situation is described. By
forcing the services to defend their budget requests
through cost-bene?t analysis, McNamara ensured
that his preferred solution, the most analytically
cost-e?ective, would prevail. Thus, through intro-
ducing PPB, McNamara was able to prescribe the
acceptable discourse for defense decision making
and in so doing dictate the decisions.
The centralizing tendency of PPB was one of the
major concerns voiced by Congress during the
PPB hearings in 1967. For example, the Initial
Memorandum for the hearings stated:
A major goal of PPB, according to Charles
Hitch, was to enable the Secretary of Defense
to run his Department on a uni?ed basis, and
PPB has meant a greater centralization of
decision-making and control. A consequence,
whether intended or not, is that it may be
more di?cult for voices of doubt and dissent
at lower levels to make themselves heard at
high levels. It means, among other things, less
bargaining between OSD and the service
departments and the services. This in turn
makes it easier for OSD to ignore or simply
not to hear things it would rather not hear —
other beliefs about technological change, dif-
ferent estimates of costs and gains, con?icting
views of the contingencies and uncertainties.
Defense programs may therefore be more
nearly tailored to one estimate of the future
and to one cost-bene?t calculus than in a
period when decision making was less cen-
tralized (US Senate, 1967a, p. 12).
The way in which PPB did sti?e dissent and
ignore con?icting points of view was evident, for
example, in McNamara’s decision to forego a
nuclear-powered aircraft carrier in favor of an oil-
fueled one. McNamara rationalized his decision
by arguing that a nuclear powered carrier would
cost one third to one half more to construct and
operate than a conventionally powered carrier and
that the operational bene?ts derived from nuclear
power did not justify the higher costs (House of
Representatives, 1962b, p. 67). However, the sys-
tems analysis upon which McNamara based his
decision relied only upon variables that could be
quanti?ed. As the following Congressional testi-
mony by Vice Admiral H.G. Rickover illustrates,
it is frequently the non-quanti?able variables that
are the most important:
In the cost-e?ectiveness studies performed by
the analysts, they compute numerical values
for the e?ectiveness of nuclear power. How-
ever, before they make the calculation, they
make certain simplifying assumptions in
order to be able to do the arithmetic. These
assumptions just happen to eliminate from
consideration the principal military reasons
for wanting nuclear power in the ?rst place.
The analysts generally start their calculations
with the assumptions that oil for the conven-
tional ships is readily available whenever and
where-ever it is needed, and that the logistic
support forces will not be subject to attack.
Now, if the Navy could be assured that they
would not be asked to perform missions
where it would be di?cult to get oil to our
ships, there would be less need for nuclear
propulsion. However, the Navy cannot a?ord
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 511
to count on such a euphoric situation, since
the history of war is replete with examples of
major military defeats that were brought
about by the inability of military forces to
maintain a supply of propulsion fuel to the
forces in combat (Rickover, 1969, p. 601).
In sum, PPB radically changed the discourse of
defense acquisition and in so doing changed the
process itself. Prior to McNamara, defense acqui-
sitions were justi?ed based on military necessity.
PPB completely disabled this rationalization and
thus, sti?ed the Armed Forces’ ability to use their
asymmetric information gained through experi-
ence as a source of power. By forcing the services
to justify their requests using a technique which
only McNamara and his sta? of systems analysts
possessed the expertise to employ, McNamara was
able to de?ne what was relevant and important in
such a way that he gained the information advan-
tage and hence, control of the process.
6. Taming the untamable
As stated previously, by the end of the 1950s
technological developments in nuclear weapons
were outstripping human control. The innovative
process needed to be slowed down if the arms race
with the Soviet Union was to retain its legitimacy.
PPB provided a mechanism by which this could be
accomplished in that its ostensible purpose was to
rationalize defense expenditures by aligning tech-
nological developments with stated military needs.
Hence, only advancements in weaponry that sen-
sibly ?t into the missions of the DOD would be
pursued. However, rejecting weapon systems that
did not logically ?t into a mission was not the only
way PPB slowed down nuclear developments.
According to Hitch (1969, p. 578), ‘‘The function
of systems analysis is to get dollars into the calcu-
lations at an earlier stage — into the planning
process, into the evaluation of alternative ways
of achieving a military objective.’’ Getting costs
into the analysis at an early stage was a powerful
tool for decelerating the arms race, for once the
need, cost and e?ectiveness of each proposed
weapon system was carefully examined and
compared with alternatives, certain technologies
would not make it through (Murdock, 1974;
Sanders, 1973).
However, forcing dollars to be considered at an
early point in the decision-making process not
only decelerated the arms race, it also elevated the
economics of defense to a position of superiority.
This was a radical change for the DOD, because
prior to McNamara military o?cers had suc-
ceeded in arguing that dollars did not matter when
the survival of the nation was at stake. Their
appeals to Congress for funding were primarily
emotive with their justi?cations relying purely on
military necessity (Fitzgerald, 1972; Kaufmann,
1964; Sanders, 1973; Sapolsky, 1972). However,
an acquisition process guided by con?ict and bar-
gaining showed the extent to which interested
human beings participated in decision making.
According to the logic of game theory, the arms
race was not controlled by fallible human beings
but by technical, non-partisan forces inherent in
nature. The acquisition process had to be made
to appear to be guided by these same impartial
forces in order for the physical preparation for
Armageddon to be sustained by the game theore-
tic justi?cation.
By elevating the economics of defense to a posi-
tion of superiority, PPB ensured that the acquisi-
tion process would be discussed within the
rhetoric of rational economic choice. In rational
economic choice models, the structural features of
an economy (e.g. supply and demand) are
endowed with life. Thus, within this perspective, it
is the characteristics of an economy, not
humans, that determine what will be produced
and what will not. Hence, PPB made humans
appear to be super?uous to the weapons acquisi-
tion process by fetishizing policy objectives (e.g.
Mutually Assured Destruction), making it seem as
if weapon systems were chosen by national goals,
not interested human beings. The extent to which
PPB fetishized policy objectives and made the
arms race appear to be free from human inter-
est is illustrated in the following Congressional
testimony by Enthoven in which he laid out the
‘‘objective’’ criteria by which US strategic forces
were established:
512 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
Our basic policy objectives and Soviet strate-
gic nuclear capabilities are the main factors
that determine the size and kind of forces we
should have. Many criteria are available for
measuring the ability of our forces to meet
the need established by these two factors. We
could use megatonnage, payload, or simply
numbers of delivery systems. However, these
are input measures which tell us what we
have, not what we can do. We prefer to con-
centrate on outputs to measure e?ectiveness.
To determine how well our strategic o?ensive
forces will achieve their objectives, we must
know their ability to destroy particular kinds
of targets. We then relate this target destruc-
tion capability to our basic objectives in order
to measure the adequacy of our forces (US
Senate, 1968a, p. 120).
Thus, PPB made it appear as if defense ques-
tions could be subsumed under an all-purpose
military science in which the choice variables were
given by nature and the e?ects of alternatives
could be stated with certainty. Thus, choosing the
appropriate nuclear weapons became a matter of
routine calculation. This allowed McNamara to
discuss nuclear weapons in a discourse that was
free of emotions or human concerns. Thus, just as
game theory converted nuclear war into a problem
of arithmetic, calculus and probability, PPB con-
verted the choice of nuclear weapons into the
same. This is illustrated by McNamara’s cool and
calculated description of how strategic retaliatory
forces were chosen:
In contrast to most other military require-
ments, the requirement for strategic retalia-
tory forces lends itself rather well to
reasonably precise calculation. A major mis-
sion of these forces is to deter war by their
capability to destroy the enemy’s warmaking
capabilities [deleted]. With the kinds of
weapons available to us, this task presents a
problem of reasonably ?nite dimensions,
which are measurable in terms of the number
and type of targets or aiming points which
must be destroyed and the number and types
of weapon delivery systems required to do the
job under various sets of conditions. The ?rst
step in such a calculation is to determine the
number, types and locations of the aiming
points in the target system. The second step is
to determine the numbers and explosive yields
of weapons which must be delivered on the
aiming points to insure the destruction or
substantial destruction of the target system.
The third step involves a determination of the
size and character of the forces best suited to
deliver these weapons . . . Clearly, each of
these crucial factors involves various degrees
of uncertainty. But these uncertainties are not
completely unmanageable. By postulating
various sets of assumptions, ranging from
optimistic to pessimistic, it is possible to
introduce into our calculations reasonable
allowances for these uncertainties (House of
Representatives, 1962a, pp. 3171–3172).
In the USA, the fear of nuclear weapons culmi-
nated during the Cuban Missile Crisis of 1962 and
started ebbing thereafter, remaining fairly dor-
mant until the 1980s. Several reasons have been
suggested as to why this occurred including the
Limited Test Ban Treaty of 1963, which literally
took nuclear weapons underground and out of
sight, the promotion and acceptance of the
‘‘peaceful atom’’, and the eruption of a hot war in
Vietnam. However, the ebbing of fear has also
been attributed to the gradual adaptation of the
world to nuclear weapons, as well as the sense that
the matter was being taken care of by reliable
experts (Boyer, 1984; Lifton & Markusen, 1990).
The abstract, technically rational discourse of PPB
contributed to the latter.
7. Discussion
While PPB contributed to normalizing nuclear
war by converting the arms race into a routine and
mundane resource allocation problem, such a
frame of reference distorted visibilities and created
even more internal inconsistencies in the logic of
national defense. PPB presupposed and therefore,
eliminated from critical appraisal, the assumption
that security could be achieved by perfecting the
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 513
art of killing. However, this occurred at exactly
the same time that the Cuban Missile Crisis and
the Bay of Pigs demonstrated that military might
was not a successful means for achieving geopoli-
tical goals (Barnet, 1972; Lifton & Falk, 1982).
Thus, PPB assisted with lending militarism cred-
ibility at a point in time when its ine?ectiveness
was becoming apparent and hence, should have
been deeply questioned.
Further, PPB assumed that the ine?cient allo-
cation of resources was the primary problem pla-
guing the defense establishment. However, given
the fact that by 1961 the USA possessed enough
nuclear weapons to destroy the world several
times over, it is questionable how improving e?-
ciency would bene?t humankind. As Frederick
Scherer, one of the ?rst academicians to do an
analysis of weapons acquisition process, stated
with respect to the goal of e?ciency:
I am troubled by a basic policy premise of
this book: that e?ciency is a desirable objec-
tive in the conduct of advanced weapons
development and production programs. It is
by no means certain that this is true. The
weapons acquisition process may be too e?-
cient already. To be sure, there are gross
ine?ciencies. But despite them, the process
has given mankind all too much power for its
own annihilation. One might justify e?ciency
measures in the hope that freed resources
could be devoted to education, exploration of
the universe, technical aid to emerging
nations, urban redevelopment, etc. Given the
pervasive pressures for added arms spending,
however, it seems likely that e?ciency gains
would lead more to increases in our already
formidable arsenal than to the reallocation of
resources into applications yielding greater
social bene?t (1964, p. ix).
In addition, PPB’s emphasis on e?ciency dis-
tracted attention away from other possible goals
for the DOD (Knorr, 1969; Murdock, 1974;
Schlesinger, 1974). As one concerned scholar
would ask, could not the minimization of military
con?ict or the loss of human life in the event of
con?ict be as important objectives as e?ciency for
defense (Knorr, 1969, p. 582). Further, given that
cost-e?ectiveness studies required all variables to
be quanti?ed, stress was placed on the tangible
characteristics of a weapon system (e.g. ?repower,
vulnerability, survivability, etc.) when performing
the analysis (Knorr, 1969; Murdock, 1974; Pal-
mer, 1978; Schlesinger, 1974). As a result, intangi-
ble factors, such as the way human beings are
impacted by or impact the system, were ignored.
Unfortunately, in the case of the M-16 ri?e used in
the Vietnam War, PPB’s narrow focus on e?-
ciency and quanti?cation actually led to an
increase in the loss of human life (Gibson, 1986).
As Senator Mundt explained the M-16 disaster:
As I understand it, the ?ap [about the M-16]
developed from the fact that after we got the
new ri?e and found we had a lot of cartridges
that wouldn’t ?t into the ri?e, and we had a
lot of powder that hadn’t been used from
another war, we would put the powder in
these bullets, and save a lot of money, which
was a perfect example of how a cost analysis
system would save a lot of money. There was
only one thing, that something in the powder
was too sticky and it clogged up the ri?e, until
they got a new ri?e cleaning system. Many
lives were lost, of course. But here is a case
where a cost analysis could go wrong,
whereas, perhaps, cranking in a lot more
human elements, we should have said, ‘Per-
haps these ri?es would be all right, but let’s
try them on the ?ring range at home with this
old powder and see how they work.’ (US
Senate, 1968b, p. 353).
Further, in order to employ systems analysis to
determine the most cost-e?ective defense, a parti-
cular con?ict situation (e.g. guerrilla war, conven-
tional war, nuclear war, etc.) had to be assumed.
Yet, as Schlesinger (1974, p. 65) notes, ‘‘The typi-
cal fare of the present world struggle is not the
expected wars, but rather the crises that erupt at
times and in places where they are not anticipated.
In Vietnam, US forces have been deployed to deal
with con?ict situations other than those for which
they were optimized.’’ For instance, when select-
ing aircraft for the Air Force, the systems analysts
514 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
presupposed the use of nuclear weapons in a
major con?ict. This meant that the bombers in
inventory during the 1960s were designed for
nuclear delivery and therefore, very expensive.
Given that nuclear war would require few sorties,
the anticipated losses due to attrition were bear-
able in terms of the cost of the bombers and the
drain on the aircraft inventory. Hence, when the
USA engaged itself in Vietnam, it needed to rely on
expensive and vulnerable aircraft to ?y repeated
sorties against heavy ground ?re. Attrition was
higher than planned, resulting in greater costs and
inventory drainage (Schlesinger, 1974). In other
words, the most cost-e?ective weapons for the
planned war were the least cost-e?ective for the
actual war. Thus, in many situations, PPB failed
to provide the best defense for the least cost.
Lastly, the instrumental rationality of systems
analysis and PPB made Enthoven’s equation of the
economics of nuclear war with that of a multi-pro-
duct ?rm appear reasonable. Using the thesis of
diminishing marginal returns, Enthoven devised a
cost-e?ective way to destroy the Soviet Union with
nuclear weapons (Enthoven, 1963). His analysis for
a cost-e?ective nuclear war proceeded as follows.
First, it was determined that the Soviet Union would
be su?ciently devastated if 30% of the population
was killed and half of the industrial capacity
demolished. Second, it was ascertained that this
could be accomplished by destroying all the major
cities in the USSR. Lastly, the precise amount of
megatons necessary to accomplish this task was
calculated, 400 megatons would su?ce. Because
the remaining cities and economic sites in the
USSR were dispersed, to kill an additional 25% of
the population would require 10 times as many
bombs. In other words, if the megatons were
doubled to 800, Soviet fatalities would only rise by
10 percentage points and industrial capacity
destroyed would only increase by three percentage
points (Fallows, 1981; Kaplan, 1983; Testimony of
Enthoven, US Senate, 1968a). Clearly, there were
diminishing marginal returns to nuclear war and a
cost-e?ective method for ?ghting them.
However, what was vastly ignored in this for-
mulation is the fact that once nuclear war began
no one would be concerned about e?ciency and it
is highly unlikely that the dictates of rational eco-
nomic choice models would be guiding human
behavior. Rather, in the advent of nuclear war,
chaos and insanity would most likely reign
supreme. As Schell notes:
. . . the outbreak of nuclear hostilities in itself
assumes the collapse of every usual restraint
of reason and humanity. Once the mass kill-
ing of a nuclear holocaust had begun, the
scruples, and even the reckonings of self-
interest, that normally keep the actions of
nations within certain bounds would by de?-
nition have been trampled down, and would
probably o?er little further protection for
anybody. In the unimaginable mental and
spiritual climate of the world at that point it
is hard to imagine what force could be coun-
ted on to hold the world back from all-out
destruction (1982, p.32).
Further, the problem with nuclear weapons is
that they keep throwing up surprises. For
instance, it took scientists more than a decade to
realize why electrical equipment at atomic bomb
test sites failed: nuclear weapons create an elec-
tromagnetic pulse which damages solid state cir-
cuitry (Schell, 1982). The implications of such a
?nding for the ability to command and control a
nuclear war are devastating. As few as one to ?ve
high-altitude nuclear explosions could trigger an
electromagnetic pulse strong enough to ruin the
circuitry underlying the command and control
system in the USA, destroying the country’s
capacity to launch a counter-attack. This com-
mand vulnerability has been one of the most sig-
ni?cant problems to plague strategic thought, yet
because it is not quanti?able it does not ?t neatly
into standard measures of the strategic balance
(e.g. delivery vehicles, equivalent megatonnage,
hard target potential, etc.) and therefore has been
ignored (Lifton & Falk, 1982; Ravetz, 1990;
Steinbruner, 1981–1982).
Further, it was not until the beginning of the
1980s, that scientists started recognizing the
possibility of a nuclear winter following nuclear
war. Nuclear explosions would create ?res which
would release enormous amounts of smoke par-
ticles into the earth’s atmosphere. These smoke
M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519 515
particles would prevent the sun’s rays from reach-
ing the earth, cooling a large fraction of the
northern hemisphere’s land surfaces by more than
10
C if nuclear war occurred in summer. In addi-
tion, it was estimated that 100 megatons may be
su?cient to produce severe climatic e?ects, if the
100 megatons consisted of 1000 individual 100-
kiloton (about eight times the size of the Hir-
oshima bomb) bombs aimed at the 1000 largest
cities in the Northern Hemisphere. However,
nuclear winter could be caused by even less than
100 megatons if the bombs were predominantly
aimed at oil re?neries, because of the huge amount
of sooty smoke this would produce (Birks & Ehr-
lich, 1990). Hence, by the 1980s, scienti?c evidence
demonstrated that Enthoven’s cost-e?ective 400-
megaton nuclear war, if conducted properly, could
have destroyed the whole world, not just the
Soviet Union.
8. Conclusion
In 1965, President Johnson ordered all depart-
ments within the Executive branch of the govern-
ment to adopt PPB by ?scal year 1968 (Johnson,
1969). However, within a brief period of time PPB
proved to be a complete failure (Jablonsky & Dir-
smith, 1978; Wildavsky, 1978). In a paper examin-
ing the reasons for PPB rejection, Jablonsky and
Dirsmith (1978) concluded that noticeably absent
from their research was a discussion as to why a
system so bound for failure was introduced to
begin with. Calling PPB a toxic agent, they query,
‘‘Maybe there is a valid reason why this type of
toxic agent was found in the corpse in the ?rst
place’’ (Jablonsky & Dirsmith, 1978, p. 224).
This paper attempted to provide an answer to
this question by demonstrating that the political
rami?cations from an accounting technique can
far exceed any ostensible gains in e?ciency from
the implementation. First, the research demon-
strated that McNamara used PPB to gain control
of the Armed Forces by centralizing decision
making in the OSD and by forcing the services to
justify their budget requests using cost-bene?t
analysis. By prescribing the acceptable discourse
for defense decision making, McNamara ensured
that his preferred solution, the most analytically
cost-e?ective, would prevail.
Second, the paper showed that PPB assisted
with rationalizing and normalizing the arms race
by converting it into a series of problems to be
solved. This contributed to masking the horren-
dous death and destruction that a nuclear war
would create and thus made the preparations
appear to be ‘‘the normal motions of normal men,
not the mass compulsions of people bent on total
death’’ (Mumford, 1946, p. 5). Further, the scien-
ti?c discourse of PPB gave the impression that the
acquisition process was under the control of
experts and this helped to alleviate the US popu-
lations fear of nuclear war.
Hence, while the accounting technique of PPB
did disappear, the economically rational discourse
it introduced to defense continued to be a useful
tool for later politicians. For instance, in March
1983, when President Reagan sought support for
his $290 billion defense budget, he stated in a
televised address:
What seems to have been lost in all this
debate is the simple truth of how a defense
budget is arrived at. It isn’t done by deciding
to spend a certain number of dollars. Those
loud voices that are occasionally heard char-
ging that the Government is trying to solve a
security problem by throwing money at it are
nothing more than noise based on ignorance.
We start by considering what must be done to
maintain peace and review all the possible
threats against our security. Then a strategy
for strengthening peace must be agreed upon.
And ?nally our defense establishment must be
evaluated to see what is necessary to protect
against any and all of the potential threats.
The cost of achieving these ends is totaled up
and the result is the budget for national
defense (quoted in Stubbing, 1986, p. 55).
Thus, even though PPB failed, it did introduce a
rhetoric which lent rational support to a highly
irrational act. By masking the human and social
costs of war, PPB turned the preparation for vio-
lence into a process free from emotions and moral
judgements and hence contributed to masking the
516 M. Chwastiak/ Accounting, Organizations and Society 26 (2001) 501–519
increasing barbarity of the twentieth century
(Bauman, 1989; Hobsbawm, 1994). If the twenty-
?rst century is to be a century of peace, then the
masks must be removed and war must be recog-
nized for what it is; death, destruction and the
normalization of insanity.
Acknowledgements
The author would like to thank Tony Tinker,
Joni Young and Alistair Preston and the anony-
mous reviewers for their helpful comments.
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