;(lein (Huseum Copy)

NATIONAL AIR AND SPACE MUSEt~ RAND CORPORATION

JOINT ORAL HISTORY PROJECT ON THE HISTORY OF THE RAND CORPORATION

EDITORIAL USE FORM PREFACE This manuscript is based upon a tape-recorded interview conducted by Dr. Ioseph Tatarewicz on August ]2. 1988 The tape and the manuscript are the property of ~he undersigned~ however, the originals and copies are indefinitely deposited, respectively, at the National Air and Space Museum of the Smithsonian Institution and at the RAND Corporation. I have read the transcript and have made only minor corrections and emendations. The reader is therefore asked to bear in mind that this manuscript is a record of a ~poken conversation rather than a literary product. Though the smithsonian Institution and the RAND Corporation may use these m~terials f~r their own purposes as they deem appropriate, I wish to place tt.· ':~ndition as selected below upon the use of this interview materia~ ~~. > thers and I understand that the Smithsonian Institution and the RAN~ Corporation will make reasonable efforts to enforce the condition to the extent possible.

CONDITIONS (Check/one)

\/! PUBLIC. THE MATERIAL MAY BE MADE AVAILABLE TO AND MAY BE USED BY ANY PERSON FOR ANY LAWFUL PURPOSE. OPEN. This manuscript may be read and the tape heard by persons approved by the Smithsonian Institution or by the RAND Corporation. The user must agree not to quote from, cite or reproduce by any means this material except with the written permission of the smithsonian or RAND. MY PERMISSION REQUIRED TO QUOTE, CITE OR REPRODUCE. This manuscript and the tape are open to examination as above. The user must aqree not to quote from, cite or reproduce by any means this material except with the written permission of the smithsonian or RAND in which permission I must join. Upon my death this interview becomes open. EDITORIAL USE FORM (CONT.)

MY PERMISSION REQUIRED FOR ACCESS. I must give writen permission before the manuscript or. tape can be utilized other than by Smithsonian or RAND staff for official Smithsonian or RAND purposes. Also my permission is required to quote, cite or reproduce by any means. Upon my death the interview becomes open.

(Signature) Dr. Burt Klein (Name, typed) 12/8/88 (Date) Klein, Burt. Date: August 12, 1988. Interviewer: Joseph Tatarewicz. Auspices: RAND. Length: 2 hrs.; 33 pp. Use restriction: Open. After briefly reviewing his upbringing, pre-World War II education in economics, and Army Air Forces training during the war, Klein discusses his work as an economist on the strategic Bombing Survey in 1945 and obtaining a PhD in economics from Harvard immediately after the war. He then describes working for the Council of Economic Advisors from 1948 to 1952, participating in a RAND summer study in 1950, and his initial work at RAND beginning in 1952 at the Development Planning Office in DCS/Development. Klein next reviews his impressions of systems analysis, heading a project studying USAF R&D and the reactions of different RAND personnel to it, assuming the leadership of the Economics Division in 1962, the growing difficulties between RAND and the USAF in the early 1960s, and his reasons for leaving RAND in 1965.

TAPE 1, SIDE 1 1-3 Dr. Klein's early life and undergraduate education at Harvard (Joseph Schumpeter) 3-4 Graduate studies in economics 4-6 Army Air Forces duty in WWII; navigation training 6-8 Becomes Galbraith's assistant for OSS bombing damage survey 8 Employment at Council of Economic Advisors 8-9 Klein's PhD studies and dissertation TAPE 1, SIDE 2 10 PhD thesis 10-11 Employment at the Council of Economic Advisors; made a representative to National Security Council 11-14 Klein's split from the Keynesian tradition; contradiction between theory based on assumptions of stability in economy and reality of instability Issue of macro-micro relationship; impact on work at Council 14-15 First introduction to and impressions of RAND 15-18 Begins employment at RAND; on loan to Air Force Development Planning Office (General Bernard Schriever); Lockheed proposal for U-2 reconnaissance plane (Kelly Johnson); RAND Washington office 18 Klein transfers to Santa Monica RAND office TAPE 2, SIDE 1 19-20 Air Force R&D system, flexibility during Klein's AFDAP assignment 20-22 Klein's first impressions of RAND; systems analysis, and Klein's view of its utility, situations in which it is not useful: different views within RAND on systems analysis; U-2 development 22-25 Klein's R&D project at RAND to test empirically his criticism of systems analysis; superiority of Sidewinder to Falcon missile 25 Klein's criticism of Air Force approach to R&D; briefings of R&D study TAPE 2, SIDE 2 26-27 Briefings of R&D study (continued); Klein becomes head of economics department 27 Use of outside consultants in economics; interaction between economists within RAND and outside RAND on question of systems analysis 27-29 RAND attitudes toward Klein's R&D study; collegiality among RAND economists; Klein's experience as a manager 29-31 Pressure on RAND for accountability in early 60's; the manned bomber question; B-70 proposal; SOFS study; changing relationship between RAND and Air Force 32-33 American military attitude toward nuclear war post-WWII, contracted to other nations 33 Decision to leave RAND KLEIN-1

Interviewee: Dr. Burt Klein

Interviewer: Dr. Joseph Tatarewicz

Location: Dr. Klein's home, just outside San Diego, Calif.

Date: August 12, 1988

TAPE 1, SIDE 1

Dr. Tatarewicz: On the biographical side, I know from a couple of little entries that appeared in American Men and Women of Science and in WHO'S WHO and so forth that you got your bachelor's at Harvard in 1940 and your Ph.D. in economics in 1948.

Dr. Klein: Yes, that's right.

Tatarewicz: I was wondering if we could go back a little bit, and if you could tell us something about your early home life and who your parents were.

Klein: Okay. I was born in Minneapolis, Minnesota but up till the time I went to college, I lived in a small town in northern Minnesota by the name of Sandstone, where my father operated a general store~

Tatarewicz: Was your mother a housewife?

Klein: No, she worked in the store.

Tatarewicz: She worked in the store. Was it a family operation?

Klein: Yes.

Tatarewicz: Did you have any brothers or sisters?

Klein: One sister.

Tatarewicz: And was she older or younger than you?

Klein: Younger.

Tatarewicz: And I presume that she worked in the store also?

Klein: No, not very much.

Tatarewicz: I see. Were you encouraged at home to pursue education? KLEIH-2

Klein: Yes, very much. Yes.

Tatarewicz: In what ways?

Klein: Well, I can't remember in exactly what ways. I know it was discussed a lot. It was just something that was understood. You know, it was talked about. It was understood, and I never objected but I imagine if I had there would have been a terrific row about it.

Tatarewicz: It was a foregone conclusion then that you were going to go to college?

Klein: Right.

Tatarewicz: Was there any thought you would take the family business over?

Klein: Yes. My father wanted me to do that, but he still wanted me to go to college.

Tatarewicz: How did you choose Harvard?

Klein: Well, they gave me a scholarship for one thing, and I don't know, I'd just heard that it was a terrific school.

Tatarewicz: Did you have any notion of what it was that you were going to study at Harvard, in college? Did you have any notion of specializing?

Klein: No, I didn't. I didn't. Not really. As a matter of fact, when I first started I was going to major in music, and I did take quite a few music courses, and I don't know quite how I got into economics.

Tatarewicz: Did you have to take introductory courses in economics at Harvard?

Klein: Yes.

Tatarewicz: As part of the undergraduate curriculum?

Klein: Yes, which I did.

Tatarewicz: What was your major when it came around to choosing a major as an undergraduate?

Klein: Economics.

Tatarewicz: It was economics.

Klein: Yes. But that only meant that about a quarter of the courses that I took had to be in economics. I also took courses outside of economics. You know, history, political science. KLEIN-3

There were a certain number required, but I took many more than that. Philosophy.

Tatarewicz: Were there any professors or teachers at that time whom you remember now as having been influential?

Klein: Oh, yes. One in particular, Schumpeter. Joseph is his first name. I don't know if you know much about economics, but he's the economist who made innovations a fashionable subject in economics. He was the great father of understanding an economy that could bring about innovations, and as a result of bringing about innovations, could bring about evolution, because that's the main source of economic evolution. And if you notice those things, if you notice that sort of tone in a couple of things I wrote at RAND way back in the early days, a lot of that comes from Schumpeter.

Tatarewicz: I see. Were you thinking, as an undergraduate, what sorts of areas of economics were you most interested in?

Klein: I've always been most interested in what you call microeconomics. Microeconomics. What goes on at the level of the firm. But unlike most economists I am not interested in equilibrium economics, the economics of the dull state, in which initial conditions never change. In such an economy firms are playing zero-sum games. By contrast, I am interested in positive sum games in which initial conditions are constantly changing. The finest example the world has never known is that in the computer industry today. It is these games that result in improving our living standards. As Caltech undergraduate students taught me, "Classical equilibrium microeconomics is Newtonian celestial mechanics for girls!"

Tatarewicz: Okay. Did your experience then naturally lead you to graduate school, to consider taking an advanced degree?

Klein: Did my experience?

Tatarewicz: Yes, how is it that you decided to take advanced degrees?

Klein: In economics?

Tatarewicz: In economics.

Klein: I don't know. [interruption]

Tatarewicz: We'll continue then. The last question that I asked was how it was that you decided to take an advanced degree. Weren't you going to return to the family business?

Klein: Well, let me say by way of answering that question, after I graduated from Harvard in 1940, I went to the University of Minnesota for one year, and I was a teaching assistant there, KLEIN-4 which you were automatically if you were a graduate student. At the time I went to university of Minnesota for that year, then I already at that time had decided to go on into graduate work. okay. I was interested in economics, you know. I thought it was interesting.

Tatarewicz: So this was in University of Minnesota's graduate school then?

Klein: Right.

Tatarewicz: And you were in economics.

Klein: Right. For just one year, but I didn't really like their economics department. I didn't like it there. It was too doctrinaire a place, and you see that was in the day when Keynesian economics was on the upswing. Coming from Harvard I was predisposed to be a Keynesian, and the University of Minnesota did not tolerate such heresies as of that time. So I went to work for the government in 1941, and this was just before the beginning of World War II, you know. This was just before the war broke out, and I worked there for about a year.

Tatarewicz: What part of the government?

Klein: Department of Commerce. Bureau of Economics. I forget exactly what they call it. It's the Bureau of Economics, I guess. They have a fancier name for it now but I forget what it is. I don't know if I'm going into too much detail?

Tatarewicz: No, this is fine.

Klein: From there, as a patriotic American, rather than be drafted I volunteered, and I went into the Air Force.

Tatarewicz: So just to back up just a bit, if you were going to go to graduate school in economics, why didn't you stay at Harvard, since it seemed to be an agreeable place to you intellectually?

Klein: I didn't have the money. I didn't have the money to go to graduate school. Those were the Depression years. I had just barely made out in undergraduate, and I didn't want to take any more money from my parents, and graduate school at the University of Minnesota--they paid me as a teaching assistant in those days almost as much as I needed to live on. I don't mean to say I was willing to starve, but I could get by. Yes, that was the reason.

Tatarewicz: Okay. So when you joined the Air Force, where were you put?

Klein: I was sent to a classification school in Nashville, Tennessee, where they gave you a variety of tests, and guess what they classified me as? They classified me as a fighter pilot. KLEIN-5

But I really didn't think I'd make a good fighter pilot, so I went to the medical guy who's in charge of that operation, a doctor, and I said, IIMaybe the test came out that I was a fighter pilot, but looking at my responses in driving a car, I certainly wasn't a fighter pilot. 1I So he wrote down navigator and I became a navigator.

Tatarewicz: Okay. Had you been interested in aircraft? Why choose the Air Force over any other?

Klein: I can't give you a good reason. I can't. I don't know.

Tatarewicz: Okay, so you were made a navigator.

Klein: Yes.

Tatarewicz: Where did they train you to be a navigator?

Klein: In Monroe, Louisiana, of all places.

Tatarewicz: The reason I'm asking that question is that another thread of research that I and some other colleagues have done has to do with what astronomers did during the war, and an awful lot of astronomers wound up teaching navigation at various places, and of course Harvard College Observatory was one place where not only were they teaching navigation, but they were inventing and developing curricula and techniques, instructional techniques and other sorts of things like that.

Klein: Well, they didn't have any Harvard professors down where I was at Monroe, Louisiana. I don't remember having any astronomy professors. In any event there wasn't much astronomy. Oh yes, you had to learn about the stars. I forgot about that.

Tatarewicz: How did the curriculum and instruction in teaching you navigation strike you? Did it seem to be competent, dreadful, easy, difficult?

Klein: It seemed to be competent and easy. There wasn't a heck of a lot to it. You see there was a kind of a slide rule, not literally a slide rule, but something that operated on the same principle as a slide rule. You slid something around and that enabled you to convert the true air speed to the real air speed, and the miles you were going per hour, and you could get your true heading and convert this into your actual heading. This course lasted for about six months, but most of that consisted of going out and actually navigating in planes. The real thing you had to learn was simply how to look out of an airplane window and recognize where you're at from the map.

Tatarewicz: Did you find that easy to do? KLEIN-6

Klein: Not at first, because at first I used to get airsick, and nothing's easy to do when you're airsick. But after I got over being airsick, I found it easy to do.

Tatarewicz: Where were you sent to ply your new trade?

Klein: I was in the Troop carrier Command, and the principal wartime duty of the Troop carrier command was to deliver paratroopers to the invasion beaches in Normandy. So that's what I did.

Tatarewicz: What happened to your interest in economics during this period? Did you keep interested in it, or did you put it on the shelf?

Klein: Well, I put it on the shelf, but after I had finished my tour with the Troop Carrier Command, and through some people I knew in OSS I was offered a job working for the United states strategic Bombing which at the time was just getting started to survey the damage done by bombing during World War II. You've probably heard of it? And so I was asked to join this group, and [John Kenneth] Galbraith was the head of the economic part of it, and he made me his deputy.

Tatarewicz: I see, so it was through your colleagues and friends who had gotten into this unit that you knew, that Galbraith-­

Klein: Well, no, no. Actually I was selected before Galbraith. But I had heard about it through OSS people who actually selected the targets during World War II. This is quite a few years ago, and so I don't remember all the details, but the three guys who were selected before Galbraith, one was a guy by the name of Alexander, and I don't know his first name. The others were Paul Nitze and George Ball, you know who I'm talking about now.

Tatarewicz: Yes.

Klein: They or somebody working for them selected me. I met Paul Nitze and Alexander but I can't remember. I think some military guy working for them selected me. [Interruption] So I got on a bombing survey.

Tatarewicz: And when you got to the bombing survey, what did you­ find? That is to say, how many people were at work on it, what were the facilities like, what kind of activity was going on, and how was it organized?

Klein: There were about a dozen economists involved. I can't remember all of them now. Some British, Nicholas Kaldor, for example. Another economist was Ed Dennison. Paul Baran--he's now dead. Tibur Scitovsky.

Tatarewicz: Yes, that's okay. But about a dozen economists. KLEIN-7

Klein: Yes. Tatarewicz: And what other sorts of people were in the group? Any other professionals? Klein: No. Not in this group. There was a group that surveyed the physical damage. There was even a group on the psychological effects, under Rensus Lickert, but I don't know much about their activities. Tatarewicz: So you and the other economists, did you have your own separate building or a suite of offices? Klein: Well, before the end of the war we were stationed in London, and in some offices really owned by the embassy. Then after the war ended we moved to Bad Nauheim which is near Frankfurt, and we conducted the survey there mainly by interviewing Germans, and by interviewing Germans who had been in the government, and by collecting a lot of documents from them. For example, we interviewed Speer. Galbraith and I interviewed Speer. And we got tons of documents, of internal documents. Tatarewicz: And was this with an eye towards trying to understand how they were organized and how they operated during the war? Klein: Well, officially this was with a view just towards understanding what the consequences of bombing were on the German economy, but to get some idea of the consequences of bombing, you had to also be familiar with these broader questions--the efficiency of the German war production program. I became so interested in the broader questions that I wrote my Ph.D. thesis on the broader questions, after I went back to Harvard. So my Ph.D. was on Germany's preparations for war. Tatarewicz: Okay. Klein: Incidentally, that won the Wells Prize, which is the best thesis of the year at Harvard, and it's been favorably commented on by some well known historians. Tatarewicz: I'd like to talk about your thesis, but before we move on to that, I'd just like to get a little bit more information about the work that you were doing in England during the war. Klein: In the Army you mean? Tatarewicz: The bombing survey and the economic impact. In addition to, after the war, collecting these documents and interviewing people and attempting to piece together what the effects were, what other kinds of data and information were you working with, actually, during the war? What were you doing with it? KLEIN-8

Klein: See, this bombing survey activity really didn't get organized until early in 1945, and so the war was almost over then. The real activity didn't start until the war was over, and the intervening months weren't used to do research, but to organize the activity. Galbraith had me hiring the people.

Tatarewicz: So you were actually doing some recruiting.

Klein: Yes, I told you I was his primary assistant and except for one or two economists, I recruited all the others.

Tatarewicz: How long did this activity last? Klein: A report was issued in the fall of 1945, so it didn't last very long. Tatarewicz: Yes. with that done, did you immediately want to get back to graduate school?

Klein: No. I worked for the Department of Commerce for about one year, then went to graduate school, finishing my work in two years. Following that I became a staff member at the Council of Economic Advisors.

Tatarewicz: When the GI Bill came around, and you decided to go back to graduate school, did you consider any place other than Harvard? Klein: No. Mainly because I told you I had gotten to know him-­ Schumpeter was my hero, but there were other guys there that I liked too, so I went back.

Tatarewicz: If you could just mention who they were, the ones that you particularly-­

Klein: Well, Ed Mason was the main one. I guess he'd be the main one.

Tatarewicz: Did you have very much course work to do?

Klein: Yes. Oh, I don't know. The usual amount, like three years of course work. I finished all my course work and wrote my thesis, the first draft of it, in two years, which was really working at a feverish pace as you can well imagine, and I got so sick of working that hard, I wanted to take a job, and I put off finishing my thesis for about six months. Have you ever had anything like that happen?

Tatarewicz: Oh, I know the feeling well, yes.

Klein: You sort of know what I'm talking about?

Tatarewicz: Oh, yes. KLEIN-9

Klein: Okay. So I don't need to explain it to you.

Tatarewicz: No, it's very familiar to me. Did you bring data, the data that you used in your thesis, did you bring that with you to Harvard?

Klein: Yes, I brought it with me to Harvard, and it's in the Harvard Library now.

Tatarewicz: So there's a certain sense in which your thesis is really an extension of what you were doing during the war.

Klein: Right. Right. Right. That's absolutely correct.

Tatarewicz: Given what you were doing and your contributions to the final reports and all of that, out of the wartime activities, and then your thesis, what do you think that your graduate training at Harvard in economics--what do you think that contribution might be to your thesis?

Klein: Close to zero.

Tatarewicz: So the course work and the other requirements for the degree at Harvard and everything didn't really flow into your dissertation all that much.

Klein: Right.

Tatarewicz: You could have done it with the data you had and the experience and work you had done.

Klein: Oh, sure. Absolutely. As a matter of fact the course work for a graduate degree in economics was really disappointing, because I had sort of gotten like seventy-five percent of what I got in the graduate courses as an undergraduate, and in any event, the way economics is, the basic ideas are not all that complicated. They're few and simple, and the difference between an undergraduate degree and a graduate degree is that in a graduate degree, you learn how to take the same ideas and put them in a more sophisticated mathematical way. It isn't that you learn more in content. You learn more in technique.

Tatarewicz: What about your fellow graduate students? Two questions. Did you keep in touch with the people you had worked with during the war while you were at Harvard finishing your degree?

Klein: No. But some of my fellow graduate students were people I'd known during the war, so I kept in touch that way, like Carl Kaysen. He had been in OSS during the war in London, and I got to know him. There was a guy by the name of Harold Barnett, who's no longer living, who was at Harvard as a graduate student, and I knew him during the war. And then there was a fellow that I did not know during the war, but we were section heads. I was KLEIN-10 a section head for Ed Mason, and the other section head was Andre Papendreous, and so I got to know him quite well. We got to be friends. You know who I mean?

Tatarewicz: No, I'm afraid I don't. Klein: The head of Greece. Tatarewicz: Oh, that Papendreous.

Klein: Yes.

TAPE 1, SIDE 2

Tatarewicz: One last question about your graduate school work, and that is, you had made a start on your thesis before you left Harvard to take the job?

Klein: Oh, I had finished it essentially. Tatarewicz: Oh, you had.

Klein: I had it almost done. I needed to have the footnotes put in, you know, all the other little things you need to do. Very little. In fact, when I finally finished it, it took me something like three weeks. So I had done all but three weeks.

Tatarewicz: After a short break we're continuing. The final question that I had about your work at Harvard before joining the Council of Economic Advisors has to do with the way in which you wrote your thesis. Did you discuss what you were doing at any great length with your fellow graduate students and colleagues, or was it more an individual kind of a project?

Klein: It was more an individual kind of project. There was no one really very interested in that kind of thing there.

Tatarewicz: And your advisor, did he exercise very much influence on it?

Klein: No. Tatarewicz: Okay. So how was it that you decided to get a job? How is it that you came to the Council?

Klein: I heard that they were looking for people, and I thought it would be interesting to work there, and at that stage I certainly wasn't interested in becoming a university scholar. It was kind of dull for me.

Tatarewicz: So did you approach the Council? KLEIN-ll

Klein: Yes. Yes, I approached the Council.

Tatarewicz: Through whom?

Klein: Oh, through a guy by the name of Ed Hoover; we talked and soon I was hired.

Tatarewiez: For what kind of work?

Klein: Staff work on the Council.

Tatarewiez: And dealing with what kinds of issues? Would you write reports for people? Would you brief people? Would you study issues that were of interest?

Klein: Well, the Council of Economic Advisors always has put out an annual economic report, so part of it consisted of writing that report. The Economic Report of the President, that's a whole institution. Then we interacted with other government agencies on particular studies of questions, and I became, while I was at the Council of Economic Advisors, a representative to the National Security Council, to the NSC, where I was involved in writing NSC-68, which was the first NSC report.

Tatarewiez: And what was the subject of that? Was this broad ranging?

Klein: This was the report that said that there was a Russian threat and that we had to do something about it, etc., etc. It was the document that admitted that there was a Cold War. I can't tell you in detail because it's highly classified, but it's a rather famous document. I understand, by the way, my role in writing it was very, very minor. I mean maybe there was a comma different than it otherwise would have been, or maybe one or two words would have been a little different. It was just an activity in which I was involved. Don't quote me as saying I had a big influence on it.

Tatarewiez: So was your role in this as an economist? That is, were you providing specific economic counsel of some sort?

Klein: There was the question of the cost of a stepped up military program and how to pay for it.

Tatarewiez: So on the Council, you worked a little bit with the NSC. You worked on this annual report. Were you applying economic theories to data for specific purposes?

Klein: Oh, sure. Sure. You see, at that time Keynesian economics was very fashionable, and of course at that time I was a Keynesian. And sure, we were applying Keynesian theory to seeing what was happening and to understanding what was going on in the economy, and on the basis of that theory, making recommendations for what ought to be done to raise or lower KLEIN-12 taxes, interest rates, etc. We were advising the Federal Reserve Board on what should be done. Sure, we were applying economic theory.

But just as an afterthought, now that I'm a grown-up, I've grown away drastically from that tradition, and that's what I'm writing this book about right now. I'm just putting this in because you asked me. I think that events in the macro world that we understand from a macro point of view, your common sense should tell you are strongly influenced by events that occur in the micro world. If I told you the micro and macro worlds were completely independent in some fields, you'd say that field doesn't know anything. Well, in economics they are more or less independent, the micro and the macro, as a result of the micro being the wrong kind of micro anyway, from understanding what's going on from the point of firms.

You see, economics is all equilibrium economics. It's all based on a static equilibrium. Well, the economic world is never in a static equilibrium. It's always making history, as you may have read some place. And I don't want to go too far on this, because this gets it way aside. The propositions that you can make on the basis of something being in an equilibrium don't necessarily hold when it's not in an equilibrium. In fact, the propositions that you make about an equilibrium system can be diametrically opposed to a non-equilibrium system. That's the general gist of it.

Tatarewicz: Very similar to the relationship of statics to dynamics in physics. Very similar to a chemical equilibrium in which initial conditions are continually changing.

Klein: Exactly. Exactly. You see, in statics you're always taking initial conditions as given, right? In dynamics you can change your initial conditions, right? Well, the propositions that you can make about statics in physics don't hold for systems that are changing their initial conditions, do they?

Tatarewicz: Right.

Klein: At CalTech I had a Japanese girl undergraduate, cute Japanese girl who made the point in an interesting way. She got up and said, "You know, Professor Klein, in physics we are taught to maximize only under special and unusual circumstances, i.e., when a system is closed. You guys in economics maximize all the time. NOw, what's the difference between economics and physics?" Don't you think that's good?

Tatarewicz: Nicely put. You were in one of the more dynamic economic conditions that it's possible to imagine when you were with the council, because they were attempting to demobilize from a very peculiar kind of an economic condition that had held during the war. KLEIN-13

Klein: Right. This is a good point, and I'm glad you brought it up, because the Keynesian economists now, and in particular Paul Samuelson, who is their god, or was at that time, he thought there would be a terrible depression after World War II. Did you know this?

Tatarewicz: I had heard some of the dire predictions.

Klein: Yes. Well, they made all these dire predictions, and so when I went to the Council, having been trained in Keynesian economics, thinking Paul Samuelson was God, I was noticing that these dire predictions didn't materialize. It began to dawn on me in a sort of vague way that something must be wrong with the macro, or more fundamentally something must be wrong with the micro-macro relationship. I'm just incredibly dumb. It took me years and years to realize what was wrong.

Tatarewicz: And? Go on.

Klein: That's it. It just took me a long time to realize what was wrong. I mean I should have known. It seems what I learned in about twenty-five years, you know, or all those years, a seventeen-year old schoolboy should have learned overnight. I feel terribly disappointed in myself.

Tatarewicz: At the time that you were with the Council, then, you didn't have any reason to distrust the theoretical tools you were using?

Klein: Yes, I did.

Tatarewicz: You did?

Klein: The forecasted depression didn't materialize. Deflation wasn't the problem. It was more inflation. You say, distrust the tools. Well, the tools as they had been developed were only good for making short-term predictions anyway.

Tatarewicz: Did that problem with the theoretical tools, how did that affect your work on the Council? Or because there wasn't anything else to use, did you just-­

Klein: Sure, I just used it. Sure. Sure, I used it just like anyone else. Everyone did, but with a sort of a gnawing feeling of uneasiness.

Tatarewicz: Did you ever give any thought to trying to work in theory?

Klein: Try to what?

Tatarewicz: Try to work in economic theory, to try to improve?

Klein: Well, that's what I did when I came to CalTech. KLEIN-14

Tatarewicz: Yes, but at the time that you were with the Council.

Klein: No. No, I didn't. I never thought of myself as being an economic theorist. In fact, I don't now. I don't think of myself that way, and I don't like to think of myself that way. I've gotten into this stuff to explain what's happening in the U.S. economy.

Tatarewicz: Unless there's something else that you'd like to say about your work with the Council?

Klein: No.

Tatarewicz: We can move on.

Klein: Right, Okay.

Tatarewicz: Had you heard of RAND earlier?

Klein: No.

Tatarewicz: How did you first hear about it?

Klein: Charlie Hitch--you know who he is so we won't go into that--he had evidently heard of me. How, I don't know. You'd have to ask him. He asked me to come out to RAND for a summer, while I was still at the Council. Well, I don't think it was a whole summer, something like six weeks. They have summer people there all the time--or they did then, I don't know if they do now--and that's how I got there. And then, after all the economists on the Council of Economic Advisors were replaced by Republicans, I took a job at RAND.

Tatarewicz: So you were at RAND the summer of '51?

Klein: No. When did Eisenhower come in?

Tatarewicz: '52. You joined RAND in '52 so you'd have been there either the summer of '50 or the summer of '51.

Klein: I guess it was the summer of '51.

Tatarewicz: What did you do that summer at RAND?

Klein: I can't remember.

Tatarewicz: Do you have any memories of how the place struck you?

Klein: Oh, yes. It struck me as being incredibly interesting, very good people. I remember Jim Dusenbury from Harvard was there. I had known Jim when I was in graduate school, and he and I wrote a little paper together but I can't remember what it was all about now. But the people struck me as being very KLEIN-15 interesting. It struck me as being far more interesting than a university. Of course the issues facing the country were pretty lively too. There were a lot of interesting people around RAND. Bernard Brodie. I became very friendly with the head of the math division. His name was John Williams, and he was an exceptionally gifted guy. There was a guy there by the name of Ed Paxson. I don't know if you've heard of him?

Tatarewicz: Oh, yes.

Klein: He was a very interesting guy. Bill Graham, did you ever meet him? He was hired by Ed Barlow.

Tatarewicz: Yes.

Klein: So there were a lot of interesting people there.

Tatarewicz: Did you meet Hitch that summer that you were there?

Klein: Yes.

Tatarewicz: Had you known who he was before then?

Klein: Oh, I'd read a few articles he had written, while I was at Oxford. That's it.

Tatarewicz: So the next time when you come into contact with RAND, it's a time when you're looking for a job?

Klein: Right.

Tatarewicz: When you're going to be out of a job?

Klein: Right.

Tatarewicz: And I'm sorry, I forget--did you say that you mentioned to somebody at RAND?

Klein: Well, I don't remember. Oh, let me say, to the best of my recollection, Hitch had asked me if I wanted to join RAND when I was out there that summer. Or at some time, period. In fact, he may have asked me if I wanted to join RAND before I took that job that summer. I don't remember those details. You'd have to ask him. I doubt if he remembers either. In any event I was asked before I went, and when that situation came up that I needed a job, I said, I'll be glad to take one.

Tatarewicz: So you started working at the Washington office?

Klein: Yes, and this was really my best, the most interesting period I had at RAND, when I was in the Washington office. More particularly, I was loaned to the Air Force, and I was loaned to an outfit in the Air Force called the Air Force Development Planning Office, AFDAP was its name, and the guy at the head of KLEIN-16 that office at that time was a guy by the name of [General] Bernard Schriever. I see from your nod that you know what I'm talking about.

Tatarewicz: Oh, yes indeed.

Klein: What?

Tatarewicz: Oh yes.

Klein: And it was during this period that I met Amrom Katz, and that I met a kind of a sidekick of his by the~name of Richard Leghorn.

Tatarewicz: Yes.

Klein: As of that time, the whole purpose of this AFDAP was looking into our intelligence collection capabilities, of this particular exercise of AFDAP, and more particularly reconnaissance capability, and, of course, it was recognized that some day satellites might be useful for reconnaissance. In fact, the very first report that RAND ever wrote, that Jimmy Lipp wrote on possible uses of satellites was for reconnaissance. I don't know if you know that?

Tatarewicz: Yes.

Klein: Okay. But that was before the satellite era, and so the question was airplanes, and there were two chief contenders. One of them was a proposal that was made by Kelly Johnson of Lockheed for something that later became the U-2. Then there was another proposal for modifying a British bomber, the Canberra was the name of it, so it could fly higher altitude missions. Well, as of the time the Air Force looked at this U-2 thing askance because it had a single engine, but Schriever didn't, and he happened to know a guy over in CIA by the name of Richard Bissell. You know who I mean?

Tatarewicz: Oh, indeed yes.

Klein: okay. So in any event there was a guy in AFDAP now by the name of Eugene Kieffer. He and I worked together in AFDAP under Schriever. We were buddies. We'd write reports together. Schriever asked us to brief Bissell and Bissell became all excited about the U-2 idea.

Tatarewicz: About this?

Klein: About the Kelly Johnson thing. He had never heard of it before. In fact, I don't think he had heard of reconnaissance airplanes before, and this is what aroused his interest in the U-2. KLEIN-17

Tatarewioz: That's very interesting, because the accounts that we have, at least the accounts that have been published, all have people going to Johnson and saying, "This is what we need. Can you do it?" and his then responding. But the notion that he had a concept, that's very interesting. Schriever went to Johnson, not Bissell.

Klein: And as soon as Bissell went into this business, he hired this guy Kieffer. In fact then I became a consultant while still working for RAND.

Tatarewioz: A consultant to Bissell?

Klein: Yes.

Tatarewioz: Okay. So this must have been about '54, then.

Klein: Yes.

Tatarewioz: Something like that, because Amrom didn't join RAND until '53.

Klein: This must have been around '54, yes. Yes.

Tatarewioz: And you were still working at the Washington office?

Klein: Right.

Tatarewioz: You were a member of the economics department.

Klein: Yes.

Tatarewioz: So you were in Charlie Hitch's department.

Klein: Oh, yes.

Tatarewioz: But you were working out of the Washington office.

Klein: Right.

Tatarewioz: How often did you go to Santa Monica in that early period?

Klein: Oh, I suppose I went once every four or five months. You know, once every several months. Certainly not once a week. I went out there and I gave talks to interested people on what I was doing. You know. I was getting paid by RAND, so I gave briefings on what I was doing and what we were doing, in AFDAP, and I collected ideas from RAND. I wasn't doing this all alone.

Tatarewioz: Right.

Klein: The RAND people knew what I was doing. They had no reason not to know what I was doing. KLEIN-iS

Tatarewicz: Right. But what I find interesting is that although a member of the economics department, it wasn't the case that you went to santa Monica and, you know, were in with this same group of people day in and day out. There's a certain sense in which the economics department in santa Monica--you, you were a part of them but you weren't really socially sharing the same sorts of things that they were sharing.

Klein: No.

Tatarewicz: And if very soon after you were hired, you were immediately put in the Pentagon, you weren't spending much time in the RAND Washington office either. Or were you?

Klein: Yes. Well, I had an office there. When I wrote these reports, I wrote them mainly there. Because I could write them in my own office. I could get a secretary to type them. Yes, I did most of the writing there.

Tatarewicz: Who else was in the Washington office? Who were your closest colleagues?

Klein: Russ Nichols. Larry Henderson was then head of the Washington office. That was before Tanham. Did that name ever corne up?

Tatarewicz: Oh, yes.

Klein: And there were two or three people in the Washington office at that time who were interesting to talk to. I can't remember who they are now.

Tatarewicz: So how long were you working then with AFDAP?

Klein: Oh, it must have been like two years all told. You understand these are all approximations.

Tatarewicz: Oh, sure. Did you then corne to santa Monica?

Klein: Yes. I then carne to Santa Monica.

Tatarewicz: How did you make that decision?

Klein: Well, my first wife was killed in an automobile accident by a drunken driver, and I had two children, and my parents lived in California. It was a pretty unsettling period, and I decided to corne to Los Angeles mainly because I needed someone to help look after the kids, right away_ Then I became remarried later. That's why I carne.

Tatarewicz: I see, and when was it that you actually moved to Santa Monica?

Klein: I think it was in '55. KLEIN-19

TAPE 2, SIDE 1

Klein: Another point that I want to make about this earlier exposure to Schriever in the Air Force Development Planning Office--I'm not now only talking about the Air Force Development Planning Office but I'm talking about the entire R&D activity in headquarters Air Force. Well, as of that time the Air Force--at least the R&D part of the Air Force--was a very unbureaucratic outfit, almost a kind of civilian outfit. You see, I had told you that Schriever had told us that we ought to talk to Bissell about this Kelly Johnson airplane. Well, those sorts of things happened rather frequently, I think, at that period of the Air Force's history, but I don't think they happened very much later. I don't think that Schriever himself would have behaved like that five years later. Tatarewicz: The Air Force at that time was a "civilian" organization?

Klein: Sure. Sure. General Putt who was then head of R&D was known not as General Putt but as "Don Putt." When I first came to work at AFDAP he called me in and gave me a lecture on why it was important to "fly before you buy." Only later did the Air Force decide to "buy before you fly."

Tatarewicz: And it didn't have the same sorts of institutional mechanisms like the Army Arsenal System or the Navy Lab System.

Klein: No. No.

Tatarewicz: It was certainly freer to innovate and develop its own unique ways of doing research and development.

Klein: And for a few years, it did. No doubt about it. But later I think it strove very hard to overcome its unmilitary image.

Tatarewicz: By later, what period of time do you mean? Are you still in the fifties?

Klein: I would say beginning in the late fifties, the late sixties. Just taking one person now, the Bernard Schriever that I knew in the fifties and the Bernard Schriever I knew in the sixties were two different guys.

Tatarewicz: And how would you characterize the chief differences?

Klein: Well, I suppose, to use a Russian term, there was much less openness. (laughter) The Air Force strove hard to overcome its earlier civilian image and that's not only my view. Many Air Force officers have said the same thing. One SAC wing commander told me that LeMay was tough in wanting results, but didn't care KLEIN-20 how you did it. However Powers and successors imposed countless rules which resulted in his (the wing commander) retiring early.

Tatarewicz: Do you recall exactly how RAND was described to you when you joined it? That is, what kind of an outfit did you think you were getting hooked up with?

Klein: Yes, I'm glad you asked that question, because I think it will get us on to the next subject, what I did there. The big word in RAND at that time that came both from the economics department and from the engineering departments, the word that hung them together, was the word "systems analysis." You may have heard that once or twice before.

Tatarewicz: One or twice or three thousand times, yes.

Klein: Right. Generally it was felt at RAND that if you were smart, you were a systems analyst, and if you questioned systems analysis, it's because you weren't as smart as you might be. For example, this was the view of Charlie Hitch, and it was a very pronounced view of his. You can tell from what I'm saying now, from a number of reports that I wrote because it's reflected in them. I'm not disposed to argue against systems analysis when you're making procurement decisions, when you're making decisions about capabilities that are already in being, you know.

The problem that arises is in making decisions about babies before they're born. If you're talking about something that could be a pretty significant advance, and many of these were things that the military developed that were supposedly, at least from a technological point of view, big advances, the problem is that in making R&D decisions you're buying information. However, while back of the envelope systems calculations are useful to obtain an idea of the payoff, only experiment can reduce the initial uncertainties. Firms like Hewlett-Packard and Corning Glass investigate hot ideas ("Investigatory Development") but they don't spend millions of dollars until they have good information.

Tatarewicz: In the systems analysis as you found it practiced in santa Monica, did you find people very willing to do that kind of very detailed analysis of what they want to procure, in the absence of hard information on those capabilities?

Klein: Yes, this was the general emphasis. But there were large differences in the analyses. In general, economists operate on the premise that initial conditions are known--all decisions must be made like grocery store decisions. Hitch, Charlie Wolt and Ed Quade were of that mind. By contrast others like Barlow were more sophisticated and took the numbers with a grain of salt.

Another name for systems analysis among the economists--they would call it cost effective analysis, right? KLEIN-21

Tatarewicz: Yes.

Klein: And that's what systems analysis is. It's cost effective analysis. But to do cost effectiveness analysis, by definition you have to be able to make good predictions about what something would cost. But you can't predict very accurately beforehand either the cost of something or what its reliability is going to be, if it's generally a new thing you're developing, because both the cost and the reliability depend on sort of what tricks you can find to make that thing simple. If that's something you've never developed before and a big advance, you don't know how simple you can make it. The basic purpose of R&D is to find out the answer to those questions. And in competitive u.s. industries that's how firms operate. If one or two out of ten exploratory development projects work out that is enough. It's not very profound. It's kind of obvious.

Tatarewicz: But it certainly went against the grain of thinking at RAND.

Klein: Yes. Tatarewicz: And it went against the grain of thinking in the Air Force, especially at the time when you were involved in the R&D study that produced some of your publications at RAND, because the crowning achievements on the Air Force side, in Schriever's own shop, once he had got out to the West Coast were the development of the ballistic missile systems in which all this was planned out. There was parallel development and everything. Klein: No. That's not how the ballistics missile program was planned. Thanks to TRW there was lots of experimentation. But on the other hand, let me take the counter example, the other side of the story. Take Bissell. The way both Bissell and Kelly Johnson operated--Kelly Johnson was at Lockheed. The whole idea of the Skunk Works approach was to get something into test very early, in a very rudimentary form, so that you could tell whether it would work or not. And so, you see, when CIA decided to develop the U-2, initially they weren't making a decision to develop a dozen U-2s, deploy them all the way around the world, and so forth. They were making a decision whether they should spend six months getting the thing to fly, to see how ingenious Kelly Johnson could be. And at the end of that six months, if it hadn't looked good as a project, you'd have hardly known about it, the cost was so little. This is a difference I could never sell to either RAND or the Air Force, but I could sell it to Frank Collbohm. He used to work at Douglas before the war, and this is the way Douglas did business.

Tatarewicz: In engineering?

Klein: In engineering, yes. This is the way Douglas operated, so Frank understood all of this very well. KLE:IN-22

Tatarewicz: These kinds of notions couldn't have gone over well in Santa Monica.

Klein: No, they didn't.

Tatarewicz: Did they go over very well even within your own department? Even within the economics department?

Klein: Well, it's hard for me to know how well. Sure, a few people. But say, did Charlie Hitch ever buy these ideas? I really doubt it. You'd almost have to ask him, but I have good reason to doubt it. No, these ideas didn't go over very well. They went over well with Collbohm and with a few of the engineers. For example, we had an engineer at RAND who was Ed Sharkey, had been at Bell Labs. During the war Bell Labs had developed a whole set of experimental radars for the Air Force, based on this very notion of getting something to test, finding out if it will work, etc, so I didn't need to convince him. He was convinced already. Generally Frank was convinced because he saw this work at Douglas. This is how they developed the DC-3. Arthur Raymond was convinced because he was the head of the project to develop the DC-3. As far as economists are concerned there are a few that worked closely with me who believed these ideas, in particular Tom Marshak, Bill Mechling, Arthur Alexander and Kenneth Arrow, who was a RAND consultant, also was a great supporter.

Tatarewicz: The R&D project that you had going in Santa Monica, how did that come about, and was that an effort to put these ideas that we've just been talking about to an empirical test? Klein: Right.

Tatarewicz: When and how did you start that?

Klein: Well, I started that almost as soon as I came to Santa Monica. Soon after. And there were some people working closely with me. One of them was a guy by the name of Bill Mechling, who later became' head of the business school at the University of Rochester. And another guy, Gus [Shubert], worked on this.

Tatarewicz: You say Gus Shubert worked on this?

Klein: Yes. A guy who's now at Berkeley by the name of--

Tatarewicz: Mesthene?

Klein: Mesthene worked on this. He wasn't all that great, but Tom [Marshak] was very good. Tatarewicz: Okay.

Klein: So you want to start working where you're going to anticipate the hardest problems, right? You won't always be KLEZH-23 right. Sometimes maybe the door will turn out to be an extreme problem. But usually it pays to start off and get the problems over on the table, so you can get them dealt with, and the case studies that we did almost all turned out that this was hypothesis.

For example, we compared the Sidewinder missile that was developed by the Navy with the Falcon missile which was developed by the Air Force, and the Falcon involved a systems approach. The Sidewinder was an experimental approach. The guy who was in charge of developing the Sidewinder had been a big wheel. He was a physicist and had been a big wheel in developing the proximity fuse in World War II. The Sidewinder was a better missile. The cost was about a third or a fourth as great, and there was just an outstanding difference, and you know, the Air Force never believed these results. People in the Air Force. Let me say, there were a certain number of people in the Air Force who believed these results. I know some personally. But these are people who never got promoted.

Tatarewicz: Two things occur to me about your research and development study that you were doing at RAND at this time. One is that the reports that I've seen, and one of the ones is R-333 and another one which is related is P-1267, just for the record there.

Klein: Yes. That was reprinted in Fortune. Tatarewicz: Yes. It's obvious that for the case studies that were done there must have been absolutely an enormous amount of research done for those.

Klein: There was. Yes.

Tatarewicz: What happened to the details of those studies, the data?

Klein: Well, they're in the studies. I mean, was the data ever used in some summary study or something like that?

Tatarewicz: Well, they wind up synthesized in the reports that I've just mentioned.

Klein: Yes.

Tatarewicz: But it occurs to me that there must be a great wealth of detail.

Klein: There is, and they're in the studies.

Tatarewicz: And they're in the individual studies. Were they ever published?

Klein: No. KLEIN-24

Tatarewicz: Or they were issued as D's or something like that?

Klein: No, they were classified.

Tatarewicz: Okay, so there are other more detailed studies that form a part of what's in the unclassified. [See book by Marshak and Glennon.]

Klein: Oh yes, there were just studies on dozens and dozens of airplanes and radars and so forth, detailed studies, big studies like this.

Tatarewicz: Several inches thick each.

Klein: Yes. On the B-52, the B-47--Mechling did a great big thing on that. There were studies on the Snark missile. There were studies on the ICBMs. Oh, I don't know. Bob Perry, who's now at RAND, maybe you can talk with him. He's an historian, by the way. If you're interested, he can tell you about this, and he did a number himself.

Tatarewicz: He did? Okay.

Klein: Right. Even before he came to RAND he was an Air Force historical officer. He was doing that. So he's done a number of things. There are a large number of these studies, and they all point in this direction. But I'm saying that, you know, a lot of people just didn't believe them.

Tatarewicz: Well, that was the second thing that occurred to me. I was wondering what else underlay this, and that clears it up a lot, now, to understand that they're classified, but there are a large number of studies that have a wealth of detail.

Klein: Right.

Tatarewicz: That's obviously synthesized in the unclassified studies. But from what I've seen in some of the correspondence files and some of the descriptions of this R&D project as being very large and very complicated and very long and drawn out, it seems to me that this study, being so interdisciplinary, drawing on so many different people in RAND, and synthesizing such a vast amount of data into such conclusions with potential very far ranging significance, it seems that this R&D study of yours should be mentioned as one of the prime examples of good systems analysis. Much in the same way that the [Albert] Wohlstetter study, the basing study, is always mentioned, yet it doesn't seem to enjoy the prominence in the RAND lore or in the published histories.

Klein: No, you're absolutely right. It doesn't, and I think for the reasons we've already talked about. For example, one guy who was a big fan of this study, and he thought it represented a great contribution, was John Williams. Besides Frank Collbohm. KLEIN-25

But you see, it went too much against the RAND tradition, too much against the conclusions of economics.

Tatarewicz: In the economics department at RAND, you mean?

Klein: Right.

Tatarewicz: Or division, as the case may be.

Klein: Well, we're just finishing up on this. You see, part of the reason why I got fed up with RAND and the Air Force is billions and billions and billions of dollars are being just thrown away in the way the Air Force does R&D, because they're constantly going for the full-fledged whole thing, and then finding out very late in the game that by God, it doesn't work the way they expected. It cost four times as much as they'd expected. They're always spending a billion dollars, billions and billions trying to make a bad investment a little better investment. You don't need to do many studies to realize that. Just read the papers.

But you see, the reason the Air Force goes into that kind of monkey business is not because they fail to understand my argument. They're not that dumb. The reason they go into that is a very simple matter. They're always worried about having some higher echelon in the Defense Department or Congress cancel the project, and the more you get invested in a project of some kind or another, the more political support that will have, and you want to get it started in such a big way that politically it becomes impossible to cancel it. That's their strategy, and probably not a bad one from their point of view. Tatarewicz: Did you go through the full briefing of sequence with the R&D study?

Klein: Oh, yes. Yes, we did.

Tatarewicz: On the dry runs and the briefings that were done at RAND, what kind of reception did you get?

Klein: We gave the briefings usually to the board of trustees there, and Lee DuBridge was always very complimentary, and so was Bob Bacher. As of the time we had on the board of RAND--you can mark this down--a guy by the name of Charles Thomas. He was at the head at the timet chairman of the board of Monsanto. And by the way, he started his career as research assistant to Thomas Kettering. I was a big favorite of his, and he invited me to Monsanto, and told me how Monsanto operates. In fact, I was invited back there three or four times to talk to the people about things. I'm saying that there were a few people who appreciated this but not very many. KLEIN-26

TAPE 2, SIDE 2

Tatarewicz: Before lunch we were talking about the R&D project that you had at RAND, and we were talking about its reception both within RAND and also within the Air Force. Now I know for briefings, in most cases you would conduct a lot of briefings informally with the RAND staff there in order to get criticism and comment. I was wondering if you remember any of the briefings that you held on the R&D study with the RAND staff, in an informal way, if that was one of the forums?

Klein: That was, but I don't remember many comments from people.

Tatarewicz: Did you brief this study in pieces, that is, the various case studies that made up a part of it in pieces, and then the overall conclusions, maybe in another tour?

Klein: Yes.

Tatarewicz: Where did you take it outside of RAND?

Klein: Oh, we went to headquarters R&D, that was then in Baltimore. The Research and Development Command in Baltimore. I remember doing a briefing to General Powers, who was then head of R&D. He had previously been head of SAC, and if there was any guy who was unreceptive to this kind of thinking, it was he. That was a terrible experience, I'll never forget it. He almost threw me out.

Tatarewicz: Oh, really? His reaction was that severe?

Klein: Right. No, the people in the Air Force didn't like this stuff at all, with the exception of those few guys like I was talking about. They were a distinct minority. No, this stuff didn't go at all well with the Air Force. The people in the Air Force who eventually became big wheels in R&D came from the operational side. They wanted to plan R&D as a military operation is planned. Insist upon imposing elaborate requirements in programs before the baby is born.

Tatarewicz: When actually did the study end? That is, when were you more or less finished with it?

Klein: Oh, I would say as of the time I became head of the department, economics department. I guess that was '62, was it?

Tatarewicz: That would have been '62, I believe, which was when Hitch-­

Klein: Well, [Joseph] Kerhaw was head of the department for a while.

Tatarewicz: Head of the department, '62. KLEIN-27

Klein: Yes. Okay. Up till then. Tatarewicz: So then the study went on about seven years, something like that. What else were you doing while you were working on this study, or was that pretty much a full-time job?

Klein: Oh, there were a tremendous amount of studies written on the materials, stacks and stacks of stuff written, case studies, and then a bunch of interim reports written, whatever you want to call them, and these were a lot of fun to do. And the other guy I was trying to think of who worked on this was Tom Marshak. He's teaching at Berkeley now. No, it was for economists entirely new, thinking about this whole logic of how you make decisions under uncertainty. For the guys involved it was highly interesting, and economists outside of RAND were very interested in these kinds of things.

Tatarewicz: Did you use outside consultants? Klein: Yes.

Tatarewicz: Did you pull in economists from outside?

Klein: Yes. For example, one outside consultant we had on this project was Ken Arrow. There was a conference on inventive activity at the University of Minnesota, and I wrote an article for that conference. Dick Nelson was there too. That's another guy who was involved in the study who's now at New York University. But in any event, I wrote an article for this conference that was based on these studies, and that article got forwarded allover. From that point of view, there was more favorable comment outside than inside, and more of a feeling on all of our parts that we were learning something of long-run interest, that these were sort of basic issues that you as an economist wanted to understand just for the sake of understanding. You can see what I mean.

Tatarewicz: Well, what about the economists within your own department at RAND? I mean here certainly are people who were part of this fraternity. If economists outside RAND recognized the importance -­

Klein: I don't say everyone. I say some didn't.

Tatarewicz: Some, yes. Klein: I would say that the economists in RAND were for the most part interested in systems studies, and that those who were interested in systems studies weren't interested in this kind of thing. There was very little interaction.

Tatarewicz: Was there any economist in your own department at RAND who was particularly interested in the study you were doing or who was most sympathetic? KLEIN-28

Klein: Oh well, sure. Thomas Marshak worked on it. Dick Nelson worked on it. Mesthene worked on it. They were all sympathetic. Nancy Nimitz didn't work on it, but she had a lot to do with it. She was very sympathetic. But the people who were driven--and this included Hitch--more by classical economic theory and systems analysis, which are closely related, I assume you know, they weren't turned on by this stuff. They were turned off by it. Ed Barlow was turned on by it. But where did Ed Barlow eventually go to work? What's its name, Varian Brothers.

Tatarewicz: Yes. Klein: Well, you see, that's a pretty progressive outfit or was then anyway. Go ahead.

Tatarewicz: In any case, even though people weren't necessarily receptive to the message that was coming out of your study, you were still supported. Klein: Sure. Tatarewicz: Nobody tried to stop the study at any point. Klein: No.

Tatarewicz: It was allowed to go to completion.

Klein: Yes. As I say, Hitch was not in love with this study, but he supported it, gave me raises. Of course Collbohm was a big fan of it, and we were good friends. He was always asking me to come down to his office to tell me about how Douglas operated. He loved to talk about that. Didn't Frank mention me? Tatarewicz: I'm sure he did. I'll have to go back and look at the transcript.

Klein: Yes. So sure, they weren't pleased, but no one was out against me. The fact that a guy like John Williams was for it, who was very smart, that kind of impressed me. Tatarewicz: Did you feel very collegially close to the rest of your department? The reason I ask is that you'd been hired into a department but for the first several years you were working out of the Washington office, so you wouldn't have had very much contact with them.

Klein: Yes. By "very collegially" I assume you don't mean having lunch with someone from time to time? You mean something more than that. Tatarewicz: I mean something more than that. Klein: I didn't really. I didn't really. I got along with them. I get along pretty much with everybody. But I didn't feel KLEIN-29 terribly close to them. I never felt very close to Wohlstetter. You know, he would invite me over to his house, and I liked to talk to his wife.

Tatarewicz: When was it that you became kind of in a sense Hitch's deputy in running the department, at some point?

Klein: I was never Hitch's deputy in running it. Joe Kershaw was, and then he was department head for about a year or less.

Tatarewicz: Right as Hitch went to Washington.

Klein: Right. Then he decided to go to teach at Williams, and that's when Collbohm made me head of it.

Tatarewicz: okay, so you had never really managed the department or run the department in any way until Collbohm made you head of the economics department.

Klein: No. Right. No, it is not one of my fondest memories, that job.

Tatarewicz: Being head of the department?

Klein: Yes.

Tatarewicz: It was a particularly rough period of time for the corporation in general. Klein: That's right. That's when the Air Force was starting to screw down on RAND. Right? starting about '62.

Tatarewicz: There were congressional hearings and all sorts of pressure to more fully document how you were spending your time.

Klein: Yes. Yes. No, it was not a happy period, and then of course this was the period of the vietnam War, which gave rise to a lot of division and tensions within RAND. There were all of these restrictions. The Air Force was clamping down on RAND, and Frank Collbohm and after the SOFS [strategic Offensive Forces study] study Collbohm became interested in helping the Air Force find a rationale for the manned bomber. And he asked me to help, which I did, and Jim Schlesinger was also involved. Here is the problem: SAC was in the position of bombing preplanned targets. That's what the eighth Air Force did during World War II. And the B-52 is, essentially, a "manned missile"--the crew sees the ground only twice, when the airplane takes off and when it lands. However, Draper at MIT had been able to develop missile guideline systems that promised more or less the same accuracy. So why not use missiles. Even if your cost estimates were off by a factor of three (I calculated) they were still a better bet. Herb York who was head of R&D in the office of the Secretary of Defense when Eisenhower was president canceled the B-70--the forerunner of the B-1 on this basis. KLEIN-30

Therefore, the rational for a manned borober had to be something missiles could not do. In particular they had to used to provide a war fighting capability in which airplanes and missiles would be used not to attack cities but opposing forces. However, not many people in RAND were enthusiastic. When I tried to work up some enthusiasm at a management committee meeting Al Ladder (head of the physics department) said I was crazy and he was right. In the heat of war how can you insure that both sides will observe Marquis of Queensberry rules.

Tatarewicz: Yes, the B-70 recommendations which were somehow or other tied together with the strategic Offensive Forces study [SOFS] that was going on at the same time, that Ed Barlow was more or less coordinating, right? We're talking '57, '58, '59 period.

Klein: Yes.

Tatarewicz: And the SOFS study, which seems to have been traumatic for RAND as an organization, because that was one in which a lot of uniformed Air Force people were brought to RAND and working on SOFS.

Klein: Right, and I was working for Ed Barlow on that.

Tatarewicz: On SOFS?

Klein: Yes.

Tatarewicz: Okay.

Klein: I was working for Ed on that. In fact, Gus Shubert was too. A lot of uniformed people were brought to RAND, and RAND was taking very much of an anti-B-70 point of view. Okay? You've gotten that from Ed Barlow, right?

Tatarewicz: Talked with Barlow a little bit about SOFS, and with Gus a little bit about it, and I've also done a fair amount of reading in the files.

Klein: But it all points to what I just said was right, doesn't it? I haven't said anything

Tatarewicz: Oh no, what you've said jibes with the things I've seen there and the things I've seen in a bunch of memos written by Ed Lindblom.

Klein: I actually never saw the Lindblom memos until recently sent to me.

Tatarewicz: There seems to be evident a general feeling of disease among a lot of sensitive people at RAND at this particular time. I mentioned earlier that it was very evident in KLEIN-31 some of Brownlee Haydon's papers. [Interruption] A certain feeling of uneasiness--well, it's more than a feeling of uneasiness. There's the whole question that's going on around this same period of time at RAND, a lot of soul-searching about what kind of an organization RAND is and what direction it should move in: should it diversify its patronage beyond Air Force and take contracts from other people? Should it get bigger? If so how big should it get?

Klein: Yes.

Tatarewicz: All of these questions are coming out.

Klein: Right.

Tatarewicz: At once.

Klein: What I want to suggest to you, and remember, don't believe everything I tell you. I'm speaking to you from my point of view. I was saying I think a whole lot of that broader soul-searching thing that you're talking about--what sort of an organization, how much we should diversify, etc.--a lot of that broader soul searching had to do with the soul-searching about the issue I just talked to you about. That's really the underneath issue. I mean, I know a lot of people in RAND were soul-searching about this because I was there. I asked you, what's it like now and so forth. I can't tell you what it's like now. I wasn't there now. But I can tell you that all the guys that I knew were engaged in this soul- searching, and you see, this is getting me towards the point I was going to make.

It seems to me that if you want to do good research for anyone, the Smithsonian Institute or such and such university or wherever, the most important thing maybe is to do research in an environment in which you feel you can be intellectually honest. Even under the best, the very best of circumstances, with no constraints on you at all, it's hard to be intellectually honest. Right? It's much easier to preach that than to do it. But I think that if you want to get good research out of people, those people have to be able to be doing something that they feel is reasonably honest with themselves. Most people feel that that is of some importance to people.

And I think that this whole war fighting game thing got you into a business where people couldn't feel that way. You can talk about the basing thing, the vulnerability, reducing the vulnerability. You can talk about it now. You can say we ought to have less vulnerability, in all sorts of studies, but if you say that, you're being kind of honest with the Air Force. You're being honest with yourself so it needn't bother you. But when it gets into this whole business of how you fight a nuclear war...

The thing that brought this to my attention, what I'm talking about, this whole subject, as of about 1965, I was asked KLEIN-32 by [Robert] McNamara to be a special assistant to him on a NATO study, so I was loaned by RAND to McNamara for about two years. So I was a special assistant to him on the NATO study that took place in Europe. What impressed me was that these military guys in the United states wanted to fight a war with nuclear bullets, more or less as you fought World War II, and they were really mesmerized about that. You see, I'd worked for the Air Force all the time. But this point about a nuclear war comes much closer to home when you start talking about a ground war.

Tatarewicz: So you've got the Army, and then you've got the NATO forces, the representatives of the NATO forces as well.

Klein: Right. Right. What impressed me was one point number one, how stupid it was to think you could fight such a war. For example, when we had these sessions in the study, I was pointing out, I was a navigator during World War II. One of our big jobs after the dropping of paratroopers in Normandy was hauling gasoline for [General George S.] Patton's advancing Army. Patton would have never been able to handle his logistics question without us. We won the war. I'm joking a little, but you see what I mean.

Tatarewicz: Oh, yes.

Klein: But I said, "How the hell would you haul that gasoline in the middle of a nuclear war?" To bring up, you know, a small disturbing element. You see, the thing that impressed me was that the U.S. was the only military establishment that believed in that jazz. The French didn't. They said that kind of thinking had cost them two world wars. That was [Charles] De Gaulle's reason for getting out of NATO. The British thought this idea of fighting a nuclear war was just for the birds, and they pooh-poohed it. The British had a model that I finally got McNamara to understand. This was General [Earl Louis] Mountbatten who invented this. They said that the best way to prevent a nuclear war is by getting a conventional brigade to the right place at the right time. I can tell by your smile that that must make some sense to you.

Tatarewicz: Yes, I get the point, yes.

Klein: Right? And one of the funniest things that happened at NATO, they had a study done, the Belgians did a study in their joint chiefs of staff or the equivalent, big full-blown study in which they proved that if the U.S. really wanted to fight a nuclear war, they ought to go back to horses.

Tatarewicz: I see.

Klein: Well, you can see the logic, right? You want to fight the war that Grant fought against Lee. What?

Tatarewicz: Yes. KLEIN-33

Klein: So this whole NATO experience just brought home very clearly to me how screwy all of this--to my way of thinking--war games business was. So I just didn't have any stomach for it.

Tatarewicz: Well, it wasn't too many years after that then that you did leave.

Klein: No, I left about a year after that. Tatarewicz: So this went on through '66 then. Klein: It went on through '65 or so, and I left. I left shortly after Harry Rowan became head, within a few months. I'm not saying, by the way, that I'm God and I'm right about all of these things. I'm just saying, it seems to me that if you're not in sympathy with this kind of research that's being done, you should leave.

Tatarewicz: Yes.

Klein: So I left. Tatarewicz: We're getting near the end of the tape. I think we have about two minutes left of tape to go, so what I'd like to do is to give you the rest of the time on the tape to give me whatever thoughts you'd like to give me on any subject whatsoever, or among the topics we've discussed today, anything you'd like to say in summation.

Klein: No, I think we've pretty well covered it. Why don't we just leave it right here?

Tatarewicz: Okay. Well, thank you very much. I really appreciate your talking with me today.