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Analytic Criteria for Judgments, Decisions, and Assessments ANALYTIC CRITERIA FOR JUDGMENTS, DECISIONS, AND ASSESSMENTS BARRY WATTS ANALYTIC CRITERIA FOR JUDGMENTS, DECISIONS, AND ASSESSMENTS BARRY WATTS 2017 ABOUT THE CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS (CSBA) The Center for Strategic and Budgetary Assessments is an independent, nonpartisan policy research institute established to promote innovative thinking and debate about national security strategy and investment options. CSBA’s analysis focuses on key questions related to existing and emerging threats to U.S. national security, and its goal is to enable policymakers to make informed decisions on matters of strategy, security policy, and resource allocation. ©2017 Center for Strategic and Budgetary Assessments. All rights reserved. ABOUT THE AUTHOR Barry Watts was a senior fellow at the Center for Strategic & Budgetary Assessments (CSBA) from 2002 to 2014. There he wrote on such topics as the second nuclear age, strategic compe- tence, realistic combat training, precision strike, the defense industrial base, diagnostic net assessment, and the military use of space. From 2001–2002 Mr. Watts directed the Office of Program Analysis and Evaluation in the Office of the Secretary of Defense. From 1986 to 2001 he was a member the Northrop Grumman Analysis Center, serving as its director from 1997 to 2001. During his years with Northrop, he published an analysis of Clausewitzian friction and future war and led the Gulf War Air Power Survey’s work on the effects and effectiveness of air power in the 1991 Persian Gulf War. From 1965 to 1986 Mr. Watts was in the U.S. Air Force. During his Air Force career, he flew a combat tour in Vietnam in F-4s, taught logic and philosophy at the U.S. Air Force Academy, served two tours in the Office of Net Assessment under Andrew Marshall, and headed the Red Team in the Air Staff’s Project Checkmate. His most recent publica- tion, co-authored with Andrew Krepinevich, is The Last Warrior: Andrew Marshall and the Shaping of Modern American Defense Strategy (Basic Books, 2015). Mr. Watts is currently retired and living in North Carolina with his wife, Hope. ACKNOWLEDGMENTS The author is grateful to Thomas Mahnken, president of CSBA, as well as to Andrew Marshall and Andrew May from the Office of Net Assessment. Thanks go to the CSBA staff for editing and production support. The author is especially grateful for Kamilla Gunzinger’s persistence in staying with this project for over more than a year. The opinions and analysis in this study are those of the author; any shortcomings are solely his responsibility. CSBA receives funding from a broad and diverse group of funders, including private foundations, government agencies, and corporations. A complete list of these organizations can be found on our website at www.csbaonline.org/about/contributors. Cover: Report covers, GDP spreadsheets, and a steam engine schematic. U.S. Government and Public Domain sources. Contents FOREWORD . i CHAPTER 1: CONJECTURES AND EVIDENCE .. 1 The Analytic Criteria Problem Stated . 1 Initial Evidence for the Problem’s Insolubility . 2 The U-boat Campaign in the North Atlantic .................................... 3 The Strategic Bombing of Germany ........................................ 15 Designing U.S. Strategic Forces in the Late 1940s ............................. 29 Working Hypotheses and a Caveat ......................................... 42 CHAPTER 2: PRACTICAL THEORY . 43 Measurement Theory and Systemic Value . 44 RAND’s Criterion Problem ............................................... 48 Wohlstetter’s Strategic Air Base Study ...................................... 52 Limited Resources and Strategic Choice . 58 CHAPTER 3: THE RISE OF THE WEST . 61 What Happened in Europe but Nowhere Else ................................... 64 Factor Endowments versus Institutional and Cultural Drivers ...................... 78 Other Prominent Explanations: Weber and McNeill to Maddison, Jones, and North ........ 84 Very Long-term Growth, the Unchanging Past versus Historical Narratives, .............. 93 and the Unpredictable Future CHAPTER 4: GDP, GAUGING THE PACE OF BUSINESS, AND MILITARY EFFECTIVENESS METRICS . 101 GDP and Wealth ..................................................... 103 Dueling Criteria . 111 Lanchester, Casualties, Force Ratios, and WEI/WUV ........................... 114 Situation Awareness .................................................. 126 CHAPTER 5: ANALYTIC CRITERIA IN NET ASSESSMENT AND THE PERSISTENCE OF THE . 131 CRITERION PROBLEM Selecting Key Issues and Opportunities .................................... 132 Universal, Enduring Problem of Selecting Analytic Criteria ......................... 139 ACRONYMS . 143 FIGURES FIGURE 1: GERMAN FIGHTER AND BOMBER PRODUCTION, ........................... 18 AUGUST 1942–DECEMBER 1944 FIGURE 2: 8TH AIR FORCE BOMB TONNAGES, AUGUST 1942–MAY 1945 ................ 19 FIGURE 3: FLAK TOWER NEAR THE BERLIN ZOO . 21 FIGURE 4: R-266 BASING OPTIONS ............................................ 55 FIGURE 5: TRACE ITALIENNE FORTIFICATIONS, FORT MCHENRY, ....................... 69 BALTIMORE HARBOR, MARYLAND FIGURE 6: ROBERTS’ SELF-ADJUSTING SPINNING MULE . 76 FIGURE 7: A WATT DOUBLE-ACTING STEAM ENGINE BUILT IN 1859 ..................... 77 FIGURE 8: MICHELANGELO’S “CREATION OF ADAM,” ............................... 79 SISTINE CHAPEL CEILING (1508–1512) FIGURE 9: FACTORS UNDERLYING THE BROADEST PATTERN OF WORLD HISTORY ........... 80 FIGURE 10: ACEMOGLU, JOHNSON, AND ROBINSON’S FRAMEWORK .................... 93 FOR EXPLAINING ECONOMIC GROWTH FIGURE 11: THE IDEAS THAT CAUSED THE GREAT ENRICHMENT ....................... 94 FIGURE 12: TRUE VERSUS TRADITIONAL LIGHTING PRICES ......................... 108 FIGURE 13: CONCENTRATION UNDER MODERN CONDITIONS ........................ 117 FIGURE 14: FORCE RATIOS AND COMBAT OUTCOMES ............................. 120 FIGURE 15: AMRAAM OUE LESSONS LEARNED .................................. 128 FIGURE 16: GROUND FORCE TRENDS IN CENTRAL EUROPE, 1965–1977 ................ 135 TABLES TABLE 1: ALLIED MERCHANT SHIPPING LOSSES 1939–1944 .......................... 5 TABLE 2: ALLIED SHIP LOSSES VERSUS U.S. CONSTRUCTION ......................... 6 TABLE 3: RESULTS, NORTH ATLANTIC ROUTES, JANUARY–MAY 1943 ..................... 8 TABLE 4: TRENDS, NORTH ATLANTIC ROUTES, FEBRUARY–MAY 1943 .................... 9 TABLE 5 GROWTH RATES OF PER-CAPITA GDP, POPULATION, AND GDP, ................... 73 1000–1973 (ANNUAL AVERAGE COMPOUND GROWTH RATES) TABLE 6: GDP, POPULATION, AND PER-CAPITA GDP FOR THE WEST ...................... 89 AND THE REST, 1000–1973 TABLE 7: GERMANY’S 2012 GDP (BILLIONS OF EUROS) ............................ 105 TABLE 8: REASONS FOR ABANDONING AN ATTACK OR DEFENSE ...................... 119 TABLE 9: ILLUSTRATIVE WUV CALCULATION FOR A U.S. DIVISION ..................... 123 www.csbaonline.org i Foreword The individual who provided the impetus for this investigation of analytic criteria for judg- ments, decisions, and assessments was Andrew W. Marshall, the Pentagon’s Director of Net Assessment from 1973 to 2015. In the early 1990s, a number of us who had served on Marshall’s small staff began encouraging him to document the intellectual history of the net assessment enterprise during the last two decades of the U.S.–Soviet Cold War. One of the subjects that came up time and again in the ensuing discussions of diagnostic net assessment was what a small group of RAND economists had termed “the criterion problem.” This issue emerged from RAND’s early efforts to employ systems analysis to advise the U.S. Air Force on the preferred instrumentalities and techniques of intercontinental air warfare in the nuclear age. Economists such as Marshall and Charles J. Hitch, who headed RAND’s economics divi- sion from 1948 to 1961, realized that there were logical and other problems with the decision criteria used in systems analyses such as the massive, multi-year Strategic Bombing Systems Study completed in 1950 under Edwin W. Paxson. It was not until I undertook the present study in 2014 that I began to realize just how ubiq- uitous and fundamental the selection of appropriate criterion problem was to judgments about historical outcomes, choices among strategic alternatives, and the conduct of useful net assessments. A related insight emerged from Hitch and James R. Schlesinger’s comments on the criterion problem. Because there is no by-the-numbers formula or method for selecting appropriate analytic criteria, such choices inevitably contain a subjective element. Among other things, this insight reveals that judgments about historical outcomes are always open to revision. Similar certainties apply to the analytic criteria underlying strategic judgments and net assessments. Barry Watts October 2016 www.csbaonline.org 1 CHAPTER 1 Conjectures and Evidence What of a constructive nature can be said about the selection of criteria? Clearly, there is no all-purpose criterion, for the appropriate test depends upon what alternatives are open to the decision-maker, upon what aspects of the situation must be taken as given, and even upon what measurements are feasible. Charles Hitch and Roland McLean, 19601 [F]or most higher-order problems adequate measures of merit have yet to be devised. Even if some improvement may be hoped for, the irreducibly subjective element in such measures will remain substantial. James Schlesinger, 19672 The Analytic Criteria Problem Stated Choosing analytic criteria for making strategic choices or judging historical outcomes is
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