Tribute to Charles J. Hitch

By Alain C. Enthoven

Editor's note: Charles J. Hitch, a past president of ORSA and one of the founders of modern management science, died in San Leandro, Calif., on Sept. 11, 1995. He was 85. At the request of Hugh Miser on behalf of OR/MS Today, Alain C. Enthoven wrote the following essay commemorating his longtime colleague and lifelong friend.
I first heard of Charlie Hitch when I was an undergraduate in economics at Stanford in the late 1940s. Charlie and Robert Hall had published an important paper, "Price Theory and Business Behavior," in Oxford Economic Papers in 1939. They had defied the conventional wisdom of academic economics and actually gone out and asked businessmen how they set prices. It turned out businessmen hadn't heard of marginal revenue and marginal cost, or anything like them. There followed a decade of debate and commentary in the academic literature that even some Stanford undergraduates were required to read. In the 1960s, one of the deputy comptrollers of the Defense Department asked me in a tone reflecting awe, "Is he the Hitch of Hall and Hitch?" I reported the question to Charlie who smiled and said, "Tell him that was in a previous incarnation." One could say that was his first of many professional incarnations.

The price theory and business behavior article showed some of Charlie's qualities: independence of mind, including a willingness to defy norms of the profession when doing so seemed to make sense; and interest in and respect for empirical facts. I think reflection on the experience led Charlie to see that economic principles could be useful to businessmen, leading Charlie to become one of the founders of modern management science.

Charlie Hitch came to Oxford as a Rhodes Scholar in 1932. Clark Kerr, Charlie's predecessor as president of the University of California, recalled: "The receipt of his degree at Oxford was a most unusual affair. He went into the examination room and sat down prepared to answer questions, but the faculty members on the committee just tipped their academic caps to him in a show of great respect and awarded him his degree. The chair of the committee was Sir Oliver Franks, later U.K. Ambassador to the United States. Subsequently, Charlie was asked to join the Oxford faculty, which almost never happened to a young American scholar. In fact, Charlie was the first American Rhodes scholar ever so chosen; and he served at Queen's College from 1935 to 1948 with leave for war-time service in U.S. agencies."

After the War, Charlie left Oxford in 1948 to found the Economics Division of the RAND Corporation, his next professional incarnation. He had a bold vision that led him to become the most influential leader of applied economics of our time. Charlie's Economics Division included:

Charlie wrote important papers on operations research, including one on the choice of criteria, "Sub-Optimization in Operations Problems," in Journal of the Operations Research Society of America in 1953, that became a classic. Forty years later, I share its insights with students in my course on cost-benefit analysis in medical care. The insights remain remarkably timely.

But most important at RAND was Charlie's development of systematic interdisciplinary policy research: economists, physicists, engineers, political scientists and others, working together to understand the implications for a national defense policy comprised of new, rapidly changing technologies. Charlie managed to create an atmosphere in which narrow disciplinary perspectives were broken down, and in which value was attached to the importance of the problem studied, the quality and depth of the analysis, the originality of insight and the practical significance of the conclusions.

This work led to profound changes in our government's understanding of the role and significance of Strategic Air Forces, and strategy for the defense of our NATO allies. This original work could not have happened without the collaboration of people from different disciplines. And Charlie's leadership played a key role.

Charlie's golden age at RAND in the 1950s set a high watermark for interdisciplinary policy research that hasn't been equaled since. It was summarized in Charlie's book, written with Roland McKean, The Economics of Defense in the Nuclear Age, which became the bible of defense economics. Charlie was elected president of the Operations Research Society of America in 1959.

Charlie was a devoted husband, and his and Nancy's love and respect for each other was an inspiration to all of us. Their desire to share their love led to one of the highlights of their RAND years - bringing Caroline into their family. She brought great joy into their lives and was a wonderful support to Charlie in his later years.

In 1960, Charlie met Secretary-Designate Robert McNamara in what was reported to be "love at first sight," and Charlie became Assistant Secretary of Defense and Comptroller of the Department of Defense.

I well remember when he outlined his bold vision for overhaul of the Defense Department's process for making program and budget decisions. One half he called Programming - a system of force and financial planning that integrated program decisions and budget decisions with forces projected at least eight years into the future, and with the implied budgets for five years. This replaced a system of budgeting one year at a time based on object classes of expenditures with no explicit link to the forces being bought.

The other half he called Systems Analysis, the discipline-neutral term we used at RAND for RAND-style cost-effectiveness analysis to be applied across the board to all Defense programs. Charlie's reform became known as the Planning, Programming and Budgeting System, or PPBS - another Hitch innovation that unleashed a torrent of academic debate and commentary. Many books and articles were written about PPBS. "Hitchcraft," as it was affectionately known, was the most important advance in public administration of our time. Charlie's vision and leadership were the crucial ingredients.

In 1965, President Johnson ordered that PPBS be installed throughout the Executive Branch. In a Phi Beta Kappa lecture in 1978, Charlie observed: "I thought at the time that this was foolish, almost certain to lead to confusion and likely to end up discrediting the management techniques it was trying to promote. Both happened. For one thing, a tremendous amount of preliminary research performed for a decade at RAND alone by several hundred professionals had gone into the development of applications for military planning. Nothing remotely comparable had been done in any other area of government. For another, there was not enough trained manpower available - too few understood what PPBS was all about, and they were spread hopelessly thin. In addition, most of the planning problems of most of the civilian departments, like those of higher education, were far different from those military planning problems which had proved susceptible to systems analysis."

Nevertheless, I believe Charlie's legacy was to raise permanently and substantially the standards for an acceptable public policy analysis in Washington. And many of the men Charlie recruited and developed went on to become assistant secretaries in other departments. The list would be impressive if someone were to tabulate it.

Another part of Charlie's legacy was the academic discipline of public program and policy analysis, and the schools and academic programs that teach it.

Charlie maintained his interest in and respect for empirical facts. Once Secretary McNamara asked Charlie to do a study of combat rifles to help resolve a controversy between the Army and General Le May of the Air Force. One day we went out to a rifle range to fire all the different types of rifles. A big, tough-looking colonel who handed him a rifle was explaining an elementary point to the mild-mannered, scholarly looking comptroller, something like, "You see, Mr. Secretary, the bullets come out this end."

"See here, young man," Charlie said, "I want you to know I was national intercollegiate rifle champion."

Charlie spent a dozen years as an Oxford don and never lost his interest in and commitment to education.

In 1958, after Sputnik, at a time of much soul-searching about our education system, Charlie addressed the Oxford Society on Oxford and education. While the tutorial system was the most noted feature, he put his finger on the examination system, i.e., comprehensive exams at the end of the years of study, set by external examiners, as the most important ingredient because of the incentives it creates for students to retain all they've learned and fit it together; to learn to think and write about problems; and to do their very best because it is hard to figure out in advance what the external examiners will find good enough. So it is not surprising that Charlie went on to become a great educator in yet another incarnation.

Charlie went to the University of California in 1965 to become vice president for finance. On Jan. 1, 1968, he became president of the university. Charlie arrived at a turbulent time: the Free Speech Movement and the demonstrations against the Vietnam War that made U.C. Berkeley the symbol of the 1960s protest movements.

Clark Kerr recalled: "As Charlie said in his farewell speech as president at Charter Day in 1975 entitled 'Missions Impossible,' the situation had gone from 'feast' to 'famine.' And, as he said, 'rocks' were being thrown 'on the campuses and in Sacramento.' It was the time of People's Park and Isla Vista. Gone were the most friendly governors in university history - Earl Warren and 'Pat' Brown. Gone were state budgets that barely missed being 100 percent of our requests. Gone were the days of creating the Master Plan, building three new campuses. Now the problem was one of preservation of what had been achieved, and there was so much to preserve, including what had become fully competitive salary scales for the faculty, more nearly competitive student-to-faculty ratios, plans to create the greatest university library system in the nation, and, above all, the autonomy of the university and the freedom of its faculty and students.

"Charlie was superb. He had the determination, the patience, the endurance, the integrity."

In 1975, Charlie, Nancy and Caroline moved back to Washington where Charlie began his last professional incarnation as president of Resources for the Future. There the challenge was to use economic analysis to find the most efficient ways to reconcile the conflicting demands of environmental protection and economic growth.

Charlie had many fine qualities. Jack Pelaston, another former U.C. president, recalled: "I admired many things about the Hitch style. I especially admired the way he fielded tough questions. After the nomination of a rather affluent - that's a fancy word for 'rich' - person to the Board of Regents, Hitch was asked by a reporter if he thought that having donated large sums of money to the university entitled someone to be a regent. 'I can think of worse qualifications,' Charlie said, and I'm sure all of us could too.

" 'How would you describe your relations with the governor?' he was asked on another occasion. 'I would describe them as correct,' he replied."

But all this risks missing the most important of Charlie's virtues, that is character. He had a backbone of steel. He considered his positions very carefully, then he held them very firmly. He stood up to enormous pressures. At RAND and the Defense Department, Charlie found it appropriate to recruit self-confident (some said arrogant) young men who liked to ask hard fundamental questions, gore sacred cows, attack the conventional wisdom and the vested interests. They (we) had little sympathy for a congressman who didn't want an air base or a factory in his district to be closed. This led to frequent demands for their scalps. Charlie protected them, stood up to the powers that be, insisted that the hard questions be asked and that the answers be based on the evidence and the merits.

At the University of California he served at the most difficult time imaginable. The students were breaking new ground daily in their methods of protest and disruption. Governor Reagan was running against the university. The two used each other as foils. Picture the scene: National Guard helicopters dropping tear gas on rioting students at the Berkeley campus, each side believing their acts made them heroes in the eyes of their supporters. And Charlie was in the center. He must have thought of Yeats:

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

But at the University of California, Charlie was the center and he held. As Clark Kerr put it, "His great victory was in preserving one of the best of all universities during one of the worst of all possible times."

Charlie's invariable habit was to stay calm and, if I may borrow Aaron Wildawsky's felicitous phrase: to speak truth to power.

Alain Enthoven went to work for Charles Hitch in the Economics Department of The RAND Corporation in 1956, right out of graduate school at MIT. In 1961 Enthoven followed Mr. Hitch to the Comptroller's Office and became deputy comptroller, and subsequently deputy assistant secretary for systems analysis. In 1965 when Mr. Hitch left for the University of California, the Systems Analysis Office was separated from the Comptroller's Office and Enthoven became assistant secretary for systems analysis. Now the Marriner S. Eccles Professor of Public and Private Management in the Graduate School of Business at Stanford University, Enthoven remained a close friend of "Charlie's" to the end.
OR/MS Today copyright © 1995 by the Institute for Operations Research and the Management Sciences. All rights reserved.
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