There is a long history of civilians performing paid services for the United States government in times of conflict. However, since the end of the Cold War this trend has significantly increased; from 10 percent of total forces during the 1991 Gulf War to almost 50 percent following the 2003 invasion of Iraq.[1] In the US, this increase is a result of the use of Private Military Firms (PMF) which has brought neoliberal ideology into the realm of security assistance by creating private solutions to roles previously fulfilled publicly.[2] This trend multiplies private defense contracts and deepens the traditional ‘military-industrial complex’ (MIC)—a term popularized by President Eisenhower to describe the influence of the defense industry upon democratic governance. However, PMFs must be understood as not only an outgrowth of the MIC, but also as a tool furthering political interests beyond this complex. This is a threat to US democracy because privatizing security roles takes an additional step in insulating the use of force from the majority vote while also providing significant monetary incentives to a fraction of the population which can capitalize upon, and perpetuate, these private firms and their profitable conflicts. This essay, therefore, argues that as a neoliberal product of the traditional MIC, PMFs comprise a threat to democratic government not only because their economic incentives tend to steer the national interest towards preparing for and waging war but also because of the degree to which politicians can expand the conflict absent public observation.

Identifying how the political-economic planning of the national economy was centralized, thereby creating the MIC, is first required in order to highlight the point at which PMFs transcend this boundary. The contemporary defense economy originates in the central planning era of WWII. Business historian Alfred Chandler explains that during WWII the… “[US] government spent far more than the most enthusiastic New Dealer had ever proposed,” with the output expended while supplying massive armed forces the US entered… “a period of prosperity,” never before seen. The effort required… “a tight, centralized control of the national economy…to carry out one of the most complex pieces of economic planning in history.”[3] Following WWII, the intricate relationship, its success in ending the Great Depression and its future applicability became well understood by policy-makers.

Head of the War Production Board during WWII, Charles Wilson argued that the answer to economic instability in a post-WWII world may require establishing what he called a ‘permanent war economy’.[4] The post-WWII plan for creating this type of political economy was outlined in National Security Council Report 68 (NSC 68), for which massive increases in defense spending were called.[5] The foundations that this spending would build upon had been established by the National Defense Research Council (NDRC) in 1941. The NDRC consisted of a web of US research universities (e.g. MIT, Caltech) and defense industries (e.g. General Electric, AT&T) working together. This created a network for the development of military innovations during the war and, after NSC 68, major increases in funding for innovations in the post-WWII era. Explicit in these relationships was an understanding that innovative technology would be diffused to private corporations. Private profit would therefore be created both from diffused technology, which would create new and more competitive corporations, as well as from direct government purchases of military products.[6] While the overall affect of this relationship has been determinative in shaping the post-WWII US economy, its general pervasiveness makes distinct separations between MIC-connected and unconnected corporate development difficult to conclude. According to economist Aguiar De Medeiros… “it is not easy to evaluate the weight and the influence of military basic innovation in all basic innovations that shaped the American economy in the post-war era…the ‘military-academic-industrial complex’ set up all new science-based industries,” and set the lead in many others.[7] A 2003 CNNMoney article explained this continuing case when it stated that… “[t]he next time American armed forces go to war…the nature of the battle will be unlike anything the world has ever known…and it’s made possible…[by a] new high-tech arsenal…[that] has also created a new military-industrial complex…the innovation that underpins high-tech warfare comes increasingly from companies that aren’t widely known for defense work”.[8] Therefore, the incentive towards increased military spending is twofold. In the one instance, research and development necessary for a competitive economy is closely linked to defense spending while in the other, the use of these products creates lucrative markets for investment—but only if demand is kept high by expended product.[9]

With a rise in neoliberal ideology following the Cold War, a larger niche in the lucrative MIC had been created. Not only weaponry and technology but security services in general, manifested in the PMF, could be undertaken for private profit. According to international security expert P.W. Singer, PMFs are… “companies first and foremost… often tied through complex financial arrangements to other firms, both within and beyond their own industry…they can make use of complex corporate financing—ranging from the sale of stock to intrafirm trade—and can engage in a wider variety of deals and contracts.”[10] Like all companies, PMFs are reliant upon financial relationships and are legally accountable to the bottom-line interests of increasing the stock for their investors. PMFs, for very obvious reasons, make the greatest profits when they can participate in conflict. Additionally, through complex corporate financing arrangements, investors in seemingly unconnected sectors will also see their economic interests tied to warfare. This is candidly revealed by Fortune Magazine analysts when they note that… “[t]he upshot [to war in Iraq] is that the Pentagon is outsourcing as many tasks as possible…we wouldn’t be so crass as to describe it as a business opportunity—too many lives are on the line. But the fact is that if America goes to war, private companies are going to be deeply involved,” in both war and reconstruction.[11] Statements to the contrary aside, they are precisely—and with depraving accuracy—describing war in Iraq as a ‘business opportunity’. But acknowledging the potential profitability of war is not a major departure from common understanding. The profitability of PMFs, however, combined with their direct war-fighting and support functions—thereby freeing up more soldiers to engage in direct combat—do, in fact, transcend the traditional MIC-sphere of political and economic influence.

Neoliberal ideology demands the transfer of formerly public organizations to private hands. As “the ultimate representation of neoliberalism,” PMFs have moved the “control of force” farther from popular reach.[12] This results in less popular control as one more layer insulates private organizations from the popular vote and creates greater ambiguity. Illinois Representative Jan Schakowsky affirms that… “[t]here’s a great lack of transparency when you contract out.”[13] This substitution of public for private means of supporting military action allows the US to increase their actual numbers in conflict zones and to keep these numbers more or less concealed from the public eye. Additionally, because the executive branch of the US government maintains a large amount of budgetary discretion in allocating defense funds, these monies can be funneled to PMFs that become invisible when the official numbers of troops on the ground are made public.[14]

The result of this is a massively increased ‘army’ that is generally not subject to public grievances. According to a recent article in the Los Angeles Times, there are currently 180,000 civilians, of coalition countries, fulfilling PMF tasks in support of Operation Iraqi Freedom. Senator James Webb of Virginia has questioned the legal ramifications of what he describes as a ‘virtual army’. He states that… “30,000 of them…[are] truly quasi-military—carrying weapons, doing security work, doing the sorts of things that we wouldn’t assume that civilians would be doing—and with very little accountability.’”[15] Accordingly, this collection is therefore the second-largest portion of the Bush

Administration’s ‘coalition of the willing’—a mere 20,000 private security employees in Iraq are required for that title.[16] The extensive use of PMFs has allowed the executive branch of the US to nearly double the size of its force in Iraq without requiring congressional approval for these numbers. In other words, when politicians’ debate withdrawing the approximately 144,000 US troops from Iraq, it would be more appropriate, in fact, to debate the withdrawal of some 270,000 US ‘troops’. Furthermore, public monies have been used to purchase this ‘virtual army’, paying major dividends to private investors, thereby purchasing much of the economic elite’s support. The disparity between these troop numbers, combined with an understanding of the transfer of public wealth to private hands, could mean the difference in waging war being split between popular grievance and popular refusal.

What is to be concluded of this increasingly heavy reliance upon PMFs in the service of US foreign policy? Amongst mainstream International Relations scholars, centralized control of military affairs is often seen as a beneficial development. This is because, the argument goes, political expediency is increased and the policy pursued is more rational; independent of ‘irrational’ popular policy. Arguments aside as to whether or not such a serious matter as waging warfare should ever be expedient, elite depictions of an uninformed, irrational public body are unsubstantiated by genuine research. To the contrary the public maintains rational, coherent and consistent desires regarding international affairs over extended periods of time.[17] These desires include not only level-headed calls for multilateralism—including diplomacy and commitments to the United Nations charter—but also for increased social spending coupled with decreased defense spending. Furthermore, economic research supports what the public desires: in straight economic terms, public spending on defense is more harmful to the national economy than spending on social programs.[18] It has been argued that PMFs comprise a threat to democratic government not only because their economic incentives are directed towards conflict but also because of the degree to which politicians can expand conflict absent public observation. Realignment of US policies so that they are in sync with the desires of the public would scale back the use of PMFs to a significant degree and provide a boost for public control. The privatization of security roles consolidates the use of force in the executive branch while also deepening the interests that are shared amongst those who stand to gain, politically or economically, from the ‘permanent war economy’. This is a trend that a democratic state would likely wish to resist.

Endnotes

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[1] Boggs, C. (2004). “U.S. Grand Strategy and its Contradictions.” New Political Science 26(3): 22. p.272 Avant, D. (2004). “The Privatization of Security and Change in the Control of Force.” International Studies Perspectives 5: 6. Knickerbocker, B. (July 18, 2007). Silent Surge in Contractor ‘Armies’. The Christian Science Monitor.

[2] Some analysts have described the privatization of security and other military roles as ‘Private Military Industry’ or ‘Private Security Companies’ among other specific terms. This essay will use P.W. Singer’s broader term ‘Private Military Firms’, Singer, P. W. (2002). “Corporate Warriors:The Rise of the Privatized Military Industry and Its Ramifications for International Security.” International Security 26(3): 36. p.187

[3] Chandler, A. D. (Winter 1969). “The Role of Business in the United States: A Historical Survey.” Daedalus.p.36, quoted in Chomsky, N. (2005). Government in the Future. New York, Seven Stories Press.,p.58-59 The Soviets likewise recognized this centralization in the US political-economy and expressed interest that it could lead to greater shared ideology, see Cox, M. and C. Kennedy-Pipe (2005). “The Tragedy of American Diplomacy? Rethinking the Marshall Plan.” Journal of Cold War Studies 7(1): 39.

[4] Fitzgerald, M. (2004). “Militarism: A Way of Life.” The Humanist: 6. Charles Wilson would later become President Eisenhower’s Secretary of Defense during his first administration.

[5] Ibid. See Gibbs, D. N. (2004). “Pretexts and U.S. Foreign Policy: The War on Terrorism in Historical Perspective.” New Political Science 26(3): 30. Gibbs, D. N. (2004). “Pretexts and U.S. Foreign Policy: The War on Terrorism in Historical Perspective.” New Political Science 26(3): 30.

[6] Aguiar De Medeiros, C. (2003). “The Post-War American Technological Development as a Military Enterprise.” Contributions to Political Economy 22: 21.

[7] Ibid.p.51

[8] Mount, I., M. Maier, et al. (Mar 1, 2003). The New Military Industrial Complex To arm for digital-age war, the Pentagon has turned to a new generation of defense contractors. . Business 2.0 Magazine (C.N.N.Money.com). p.1

[9] Edwards, J. (September 2006). “Military R&D 101: Many of the military’s newest and most sophisticated technologies lie behind ivy-covered walls on the nation’s campuses.” Electronic Design: The Authority on Emerging Technologies for Design Solutions Retrieved Aug 3, 2007.

[10] Singer, P. W. (2002). “Corporate Warriors:The Rise of the Privatized Military Industry and Its Ramifications for International Security.” International Security 26(3): 36. p.192

[11] Schwartz, N. D. and N. Watson (2003). The Pentagon’s Private Army. Fortune. 147: 7. p.104

[12] Singer, P. W. (2002). “Corporate Warriors:The Rise of the Privatized Military Industry and Its Ramifications for International Security.” International Security 26(3): 36. p.197, Avant, D. (2004). “The Privatization of Security and Change in the Control of Force.” International Studies Perspectives 5: 6.

[13] Schwartz, N. D. and N. Watson (2003). The Pentagon’s Private Army. Fortune. 147: 7. p.2

[14] Avant, D. (2004). “The Privatization of Security and Change in the Control of Force.” International Studies Perspectives 5: 6.

[15] (July 8, 2007). The pitfalls of privatizing war.(Editorial) Roanoke Times (Roanoke, VA). Roanoke.

[16] Avant, D. (2004). “The Privatization of Security and Change in the Control of Force.” International Studies Perspectives 5: 6. p.156

[17] For the benefits of ‘political expediency’ see Singer, P. W. (2002). “Corporate Warriors:The Rise of the Privatized Military Industry and Its Ramifications for International Security.” International Security 26(3): 36., For popular opinions on US foreign and domestic policy see Page, B. I. and M. M. Bouton (2006). The Foreign Policy Dis*connect: What Americans Want from Our Leaders but Don’t Get. Chicago, The University of Chicago Press.

[18] Baker, D. (May 2007). “The Economic Impact of the Iraq War and Higher Military Spending.” Center for Economic Policy and Research: 10.

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