Privatization of Military Capability Has Gone Too Far

I would like to respond to Lindy Heinecken’s “Outsourcing Public Security: The Unforeseen Consequences for the Military Profession.” ¹ It is an interesting article, but does not go far enough. Heinecken describes the process of privatization in stages but like others (1) does not provide explanation for how or why it came to be and she acknowledges or bypasses the savings argument altogether, as has everyone else. (2) She mentions, but fails to document savings; Heinecken cannot do this because it is extremely difficult to identify studies that document savings, even in sectors such as state or local governments. John Hilke documents an impressive 137 studies supporting the efficiencies of privatization in a survey of the literature, yet a number of these are problematic. ² As researcher Debora Avant would no doubt indicate, actual savings are very difficult to get a handle on and has said as much in her work. ³

Heinecken’s very first paragraph in the introduction lays out the mantra of the neoliberal public management strategy of what it claimed to be beneficial reforms. Heinecken lists these and quickly moves on, avoiding the question of the veracity of these claims. The trouble is the absence of discussion implies uncritical acceptance of the neoliberal position, but a reading of two sources cited very early in the article reveals many problems and questions with the presumptions of unquestionable savings and efficiency behind the conservative argument. These include risks such as the abrogation of functional control, political (foreign policy) decision control, externalization of costs, and limitations of transparency in the overall process. For example, the Singer article cited actually focuses on five problematic sectors. ⁴ The Schreier and Caparini article (note 6) is far more critical of the industry than Heinecken’s use of it would lead a reader to believe. Schreier and Marina note many transaction costs of outsource contract management are not taken into account, for example, the cost of arranging bids, monitoring outcomes, and taking legal action for contract failures. These features may offset any claimed savings. ⁵

The hedging continues in her text and in many of the citations she utilizes. Again, ultimately who claims evidence private military corporations can more efficiently execute peace building and postconflict reconstruction? What are the parameters here? Can the for profit sector actually do this more efficiently than the US military, North Atlantic Treaty Organization (NATO), the United Nations (UN), international nongovernmental organizations (NGOs), and local NGOs? The topic is broached and then dropped; does this not lead to a reading of acceptance of this claim as fact? This is a corporate marketing or sales claim, is it not? Evidence to the contrary can be claimed, for example, Executive Outcomes in Sierra Leone; the governmental leaders saved money by assigning or contracting away public resources directly related to the diamond industry. Such actions also externalized costs in the creation of ungoverned space. ⁶

Further, these efficiency savings and particularly claims for professional expertise can be justifiably referred to as a front-stage, front row phenomenon; it is a very adroit marketing tactic. The actors are initially highly trained, but after so many months there is a transition to personnel ever-less well trained and far less well paid. In some cases, the personnel recruited have been easily and brutally abused and taken advantage of in theater operations. ⁷

Heinecken’s presentation of how we arrived at the current state of affairs is a thesis of stages; the first area of control to be relinquished was combat service support; the second was the area of combat support; and currently we face encroachment of core military functions by these private sector providers. However, in the discussion concerning stage 2, Heinecken noted it has been primarily weak states that required the private military corporations to come in…“to deter threats and to protect strategic assets.” Again, citations are made implying agreement or rather nonargument to the claims of services being an acceptable and unproblematic. Yes, the Singer article in Foreign Affairs (cited again as note 9) does have the phrase…“tactical military assistance.” However, the thrust of that article does not discuss the issue in a neutral fashion as Heinecken implies utilizing the phrase; it is as if it were taken out of context, because Singer’s article overwhelmingly discusses the large US financial contractual expenditures going to the private sector and noted five obstructions or problematic areas and more importantly noted the…“Pentagon's…business minded leadership”…has little economic memory and no proclivity to ask questions about savings or quality. ⁸ The point is if one has not read the cited article, then one might presume the cited article supported the statement or flavor implied by Heinecken. Perhaps social conditions function along the lines of Says law, that is, the supply of ideological supply begets its own demand in the policy arena.

Heinecken moves to issues concerning unforeseen consequences and this is very well done. Heinecken notes the loss of monopoly over knowledge, skills, and increasingly personnel and the loss of autonomy—the civilian leadership exerts control over the military, but the military has little control over the private sector military corporations or their personnel. This segues into the notion of loss of “corporateness.” I think it would have been better to simply utilize the concept of “culture” and then the erosion of service ethic and the occupational trend/mind-set, which Moskos’ noted some years ago.

In her discussion concerning loss of autonomy, Heinecken gives equal weight to the lack of governmental regulation and the corporate response to police themselves with the formation of private military security associations to develop codes of ethics and self-regulate their conduct. Heinecken is not strong enough here; there have been a number of demonstrations of how self-regulation and code of ethics worked in both Iraq and Afghanistan. Compared to thousands of man-hours of genuine good work, these incidents represent a tiny fraction; however, the leverage of damage power those fractions have reverberates more piercingly than all the provisions of any and all brick and mortar school building and well drilling. When it is a military actor, the leverage of damage is also of perhaps even greater magnitude; however, at least there can be accountability, for example, the Army staff sergeant Robert Bales case. ⁹

In her conclusion, Heinecken hedges her bets again by noting the possibilities of private security corporations being a force multiplier, notes the casualties, and finally gets to the question of whether privatization has gone too far. She is the first author to do so in our journal. Yet, Heinecken says this noting the question is no longer about cost-effectiveness, efficiency, and flexibility. Again, the arguments of cost, efficiency, and flexibility are stated as implying they are very probably the case. Similarly, she discusses the important implications—loss of autonomy and control and continuing erosion of these and other cultural features of a public military. Yet, Heinecken (and to be fair, virtually everyone else) deters/eschews from stating several obvious features of the entire debate.

These are as follows. There are few articles or solid references that illustrate savings, or increases in efficiency, and/or improvements in product quality since the early 1970s and 1980s; claims are made and arguments are advanced, but seem skewed with their focus on cost as an argument and being oblivious to measures of worker quality of life; the language is economically skewed toward free market supply side—Keynesian concerns are “disappeared.” ¹⁰ Further, there is a significant issue here with OMB Circular A-76, which requires the identification of all activities performed as being either…“commercial or inherently governmental” and that commercial activities are to be subject to competition, and much more—including a fundamental definitional change in the language, shifting the mandate from comparative cost studies to mandated targets.¹¹ Still, there should be comparisons out there.

There are however, certainly several articles where strong arguments do exist. ¹² However, all are without any data or evidence. Many argue and then cite others as warrant for the claim. Yet a look at the citations, one sees circular references; at best, there are a number of provisos involved, for example, if this or that policy is executed, then this or that savings will be accrued. However, I have failed to find citations documenting where the policy was executed and a follow-up initiated to illustrate actual savings, particularly over the long run. Is “lowballing” as a technique prevalent at the beginning followed with accelerating contract increases over time?

Sources do exist indicating plenty of malignant consequences from an actual default policy of limited management, extremely weak oversight, poor accountability, and very limited transparency. The result has been sizable percentage of noncompetitive contract awards, and more than a few cases of blatant financial fraud. ¹³ And yet no one states the obvious—the policy of privatization—outside of the narrow technical equipment and weapons platform area—is in gross error. I think there are no savings, certain none that justify such an extensive privatization of our national security.

My principal objections in all of these are Heinecken and many other authors note objections and concerns of others around costs, efficiencies, and quality, and obliquely mention many relevant social issues, but fail to take a definitive position that is implied. In the case of Heinecken’s article, what I read she implies is the proverbial jury is still out in connection with savings, quality, and efficiency. More importantly, she fails to more bluntly comment on the question of how we came to this position. Yet there are implied and explicit offerings out there. One is found in Mandel’s work where he refers to public security fears and the…“spread of free market values [and] growing free market [neo] liberalism [and despite mixed reviews there is a belief in privatization as a] panacea.” ¹⁴ Heinecken wrote a good article and had the courage to ask the important and obvious question; no one else has. I include myself here, but her daring has provided me with a bit of Moxie.

It is perhaps best to present my questions and concerns as bullets:

Can any of our readers come forth with circular A-76 studies illustrating savings beyond the Hilke summaries?

Can a comparison where the cost for say, feeding a rifle company battalion at Camp Lejeune in 1965 and a current cost of having this done privately be made where the metrics are reasonably similar with dollar adjustments? ¹⁵

What is the result for an increase in corporate profit, what is the result for quality of task when the private military security corporations begin to recruit less skilled or knowledgeable personnel for various tasks? ¹⁶

Can anything stop the increase in the no-bid contract sector? Particularly when most authors couple their support of the privatization process with the call for increased competition.

In addition, are the many transaction costs of contracting out taken into account? Are the costs of managing contracts, including arranging bids, monitoring outcomes, and taking legal action for contract failures taken into account or are these and other costs externalized? ¹⁷

Why is the standard metric (in many cases the only metric) cost savings? Was this not a result of the supply side revolution of the early 1970s and a post—Fordism focus on increasing profits at the expense of worker wages? Is there not far less (adjusted) currency and multiplier impact at the lower socioeconomic levels then forty years ago?

What does the imperial focus of cost cutting do to other metrics?

Savings claimed by savings not spent directly on our military are simply shifted to private contractors. Is this not simply an “externalization” of the cost by shifting it away from direct observation?

We are not “out” of Afghanistan or Iraq. Are we not still paying for contractors? Are those corporations not still acting in the name of the United States? How can it be argued because of privatization everything unequivocally translates to saving public money, particularly when cost comparisons have been abandoned?

Has Republican Party affiliation in the officer corps influenced naive acceptance of the privatization phenomenon? ¹⁸ Is it really an overstatement to say this? ¹⁹

Finally and more broadly, what does the privatization of the military down to (now) its core functions ²⁰ say about the conduct of foreign policy? Must we enter into consultation with the private military corporations to secure their support before making decisions of national security and taking action?

Further, what does privatization of military functions “say” about national sovereignty, particularly for weak states? Do the private sector military providers have a comprehensive peacekeeping doctrine—for that matter does anyone (albeit some hints are to be found best practices commentaries in the literature)? ²¹ Can they hire better translators and cultural experts for the country they are to perform services for?

Are the collapsed/weak/fragile nations such as Somalia actually better off stateless and financed with privatized currency? Is this not folly with numerous cascading consequences?

Finally, what does all this privatization imply about citizenship? Has citizenship no public requirement as for males in the days of the draft? Is it only a cash/financial nexus? If so, is citizenship for sale? Perhaps the investor visa is a good idea, but what does it imply? ²²

For me it is obvious that privatization in general overwhelming the public space and in the area of national defense has gone dangerously too far and probably cannot be reversed. Is this drive toward privatization a progression of what the volunteer military initiated? Has it not augmented erosion of the responsibility of citizenship and is not our nation poorer for the effort?