10/30/2010 07:03 pm ET Updated May 25, 2011

Admiral Bob's Global Security: The Future of PSC?

Today is a two for one day. Not only do we look at a law journal article, one of my favorite hobbies, but we also indulge one of my favorite obsessions, science fiction.

I'll let you in on a little secret. Years ago I noticed that certain sci-fi novels, particularly those of the cyberpunk genre, when it came to issues of security and defense, relied heavily on private, not public, institutions. For many years I have been telling anyone who would listen that if they want to understand the future of private military and security contracting they should be reading the works of authors like William Gibson and Neal Stephenson.

But few people listen to a lowly blogger. But they will listen to people with academic credentials. Thus I am delighted to refer you to an article in the February 2010 Harvard Law Review. It is "The Possibilities and Limitations of Privatization." by Edward Rubin, a law professor at Vanderbilt University. Actually it is a review of a book published last year The Possibilities and Limitations of Privatization: Government by Contract: Outsourcing and American Democracy, edited by Jody Freeman and Martha Minow.

Rubin starts with this:

Neal Stephenson's Snow Crash envisions a United States of the future where protection against foreign enemies is provided by Admiral Bob's Global Security, domestic order is the domain of the Central Intelligence Corporation, and local safety is maintained by MetaCops Unlimited ("Dial 1-800-THE COPS: All Major Credit Cards") - all of which fits perfectly with the name-branded, commercialized environment that dominates people's day-to-day existence. In Los Angeles, where the Mafia, a legal corporation, will deliver pizza anywhere in thirty minutes guaranteed, Fedland is a highly guarded office complex that has no function that anyone can discern other than to protect itself. The novel merits science fiction's much-coveted accolade of prescience for having also envisioned a cyberspace world where people can create virtual characters that move around and interact, and having introduced the term "avatar" to describe them. Whether Stephenson's vision of a totally privatized America will turn out to be equally prescient is at least one theme of Jody Freeman and Martha Minow's edited volume, Government by Contract.

Rubin notes that the authors in this edited work make some valuable points for any intelligent discussion of this issue, starting with this piece, by a William Novak, on the history of privatization.

Over the course of American history, patterns of collaborative governance inherited from longstanding English practice have produced a porous, intricate, and ever-shifting boundary between these supposedly separate spheres. Many state and city governments originated during the Colonial era as charters to private companies, and early American corporations were conceived as instruments of governance. The dynamic interplay between the two realms, Novak notes, continues to the present time: "In the context of these twin concerns about the potential for public corruption in state-directed projects and private coercion in the free market, it is not an accident that the United States developed a preference for balancing public direction with private initiative.

As this brief history suggests, there are no particular sets of functions or responsibilities that are inherently public. For most of Western history, private parties carried out virtually all the activities we now regard as governmental. The last two centuries have seen a steady and dramatic increase in the scope of direct government authority, although often with the continued involvement of private parties, as Novak indicates. Consequently, the current spate of privatization is correctly viewed as a sort of minor epicycle in a massive trend that has been moving rather steadily in the opposite direction. That fact does not reduce recent developments to insignificance, however. There can be no doubt that the last few decades of our nation's history have it is seen the privatization of many activities that were previously regarded as the preserve of public authority. The point is simply that these recent privatization efforts cannot be opposed on the ground that they relinquish inherently governmental functions into private hands. Arguments against privatization must be framed in more pragmatic, and instrumental terms.

But, to paraphrase Sir Isaac Newton's Third Law of Motion, for every good there is a bad. Thus:

One of the many virtues of Government by Contract is that it is precisely these kinds of pragmatic arguments that its contributors advance. The critics of privatization, avoiding both the conceptual error and the unconstructive consequences of deontological declarations, focus on particular and potentially remediable defects, thus inviting rather than foreclosing a response. Martha Minow offers one of the most far-reaching critiques.

Her examples are the wars in Afghanistan and Iraq, in which the second Bush Administration's heavy reliance on privatization overlapped with a number of its other readily critiqued enthusiasms. She notes that, in Afghanistan, private contractors "served in paramilitary units with the CIA, maintained combat equipment, provided logistical support, and worked on surveillance and targeting." In Iraq, they were involved in the "planning, policy writing, budgeting, intelligence gathering, [and] nation building." And because monitoring these varied, extensive, and complex contractual activities was clearly a difficult task, the Department of Defense contracted out its monitoring function to private contractors as well.

This extensive reliance on private contracting was not accompanied by a concomitant commitment to the procedures that are supposed to govern the contracting process. The Department of Defense failed to follow the required rules for competitive bidding, to monitor and control the performance of the contracting parties, and to ensure that contractor employees followed appropriate legal and moral norms. In consequences of these casual attitudes are well known in the case of Abu Ghraib, where private is contractors in carried out many of them the interrogations. This was more than an unfortunate and lapse in contractual supervision of the sort that can cost the U.S. government a billion dollars or so. Regardless of how one feels about such a massive human rights violation, the fact is that the images of naked, sometimes bloodied Arab men lying on the floor under the supercilious grins of male and female Americans will be vividly present in the mind of every adult in an embattled region where we are absolutely reliant on the support and goodwill of moderate forces for our security and our supply of crucial resources.

But the difficulties with the military's use of private contracting, in Minow's view, run as deeper than the specific failures during the wars in Afghanistan and Iraq. First, the competitive process that supposedly renders private enterprise more efficient than public agencies cannot be effectively implemented in many cases because there is no nongovernment market for the product in question. An obvious example is the LOGCAP contract through which a few private companies have provided a broad range of logistical services to the Army since the Reagan Administration. In these circumstances, there is no real competition for the initial award, and there is also a serious constraint on the effectiveness of subsequent monitoring because the government cannot afford to terminate the contract. Second, the private contractor's employees cannot be fully monitored or controlled because they lie outside the hierarchical structure that is so central to military discipline, and are thus exempt from many of the rules that constrain military personnel. Third, legal and moral norms can never be fully imposed on private contractors because private firms lack the democratic accountability of public agencies.

This is not a one-sided book. At least three of the five chapters, those written by Steven Kelman, Stan Soloway and Alan Chvotkin, and Mathew Blum, argue that existing controls on government contracting are adequate and that additional restrictions of the sort proposed by other contributors would be counterproductive.

There is much useful material in this article, and, of course, the book itself, but the bottom line is Rubin's conclusion:

There is a direct connection between the two apparently distinct predictions in Stephenson's Snow Crash. The cyberspace world into which his characters withdraw to indulge their fantasies also represents a withdrawal from public, collaborative life that might well lead to the atrophy of government and its replacement with a largely privatized mode of social regulation. During the past several decades, there has been a substantial amount of enthusiasm for this vision of the future. But the catastrophes that have ensued from the second Bush Administration's efforts to fight a war with unsupervised private contractors; to respond to a natural disaster with an underfunded, incompetent emergency relief agency; and to allow private money managers to spin out increasingly complex financial instruments without regulatory constraint have brought home the values of collective action and government responsibility. As we move into a new presidential administration, and perhaps a new paradigm of governance, we should not recreate the bureaucratic rigidities that inspired the prior paradigm. We need a new approach to the complex relationship between government and private parties, one that recognizes the strengths of each and deploys them in a sophisticated, microanalytic manner. Government by Contract, with its well-informed, insightful individual essays and the engaged, attentive dialogue that emerges from the volume as a whole, represents an enormously valuable step in that direction.