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Deconstructing the PMSC Frame

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Sometimes, as the saying goes, it is not what you say, but how you say it. Or to put it contemporary terms, how you spin it. And for the past couple of decades the primary message for the private military and security contracting industry has been that as a creation of the unfettered private enterprise system, -- or to revise the old U.S. Army recruiting slogan, letting the free market be all that it can be -- it delivers more bang for the buck.

I've pointed out in past articles that there is not nearly as much empirical, methodologically sound evidence to confirm that point but I don't want to rehash that here. What I do want to discuss is that the very language used in the continuing debate on whether and how to privatize or outsource functions that used to be considered inherently governmental helps influence the decisions made about it.

Admittedly, this is not the most novel of realizations. For as long as humans have debated issues they have used language to put their point of view in the best possible light.

But privatization of military tasks is inextricably linked to our conception of the free enterprise system and over the past few decades we have been conditioned to accept, in Tarzan-like terms -- you: big bureaucratic, wasteful, inefficient, free spending, government apparatchik; me: lean, mean, outsourced, cost-effective, fighting machine.

In other words, up until the past few years most people accepted, at least at first thought, the idea that the "centerpiece of neoliberal, market-based governance" is privatization, which refers to the use of the private sector in the provision of a good or service, according to Matthew Titolo.

So, most of us willingly drank the neoliberal Kool-Aid, at least until the economy started melting down. But since then people have been expressing doubts about both neoliberal economics and privatization. Are they right to do so? Possibly, according to an article published earlier this year.

Writing in the Buffalo Law Review Titolo has in an article titled "Privatization and the Market Frame":

What allows neoliberal efficiency arguments their politically persuasive force? Just this: that they are enmeshed in other networks or clusters of values that appeal to us in some, usually intuitive, fashion. Absent sheer repression, no set of ideas as abstract and counterintuitive as the "free market" or "efficiency" can command anything like a consensus without a strong grounding in a network of recognizable moral values. Figures such as Milton Friedman, Friedrich Hayek, and Ayn Rand helped to provide that network by breathing new life into a moribund libertarianism. At the heart of libertarianism is a powerful narrative of "negative freedom" from government interference in what are imagined to be the pre-political liberties of property and contract. Outside the narrow cases of force and fraud, private coercion as a systemic worry is a nonstarter, because in a free society, individuals have recourse to courts of law to settle private grievances and to seek remedies for private harms. So, our consciences can rest easy. To be sure, many individuals will fail to reap market rewards. However, this is not a drawback but rather the genius of the neoliberal setup: structural forces and dynamics can be reframed in terms of personal morality. In other words, the fact that a large number of individuals do not reap the benefits of the free market can be understood as the system working the way it is supposed to. After all, the "free" in "free market" means that individuals are at liberty to make good or bad choices without the government rescuing them from their shortsightedness or imprudence. Free from the smothering embrace of the nanny state, social policy will largely be written by the market itself, where countless individual transactions aggregate to set the social price of the public good in question.

It's a nice story but in recent years its luster has worn off after meeting up with reality. As Titolo puts it, "Whatever the appeal of this story, the global financial crisis has made it impossible to take at face value."

Titolo details several ways in which the current privatization discourse is insufficient but let me just mention a couple of his points.

According to Titolo, First, even if "we take the efficiency imperative as given and self-evident," and we all agree on a definition of efficient, "we can have little confidence in the notion that markets are categorically or even typically more efficient than government. This is simply an ideological bias inherited from the intellectual tradition of neoclassical-neoliberal economics."

Privatization discourse accepts the standard economic model of a competitive marketplace as a starting point. That model assumes a picture of government contracting where barriers to entry are low and in which producers can readily enter the market for public contracts. Competition is supposed to keep market actors disciplined and accountable. But the empirical realities of government contracting do not resemble this picture...

So this is the first problem with the presumption of efficiency when applied to the privatization debate: federal government contracting "markets" are often monopolies or oligopolies and thus not good candidates for a presumption in favor of competitiveness. At the state and local levels, competitive bidding is often not the norm. Even if public contracting markets are born in the image of the classic competitive market, they may mature quickly to take on anti-competitive features. For example, actually existing federal contracting markets are plagued by no-bid contracts. To illustrate, in 2006, the Waxman House Committee on Oversight found that "50.2 percent of federal procurement spending -- $ 206.9 out of $ 412.1 billion -- was awarded without full and open competition." Likewise, in 2007, 69 percent of Department of Defense ("DOD") contracts and 73 percent of Department of Homeland Security ("DHS") contracts were awarded without full and open competition.

A more sobering point would be this:

In the military context, non-economic status differentials can emerge as all-important in (rather than incident to) decisions to privatize. Private actors qua private actors may be sought--not because they are situated in a more efficient market or even because they command lower market wages, but because legally, politically, and symbolically they are not soldiers. Military privatization can allow the government to achieve national security and even humanitarian ends that would be more difficult, if not impossible, to accomplish using American soldiers.

In other words, one of the rationales for contracting out is precisely that it enables governments to avoid mechanisms of public accountability for controversial policies. To take the Iraq example again: private contractors operate in a grey area that allows them to circumvent legal constraints that would otherwise limit the options available to the executive branch. At a general level, the power to pursue executive objectives unfettered by political and legal constraints is a core reason for contracting out government operations. If this view is correct, and there is very good reason to think it is, then our accountability worries may be even worse than we have feared. From the perspective of the hybrid public-private governance system, with its emphasis on flexibility and cutting through red tape, a lack of accountability is not a problem, it is a solution to a problem. Jon Michaels makes a powerful case that "privatization workarounds" are often the sine qua non of large-scale privatization projects. I would add that tactical privatization is not a pathology that we can cure by urging more accountability. Tactical privatization may instead be a natural incident to our technocratic habit of foregrounding pragmatic flexibility. It is easy to see why an official of the executive branch might view "rule-of-law constraints" and "public opinion" as "costs" that privatization helps it avoid.