10/19/2011 11:13 am ET | Updated Dec 19, 2011

The Neoliberal Wars

One of the perpetual problems one encounters in discussing and trying to analyze private military and security contractors (PMSC) is what perspective to approach it from. Do you use political science, international relations, economics, business, or history, to name just a few disciplines? While they all offer useful insights some deal more with the past than the present. History, for example, is more likely to offer examples dating back to the East India Company or 19th century privateers, which is not that useful when dealing with the latest iteration of the LOGCAP program. Personally, since the bottom line is making a profit I increasingly favor economic analyses.

That brings us to a paper presented in May at a meeting of the Canadian Political Science Association. The author is Aaron Ettinger, a PhD candidate at Queen's University. The paper, "Neoliberalism and the Rise of the Private Military Industry" explores the transformative interactions of the US state and economic neoliberalism.

His first point, which is always useful to keep in mind, is that the PMSC industry is not something that that came about as a result of unhinged Milton Friedman type free marketers suddenly let loose. As Ettinger notes, "In the United States, the effects of military neoliberalism run deep, as the figures below will attest. However, the US did not arrive at this state overnight. Military privatization and marketization has been an uneven and improvised process, reflecting the real world limitations of applied neoliberalism, and the evolution of the neoliberal ideational framework itself."

Before getting into neoliberalism, and I don't pretend to be any more knowledgeable than the next person on the subject, let's pause to think about the perspective traditionally used to analyze PMSC issues. That would be International Relations which many academics have long been criticized for its inattention to its primary unit of analysis, the state. Thus, many have turned to International Political Economy (IPE) to develop more sophisticated theoretical inquiries into the changing nature of the state. According to Ettinger, "What they seized upon was the idea that the modern state is conditioned by a complex array of forces that must be understood holistically, rather than as discrete variables with clear causal effects."

Neoliberalism can simply be defined as seeking to transfer control of the economy from public to the private sector, under the belief that it will produce a more efficient government and improve the economic health of the nation. Military outsourcing and privatization is just one aspect of neoliberalism. Like all other processes, neoliberalism is not static. It unfolded in two phases, especially but not exclusively, in Western Europe and North America. To paraphrase what Ettinger writes:

The first 'roll-back' phase began in the 1980s with a rolling back of state intervention in free markets. 'Roll-back' neoliberalism was an active set of state-initiated, though by no means uniform, programs associated with attacks on organized labour, planning agencies, and bureaucracies by way of funding cuts, downsizing and privatization.

But that phase quickly met real-world limitations as the perverse consequences of market-centric reform became evident. Yet the exigencies neoliberal framework did not collapse. Rather, it evolved to reconcile the social and political tensions that arose in its wake. By the end of the 1980s, roll back neoliberalism changed in form to incorporate technocratic, strategic and market-oriented state interventions into the free market. In essence, 'roll-out' neoliberalism halted and reversed the dismantling of the state with a deliberate series of state interventions and re-regulations. This phase is characterized by the proliferation of "market conforming regulatory incursions" including networked forms of governance, multilateral economic surveillance, technocratic management, public-private partnerships and market-complementing forms of regulation. It was, and remains, "a series of politically and institutionally mediated responses to the manifest failings of the Thatcher/Reagan project, formulated in the context of ongoing neoliberal hegemony in the sphere of economic regulation. In a sense, therefore it represents both the frailty of the neoliberal project and its deepening."

Moving on to what we follow, the PMSC industry, Ettinger writes this:

In the US, both phases of neoliberalism entail the normalization of marketizing the state's legitimate use of coercive force. With the privatized 'coalition of the billing' in tow fighting alongside state forces, the military-commercial complex in the US has blurred distinctions between state and market, public good and private gain, foreign policy and corporate profit. The US remains capable of presenting a politically viable war policy to its domestic audiences by claiming that uniformed troop levels will be kept low thus avoiding Vietnam-era domestic strife. In Iraq and Afghanistan, the initial 'roll back' phase of military privatization created a boom industry in the midst of a war zone. However, unanticipated complications and failures accompanying the marketization of war necessitated a response from the US state. Over time, the US rolled out an uneven and improvised set of policies to bound the private military industry within a framework of patchy regulation intended to resolve, or at least address the failures of the 'roll-back' while perpetuating the lucrative market for force. In this regard, privatizing warfighting in Iraq and Afghanistan should also be included alongside other public-private partnerships within the context of 'embedded,' or 'roll-out' neoliberalism. US military outsourcing follows a pattern of neoliberalization; from a largely unqualified approach, to a more circumscribed method necessitated by unforeseen events on the ground.

Wit the advantage of hindsight we can see that, at least for the U.S. military, the first significant step into PMSC waters was the Logistics Civil Augmentation (LOGCAP) program. Not coincidentally this tracks with the emergence of neoliberalism as an organizing policy principle during the Reagan and Thatcher era. Administratively, the origins of private contracting can be traced to 1985 when US Army Chief-of-Staff General John A. Wickham signed an order that set out the concepts, responsibilities, policies and procedures for using civilian contractors to replace soldiers and local labour during wartime.

But as Ettinger notes, and what most PMSC advocated neglect to mention, is that this did not mean that the U.S. military thought the use of contractors was the next best thing to sliced bread.

Though the seeds of wider scale privatization were sown in LOGCAP, the original order reflects a deep concern about the heightened risks associated with incorporating civilians into war operations. The original program was designed to allow maximum decision-making flexibility for each Army command, permitting commanders to "balance its military and contractor mix accordingly." (US Army 1985: 3) Since civilian performance is far less predictable under wartime conditions, the document cautions contracting agencies to be judicious about the requirements, type and administration of each contract. "It is probable that deficiencies in any of these efforts will result in increased costs and may result in less than desired contractor performance levels." (US Army 1985: 7) Quite perceptively, General Wickham's memorandum anticipated many problems that the US would face with its contracting corps two decades later in Iraq and Afghanistan.

If the Reagan years planted the see for military privatization the first Bush junior presidency proved to be the flowering stage.

Public statements made by US Secretary of Defense Donald Rumsfeld foreshadowed the massive outsourcing under LOGCAP III and IV. During his tenure at the Pentagon, the United States embarked on an explicit program of 'roll-back' outsourcing and privatization intended to incorporate the logic of the private sector into the operations of the Pentagon apparatus... Rumsfeld's statements read like a manifesto for the neoliberal 'roll-back' of the largest bureaucracy in the US government. His language of entrepreneurship and venture capitalism in these early declarations would be transformed into standard operating practices over the course of the next decade.

Looking back at the past decade it is impossible to argue that, at least on this one issue, that Rumsfeld failed. Whether those SOPs are an unmitigated benefit is another question.

Ettinger concludes that:

In the US, the privatization of military functions and the market constraints on US force projection represents an incursion of the logic of capitalism into the logic of security policy, a development that is obscured by state-centric theories of International Relations. The uneven roll-back and subsequent roll-out of neoliberal state incursions into the market for force has facilitated the rise and entrenchment of a highly profitable private military industry with global reach. With regard to the private military industry itself, the failures of applied neoliberalism have given rise to demands for industry-friendly regulation. While early forms of governance have come in fits and starts it is apparent that is that the primitive 'roll out' approaches are not sufficient to bring the massive and hitherto unconstrained industry under political control. Given the extent to which the US state depends on the private sector for its own foreign adventures, it is incumbent upon scholars to account for this transformation of the state, shot through as it is by the logic of neoliberal capitalism.