One of the perennial assumptions in the never ending debate about outsourcing and privatization is that doing so is more cost-effective. Don't believe me? Try searching online for "cost-effective AND outsourcing" I just tried and received 1,210,000 hits on Google.
But, to paraphrase Bill Clinton, it all depends on what you mean by cost-effective. There is more to it than just the lowest monetary cost. It appears that the very act of outsourcing creates a bureaucratic version of the Heisenberg Uncertainty Principle, which in the social sciences is often taken to mean that the very act of observing a phenomenon inevitably alters that phenomenon in some way.
This bring us to the article published in the Spring 2010 issue of the University of Chicago Law Review, titled "Privatization's Pretensions" by Jon D. Michaels, Acting Professor of Law at the UCLA School of Law.
Prof. Michaels writes, "For decades, policymakers have been privatizing government responsibilities for the customary, and ostensibly exclusive, objective of providing the public with the same goods and services more efficiently. It is becoming increasingly apparent that these policymakers are also doing something different: they are using that purportedly technocratic process to substantively alter the very policies they are supposed to be neutrally administering. And, it is working: these privatization "workarounds" can directly change the content of public education, health, and social welfare programs, the outcome of regulatory enforcement and rulemaking proceedings, and the trajectory of police and national security operations."
Well, why is that bad, you ask. Because, as Michaels writes:
Workarounds provide outsourcing agencies with the means of accomplishing distinct policy goals that--but for the pretext of technocratic privatization--would either be legally unattainable or much more difficult to realize. In short, they are executive aggrandizing. They enable Presidents, governors, and mayors to exercise greater unilateral policy discretion--at the expense of legislators, courts, successor administrations, and the people.
In plain English that means a gutting of the democratic process, or as Dick Cheney so fervently supported, a strengthening of the unitary executive theory of government. Or, to paraphrase the famous line from The Treasure of the Sierra Madre, we don't need no stinking democracy.
I am tempted to note that those who advocate for PMSC on efficiency grounds might remember that Italy's Benito Mussolini also said that Italian fascism should have been welcomed because it made the trains run on time. As that is a popular myth I won't belabor the point; at least not for now.
Note that Michaels is not arguing against privatization per se. But he does note that we don't even have the proper language and metrics to understand it:
To care about workarounds, we need not be skeptical of executive authority, nor need we be hostile to privatization. We must simply appreciate that this powerful, potentially transformative phenomenon (1) raises novel questions that sound in separation of powers, intergenerational sovereignty, and democratic theory, and (2) has been overshadowed by the dominant, but analytically orthogonal, efficiency versus accountability debate. Because workarounds are undertheorized as well as underdeveloped as a regulatory matter, we currently lack the vocabulary, the data, and the tools to make thoughtful analytical and legal interventions.
Michaels examines various agencies and scenarios. But with respect to PMSC here is the key section:
Though concerns about military contracting typically sound in terms of oversight difficulties, cost overruns, and encroachments on inherently governmental responsibilities, increasing attention is being paid to an additional concern. As noted in the Introduction, out sourcing conceals the true scope and human costs of war efforts by understating the size of deployments and diluting casualty counts.
A large percentage of our troop commitment in Iraq and Afghanistan is comprised of contractors. For example, a 2007 estimate had 180,000 contractors supporting roughly 160,000 troops in Iraq; to the extent official numbers list just the 160,000 military personnel, the government can give the impression that our footprint is only half its actual size. As Charles Tiefer has written, the Pentagon "ardently desired . . . to keep the illusion of a low number of troops." The illusion was certainly enhanced by efforts, intentional or not, to conceal military contracts by routing them through civilian agencies, to refer to contract services in official documents in generic and arguably misleading terms (such as "information technology" specialists rather than as "interrogators"), and to complicate the contracting processes such that the federal government still has trouble providing an accurate contractor headcount.
Private contractors are politically valuable insofar as they neither enter into official head or body counts--nor, it appears, into our hearts. That is to say, the nation identifies with its troops to a far greater extent than its contractors: "Americans are accustomed to hearing the military death toll . . . . But largely absent from the public consciousness are the thousands of civilians putting their lives on the line as contractors in Iraq." Combining US military personnel and contractors in combat zones thus allows for contractors to lighten the troops' share of long tours, injuries, and other physical and emotional hardships. But even more importantly, the aggregate loss of life (and quality of life) is discounted by the fact that we neither hear as much about nor, evidently, care as much about homesick or fallen contractors.
This misperception of the war effort generates tangible effects that redound specifically to the executive's benefit. Concealing these costs, the people are less sensitive to the President's handling (or mishandling) of the military campaign. In turn, the executive has more political capital and thus more maneuverability in conducting the war. Indeed, without contractors: (1) the military engagement would have had to be smaller--a strategically problematic alternative; (2) the United States would have had to deploy its finite number of active personnel for even longer tours of duty -a politically dicey and short-sighted option; (3) the United States would have had to consider a civilian draft or boost retention and recruitment by raising military pay significantly--two politically untenable options; or (4) the need for greater commitments from other nations would have arisen and with it, the United States would have had to make more concessions to build and sustain a truly multinational effort. Thus, the tangible differences in the type of war waged, the effect on military personnel, and the need for coalition partners are greatly magnified when the government has the option to supplement its troops with contractors.
Note, too, that the public may well catch on. As contractors become fixtures on the national security landscape and as the public starts demanding numerical accountings, will workarounds diminish in strategic value? And, if so, does that mean the executive as an agent of the people will be on a tighter leash? Obviously, one cannot draw any causal connection between growing calls for reducing America's military presence in Iraq and greater awareness of contractors. But given how much we now know about contractors--compared to how little was known before the invasion and occupation of Iraq--one might query whether contractors will ever be used for such politically strategic purposes in future engagements.
To me Michael's most important point is to point out that the concern we should have is not about contractor's being unaccountable. Rather it is that they are too accountable to the policymakers in the executive branch--yes, we are talking about the White House--who set the policy.
For its part, the academic community has largely zeroed in on the government delegating sovereign authority to contractors--and those contractors' frolics and detours. Concerned that the regulatory framework does not do enough to deter rogue contractors, or to bolster agencies' efforts to limit contractor manipulations, scholars have sought to introduce, among other things, constitutional and administrative law norms into the privatization paradigm, and to have the contractors treated as state actors for legal purposes. However effective these approaches might be in reining in wayward contractors, there are important differences between (1) contractors who exploit the discretion afforded to them as proxies of the government and (2) agency officials directing workarounds through these proxies. With contractor abuse, the concern is unaccountability--a breakdown in the traditional principal-agent relationship. With workarounds, the contractors are not necessarily disloyal; indeed, they may be too accountable to their governmental counterparts--too willing to facilitate their policy altering agendas. Instead, it is the executive as unaccountable agent that changes the substance or the temporal duration of a policy in a manner potentially inconsistent with the expectations of its co-principals (namely, the coordinate branches, future administrations, the bureaucracy, and the people).
In other words let's not blame Xe Services etc etera for bad things that happen in war zones. Let's blame U.S. policymakers who create those wars in the first place.
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