Outsourcing War

P. W. Singer

From Foreign Affairs, March/April 2005

Summary:  Recent scandals in Iraq and elsewhere have shone unaccustomed light on an explosive trend: the growth of private military contractors. Such firms allow governments to accomplish public ends through private means and without much oversight. This lack of scrutiny may be expedient, but it is not necessarily good for democracy. Privatization can benefit everyone, but only if done in the right way.

P. W. Singer is a Senior Fellow and Director of the Project on U.S. Policy Towards the Islamic World at the Saban Center for Middle East Policy at the Brookings Institution. He is the author of Corporate Warriors: The Rise of the Privatized Military Industry and Children at War.

The final dilemma raised by the extensive use of private contractors involves the future of the military itself. The armed services have long seen themselves as engaged in a unique profession, set apart from the rest of civilian society, which they are entrusted with securing. The introduction of PMFs, and their recruiting from within the military itself, challenges that uniqueness; the military's professional identity and monopoly on certain activities is being encroached on by the regular civilian marketplace.

Most soldiers thus have a deeply ambivalent attitude toward PMFs. On the one hand, they are grateful to have someone help them bear their burden, which, thanks to military overstretch in Iraq, feels particularly onerous at the moment. Even though the job of the U.S. armed services has grown, the force has shrunk by 35 percent since its Cold War high; the British military, meanwhile, is at its smallest since the Napoleonic wars. PMFs help fill the gap as well as offer retired soldiers the potential for a second career in a field they know and love.

Some in the military worry, on the other hand, that the PMF boom could endanger the health of their profession and resent the way these firms exploit skills learned at public expense for private profit. They also fear that the expanding PMF marketplace will hurt the military's ability to retain talented soldiers. Contractors in the PMF industry can make anywhere from two to ten times what they make in the regular military; in Iraq, former special forces troops can earn as much as $1,000 a day.

Certain service members, such as pilots, have always had the option of seeking work in the civilian marketplace. But the PMF industry marks a significant change, since it keeps its employees within the military, and thus the public, sphere. More important, PMFs compete directly with the government. Not only do they draw their employees from the military, they do so to play military roles, thus shrinking the military's purview. PMFs use public funds to offer soldiers higher pay, and then charge the government at an even higher rate, all for services provided by the human capital that the military itself originally helped build. The overall process may be brilliant from a business standpoint, but it is self-defeating from the military's perspective.

This issue has become especially pointed for special forces units, which have the most skills and are thus the most marketable. Elite force commanders in Australia, New Zealand, the United Kingdom, and the United States have all expressed deep concern over the poaching of their numbers by PMFs. One U.S. special forces officer described the issue of retention among his most experienced troops as being "at a tipping point." So far, the U.S. government has failed to respond adequately to this challenge. Some militaries now allow their soldiers to take a year's leave of absence, in the hope that they will make their money quickly and then return, rather than be lost to the service forever. But Washington has failed to take even this step; it has only created a special working group to explore the issue.

CAVEAT EMPTOR AND-- AND RENTER

As all of these problems suggest, governments that use PMFs must learn to recognize their responsibilities as regulators--and as smart clients. Their failure to do so thus far has distorted the free market and caused a major shift in the military-industrial complex. Without change, the status quo will result in bad policy and bad business.

To improve matters, it is first essential to lift the veil of secrecy that surrounds the private military industry. There must be far more openness about and public oversight of the basic numbers involved. Too little is known about the actual dollars spent on PMFs; the Pentagon does not even track the number of contractors working for it in Iraq, much less their casualties.

To start changing matters, clients--namely, governments that hire PMFs--must exercise their rights and undertake a comprehensive survey to discern the full scope of what they have outsourced and what have been the results. Washington should also require that, like most other government documents, all current and future contracts involving nonclassified activities be made available to the public on request. Each contract should also include "contractor visibility" measures that list the number of employees involved and what they are to be paid, thus limiting the possibility of financial abuse.