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Last Updated: 12/15/2003
The business of war
Marc von Boemcken

Saddam was captured by regular troops. However, underlying the tactical and strategic operations in Iraq, has been and is an emerging new generation of US military tactics that relies increasingly on sophisticated information and communication technologies, which are not only developed and produced by the civilian industry, but can in fact only be maintained and operated by civilian experts.

The outsourcing of certain military capabilities to private contractors has been a clearly discernible trend within the United States since the end of the Cold War. Gaining momentum in the early 1990s, this development continues to neatly fit into the hegemonic neo-liberal discourse of advocating a ‘leaner state’. Originally, it was the overall reduction of defense budgets that forced the military to look for more cost-effective means to meet the increasing range of tasks and responsibilities assigned to it. In addition, the downsizing of large standing armies often drove former military personnel to sell their talents in the public sector (see: Isenberg, 1997; Silverstein, 1997; Singer, 2003a:53; Wulf, 2002:104). However, since September 11 the trend of privatizing considerable segments of the United States’ armed forces, has visibly accelerated. This is particularly true for the current US military engagement in Iraq. The driving forces behind this current development are less budgetary constraints, however, but the particular ideological bearings of the Bush administration, itself characterized by a close affinity to the private sector, as well as – in many cases – operational necessities. That is, an emerging new generation of US military tactics is increasingly relying on sophisticated information and communication technologies, which are not only developed and produced by the civilian industry, but can in fact only be maintained and operated by civilian experts. (Singer, 2003a:62-3; Wulf, 2003)


          The various different firms gradually replacing the military in many of its traditional areas of competency are usually referred to as “private military companies” or PMCs. They tend to be organized as corporate hierarchies in scale and transnationally networked in operational scope. A 2002 report by the International Consortium of Investigative Journalists (ICIJ) identified at least 90 such PMCs, which were active in 110 countries worldwide. Their total annual revenue is estimated to lie at more than US$ 100 billion (Singer, 2003a:78) – a number that is expected to double by the end of the decade (Yeoman, 2003). Figures of this kind, however, do little justice to the diversity of distinct tasks gathered under the large umbrella of military privatization. Peter W. Singer from the Brookings Institution roughly distinguishes three major types of business (2003a:101-48; see also Adams, 1999). The first and currently least common type of PMC sells active combat assistance to armed forces, mostly in the developing world. The second offers military training and consulting services. The third and by far largest market specializes in the provision of logistics, intelligence and maintenance services to the military.


          David Isenberg (1998) labels these companies the “new mercenaries”. However, the vast majority of military privatization seems to concern tasks outside the ‘core’ military competency of direct combat engagement. It is thus questionable whether one can speak of ‘mercenary’ activity in the strict sense of the word, which is after all banned under Article 47 of the Geneva Convention. Indeed, Herbert Wulf (2002:98; also Shearer, 1998:16-21) rightly emphasizes some important differences to the archetypal ‘gun-for-hire’, namely the clout of legitimacy usually surrounding PMC operations, more often than not a strictly indirect combat support assignment conducted with the blessing of democratically elected Western governments. On the other hand, with the outcome of modern battle decided less by the dirt-covered warrior on the ground than by a distant array of complex technologies, which often require private expertise to function, the line dividing ‘direct’ from ‘indirect’ combat support appears increasingly blurred. As such, the precise role of PMCs in modern war remains obscure; legal definitions pertaining the their supposed activity are vague at best (Singer, 2003a:238-9). 


          The most popular criticism put forward against the ongoing privatization of the military expresses the fear of quietly forfeiting the Weberian monopoly of force encapsulated in the sole gambit of the modern nation-state. However, a perspective placing the PMC, as it were, in diachronic opposition to the state appears as largely inadequate for describing the presently developing mode of private-military relations. That is, the vast majority of PMCs would not seem to operate radically external to the realm of state-authority as much as they were in fact complimentary to its perceived national interests. As Kevin O’Brien (1998:78) aptly points out, “the state […] is both being strengthened and disassembled.” Within this dialectic, we may not be so much witness to a fundamental rupture epitomized by the much-evoked ‘end of the nation-state’, but rather, to paraphrase Herbert Wulf (2002:100), to a “different way of management” – i.e. a different way the state organizes its pursuit of security. For it is the US government that has emerged as the primary client of the private military industry. Between 1994 and 2002 the US Defense Department entered into 3,061 contracts with PMCs, valued at more than US$ 300 billion. (ICIJ, 2002) It remains to be seen to what extent such developments will not abolish but transform the formative principles of statehood. 


          Since 11 September 2001 the private security industry has experienced an unprecedented boom. President George Bush’s “war on terrorism”, which has considerably expanded the global commitments of US military forces, has so far resulted in a bonanza for many private military companies, particularly those specializing in logistic support and high-tech systems maintenance and operation. Their stocks skyrocketed throughout the years 2002 and 2003 (Schwartz, 2003) At present, there is no indication as to this trend being reversed. On the contrary, only recently both US Secretary of Defense Donald Rumsfeld as well as the Secretary of the Army, Thomas White, have firmly reiterated their conviction and willingness to further privatize military capabilities. (Dobbs, 2003; Kurlantzick, 2003) As Mathiason (2003) has put it in the Observer, we may be seeing “the most fundamental shake-up of the military for more than 100 years.”


          The US attack against Iraq in March 2003, which the Economist referred to as the “first privatized war”, perfectly illustrates the current dimension of US military outsourcing. In the preparation and conduct of the war approximately 20,000 employees of private contractors assumed central military tasks. They not only fed and housed the coalition forces, but also maintained 28 per cent of US weapons systems, including the B-2 Stealth Bomber, the F-117 Stealth Fighter and the unmanned reconnaissance plane Global Hawk. PMCs operated computer and communications systems. They guarded a US military base in Qatar, trained soldiers at Camp Doha in Kuweit and coordinated the logistic supply lines as the US military advanced through Iraq, “often right behind the front lines”. (Kurlantzick, 2003; Singer, 2003b; Yeoman, 2003) As Singer asserts, the ratio of private contractors to US military personnel was roughly 1 to 10 during the Iraq war. Compared to a ratio of 1 to 100 during the 1991 Gulf war that is a tenfold increase (Singer, 2003b). Without the operational support of PMCs the war could not have taken place. Through its subsidiary Brown and Root, the US firm Halliburton, for example, won a contract worth US$ 1.7 billion during the Iraq war for logistical support, the construction and managing of military facilities – particularly prisoner of war camps – as well as mail and food delivery (Dobbs, 2003). As Michael Dobbs contends, “dressed in Army fatigues with civilian patches on their shoulders, Halliburton employees and contract personnel have become an integral part of Army life in Iraq.” He goes on to argue that an estimated one-third of the monthly cost of US$ 3.9 billion for deploying US troops in Iraq is presently going to private companies. (Dobbs, 2003) Interestingly, however, there are no official figures on the actual amount of money the US government is spending on private contractors. In fact, as David Wood (2003) suggests, given the “overlapping contracts and multiple contracting offices” coupled with “little apparent coordination and oversight” it is not even certain whether the Pentagon itself is aware of the precise figure. For the year 2003, Nelson D. Schwartz (2003) makes a rough guess of US$ 30 billion. And Singer carefully predicts that in the year 2004, the United States will spend at least another US$ 25 billion on PMCs (cited by Kurlantzick, 2003). That is more than twice as much it spent ten years ago.


          Maybe the figure will be even much higher. With an incessantly rising body count of US soldiers in Iraq paralleled by a growing unpopularity of the Bush administration, the prospect of further accelerating the privatization of military tasks in the Gulf may appear to behold some distinct advantages. Outsourcing the provision of security in Iraq to private companies could give the US government a much-needed exit-strategy, thus avoiding a strenuous entanglement of American soldiers. The death of private employees generally attracts a lot less media attention than the killing of soldiers wearing US uniforms (see Yeoman, 2003). Indeed, given the approaching presidential elections, such concerns are likely to be high on the administration’s agenda. In particular, PMCs can be expected to be heavily involved in Iraqi security sector reform. Halliburton’s contract in Iraq has already been extended to January 2004 (Margasak, 2003). And the controversial company DynCorp, which was allegedly implicated in the sex and arms trade on the Balkans and is presently also providing close protection for Afghan President Hamid Karzai, was tasked to train the Iraqi police force. More contracts of a similar nature are likely to follow suit in due course. Other corporate consultants are reportedly going to facilitate the build-up of the new Iraqi military (Singer, 2003b). Moreover, in the long run, the increasing employment of PMCs by the Pentagon could considerably lessen the United States’ inhibitions concerning the use of force in many other areas of the world, since the political risks associated with such operations are much lower. 


          Of course, the substantial privatization of military capacities is anything but unproblematic. It remains a highly contentious subject of debate. In fact, it divides the military itself. Here, the reported mismanagement in the supply of warm food and housing to US Soldiers by private companies during the Iraq war (Wood, 2003) may be less of an issue than the question of ultimate contractor accountability. Should a PMC decide to withdraw from the war-zone, for example because rising insurance rates of its employees diminish the expected profit, it could seriously damage overall military capacity whilst at the same time enjoying virtual impunity. (ICIJ, 2002; Yeoman, 2003) PMCs occupy a highly ambiguous space exceeding the traditional domains of the modern nation-state, whose basis of legitimacy is fundamentally derived from an exclusive civil-military dichotomy. Belonging to neither category, they successfully escape conventional regulatory mechanisms. More worrying than the strategic implications is, therefore, the depletion of public scrutiny vis-à-vis security privatization. As Singer (2003b) writes, “[t]here are almost no international laws or national regulations that have significant bearing on the industry.” Lack of a clear-cut legal definition, lack of transparency and lack of oversight therefore are by far the main problems currently accompanying the popular trend of military outsourcing (also Büttner, 2003; ICIJ, 2002; Wulf, 2002, 2003). With the expected continuation of the present boom in the industry following the Iraq war, the political need for both the international community as well as national governments to address and tackle these shortcomings is greater than ever before.






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Marc von Boemcken is a researcher at the Bonn International Center for Conversion (BICC), November 2003. See also: