To Know Contractors, Know Government

Wednesday, July 16th, 2014

Military contractors do not set the tone, Tyler Cowen notes, but rather reflect the sins and virtues of their customers:

It is easy to rail against contractors for holding money above loyalty to country; Halliburton, for instance, has been a target of this criticism. But money isn’t the real issue. Few Americans would join the armed services without pay, and most American weapons are made by the private sector for profit.

Furthermore, privateers, private ships licensed to carry out warfare, helped win the American Revolution and the War of 1812. In World War II, the Flying Tigers, American fighter pilots hired by the government of Chiang Kai-shek, helped defeat the Japanese. Today, many of our allies receive payment, either implicitly or explicitly, to support American efforts. War is, among other things, an economic undertaking, so the profit motive in military affairs isn’t always bad or ignoble.

When it comes to supplying troops, or protecting high-ranking officials, private military contractors often offer greater flexibility and rapidity of response. The employees, many of whom are former soldiers or operatives, tend to have more experience than current, mostly younger soldiers.

The recent comeback of private contracting suggests that central governments have become weaker again, at least relative to the tasks they are undertaking. Alexander Tabarrok, my colleague (and sometimes co-author) at George Mason University, where he is also a professor of economics, traced the history of private contractors in a study, “The Rise, Fall, and Rise Again of Privateers” (The Independent Review, spring 2007). He showed that public navies and armies began to displace private contractors in the 19th century, as governments became more powerful and better funded.

Today, America no longer has a draft, its military bureaucracy can be inflexible and the public wishes to be insulated from the direct impact of war. Contractors are a symptom of government weakness, but are not the problem itself. The first Persian Gulf War, which enjoyed greater international support, was not reliant on contractors to nearly the same degree.

Among many Iraqis, Blackwater and other companies have a reputation for getting the job done without much caring about Iraqis who get in the way. But part of the problem may stem from economic incentives. If Blackwater is assigned to protect a top American official, who is later assassinated, Blackwater may lose future business. A private contractor doesn’t have a financial incentive to protect Iraqi citizens, who are not paying customers. Ultimately, this reflects the priorities of the United States military itself. American casualties are carefully recorded and memorialized, but there is no count of Iraqi civilian deaths.

It is harder to recognize when private contractors are being underemployed. During the Rwandan civil war in the 1990s, the United Nations debated using two private contractors, Executive Outcomes or Sandline International, to intervene. The U.N. rejected the notion and instead turned to a poorly trained Zairean police contingent. We’ll never know how private contractors would have fared, but the Zaireans were ineffective; some 800,000 Rwandans were murdered.


  1. Rollory says:

    In the early 1700s much of Europe allied against Louis XIV’s France, invading France. He sent out a call for volunteers to fight for the defense of the national family honor. The result was the victory of Malplaquet.

    Can anybody seriously imagine Americans signing up to fight “for God and country” and maybe rations, and nothing else?

    At the final siege of Constantinople, approximately 1% of the city’s populations actually took up weapons to fight.

    When the Germanic tribes invaded Roman Gaul, the Gallo-Romans essentially did nothing whatsoever to stop them. The result was the Frankish kingdom.

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