Where Risk Meets Monopoly: The Monetization of War

by Travis Skene

Warfare is generally viewed as something horrific, and should be avoided at all costs. However, some companies have not only proven the industry to be economically viable, but a lucrative one. For some, this raises red flags that policy makers worldwide should be aware of to be able to dynamically set boundaries for these organizations. Private military firms have been used by various nations in past decades. The United States currently employs these companies to complete its military goals worldwide, a policy that has become particularly controversial over the past ten to twenty years as PMCs (private military companies) have become increasingly utilized by the federal government. The fact that the United States uses commercial troops to not only carry out raids and eliminate targets, but to guard convoys and supply routes, escort officials to and from the warzone, and perform backbone tasks is nothing short of intriguing to many Americans who become more aware of the issue. Perhaps the greatest problem facing citizens and lawmakers alike is the lack of public awareness and concern. These corporate bodies can provide useful services to their clients but, as many would argue, only with strings attached.

What are mercenaries are doing with your money?

What are mercenaries are doing with your money?

One viewpoint suggests that these firms have not only been useful, but should be encouraged by the international community. Doug Brooks, the president of the International Peace Operations Association, published a study for the South African Institute of International Affairs (SAIIA) that reviewed PMC involvement on the African continent in recent years. In his study, Brooks displayed that these companies have been shown to be a sometimes invaluable asset to small countries to who do not possess the ability to create a military of their own (Brooks 4)1. He concluded that these firms could not only dynamically react to situations faster than a standard military could, but act as a “force multiplier”, which means they are able to support countries who cannot control crisis in their own country as an affordable option for keeping the peace. As these companies are very versatile in their uses and functions, they have proved to be a game changer in African affairs and, as Brooks would argue, for many other places in the world. Such studies have persuaded institutions like the SAIIA to endorse the firms. Studies created by authors like Brooks provide an alternative viewpoint of the aspects that these enterprises bring to the table, however, they beg questions of real efficacy and cost when these associations are put to the test in warzones by first-world countries.

Others, such as Scott Fitzsimmons (a writer for the Journal of Military and Strategic Studies), argue that private military troops can also act as additional force for countries whose defense forces aren’t large enough for an unanticipated conflict. Fitzsimmons argues that in the Angolan conflict, the UNITA rebels were largely able to be contained because of the use of private military companies who provided and trained over 5,000 troops. These UNITA soldiers have attested to the efficacy of these organizations (Fitzsimmons 8)2. One stated, “[they] would come deep behind our lines. We could no longer rest. It weakened us very much. It is the new tactics in which they trained the FAA (Armed Forces of Angola, the Angolan government army) that made the difference”. The rebels claimed that the firms and their training introduced a “new style” of warfare to the country, one that they weren’t prepared for (Fitzsimmons 8)2. Certainty, within smaller parts of the world, governments largely benefit from interaction with the military-industrial complex.

While it is true that these forces can be deployed and mobilized far faster than regular military, their ability to get the job done just as effectively is disputed. Dexter Filkins is a Pulitzer Prize winning correspondent for the New Yorker who spent years overseas during the heat of the Middle-Eastern conflicts. His findings dispute the idea that private military companies are beneficial to large, organized militaries (like ours in the United States) in his study, which draws information from NATO and UN reports. These militaries worked extensively alongside PMCs during the War on Terror; more specifically, in the Iraq and Afghanistan conflicts (Filkins 1)3.  Filkins looks at not only the efficacy of such firms when used by countries with large, organized militaries such as the United States, but also looks at these companies possibly working with the enemies of the countries they are employed by in order to preserve their contracts. One of the examples it presents is the United States employing a firm to guard a supply route in Afghanistan in May of 2010 near the city of Kabul, one of Afghanistan’s most dangerous areas. The money that was used to contract the corporation could be traced back to the very Taliban groups that posed a danger to that supply route due to their relationships with top Afghan officials in the Taliban controlled region (Filkins 1)3.

Thousands of vehicles with loads of supplies were halted on multiple instances, but soon allowed to pass after negotiations between the firms and raiders, further suggesting monetary coercion. The funds that are allocated to these organizations to fight the war are funneled through to the exact individuals that the nation is fighting. Some individuals, like Peter Singer (a senior fellow at the Brookings Institute and director of the 21st Century Defense Initiative), claim that these firms have go so far as to monetarily take advantage of their clients, namely the Department of Defense, by committing fraud (Singer)4. He specifically cites companies such as Halliburton and Custer Battles, both of which were accused of war profiteering. Halliburton alone has racked up 1.8 billion dollars of disputed claims, including violations like charging for gasoline and billing for services they never rendered. Custer Battles has been accused of various fraudulent schemes of “subsidiaries and false charges” (Singer)4. Trends like these spiral into endless war without regulation, as these contracts are increasingly expensive, but only prolong the war as they fill executives’ coffers.

Another issue that has been raised concerning private military companies is the growing impact they have on Washington and its policy makers. Stephen Lendman, a Harvard and University of Pennsylvania graduate and former serviceman, has written a list of books on foreign affairs, particularly concerning the Iraq conflict. One paper that he authored found that the United States contracts these corporations now more than ever. He states: “Since 2003, Iraq alone represents the ‘single largest commitment of US military forces in a generation [and] by far the largest marketplace for the private military industry ever.’” (Lendman 1)5. He goes on to explain that the industry’s largest business partner is the Pentagon, who has contracted over 3,000 of these organizations. That number has been steadily growing as the conflict progresses. By crunching data provided by the Congressional Budget Office, Lendman has concluded that “a single company (Halliburton and its divisions) grossed between $13 – $16 billion from the Iraq War, an amount 2.5 times America’s cost for the entire Gulf War.” (Lendman 1)5. These numbers not only frighten the tax-payers, but show serious implications seemingly inherent in contracting these companies. They are not only allowed to persuade congressmen to extend their contracts, but they continue to increase the number of transactions they participate in year to year.

The aim of these corporations, like any profit-orientated institution, is self-preservation. Given that they are allowed to continue to lobby politicians, they will consequently undermine the government’s sovereignty. Lendman would argue that peace creates deficits for these firms, so they will always attempt to prolong and create conflicts and situations that justify their involvement. Moshe Schwartz, a specialist of defense acquisition for the Congressional Research Service, has expounded upon the ideas that Lendman has expressed by citing that the Department of Defense has failed to account for the abuses committed at the Abu Ghraib prison, a facility used for storing Iraqi nationals during the violent conflict. He argues that the actions of the prison’s security contractors escalated anti-American sentiments and prevented the U.S. from winning its “hearts and minds” campaign (Schwartz 21)6. These kinds of problems do much to contribute to the fragile depiction of the United States’ governmental legitimacy. As long as the Department of Defense continues to hire out private institutions to fulfill its objectives, there will always be an incentive against the preservation of peacekeeping operations worldwide.

Private military firms have expanded their reach in past decades as the War on Terror has sprung up abroad. The United States boasts a defense budget of 682 billion dollars, which dwarfs China’s expenditures: rated at 166 billion (Perlo-Freeman, et al. 2)7. It begs the question, however, if the United States is substantially more effective. Many ask where is that extra money going and how is it justified. America employs more private military contractors now than ever before, contractors who cost substantially more per soldier than regular military. These corporations have proven to be very helpful and effective for small countries with shallow pocketbooks in times of dire need, however, they violate the efficacy and purpose of the military as a whole by providing a poor cost/benefit ratio and undermine national sovereignty by posing a threat to governmental legitimacy.

  1. Brooks, Doug. “Creating the Renaissance Peace: The Utilization of Private Companies for Peacekeeping and Peace Enforcement Activities in Africa.” South African Institute of International Affairs (SAIIA) (2000): 1-10. www.sandline.com. Sandline, 1 June 2000. Web. 24 Mar. 2014. <http://www.sandline.com/pdfs/brooks.pdf&gt;. 

  2. Fitzsimmons, Scott. “Dogs of Peace: A Potential Role for Private Military Companies in Peace Implementation.” Journal of Military and Strategic Studies 8.1 (2005): 8. Print. 

  3. Filkins, Dexter. “Convoy Guards in Afghanistan Face an Inquiry.” www.nytimes.com. The New York Times, 6 June 2010. Web. 24 Mar. 2014. <http://www.nytimes.com/2010/06/07/world/asia/07convoys.html?pagewanted=1&_r=2&gt;. 

  4. Singer, Peter. “Outsourcing War: Foreign Affairs.” 21st Century Defense Initiative 84.2 (2005): n. pag. Print. 

  5. Lendman, Stephen. “Outsourcing War: The Rise of Private Military Contractors (PMCs).” www.thepeoplesvoice.org. thepeoplesvoice.org, 19 Jan. 2010. Web. 24 Mar. 2014. <http://www.thepeoplesvoice.org/TPV3/Voices.php/2010/01/19/outsourcing-war-the-rise-of-private-mili&gt;. 

  6. Schwartz, Moshe. “The Department of Defense’s Use of Private Security Contractors in Iraq and Afghanistan: Background, Analysis, and Options for Congress.” Www.crs.gov. Congressional Research Service, 19 Jan. 2010. Web. 03 Apr. 2014. <http://www.dtic.mil%2Fcgi-bin%2FGetTRDoc%3FLocation%3DU2%26doc%3DGetTRDoc.pdf%26AD%3DADA513870&gt;. 

  7. Perlo-Freeman, Sam, Elisabeth Sköns, Carina Solmirano, and Helen Wilandh. “Trends in World Military Expenditure.” www.sipri.org. SIPRI Publications, 15 Apr. 2013. Web. 02 Apr. 2014. 

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