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Markets in everything - the new mercenaries

By Jeremy Ballenger - posted Friday, 15 September 2006


A Slate homepage leader caught my eye recently - "Why Everyone Wants to Hire South African Mercenaries". Clicking the link led me to a piece by Nathan Hodge, "Army for Hire".

Nathan's article is a review of "two new books on the global market for armed force" and gets underway with the following:

A piece of popular wisdom passed around by contractors working in Iraq says, "You know you've been in Baghdad too long when hearing Afrikaans at the pool is normal."

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That observation speaks to the outsize presence of South Africans in Iraq's wartime contracting boom. Security costs have soaked up a massive chunk of Iraq reconstruction funds, and former South African soldiers and police, often veterans of the country's apartheid-era border wars, have found their skills in high demand.

We may not all be aware of the growth of private military companies (PMCs), but most of us are now accustomed to hearing about the outsourcing of security operations by sovereign governments such as the US and UK. From a governmental perspective, it's much easier to prosecute a military or security action unpopular at home when you've contracted part of it out - voters worry an awful lot less if the people being killed are in it for the money.

Cynicism aside, the rapid growth of PMCs is evidence of market demand as an increasing number of firms (who themselves have an abundant labour supply) line up for lucrative contracts, confident they can manage the risks involved. A growing number of governments are also going to market for military assistance. This simple supply and demand arrangement is arguably leading to the price mechanism controlling military and security arrangements, in a way very different to price effects via defence contractors of the past.

Is this a problem? Conservative governments and neo-classical economists would say no, deferring as they always do to The Market. Let’s use that premise as a basis for a quick hypothetical.

Everyone assumes private security contractors (a.k.a. the New Mercenaries) will only work for The Good Guys and that even the most venal of modern private soldiers holds some understanding of right and wrong - a line even they won't cross. But markets ignore such moral and ethical niceties, and historically mercenaries have mainly worked for somewhat less than completely democratic governments. These factors combine to move us closer and closer to private firms prosecuting wars on behalf of their “clients” at a market equilibrium price.

Glenn Reynolds, Professor of Law at the University of Tennessee and author of the prominent weblog Instapundit, points to people like Max Boot from the Los Angeles Times  arguing for the use of mercenaries as peacekeepers in places like Darfur. Cheaper and more effective than the UN:

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But perhaps there is a way to stop the killing even without sending an American or European army. Send a private army. A number of commercial security firms such as Blackwater USA are willing, for the right price, to send their own forces, made up in large part of veterans of Western militaries, to stop the genocide.

With price becoming an increasingly dominant factor in a market with burgeoning supply (increasing pressure on price), demand increases and other players enter the market to bid for mercenary expertise. This gives rise to our hypothetical - what happens in an “open” market for mercenary services? What would happen if al-Qaida or a similar organisation flush with oil or drug money decided to approach a PMC for a little help?

First, The Bad Guys (let’s stick with al-Qaida) pay the same as everyone else. In cash. Second, the market is awash with highly trained ex-service and former government personnel, and not just those speaking Afrikaans. Geopolitical developments in Eastern Europe and the former Soviet states during the last 15 years placed large numbers of elite soldiers in unemployment queues, particularly those on the “losing” or dispossessed sides. These people are serious professionals, not poorly trained, politically and ideologically aggrieved martyrs who just have to get on a bus or train and press a button.

A team of four former Special Forces personnel could clinically target infrastructure in a major city like London, detonating IEDs without loss of life and creating maximum terror. It must be remembered that elite ex-military personnel are trained in infrastructure protection, so it's hardly a quantum leap in thinking for them to turn what they've learned around, moving from defence to offence. Doing so achieves the goals of terrorism as described by Arjun Appadurai in his recent book Fear of small numbers: An essay on the geography of anger:

Terror produces its effects by regularly blurring the bounds between the spaces and times of war and peace …

And it is above all devoted to the decimation of order, understood as peace or freedom from violence. Terror in the name of whatever ideology of equity, liberty or justice, seeks to install violence as the central regulative principle of everyday life. This is what is terrifying about terror, even beyond its bodily traumas, its spatial promiscuity, its dramas of self-sacrifice, it’s refusal of reciprocal humanism. Terror is the rightful name for any effort to replace peace with violence as the guaranteed anchor of everyday life. It uses emergency as its routine and values exceptional forms of violence and violation as its norm.

Terror is first of all the terror of the next attack.

Should we be lucky in this hypothetical, the early days of an “open” market for mercenaries will see us in a situation where we face maximum disruption and no (possibly minimal) loss of life. That's what you get with principled mercenaries who are first to market and skilled in the guerilla warfare concept of maximum terror of a populace for minimal collateral damage.

After a while, as the market for private military services bloats on the supply side, scruples vanish and suppliers start cutting prices, offering bigger bang for your buck. It will be messier, more people will die, but it will be at an efficient market price.

As we talking hypothetically here I can say we shouldn’t worry. I can say The Good Guys, our government security and intelligence services, have contingency plans in place to readily thwart developments such as those I’ve described.

Unfortunately, outside the safety of this hypothetical discussion, all I can see is a dangerous market growing in direct relation the perceived quality of politically expedient solution its suppliers can provide. Like it or not, the tacit acceptance and promotion of PMCs by Western governments has invited the growth of supply firms. Externalities like South Africa’s recent moves to sanction such behaviour aside it’s only a matter of time before the market opens up to all parties with demand, finding a new equilibrium rather than the current quasi-monopolistic demand of Western governments.

It happened with nuclear technology in Pakistan. What makes this scenario so different?

And if I can see this, so can The Bad Guys, wherever and whoever they are this election cycle.

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Jeremy Ballenger is a Melbourne-based researcher and writer. His website is here.

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