Although private corporations under capitalism have always been heavily involved in promoting war, the direct role played by the private sector in the prosecution of war has traditionally been quite limited, falling well short of the supply of combat troops. There are signs that this may now be changing. The decade and a half since the end of the Cold War has seen the rapid proliferation of private military firms, hundreds of which are now engaged in combat and combat-support operations in Iraq and throughout the globe. Some of these firms are subsidiaries of much larger multinational corporations. The private soldiers employed in this industry are mercenaries, but not of the traditional kind. They are employees of corporations that have boards of directors, are publicly traded, participate in the open market, carry out mergers, hire and fire in accordance with market criteria—and above all are not directly responsible to any public authority. In other words, these corporations and their employees are fully integrated with capitalist enterprise as a whole. This phenomenon has recently been dubbed “the corporatization of the military” by Peter Singer, a Brookings Institution analyst and author of Corporate Warriors (2003).
During the 1991 Gulf War there was one private soldier (or “contractor”) for every 100 regular soldiers. In contrast, in today’s occupied Iraq there is at least one private soldier for every ten regular soldiers—with 10,000–15,000 private soldiers deployed in that country alone. The United States is currently spending a gargantuan $400 billion a year on the military. Yet the market revenue of the private military industry has already risen to about a quarter of that total and is skyrocketing.
The killing by the Iraqi resistance on March 31 of four private military contractors working for Blackwater USA (most of whom were former U.S. special operations personnel), and the subsequent mutilation of their corpses by an angry population, brought international attention to the growth of private military firms. Blackwater’s operations in Iraq include a contract to provide the security guards that protect the U.S. proconsul, L. Paul Bremer III. It has also used a subcontractor to hire former members of the Chilean military to help guard Iraqi oil fields—including some that served under Chilean dictator Auguste Pinochet. The chief private military contractor operating in Iraq is Kellogg, Brown & Root Services, a subsidiary of the Halliburton Corporation. In 1991, Secretary of Defense Dick Cheney paid Brown & Root (as it was then called) $9 million to study how private companies could support U.S. combat operations. Later Cheney went on to become CEO of Halliburton, during which time Brown & Root emerged as one of the foremost private military firms in the United States. It was to strengthen this position, with lucrative contracts being thrown its way, after Cheney became vice president (USA Today, April 1, 2004). Another leading private military firm, ArmorGroup, which has 800 private soldiers in Iraq, was listed as one of Fortune’s 100 fastest growing companies in 1999 and 2000. One of ArmorGroup’s most important acquisitions is Alpha firm, based in Moscow, a privatized unit of Alpha, the former elite Soviet special forces organization, roughly equivalent to the U.S. Delta Force. ArmorGroup currently operates in more than 50 countries. Military Professional Resources Incorporated (better known as MPRI), one of the biggest and most prestigious private military firms because of its leading role in the Balkans, was purchased in 2000 by L-3 Communications, an entity spun out of military manufacturers Loral and Lockheed Martin in 1997. Vinnell Corporation, a subsidiary of Northrop Grumman, the second largest defense contractor in the United States, trains the Saudi National Guard and has been given the contract to train the New Iraqi Army. Custer Battles with 1,300 employees in Iraq has a contract to guard the Baghdad airport. Dyncorp is receiving tens of millions of dollars to train the Iraqi police force.
Behind the dramatic growth of these private military firms lies a vast shift in world power that began with the end of the Cold War. The demobilization that followed the fall of the Berlin Wall meant that states at the beginning of this century employed far fewer soldiers than in 1989. Over the same period, marked by the triumph of capitalism worldwide, the incidence of civil wars has doubled, while the total number of combat zones around the world has vastly increased (Singer, Corporate Warriors, p. 50). From a market perspective this means that supply and demand forces are favorable to the growth of private industry in this sector. Propelling this tendency still further is the “privatization revolution.” Thus in 2002 Secretary of Defense Donald Rumsfeld declared that the Pentagon would “pursue additional opportunities to outsource and privatize” (quoted in The Guardian, December 10, 2003).
With conflicts breaking out in much of Africa, Asia, and Latin America and even parts of Europe, private military firms see nothing but expanding market opportunities. From a purely economic standpoint, there are relatively few barriers to entry in this sector. Private military firms employ a wide array of military specialists, drawing on a huge and growing military reserve army and luring key specialists away from the regular militaries with lucrative salary offers. Each employee is viewed as an ex-something—an ex-general, an ex-Navy Seal, an ex-combat helicopter pilot, etc., and is hired on the basis of this previous expertise. Since the specialists hired by these firms were all trained by the militaries of various states at public expense, training costs for corporations are minimal. Also minimizing costs is the fact that a flood of weapons into the market has made large-scale killing far cheaper than ever before. Nearly the entire weapons stock of the former German Democratic Republic, for example, was auctioned off in the 1990s to the highest bidders at cut-rate prices.
Right now the number of private military firms is multiplying rapidly. But in line with the normal pattern of capital accumulation there will eventually be a shakedown of firms leading to concentration and centralization, with a relatively small number of firms, such as Kellogg, Brown & Root (Halliburton), emerging as the dominant corporate entities. Such giant private military firms will no doubt engage in their own unique version of what Schumpeter called “creative destruction.” We have no way of knowing what the actual result of all of this will be. But it is difficult to avoid the conclusion that the privatization of war, if it continues to gather momentum, will contribute massively to the expansion of barbarism in the world as a whole. This after all is the basic tendency of capitalism in our time.
We have received many moving letters and tributes in response to MR founder and coeditor Paul Sweezy’s death. Unfortunately, we have been so overwhelmed both by his death and the sheer magnitude of the response from MR readers that we have thus far been able to answer only a small fraction of this correspondence. We would therefore like to take this opportunity to thank all of you who have written to us about Paul. We will report next month in this space on the memorial held in New York City on April 17. We also hope to publish some of the tributes we have received in a special memorial issue on Paul’s life and work scheduled for October.
From time to time we receive bequests from readers who want to contribute to the continuance of Monthly Review, Monthly Review Press, or the Monthly Review Foundation. Those who wish to do the same may simply state in their wills that the bequest is to “The Monthly Review Foundation, 146 West 29th Street, #6W, New York, NY 10001.” For additional information contact Martin Paddio at (212) 691-2555 or use our contact page.