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The Plan to "Privatize" the Afghanistan War Doesn't Privatize Anything

Tags War and Foreign PolicyMonopoly and Competition


Any time we hear the term "privatize" coming from the usual suspects in Washington, DC we should immediately be suspicious. When this word is used, there's usually precious little actual privatization going on.

Thus, we should regard the Trump administration's proposed plan to "privatize" the war in Afghanistan with extreme amounts of skepticism. 

USAToday reports

The White House is actively considering a bold plan to turn over a big chunk of the U.S. war in Afghanistan to private contractors in an effort to turn the tide in a stalemated war, according to the former head of a security firm pushing the project.

Under the proposal, 5,500 private contractors, primarily former Special Operations troops, would advise Afghan combat forces. The plan also includes a 90-plane private air force that would provide air support in the nearly 16-year-old war against Taliban insurgents, Erik Prince, founder of the Blackwater security firm, told USA TODAY.

Anything worthy of the term "privatization" would mean an end to government spending, and getting the American taxpayers off the hook for perpetuating what is obviously a failed war. 

RELATED: Taxpayer-Funded Mercenaries Are Not the 'Private Sector' by Ryan McMaken

But that's not what we're talking about at all. This sort of privatization simply means handing over taxpayer money to private companies to do what government employees had been doing. 

This has already been going on for years in Afghanistan, of course. According to the Congressional Research Service, in Iraq and Afghanistan, private contractors "comprised approximately 50% of DOD’s combined contractor and uniformed personnel workforce in country" over the past 15 years. 

Private contractors have long had a significant role in ongoing conflicts. 

According to proponents of the privatization plan, however, increasing this percentage from 50 percent to a higher number will somehow bring "victory" in Afghanistan. 

RELATED: The US Taxpayers Have Spent Enough on the War in Afghanistan by Tim Haffner

Now, if the Pentagon or the Trump administration could actually define what victory is in Afghanistan, we might be able to evaluate the plausibility of this claim. But, since the US government has never defined victory beyond some vague words about terrorism, we can only assume that the latest proposal is nothing more than a scheme to perpetuate an open-ended conflict.

The Political Advantages of "Privatization"

There are obvious political advantages to privatizing the war. As the Atlantic has noted:

[C]ontractors don't count as "boots on the ground." Congress does not consider them to be troops, and therefore contractors do not count again troop-level caps in places like Iraq. The U.S. government does not track contractor numbers in war zones. As a result, the government can put more people on the ground than it reports to the American people, encouraging mission creep and rendering contractors virtually invisible.

As anyone who has attempted to research military spending on weapons programs can confirm, military spending on private firms is notoriously difficult to track and evaluate. While government spending within government departments is very easy to follow, the paper trail quickly becomes blurry once the money is spent on private firms. Spending on subcontractors becomes very hard to track. 

Thus, by further privatizing a war, the federal government can more easily cover up what exactly it is spending money on, while also saying to the taxpayers that the US is lessening its military role in the conflict. 

But, of course, privatizing defense never really means lessening the government's role. Under the proposed scheme, the war will no more become private than a government highway becomes private because a private construction firm has been brought in to pour concrete. The highway system remains a government program, and the taxpayers foot the bill. 

Even worse, the more a private firm relies on government spending, the less interested it becomes in the competitive marketplace. In an unhampered market, of course, a firm can only continue to exist so long as it can provide a service that customers that are willing to voluntarily pay for. Once a firm begins to take on government contracts, though, voluntary exchange loses its appeal, and it often becomes easier to simply encourage more spending by government agencies instead. 

This situation is the worst of all in matters of military operations. At least in the case of a road-building firm, the company might actually engage in a sizable amount of true private-sector activity. The need to build private driveways, parking lots, toll roads, sidewalks and other private spaces provide opportunities for truly private firms. In the world of military spending, on the other hand, we're looking at a monopsony environment where a single buyer — the US government — overwhelmingly dominates demand and spending within the industry. Thus, military contractors often receive little revenue at all outside taxpayer funds. 

By no meaningful definition can these firms — or a political scheme that relies on them — be considered a private-sector operation. 

The only apparent bright spot in the plan is that it could potentially reduce government spending. The claim right now is that the proposed scheme "will cost less than $10 billion a year, significantly lower than the more than $40 billion the Pentagon has budgeted this year."

In general, figures like this are only to be believed by the gullible. The Bush administration, for example, once claimed Iraq would "finance its own reconstruction." Then-Defense Secretary Donald Rumsfeld claimed that the Iraq War would last “five days or five weeks or five months, but it certainly isn't going to last any longer than that.” The Iraq War ended up costing US taxpayers two trillion dollars. 

So, low-ball estimates of war spending should be treated largely as fictional stories. 

But, let's say for the sake of argument that the plan could actually reduce government spending.  

In this case, the problem lies in strategic concerns. 

If private contractors claim the war can be concluded much more inexpensively, we must ask ourselves why that should be so. Erik Prince has already explained how this might be possible:

Prince explained to [Tucker] Carlson how the almost 16-year-old war and occupation of Afghanistan is premised on a faulty model. “We’ve fought for the last 15 years with the 1st Infantry Division model,” he says. “Now we should fight with an East India Company model, and do it much cheaper.”

In other words, Prince's model is to grant government monopolies to corporations that can cover the costs of military occupation by extracting resources from the occupied lands and populations

Even if we totally ignore the moral problems of this idea, we still are forced to conclude the idea makes sense only from a purely short-term tactical point of view. From the point of view of global strategy, this is extremely counterproductive. 

The US has always used its alleged "humanitarian" missions as a means of exploiting foreign lands and foreign populations. Nevertheless, political pressure from US voters — who credulously continue to see US foreign policy as morally high-minded — has often limited the full extent to which the US government has been able to get away with using military occupations as a means of enriching the US government and its friends. 

Any plan that resembles the "East India Company model" — employed to finance the operations of military contractors — would simply be another nail in the coffin of American moral authority in international affairs. 

If the supposed goal of US policy in Afghanistan is to "fight terrorism," then a new policy of corporate-monopoly-exploitation will hardly contribute to that goal. Indeed, such a move would likely increase hostility toward the United States in a variety of ways.

And, of course, there's no more reason to believe privatization will bring about an end to the conflict any more than the much-lauded "surge" and more than a decade of military occupation. 


Contact Ryan McMaken

Ryan McMaken (@ryanmcmaken) is executive editor at the Mises Institute. Send him your article submissions for the Mises Wire and Power and Market, but read article guidelines first. Ryan has a bachelor's degree in economics and a master's degree in public policy, finance, and international relations from the University of Colorado. He was a housing economist for the State of Colorado. He is the author of Breaking Away: The Case of Secession, Radical Decentralization, and Smaller Polities and Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

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