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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."


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:


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.

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

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