A PRIVATE SECTOR WAR IN IRAQ?

According to new figures obtained by the LATimes, the number of contractors in Iraq has ballooned to 180,000 civilians (at the very low end, given that many firms weren't counted in this survey). Employees of private firms now, for the first time in a major conflict, outnumber uniformed forces (160,000) in the country. This is an important milestone, particularly since most of the functions that are most important to counter-insurgency don't involve pulling triggers.

This trend towards privatization will not be reversed despite the desire by many to return to 20th century legacy force structures. Instead, the trend will continue to accelerate as the threat of disorder (accelerated by global guerrillas) begins to dwarf state vs. state conflict -- the last refuge of the uniformed military.

Unfortunately, the trend towards the privatization of warfare (a long tail force structure) has radically outpaced the ability of the military to slave these firms into a cohesive whole. Instead, this private sector effort operates as a chaotic mix of bureaucratic networks and byzantine process structures (to wit: there isn't enough insight into the use of private contractors in Iraq to generate a complete list of firms operating there). Given the importance of private contractors to any effort against disorder generated by global guerrillas, it would be fair to conclude that at a deep systemic level, the effort in Iraq never had a chance. From the start: decision loops were broken, coherence was absent, adaptation was slow, and innovation was turgid (turgid, in the sense that it was grossly distorted to focus on the wrong things).

The only way to correct this fundamental problem, is to implement a solution I proposed at the end of Brave New War: platforms (see the book for background). In short, experience with platforms (usually with a layer of information technology as a fundamental building block) across a wide variety of complex situations (most successful global firms are transitioning to them, as evidenced by a Harvard Business School study I conducted a couple of years ago) shows that they could work in this area too since they grow efficient business ecosystems, establish coherence, supercharge innovation, and provide substantial improvements in flexibility/adaptability.

So far, the effort to create platforms that will do this have been stillborn (due to top down efforts from large, innovation free companies). The only hope is that organic efforts will emerge that rapidly propagate under the cover of stealth.

Comments

[Tim]

John,

While I generally agree with your recommendations and the discussion regarding the poor implementation of contractors into the war effort, I'd argue that the LA Times article creates a false picture of the level of outsourcing - considering the vast majority of the "contractors" it references are actually Iraqis. If we're going to count Iraqi civilians in the contractor count as we hold it up against the total "official" military strength, we have to tally the "official" Iraqi forces as well. Clearly, when those numbers are added (or the Iraqi civilians are dropped from the argument), outsourcing is not as large a percentage of effort as the article contends - at least in terms of numbers.

Of course, this also leads us back to the discussion of poor management by the US. I don't think the USG (DOD or otherwise) KNOWS what all of those contractors are doing; how many are in support of State, how many in support of DOD; how many in support of other initiatives? Looked at very carefully, the number engaged in activities that might otherwise have been conducted by military forces is smaller than the LA Times article insinuates.

[Cavolonero]

" I'm a privateer ! " ( Erol Flynn , ' Captain Blood ' )

[RyanLuke]

Trying to control massive markets that are subject to constantly changing and chaotic conditions (like contractors in Iraq) in a top down manner is probably a rather hopeless effort. It's like communist central economic planning.

The "other" side uses contractors as well. But they seem to be able to do so in a much more effective manner, with zero central planning.

The USG is on the wrong side of the free-market vs centrally planned economy dynamic on this one.

Not that markets are the complete answer, but a basic understanding of that dynamic is crucial.

[Duncan Kinder]

According to the NYT:
"Contractors who have worked in Iraq are returning home with the same kinds of combat-related mental health problems that afflict United States military personnel, according to contractors, industry officials and mental health experts.

But, they say, the private workers are largely left on their own to find care, and their problems often go ignored or are inadequately treated."

http://www.nytimes.com/2007/07/05/us/05contractors.html?_r=1&hp&oref=slogin

[anna missed]

An undercurrent of what you are saying (&I would agree) is that the general trajectory in Iraq has been one of radical privatization. This was also true in Iraq under Saddam, where from the Iraq/Iran war on, economic policy became ever more subordinated to the "underground" economy controlled by tribal/criminal/ and now militias -- oil smuggling being the most famous example. The post invasion CPA economic edicts from Bremmer simply eradicated (for good) the final and last vestiges of state economic policy cohesion. Which has developed into a kind of superheated privatization funding all strata of Iraqi life, but most importantly funding those factions/militias currently vying for power. It should be no suprise then that the net effect of U.S. foreign policy - either through pressuring the former regime through sanctions, and subsequent CPA economic policy - has created a classic failed state in Iraq. A failed state indeed, where privatization of the economic apparatus has transcended all attempts at external control.

Careful what you wish for.

[bobw]

The logic of the shift to private/mercenary armies,in the US at least, is that the national government will eventually be unable to afford them (foot soldiers will go first, because there is no interest group to lobby for them; and hi-tech weaponry will go last, for the opposite reason.)
It will be interesting to see how conflicts will end or alliances be made, in the future, when the agreeing parties will be private companies, not states.

[Keith]

John-- What sorts of solution "platforms" could you see emerging organically?