Economist Milton Friedman R.I.P.

[Pure]

fighting the war, Friedman style

can get a bit costly; you see, his 'volunteers' have to be supplemented with 'private contractors' (formerly known as mercenaries), who are also volunteers, but who cost the US gov in the tens of billions:

http://www.pbs.org/wgbh/pages/frontline/shows/warriors/view/#lower

As the Army struggles to meet recruitment numbers, FRONTLINE takes a hard look at private contractors servicing U.S. military supply lines, running U.S. military bases, and protecting U.S. diplomats and generals. Between the logistics giant Halliburton and a myriad of armed security companies, private military contractors comprise the second largest "force" in Iraq, far outnumbering all non-U.S. forces combined. There are as many as 100,000 civilian contractors and approximately 20,000 private security forces.


In "Private Warriors," FRONTLINE correspondent Martin Smith travels throughout Kuwait and Iraq to give viewers an unprecedented behind-the-scenes look at companies like Kellogg, Brown & Root, a Halliburton subsidiary, and its civilian army. KBR has 50,000 employees in Iraq and Kuwait that run U.S. military supply lines and operate U.S. military bases. KBR is also the largest contractor in Iraq, providing the Army with $11.84 billion dollars in services since 2002.

Historically, there is nothing new about the military's use of private contractors, but the Iraq war has seen outsourcing on an unprecedented scale. The policy change came after the Cold War when the Pentagon was downsizing under then Secretary of Defense Dick Cheney. Cheney first hired Halliburton as a consultant and later became the company's president. Halliburton subsidiary KBR is now one of the largest recipients of government contracts.

FRONTLINE visits the biggest Halliburton/KBR run base, Camp Anaconda, in the Sunni triangle. Behind concrete walls 28,000 soldiers and 8,000 civilians live in bases that offer Taekwondo and Salsa lessons, movie theatres, fast food courts, and four meals a day. The amenities are impressive, but some argue that there is a price to pay. Says a former base commander Marine Colonel Thomas X. Hammes, "it's misguided luxury … somebody's risking their lives to deliver that luxury."

And while KBR was glad to provide Smith with a tour of the facilities, they weren't able or willing to answer some basic questions about how much certain services -- like feeding the troops -- cost. Smith eventually finds some answers from the Army base commander, but numerous audits are underway to determine just how the contracts are being fulfilled. In response to allegations of overcharging in the tens of millions of dollars, KBR's Vice President of Worldwide Military Affairs, Paul Cerjan says, "the only thing we can do is stand up and give a true and honest evaluation of what we've done. … And let whoever is making the assessment make the assessment. We are not afraid of that process."

"Private Warriors" also explores a very different kind of contractor -- the private world of security teams that work for firms like Blackwater, Aegis, and Erinys. They provide armed protection for U.S. government officials, government offices, military installations and even military commanders.

"The Pentagon's increasing reliance on outsourcing military functions raises important questions about accountability and the chain of command," says Smith. Through conversations with top military commanders, policy planners, military experts, and contractors, "Private Warriors" explores some of the dangers in bringing in the private sector to prosecute the war.

Warns George Washington University Professor Steve Schooner, an expert on military contracting, "We have tens of thousands of armed contractors in Iraq defending the Green Zone, defending the military, defending contractors… But they're not part of the military command structure." Schooner suggests there can be trouble when private contractors carry weapons and have tactical responsibilities yet aren't getting the same information or direction. Peter Singer, a fellow at the Brookings Institution and author of "Corporate Warriors" agrees: "There's a bubbling resentment … and you're starting to sense a backlash from the military."

Smith obtains unusual access to Erinys, a British private security company. They have been charged with protecting the U.S. Army Corps of Engineers and are paid $50 million a year for the task. Erinys is staffed with an assortment of ex-Special Forces and policemen from around the world. A private security guard at Erinys makes approximately $400 dollars a day, twice what a soldier makes. Some guards make up to $1000 a day. While some see these men as hired guns, they do not view themselves that way. They say they are just men with more expertise than the military when it comes to protection. If Andy Melville, a project manager with Erinys in Iraq is correct, private warriors could become more prevalent in Iraq.

"Americans would like to withdraw troop members," says Melville. "And perhaps it is part of their policy to reduce troop members and replace them with private security contractors."

 

[Oblimo]

This doesn't make sense. "Barter" refers to the medium of exchange. "Captalism" refers to a means for combining deferred consumption by individuals (savings), to acquire and create productive tools and systems that will hopefully enable greater consumption in the future by increasing productivity.

You're right, it doesn't make sense if that's the only meaning of those terms, but they're not. A "barter economy" is an economy lacking a common monetary or central banking system. (Modern/early barter markets use a private scrip and promissory notes, not currency.) There are many definitions/uses of the word "capitalism," but I was using "capitalistic economy" to mean "an economic system characterized by private (as opposed to public) ownership of capital goods" because I think private ownership of capital goods is a central concern in almost any discussion when the word "capitalism" is bandied about.

Now, a barter economy can be capitalist, but it has no monetary system. An economy's monetary system, Milton Friedman argued, is the primary medium through which markets can be controlled, or made free. So when Friedman talked about "free market capitalism" he did not mean a barter economy.

Anarcho-capitalism takes this a step further. Since a monetary system, corporatization, and centralized banking are the primary means of controlling a market, it is argued, let's just get rid of the darn things altogether and go to a barter economy where the government's only roles are a) adjudicating contractual disputes and b) maintaining network neutrality of the intarweb's series of tubes or whatever communications system with which we end up. That, the anarcho-capitalists argue, is a less coersive system than free market capitalism, since the primary means of coersion is eliminated.

Milton Friedman, on the other hand, wanted the world's monetary markets to achieve equillibrium, and argued that the means (the risk of revolutionary collapse and the deaths of millions) were justified by the ends (it was the ony way to reach a post-scarcity economy, after which we wouldn't need money anymore).

Is this post really just another attack on "capitalism" by someone who deplores the effects in the world of the realities of scarcity, self-interest and human difference?

I don't think I've ever attacked "capitalism," because I consider myself a capitalist. Instead, I disagree with what I consider oversimplified divisions of "private" and "public" because they do not reflect the realities of today's corporate, banking, contract, and insurance laws, and that most definitions of "coersion" do not hold up to scrutiny.

Edited to add: Why is it that some people always attribute abuses of concentrated power to a particular economic system (capitalism)?

Because those people would argue that capitalism is more prone to such abuses than other systems. I, however, would disagree.

Indeed, pure capitalism can only thrive where the rule of law is supreme, and where that is the case such abuses would by definition not occur - all humans would truly be equal under the law, and none would have any more call on the instruments of coercion ("legal" or otherwise) than any other.

I am not sure what you mean by "pure capitalism" or "coersion." Typically, a "non-coersive" exhange is defined as a freely-entered, arms-length transaction, but many defintions of "free" and "arms-length" turn out to be circular or inconsistent.

That, however, is a long and utterly unsexy discussion.

 

[Oblimo]

She merely is stating that in an ideal capitalist setup with ideal rule of law, there is, BY DEFINITION, no abuse.

But that's not true, or at least not nuanced enough. Even in an ideal capitalist setup with the ideal rule of law, "abuse" continues until markets achieve equillibrium, which does not happen overnight, and even in the most optimistic of circumstances involves the disenfranchized coming in through the window at mindnight to chop you up with machettes a couple of times before it is achieved.

 

[Roxanne Appleby]

Whatever.