The Markets for Force

Privatization of Security Across World Regions

Molly Dunigan, Ulrich Petersohn, Molly Dunigan, Ulrich Petersohn

• Publisher: University of Pennsylvania Press
• Year: 2015
• ISBN:
  9780812291438
• Topic: Politics & International Relations
• Subtopic: National Security
• Index: Politics & International Relations

The Markets for Force examines and compares the markets for private military and security contractors in twelve nations: Argentina, Guatemala, Peru, Ecuador, the United Kingdom, the Czech Republic, Ukraine, Russia, Afghanistan, China, Canada, and the United States. Editors Molly Dunigan and Ulrich Petersohn argue that the global market for force is actually a conglomeration of many types of markets that vary according to local politics and geostrategic context. Each case study investigates the particular characteristics of the region's market, how each market evolved into its current form, and what consequence the privatized market may have for state military force and the provision of public safety. The comparative standpoint sheds light on better-known markets but also those less frequently studied, such as the state-owned and -managed security companies in China, militaries working for private sector extractive industries in Ecuador and Peru, and the ways warlord forces overlap with private security companies in Afghanistan.An invaluable resource for scholars and policymakers alike, The Markets for Force offers both an empirical analysis of variations in private military and security companies across the globe and deeper theoretical knowledge of how such markets develop. Contributors: Olivia Allison, Oldrich Bures, Jennifer Catallo, Molly Dunigan, Scott Fitzsimmons, Maiah Jaskoski, Kristina Mani, Carlos Ortiz, Ulrich Petersohn, Jake Sherman, Christopher Spearin.

CHAPTER 1

Introduction

Ulrich Petersohn and Molly Dunigan

In the early 1900s, Max Weber developed his definition of the modern state as a sovereign entity holding a monopoly on the legitimate use of force within a territory. Ever since, many have taken Weber’s definition to depict the actual characteristics of a state. However, Weber’s use of the term modern state and his reference to historical development underscore his awareness that this form of organizing violence has been volatile over time (Weber 1999: 815–22). In keeping with this, Janice Thomson (1994: 3) points out that there is nothing natural or timeless in the state-centric organization of violence. Exploring European history dating back to the fourteenth century, she highlights the prevalence of various forms of mercenarism, privateering, and mercantile companies capable of raising their own armed forces (ibid.: 27–42). Other historians, meanwhile, note the presence of mercenaries in the Middle East and North Africa as far back as 1479 B.C. (Lanning 2005: 3–4).

Though Weber’s idea of the state having a monopoly on the legitimate use of force has been the predominant conception of the control of force over the past 200 years, a vibrant market for force has become a major player in international politics and military operations again over the course of the last two decades (Abrahamsen and Williams 2011; Avant 2005; Singer 2003). Many authors have already considered the driving forces behind the emergence of this new market, attributing it to an increase in violent conflict, the failure of governments in the Third World, and/or the massive demobilization of state-run armed forces and a decrease in the willingness to intervene abroad since the end of the Cold War (Kinsey 2006: 95–96; Shearer 1998; Singer 2003: 49–70). Another reason often cited is the “privatization revolution,” which was based on the belief in the efficiency and effectiveness of the marketplace as well as a reduction in military operations’ political risk through the deployment of private contractors in place of regular military personnel (Mandel 2002: 57–60; Schreier and Caparini 2005: 3–6). Deborah Avant (2005: 38), by contrast, claims that states have chosen privatization because they are unable to deal with global security threats alone and multilateral institutions have been unable to adequately cope with these challenges. The marketplace, according to Avant, therefore offers a more workable solution.

Yet, all of these approaches to understanding the underlying drivers of the market for force are incomplete to the extent that they treat the market as single, homogenous, and neoliberal, that is, as a market organized around privately owned business entities where property rights prevail and clients and providers enter into legal contracts for the voluntary exchange of goods and services. Such assumptions regarding the nature of the market for force currently operating globally overlook the fact that this market appears to be a very diverse system, varying along a number of dimensions in different areas of the globe. For instance, in some areas, the market for force is characterized by the involvement of only domestic firms; in others, the market is marked by the presence of a large number of international actors. Moreover, some firms only provide security domestically (i.e., “internally focused” firms), while others appear to be primarily “externally focused,” exporting their services abroad. Still others reportedly provide a mixture of internally and externally focused services. Even the kind of providers trading security services fluctuates, with private firms, local militias, organized crime rings, and/or warlords entering the market in various areas to provide security.

In short, our analysis in this volume takes as its starting point that the market for force is actually a conglomeration of different types of markets, rather than a singular neoliberal entity. Because little scholarly attention has been devoted thus far to any sort of empirical, comparative investigation of the various causes and effects of different forms of markets for force operating across the globe, we seek to perform such a comparison here through an analysis of the markets for force in twelve states: Argentina, Guatemala, Peru, Ecuador, United Kingdom, the Czech Republic, Ukraine, Russia, Afghanistan, China, Canada, and the United States. In performing this comparison, we hypothesize that the different market types and their different characteristics have different causes and effects. The more specific questions we are interested in, therefore, are the following:

1. What are the particular characteristics of the respective markets?

2. What has caused the markets to evolve into their current forms, and to what extent do these causes vary across different markets?

3. What are the consequences of the different types of markets for the state’s monopoly on force and the provision of security as a public good, and to what extent do these consequences vary across the different markets?

The significance of the answers to these questions stretches beyond mere academic interest, particularly in the context of the rapid expansion of security privatization and force marketization that the world has seen since September 11, 2001 and the beginning of Operation Iraqi Freedom (OIF) in 2003. Because states across the globe are increasingly turning to nonstate actors to perform security functions—either intentionally or unintentionally—it is important for the persistence of state power to develop a more complete understanding of the implications of such outsourcing of security functions. Moreover, if, as postulated here, this marketization of force takes different forms in different areas of the globe, it is important for policymakers and scholars alike to better understand how each form of marketized force interacts with the local politics and geostrategic context of the particular area in which it occurs—in addition to its effects on state power in that region—so that policies may be adapted accordingly.

The remainder of this chapter proceeds first by defining how we conceive of and utilize the term market throughout the volume. We then provide a brief overview of the debate in the scholarly literature regarding the causes of the market for force. Next, we identify the specific areas on which the volume focuses its analysis of the consequences of the markets for force, elaborating upon the concepts of the state’s monopoly on force and the provision of security as a public good. We then define more specifically the existing literature’s explanations of the variation within the neoliberal market model, situating this volume’s argument in relation to these explanations. Finally, we outline our analytic framework, provide further details regarding the case selection process, and acknowledge several caveats regarding the scope and design of this study.

Conceptualizing a Market

The term market is rarely defined in the literature on security privatization. This is partly due to much of the existing literature’s focus on things other than the market itself, and partly due to the fact that the literature has taken the neoliberal approach as given. Neoliberals subscribe to the notion that the market is merely a virtual arena for actors to engage in voluntary economic exchange, and it does not exert any influence on the interaction or the conditions of exchange (Jackson 2007: 235). The outcome of a neoliberal market is, therefore, only determined by the interaction of rational actors and not by characteristics of the market itself. Although this is not wrong, the neoliberal approach is only one way of conceptualizing a market, and it is very specific regarding the factors shaping the market and the mode of exchange. This approach thereby excludes other potential organizational forms of markets, such as casual trade markets, collusive trade markets, open security markets, or oligopolistic security markets (for other forms, see Jackson 2007; Branovic and Chojnacki 2011).

In order to grasp the full range of variation between different types of markets for force, we utilize a broad definition of a market as a locally specified “set of formal and informal rules” under which actors engage in exchange (Fligstein and Dauter 2007: 113). However, not all forms of exchange qualify as market exchange. Barter, for instance, does not depend on money but on the direct exchange of goods. In contrast to this, markets are arenas where commodities are sold and bought and property rights are transferred upon monetary payment (Jackson 2007: 236). Second, market exchange is always a two-way street, wherein one party provides a commodity for future payment. This distinguishes market exchange from one-way transfers such as gifts (ibid.). Third, market exchange takes place regularly, and commodities are characterized by a certain degree of similarity. Markets require a regular exchange, in contrast to a single unique event. To achieve regular exchange, commodities need to be similar to some extent, as otherwise prices necessary for monetary exchange could not form and there would simply be a multitude of unconnected exchanges (Rosenbaum 2000: 470).

Although market exchange has to fulfill all of these criteria, we acknowledge that the specific exchange conditions and the mode of exchange may differ. This is in contrast to neoliberal theory, which suggests that the mode of market exchange is always the same: based on mutual voluntary agreement between the two parties (Rosenbaum 2000: 466–68). Furthermore, mutual agreement is not necessary to allocate commodities on markets. For instance, Donohue and Levitt argue that on illegal markets, the use of force is the prime mechanism to allocate resources (Donohue and Levitt 1998: 463; Reuter 2009).

We also acknowledge that markets can vary in their degree of openness and competitiveness. “Openness” means that new actors can enter the market freely, and “competitiveness” means that multiple suppliers and sellers compete (Jackson 2007: 236–37). This is considered an important mechanism of market efficiency because under the condition of competition, suppliers constantly attempt to surpass competitors by offering better contractual conditions, which ensures low prices and high-quality services (Rosenbaum 2000: 472). However, perfect competition and openness are not necessary requirements for market exchange. Both may be impaired by legal requirements, government policies, personal relationships, or market power (Drutschmann 2007: 450; Burt 1993). Thus, competition and openness vary from market to market.

The Underlying Causes of the Markets for Force

There is no agreement among scholars regarding the cause(s) of the market for force. Prominent explanations include an increase in violent conflict, the failure of governments in the Third World, and/or the massive demobilization of state-run armed forces and a decrease in the willingness of states to intervene abroad since the end of the Cold War (Singer 2003: 49–70; Shearer 1998; Kinsey 2006: 95–96). Abrahamsen and Williams (2011: 26, 89) move beyond this post–Cold War explanation to argue that the emergence of private security is part of the wider process of globalization that disassembles the state and restructures power relations. As discussed above, many scholars also cite the “privatization revolution” as a cause of the market (Schreier and Caparini 2005: 3–6; Mandel 2002: 57–60), and Avant (2005: 38) argues that privatization is the result of both states and multilateral institutions being unable to deal with global security threats alone.

Others have analyzed variation in the market’s causes. Elke Krahmann (2010), for instance, argues that there is variation in the extent to which states embrace privatization. Some have acknowledged that the demand for market services may have different roots in weak and strong states (Petersohn 2010). However, because all of these approaches implicitly understand the market to be a neoliberal market, the discussion of the causes is, thus far, unable to account for the variation in the types of markets for force that exist. The volume at hand seeks to remedy this shortfall by inductively exploring the emergence of the various market types, looking for patterns of conditions yielding particular types of markets.

The Consequences of the Markets for Force: The Monopoly on Force and Provision of Security as a Public Good

Ever since the reappearance of marketized forms of force in recent years, scholars have engaged in a spirited debate about their consequences. Some authors have investigated repercussions for the democratic control of force (Verkuil 2007), while others have been more concerned with the market’s impact on the armed forces (Kidwell 2005) or the market’s reconfiguration of state power (Abrahamsen and Williams 2011). However, some of the most fundamental questions that scholars have raised with regard to the effects of marketized force relate to their impact on the state. As many analysts have pointed out, the state’s monopoly on violence (Coker 1999) and its provision of security as a public good (Mandel 2002: chap. 2; Krahmann 2008) are potentially affected by marketized forms of force. We elaborate upon these two concepts below.

The State Monopoly on Force

Although the literature on the privatization of force extensively addresses the impact of marketized force on the state’s monopoly on the use of force (Singer 2003: chap. 10), a universal understanding of what comprises that monopoly on force is lacking. Some straightforwardly define it as the “monopoly over the possession and use of the instruments of violence” (Edmonds 1999: 118). Deborah Avant (2005: 5–6), in contrast, relaxes the monopoly aspect and rather focuses on the level of functional control (i.e., the ability of the troops to exercise their mission), social control (i.e., to what extent the conduct of the violent actors reflects current norms), and the political dimension (i.e., who makes decisions regarding the use of force). In other words, there is a distinction between a state’s authority to use force and a state’s capability to use force. Elke Krahmann argues that it is this political or authority dimension, the question of who makes decisions regarding the use of force, that is of central importance: “The norm of the state monopoly on violence rests on the assumption that a general expectation of peaceful cooperation and conflict resolution can only develop among all citizens if private individuals are prohibited from using armed force to further their own interests” (Krahmann 2009: 2–3).

For the purposes of this study, we focus solely on the political/authority di...