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October 02, 2007

Buying Soldiers

Yesterday, at Tapped, I argued that when evaluating whether a good or service is better provided by the public or private sectors, you have to keep in mind the private sector's need to turn a profit. So if company X is 6% more efficient than the government at doing something, but will take a 12% cut for profit, you're better off leaving the service in public hands. This article on how much we're paying for private military contractors in Iraq makes the point nicely:

Blackwater was a subcontractor to Regency, which was a subcontractor to ESS, which was a subcontractor to Halliburton's KBR subsidiary, the prime contractor for the Pentagon -- and each company along the way was in business to make a profit. [...]

According to data provided to the House panel, the average per-day pay to personnel Blackwater hired was $600. According to the schedule of rates, supplies and services attached to the contract, Blackwater charged Regency $1,075 a day for senior managers, $945 a day for middle managers and $815 a day for operators.

According to data provided to the House panel, Regency charged ESS an average of $1,100 a day for the same people. How the Blackwater and Regency security charges were passed on by ESS to Halliburton's KBR cannot easily be determined since the catering company was paid on a per-meal basis, with security being a percentage of that charge.

And how does that compare with what the government spends?

An unmarried sergeant given Iraq pay and relief from U.S. taxes makes about $83 to $85 a day, given time in service. A married sergeant with children makes about double that, $170 a day.

Army Gen. David H. Petraeus, the top U.S. commander in Baghdad overseeing more than 160,000 U.S. troops, makes roughly $180,000 a year, or about $493 a day.

So we're paying Halliburton $1,100 for their rent-a-soldiers, while we're paying General Petraeus less than half that for his services. It's astonishing. And we have less operational control over the Blackwater forces than we have over members of the military.

The Bush administration has discovered that it's far easier to convince Congress to appropriate more funds than it is to convince the American people, much less the military, to send more troops. So we're purchasing extra manpower instead. It's a way of hiding the human cost of the war in the financial cost of the war. It's a way, in other words, of lying, albeit in a uniquely expensive fashion.

October 2, 2007 | Permalink


For the most part, I agreee.

However, Blackwater contractors are battle-hardened badasses and not little Johnny from Ohio with six weeks training.
Like NFL free agents, they are able to command more money than the army is willing to pay and if you want and need that kind of talent, you will pay more.

Posted by: El Viajero | Oct 2, 2007 11:55:26 AM

Yeah, tell that to the military, In fact, give me some evidence. Evidence both that such talent isn't to be found within the military, and that Blackwater's presence has been to our benefit.

Posted by: Ezra | Oct 2, 2007 11:56:30 AM

Not to put too much of a point on it, but when you add Petraeus's benefits and overhead costs of retaining him, it probably costs about double -- $1000/day -- to pay him, whereas the Blackwater guards are billed out at about $1000/day (incidently, software engineers are billed out at the same going rate by consulting companies) and have a take-home pay that is far lower.

Posted by: Tyro | Oct 2, 2007 11:57:20 AM

This is yet another story that, a few years back, my friends who are farthest to the left kept talking about. And I, fool that I am, kept saying: "oh no, it can't be that bad." This was a recurring theme for quite awhile in these relationships, as I continued to insist to myself that this administration couldn't possibly be as horrible, as venal, and as dishonest as these friends, who once upon a time I believed held fringe views, argued. But time has, in this instance as in so many others, proven them right about the president. Which has left me wondering how many of the other theories that I once labeled conspiracies are actually true. I'm not rushing out to buy tinfoil for a new hat, but it's amazing how much doubt can be seeded when our leaders make a mockery of public virtue.

Posted by: anmik | Oct 2, 2007 12:02:00 PM

Seriously, El Viajero, do you know any soldiers currently serving? That's not snark; it's a serious question. The ones I know, many of them my former students, are plenty hard: they're trained to kill, will do so when so ordered, and are deeply committed to their mission. And that's not even getting into the very few who I know in Special Ops.

But what's even more significant, I think, is the way these people feel about the mercenaries. To a man -- and woman, in one case -- they think that Blackwater makes them less safe. And they resent the pay differential. I'll admit that my sample size is pretty small -- not more than three or maybe four people with whom I've talked about this issue -- but the opinion is constant. That's not to say that they won't take a job with Blackwater or another "private security" firm when they're out of the service. In the meantime, though, they're not fans of the privatization of the military.

Posted by: anmik | Oct 2, 2007 12:09:59 PM

being able to hide the human cost as merely a financial cost, i think, is a secondary benefit of the main impetus for hiring out mercenaries. and that is to transfer tax money into private hands. the Iraq war is little more than a reverse robin hood laundering scheme to send money collected from the poor in the form of taxes directly to the rich in the form of government contracts for services from private industries that could be paid for more cheaply by leaving them public. the fact that Bush Sr. can sit on the board of KBR and not bring conflict of interest charges against his son is something i will never understand.

Posted by: Cody | Oct 2, 2007 12:12:41 PM

Of course they aren't just hiding the financial cost. Our mercenaries aren't tallied in the official killed in action figures. Last time I checked this had led to undercounting our war dead by at least a thousand soldiers.

So, not only do they hide the cost to the treasury but they manage to understate the true cost in blood.

Posted by: Curt M | Oct 2, 2007 12:21:34 PM

I think you are missing several things, Ezra.

First, pay to Blackwater does not equal a soldier's salary; a soldier gets paid when in training, gets benefits, etc. The figure I recall is that only about 1/3 of a soldier's lifetime cost to the government is in salary--so to start with, multiply your costs by 3. That gets you to a sergeant getting $510 a day. Next, remember that a Blackwater guy is only paid when he works; he's not paid for training, rest time, etc. A soldier spends at least half his time in training or at home base; that gets a day of in-field time, for a sergeant, up to $1020 a day. And it's my guess that most Blackwater personnel are much better combat-trained than the average sergeant (since many of them are ex-Special Forces, and/or have significant combat experience).

Posted by: SamChevre | Oct 2, 2007 12:30:39 PM

While you may be right that we’re paying too much for Blackwater resources, the analysis is a little short. First off, the cost of a resource goes far beyond salary. There’s benefits, overhead, etc. that needs to be considered. For example, for most business cases, we use a rough employee cost of $75 per hour when typical salaries are far lower. In this case, I would want to know if the Blackwater rate includes housing, logistics (such as transporting the resource to Iraq), etc. Until you know that, you really can’t make the comparison.

Also, on the margin, each additional us soldier requires training, which probably isn’t the case with Blackwater resources (I don’t know this, hence the use of “probably”). And, if the Blackwater resource is more experienced, they’ll likely require less overhead to function.

Point being: you need to consider all the data, not just pay/salary, when doing this analysis.

Posted by: DM | Oct 2, 2007 12:34:18 PM

It is close to a cliche to say the military runs on its non-commissioned officers, and having them being hired out from the military services by private firms is hollowing out the actual armed forces. This is bad, bad, bad and makes the US less effective in executing the military mission. Recent testimony to Congress makes this a key issue.

But, I'm more concerned with having a professional military that is only controlled loosely by the executive branch. Congress recently is trying in the defense authorization and appropriations bills to even find out how many of these private soldiers are in our service - the numbers are not reported currently.

One of ills of the British military in revolutionary war times was the King's unaccountable use of hired mercenaries (the Hessians!). The Constitution envisioned an army and navy under Congressional control (read Article I) in all its general aspects, including the ability to declare war, grant letters of marque, etc, in response to the Brit's out-of-control executive/King situation. Even a standing army was not envisioned, but reliance on state militias instead. We have come too far in the other direction and the pendulum needs to swing. I highlighted letters of marque, above, since without private actors being specifically authorized by Congress, military forces are just pirates, and should be viewed as outlaws. One of the fundamental basis of the nation-state system is that the state has a sole monopoly on organized military force, and the private 'security' contractor voids that basis.

Step back, think, and tell me how a terrorist organization is different than a private security military force?

Needed: a US law that forbids the use of private security contractors in any area where US military forces are deployed. Also needed: a US law that says that no security firms can exist without licensing, and control by US or State governments. Their actions must be overseen and regulated by public officials, including legislative oversight.

I don't want Blackwater enforcing some Executive Order to capture and imprison US citizens (read: any lefty opponents of Bush/Cheney) in Guantanamo-like camps on Dick Cheney's direction. There is nothing now that would prevent this.

Posted by: JimPortlandOR | Oct 2, 2007 12:38:57 PM

Step back, think, and tell me how a terrorist organization is different than a private security military force?

In a perfect world, a terrorist would kill more civilians and a private security military force would kill less. Intent matters.

Posted by: DM | Oct 2, 2007 12:50:40 PM

"In a perfect world, a terrorist would kill more civilians and a private security military force would kill less. Intent matters."

DM: I couldn't agree more. But you will find many people in your party and on this blog who don't, and who think that what the US Army (let alone Blackwater!) is doing in Iraq is morally equivalent to terrorism. That's the reason I don't count myself as a "progressive" anymore. On almost all social issues, and on many economic issues such as UHC, I support the goals of the progressive movement. But I won't stand up to be counted with a group of people who thinks we are no better than the terrorists. It doesn't matter how badly we fuck up in Iraq, that will never be true, because intent matters.

Posted by: HFS | Oct 2, 2007 1:06:08 PM

Blackwater mercenaries are almost exclusively former American military personnel, usually from the various special operations forces we have. So all those training costs borne by US taxpayers have already been paid. If you want to add training costs to active duy personnel, add it to Blackwater as well. We're financing them at least two times over.

There are active duty soldiers who resent mercenary forces like Blackwater precisely because they consist of people who benefited from taxpayer-funded training and other benefits like education, and who then jumped ship as soon as they could in order to make more money. And, not insignificantly, they get to make that money in a much less restrictive environment than the US military.

One of the problems with any military is the attraction it holds for assholes and borderline sociopaths - and not so borderline, for that matter.

Mercenary outfits like Blackwater are very good at providing a killing-people-and-blowing-shit-up environment without any little annoyances like patriotism and commanders who are actually accountable to anything more than the bottom line.

Mercenaries might have legitimate uses. But they don't have honor, they aren't patriots and they neither have nor deserve my respect.

Posted by: Stephen | Oct 2, 2007 1:07:50 PM

Ezra: "So if company X is 6% more efficient than the government at doing something, but will take a 12% cut for profit, you're better off leaving the service in public hands."

Is that really true? Let's say there is some non-essential service provided by the government. The 6% of the money in profits goes back to the shareholders of the company, which in turn is reinvested in the economy, and the entire public pays less in taxes overall, because they aren't forced to buy the service.

I agree that it's not a good idea to have tax collection be in private hands because historically private tax collection hasn't worked out to well (as Krugman mentions), and tax collection is a service everyone is forced to buy in any case. But your quote above oversimplifies things greatly.

Posted by: HFS | Oct 2, 2007 1:18:57 PM

another advantage for the administration is that blackwater seems to be above the law, and completely hidden from public scrutiny.
...do we even know what their training facilities look like here, no less in iraq?

........and i have recently been thinking...
if demonstrations and protests against the war and government policies ever grew in numbers and unrest in this country, (and also if nooses keep showing up) would blackwater's services be used against unrest in this country?
....blackwater looks like it could be used for "homeland security" as well.
maybe i am just paranoid, but who knows?

Posted by: jacqueline | Oct 2, 2007 1:32:03 PM

But I won't stand up to be counted with a group of people who thinks we are no better than the terrorists. It doesn't matter how badly we fuck up in Iraq, that will never be true, because intent matters.

I would say that terrorism at it's most basic level is using violence against innocents to force policy changes from those in authority.

To say that "intent matters" sounds good, but it's wrong. By that logic, Blackwater mercenaries - excuse me, civilian contractors - could plow a path of destruction through the neighborhoods of Baghdad, indiscriminately killing whoever they see, and as long as in their hearts they really believe that they needed to do it in order to fulfill their contracts, then that's fine.

This idea that intent matters certainly turns the Geneva Conventions on their head, since those are based upon the idea that actions matter. If you torture people, it shouldn't matter that you're a nice guy with good intentions.

I think what's tripping you up is the distinction between the idea that US policy in Iraq is akin to terrorism and the not necessarily related belief that each US soldier in Iraq is a terrorist.

If US policy has resulted in the deaths of around 1,000,000 Iraqi citizens, the displacement of several million more, millions more wounded, untold destruction of Iraqi property, and if this is done in order to establish a friendly regime and to show other countries in the region that it's best to appease us, then that can reasonably be called a gigantic terrorist operation.

But that doesn't mean our soldiers are terrorists, because they're soldiers following orders. Certainly those who follow blatantly illegal orders like intentionally targeting civilians and/or torturing prisoners should be held accountable and kicked out of the military (I hear Blackwater is hiring). But those that respond to attacks, that train Iraqi military and police forces and provide protection for Iraqi and American governmental forces are not terrorists in any sense of the word, no matter how immoral and illegal the invasion and continued occupation of Iraq is.

Posted by: Stephen | Oct 2, 2007 2:07:25 PM

Blackwater's sole intent is profit. Maximum profit.

And while that's certainly a different intention than Al Qeada's, I'm not sure that difference makes one more moral than the other.

Posted by: keatssycamore | Oct 2, 2007 2:17:38 PM

Stephen: I don't think the Iraq war was a good idea either. If you want to take the position that any attack against another country is terrorism, I think that's disingenuous and untrue. First, it broadens the term "terrorism" to the point of uselessness. Clearly, we consider terrorists to be non-state groups that commit acts that are "beyond the pale." Governments and their soldiers can commit war crimes, but they don't commit terrorism, which is the province of non-state groups. Sometimes they aid and abet groups that engage in it (e.g. Iran and Hezbollah, or the U.S. and the Contras). This distinction is recognized in the Geneva conventions: non-uniformed combatants (e.g. terrorists/spies/saboteurs) don't benefit from their protections. Was invading Iraq based on flawed intelligence resulting in the deaths of tens of thousands (where are you getting 1M from? not from the IBC, that's for sure) a war crime? No, not as the term is currently understood, because intention matters. The war may have been immoral, and it has surely had terrible consequences, but in the end, our policy towards Iraq is absolutely not the moral equivalent of terrorism, nor did we commit a war crime by invading, and it cannot reasonably be called a "gigantic terrorist operation."

Posted by: HFS | Oct 2, 2007 3:07:08 PM

but in the end, our policy towards Iraq is absolutely not the moral equivalent of terrorism

i'm not making the argument, but you're avoiding exactly what it was, which was that intent does not matter as much as the result, and so questions of moral equivalence are moot, especially considering that any moral judgment you make is going to be heavily biased by which side of the conflict (and by that i mean the aggressor vs. the receiver, not hawk or dove) you happen to be on.

Posted by: Cody | Oct 2, 2007 3:17:00 PM

what stephen said. it can't be stressed enough that most of the blackwater mercenaries are ex-military forces. that means we paid for their training.

Posted by: verplanck colvin | Oct 2, 2007 3:18:16 PM

what stephen said. it can't be stressed enough that most of the blackwater mercenaries are ex-military forces. that means we paid for their training.

they're also mostly non-american, so we kind of didn't. but somebody did, so the point still stands at least with regards to there being no training costs.

Posted by: Cody | Oct 2, 2007 3:20:40 PM

I don't think the Iraq war was a good idea either.

That wasn't an argument I was making, at least insofar as your opinion of it.

If you want to take the position that any attack against another country is terrorism

Um, not what I was saying. My problem is with your definition of terrorism, which relies way too much on one's state of mind.

Further, I find it a little odd to accept an very dry, technical and arbitrary definition of "terrorist," and then inform that word with all the revulsion and moral outrage a human is capable of feeling.

If a terrorist is merely someone who doesn't wear a uniform, and that's all they are, then there's not much of a moral judgment that we can make. If the terrorists' actions matter, then we can make a moral judgment - but we should then be obligated to a serious discussion about the methods our forces use whether they wear a uniform or not.

I really don't want to get into a "war crimes vs. terrorism" argument. Both terms describe the same types of actions, and I doubt you'd be happier with people calling our soldiers "war criminals" anyway.

Which goes to the substance of my argument, which is that it's entirely possible to see the Iraq War as morally equivalent to terrorism - regardless of the technical accuracy of the term - without implicating every American soldier as a terrorist/war criminal. In fact, it's even possible to identify particular soldiers as war criminals/terrorists because of their actions without implicating all other American soldiers.

As far as people who do accuse all American personnel in Iraq of being terrorists - I don't know of anyone doing that.

Posted by: Stephen | Oct 2, 2007 3:50:39 PM

Oh yeah:

they're also mostly non-american, so we kind of didn't.

That doesn't square with what I've heard, which is that Blackwaterhas more Americans than any other nation. Do you have a source?

Posted by: Stephen | Oct 2, 2007 3:51:41 PM

...give me some evidence. Evidence both that such talent isn't to be found within the military...

I have no doubt that the military has such talent. After all, where do you think Blackwater contractors got their training?

Like any other professional, they quickly learn that their talents can be sold on the market for more than the US military is willing to pay, or they would have stayed in. Instead, these professional badasses hire out to blackwater, or whoever has a war.

If you think they are the same as the average army enlisted man, you are sadly mistaken.

Posted by: El Viajero | Oct 2, 2007 7:27:25 PM

Yes, but General Petraeus does not make big buck contributions to the campaign funds of Republican politicians.

Eric Prince and his family do make big contributions.

Back in the day, the most important cabinet appointment was Postmaster General, because all of those Post Office jobs were the patronage farm where the party trees were grown.

Now, the Republican Party tree feeds off of deeply tiered no-bid, cost-plus military contracts.

The tree of liberty is fed with the blood of patriots, and the tree of tyranny, something similar.

Posted by: Bruce Wilder | Oct 2, 2007 10:05:39 PM

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