A corporation will find a way to balance its own conscience and legal exposure with the profit maxim. Local beliefs and desires will be balanced with the costs of dealing with them. Taking oil as an example, the profits are so large as to make the locals completely irrelevant.

... unless they are sufficiently armed to damage production and the main revenue source.

This has already happened in Bougainville (copper mines), and is ongoing in Nigeria (oil), beef ranchers in Brazil.

Operations other than resource extraction may have more positive slants. The security arm of a transport operation that cuts through illegal checkpoints and corrupt local “cops”, and maintains connectivity and freedom of movement, may well be beneficial (this was actualy one of the few good deeds the Taliban used to win acceptance). Retail operations use security in the west, and since the people are the profit source (customer base) it behooves them to be good citizens.

http://icasualties.org/oif/Civ.aspx

Also, here’s a comment from an old post:

http://www.cominganarchy.com/2006/06/25/independence-inc/#comment-106991

As an aside; it is necessary to put corporate activities in the proper context. Corporations are ultimately made up of individuals who have an objective/s (often times not a clear objective/s,) a set of beliefs, many biases, and many demands. Corporate action is not driven by some amorphous corporate being that makes all the decisions. It is human action and desire that drives corporate action.

Regards,
TDL

State platforms functions are progressively being handed off towards the individual, PMCs and the various iterations of corporation states (amid a variety of emerging state structures) are just steps along the way.

My main concern is counterinsurgency, especially in resource-rich areas like Nigeria, Sudan or Bougainville. In general, corporations will choose the short-term easy route of supporting and funding atrocities by state forces, and keeping civilians in line using aerial bombing and scorched-earth, to safeguard their infrastructure. Often its a strategy that backfires. But there seem to be few examples of private corporations successfully waging 4GW, and where they win hearts and minds, it is often through the bribery of local leaders rather than real investment or job creation.

Can the utilization of PMC’s turn into an “East India” event? I think that it is highly probable that they will to an extent, but the unfolding of any power garnered from the use of PMC’s in an East India manner will happen much more quickly.

Regards,
TDL

It was replaced by the British government because it FAILED.

And it failed in a way that has parallels to today.

The early East India reps picked up Indian mistresses, helping to integrate them into the culture of the various kingdoms of India. But Victorian morality, itself needed to create a moral aura for vicious laissez-faire capitalism, attacked this arrangement. The usual “liberal” moralists demanded that the reps dump the mistresses, bring their wives and children, and live superior Christian lives. But that required the families be given immunity to local law, which fed resentment. Combined with the famous fiasco of the Company’s army of Hindus and Moslems being forced to touch either cow or pig fat to load their rifles, and the realization of the princes that they were being conquered by the Company, a rebellion was hardly surprising.

Now our liberal moralists want us to impose feminism on the Arabs to go along with the capitalism and Christianity that our conservative moralists demand. If we had corporations there instead of our Army, they’d be under pressure from all these moralists. And the companies would demand legal immunity for their henchmen, and so on and so forth.

No, the East India Company existed because that is how capitalist empires expand – greedy private actors go over first, screw up, demand rescue by the Marines, and bang, you’ve got an empire. Our settlers and the cavalry played the same game against the Native Americans, land theft after land theft until we got it all. (France preferred to send the Jesuits for this same scam.) PMCs are merely transitional tools.

If the British had just gone home in 1857 instead of turning from a corporate to a bureaucratic empire, we would have been spared some of the imperial frenzy that bloodied the world, and in turn created the European arrogance and armed paranoia that led to 1914. Let’s not start down this road in America.

The west needs to come to terms with the realities of 50 cent hand grenades, 50 dollar machine guns and modern medicine. Hezbollah style organizations do a much better job of organizing the resulting masses of heavily armed unaffiliated teenage males.

Agreed, and currently the PMCs are playing nice, but because they are under the control of Western governments, and staffed by the ex-soldiers of western armies. However, in a future weak legal environment without these two restraints, the PMC/corporate army is placed in a situation where the prime factor determining the utility of violence becomes maximisation of profit. No need for hypothetial examples. This can be seen in operation today in the business environment in Russia, and it is not pretty.

“I’m not sure how they could be qualitatively worse than say, the government of the Sudan.”

Agreed. Quite right. Take the hypothetical example of Shell and a failed Nigeria. A corporate army is unlikely to be worse than the forces of a third world despotism, indeed, it is quite liable to resemble the corrupt but elite forces that keep the people at bay while kleptocratic tyrants loot the country, for it will fulfill essentially the same function.

For these reasons, as well as the third of seizure of power and fomenting disorder, I can only echo the conclusion “Useful entities but not ones that should be untethered from the supervision a great power military.”

As for a Sulla or a Marius arising from a PMC it is plausible, but I don’t think it will lead to any success. Sulla and Marius were politically popular before the civil war, I just don’t see many in our political class picking up a rifle. I would also argue that the political bulwark of the states would prevent the mere taking of D.C. as being as important as the taking of Rome was. This doesn’t mean that a pure dictator couldn’t rise, but the states are a check against a Sullan or Caesarian type of rise to power. At least that is my contention.

Regards,
TDL

The record of human rights abuses committed by the armed forces and security services of sovereign governments is so infinitely appalling as to render the objection meaningless. I’m not sure how they could be qualitatively worse than say, the government of the Sudan.

The real danger of PMC ” free companies” is that become financially self-sustaining powers in their own right, seizing territory and making war as they chose, become engines of disorder. Useful entities but not ones that should be untethered from the supervision a great power military.

In the short term, while they are based on cadres from prfessional armies of civilizes states, I assume they will play nice.

But if history is any guide, privatizing conflict is guaranteed excesses. In line with the 19th century styling of this blog : Belgians in the Congo. East India Company actions and involvement in opium trade. Rhodesia.

“...strict ethical guidelines…” Enforced by who? There is no reason to assume mercenaries will have more “strict ethical guidelines” than Exxon or Enron.

Shell employs Corporation X, which is essence fighting a fragment of 4GW to keep security over an area with distributed oil infrastructure. Will Shell or Corporation X plow millions into “hearts and minds” in a place without a state? I suggest only if it is cheaper than shooting any miscreants. If Shell needs to keep a clean image, Corporation X must consider whether it is cheaper being nice, or cheaper hiding the bodies. Or hiring some “bandits” to do it (in a place that sort of casual violence happens the time anyway).

Think mining operations in New Guinea and Bougainville late 20th century.

Shell employs Corporation X. Conditions change and Shell ditches Corporation X. The capability has been created, paid for by Shell. However, unlike a state military, it does not go back on the shelf (for long anyway). Corporation X needs cash flow. Corporation X core competency is “provides security”, but it needs conflict and failed state anarchy in order to do that….Today, in the world of strong state militaries, a rogue operator would get stamped on quite rapidly (think Bob Denard). In tomorrow’s coming anarchy, if state militaries are weak, and only intervene where directly necessary … well.

Maybe I’m misunderstanding something, but I don’t get the differentiation between Shell fielding an army and PMCs. If we’re talking about Shell growing their own army, no, not happening. But if we’re talking about Shell engaging a Blackwater brigade…

The assumption that these private contractors will not play by “civilized” rules is dubious. There may very well be abuses, but some firms will have strict ethical guidelines (while other firms may have none.) Furthermore, the clients of these firms may find it beneficial to put certain requirements in the contracts (such as “no genocide” or “no rape”.) A company like Exxon/Mobil will not want to have its reputation sullied by the excesses of a PMC; this is especially relevant today where it is much easier to communicate with the world.

A last point. A soldier who served his country for 4, 8, 12, or more years should not be prevented from profiting from his experience and skills. If this soldier wants to start a PMC and hire a bunch of his buddies, I do not see that as being “parasitic”.

Regards,
TDL

Why wouldn’t they be competitively priced? It is entirely possible that an unbureaucratic military-for-hire could take current state-military best practices and do them in barebones fashion at lower cost. So, while the start-up would be “parasitic”, I can easily imagine a situation where the influences were running back the other way.

The point about not employing civilized norms is also dubious, because their employers would still be subject to political pressure at home. So, it would depend on what their market was. A free company working for China might not bother with any “civilized” norms at all. One which wanted American or European employment might seek to have a cleaner image.

Belgium in the Congo.