Very rarely do I read a “policy wonkish” book in which I so clearly agree with the diagnosed problem, but feel like the solutions offered leave me completely at sea.

Allison Stanger’s One Nation Under Contract: The Outsourcing of American Power and the Future of Foreign Policy is such a book.

Stanger is no slouch. She is Middlebury College’s Russell Leng `60 Professor of International Politics and Economics, and directs the college’s Rohatyn Center for International Affairs. Her clear, concise, and thoughtful new book is “blurbed” by some high-powered people, including USMC General Anthony Zinni (who calls Stanger’s analysis “a superb work on government outsourcing and contracting”); Canadian Liberal Party leader Michael Ignatieff (“a clarion call to bring the business of government under more effective public control”); and Harvard University professor Joseph Nye (“well-reasoned”).

But her book’s conclusions left me scratching my head.

Stanger sets out to answer a big and crucially important question: In an age in which governments around the world have “outsourced” nearly everything to private for-profit corporations, how do citizens reestablish effective oversight over private-public partnerships? This outsourcing problem is so vast and extensive that even the Establishment New York Times, an overexuberant cheerleader for U.S. foreign policy if ever there was one, referred to contractors as a “fourth branch of government” in 2007, a sign of just how troublesome things have become.

Stanger’s extended case-study is the United States, a “republic-turned-Empire” (to her credit, Stanger is willing to entertain the use of the term “empire” to describe U.S. activities abroad) of 300 million citizens that has emerged over the past several decades as the richest, most powerful, most influential nation in the world, with as many as 1,000 military bases networked across more than 130 countries across the planet, 10,000 nuclear warheads, and an annual “defense” budget (read: “war-making”) larger than the next twenty countries combined.

Her conclusions?

What once was considered public oversight (the domain of Congress, the State Department, and other somewhat-publicly-accountable government organizations) for maintaining this emerging global “Empire of Bases” is increasingly being governed by the dictates of private for-profit corporate interests. In her book, Stanger examines what she calls “the evolution of military outsourcing,” including the privatization of U.S. matters diplomatic (which she rightly traces to the 1947 Congressional passage of the National Security Act), a process that has emerged in full dysfunctional flower with the 2001 creation of the so-called Department of Homeland Security, as well as the “slow death” of the U.S. Agency for International Development (USAID).

Stanger is at her best when chronicling the waste, fraud, and abuse that has accompanied ongoing outsourcing. The U.S. government’s six year invasion and occupation of Iraq is the most recent reminder of just how nasty things can get: more than 1 million Iraqi lives lost, billions of dollars “disappeared,” U.S. tax-supported private corporate armies waging a mercenary war against entire Mesopotamian cities (Fallujah, anyone?) while U.S. diplomats hole up inside the so-called “Green Zone,” home to the new U.S. embassy in downtown Baghdad: the largest, most extensive, and most expensive embassy compound the world has ever seen.

And Iraq is just the tip of the “outsourcing” iceberg.

While I appreciated her diagnosis of the “outsourcing” problem, I have two big issues with Stanger’s book.

The first is her continual acceptance (not unusual for a U.S. scholar/policy wonk) of the U.S. government’s officially stated “party line” on all matters diplomatic. When she asserts, for example, that the U.S.’s primary interest in invading and occupying Iraq was to help bring “democracy” to the Middle East, I found myself scrawling the word “nonsense” in the book’s margin. Her unwillingness to push beyond presidential rhetorical rationales for U.S. actions abroad – Oil? Support for Israel? Profit for “Defense” Corps like Halliburton and KBR? – deeply undercuts the credibility of her argument.

Second, and more troubling, are her “solutions,” packed into the last few pages of the book, which seem utopian to the extreme, even for this idealist. She speaks of “cultivating an emerging market for virtue” built on the “creativity of free individuals”; of “radical transparency in all government financial transactions” (and oddly, points to Wall-Street-Bankster-Backscratcher President Obama as a model here); of “loosening the grip of special interests on American politics” (yawn); and more to the point, of “restricting the use of no-bid contracts” and “demilitarizing U.S. foreign policy,” both wonderful ideas that any D.C. insider will be the first to tell you will never happen.

In short, to this decentralist reader, Stanger’s book is right in its diagnosis of what ails the United States, but wrong on the cure. Only a radical devolution of political and economic power away from the center (Washington, D.C. and Wall Street) and towards the periphery (Main Street and individual states, with Vermont leading the way, perhaps) will be able to stanch the “outsourcing” and the complete collapse of this once-great constitutional republic at the hands of those wringing a profit from its ruin.

To explore that phenomenon, however, Ms. Stanger may have to write another book.
Rating: 3 / 5

Dire as these problems are for America’s continued strength, Dr. Stanger’s conclusion is wise. She understands what many activists do not — that private businesses and nonprofit organizations are now part and parcel of foreign policy worldwide, and that the movement towards a more open world in which private citizens make a significant impact on world affairs can’t be stopped. The clock can’t be turned back, she says: we live in a world where Bill and Melinda Gates can do more for malaria in Africa than most governments, and where the decisions of Walmart affect trade more than the demands of most countries. These are facts on the ground–they are caused by globalization, increased wealth, and the internet–they can’t be reversed without returning to totalitarian states or a world of reduced connections between countries that would impoverish billions. Dr. Stanger thoughtfully concludes that when change cannot be fought, it should be understood, and managed. Government must decide what functions are inherently governmental and must be made in the public interest: trigger-pullers in war, for instance, and bring those functions back inside. And it must then regain the capacity to manage, oversee, and police the rest.

One Nation Under Contract should be required reading for everyone serving in government, and everyone who wants to understand today’s world. I run an organization that trains young leaders, and believe that every single one of them needs to understand the crucial points this book makes.
Rating: 5 / 5

The Dept. of Defense is a good place to start. Stanger points out that the Pentagon’s acquisition workforce shrank 25% between 1990-2000, while the volume of contracting increased 7X, and that between 2002-2005, the number of its contract employees rose from 3.4 million to 5.2 million. A key point here is that the simplest way to handled increased contracting with reduced staff is to issue giant contracts that allow subcontracting as desired – including evaluations. Thus, we end up with contracts that generate sub-contracts that generate sub-contracts, etc., for as many as five layers – adding costs at every layer. Then there’s the missing billions in Iraq. Another typical problem is that various reports on procurement estimate that at least half of these contracts take place without full and open competition. Thus, there is no need for surprise when Stanger points out that a school costing ASAID $25,000 to build in Afghanistan could have instead be built for $50,000 by local Afghans (and probably generated good feelings for the U.S. at the same time). As for quality – shoddy electrical work by KBR is blamed for the deaths of at least 18 soldiers in Iraq, and Blackwater Security severely damaged U.S. credibility when it killed 17 civilians in Baghdad.

Sranger is correct that private contracting weakens control over government policy, but she does not account for some of the major mechanisms by which this occurs. A major source of the problem is that creative people can always find their way around a government contract; this problem is sometimes further acerbated intentionally by government managers, and the fact that government contract positions are not attractive to anyone with high skills and initiative. Then there’s the ‘revolving door problem. A USAToday article (11/16/09) pointed out that 158 retired general officers now consult for the Pentagon, and most also work for private industry – all at salaries far exceeding their former military pay. Clearly, the potential lure of those jobs can skew thinking of today’s active-duty leaders. My own experience with contractors and consultants is that they spend about half their time looking for ways to extend and expand their scope of work, are much harder to get rid of than to bring in, and become a crutch for weak managers to lean on and hide behind – as a result, their advice must always be taken with a grain of salt. Another problem is that bringing in contractors usually reduces flexibility (eg. the outsourced warehouseman can no longer be asked to pitch in to help with a delivery crisis) and unforeseen changes in technology and/or task requirements create never-ending ‘discussions’ over who is responsible. Another problem with privatization is that it creates a powerful never-ending incentive to for private contractors to lobby for more government services etc., and a major new source of campaign donations.

In another section, Stanger points out that U.S. interests in the Mexican embassy were (and probably still are) promoted by representatives from 32 different agencies, that in 2005 the federal government had contractors in every U.N.-recognized country but Bhutan, Nauru, and San Marino, and we have military bases in 130+ countries. This gets to an even bigger problem – the size, reach, and complexity of American government. We end up with spaghetti-like organization and flow charts, never-ending coordination meetings, and obvious silliness such as the Director of Homeland Security giving briefings on the availability of swine flu vaccine. More important, it just doesn’t work – both 9/11 and the Ft. Hood shooting took place despite numerous warnings, government’s response to Hurricane Katrina was horribly botched, Madoff’s Ponzi scheme was missed until he turned himself in, our financial system nearly collapsed last year, and pupil test scores and dropout rates have stagnated for decades,

Bottom Line: I doubt that any ‘super-manager’ (eg. a composite of Peter Drucker, Andy Grove, Steve Jobs, Jack Welch and anyone else you might want) would even want to try managing the federal government as it now stands. Significantly improving government performance requires that we first stop digging holes – the most obvious example is the link between our overly-biased support for Israel and the ensuing increased motivation for terrorism. A second is staying out of the affairs of other nations – our own ‘bought and paid for’ democracy is an embarrassment, as well as our financial management, and we need to stop telling others how to run their affairs – especially China and Russia. A third is reducing our dependence on foreign oil and associated interference in Iran, Iraq, and (formerly) Saudi Arabia. Fourth, get out of Afghanistan and Iraq – there is no reason to be there. At that point we need to implement a major government downsizing – eg. at least 50% in the Pentagon (we already spend about as much as the rest of the world combined), 75%+ in Departments of Commerce, Labor, State, and others; this would need to be accompanied by significantly reducing the accompanying rules and regulations. Then, reconsider restructuring. Only then does it make sense to consider Stanger’s question of “What should be privatized?” Perhaps nothing.
Rating: 4 / 5

Her argument is that the U.S. government has embraced outsourcing its overseas agenda as a solution for every international problem, with disastrous unintended consequences. That combined with a simultaneous explosion of creative initiatives bubbling up from below, both in the for-profit and not-for profit sectors, have real foreign policy impact. For her, the transformation of the politics and process of foreign policy elevates the “how” above the “what” and means that implementation defines the substance and has led to a militarization of American foreign policy. Finally, she situates these power shifts of the disaggregated state within the context of a private sector populated by corporations with unprecedented global muscle.

As a gardener, I understand the importance of surging plant material in the landscape. When I began gardening in earnest on Cape Cod in 2004, I planted native shrubs, like Red Osier Dogwood, to quickly fill the gaps until the specimen trees I had planted to replace our beloved but dying Pitch Pines could mature. For years the Red Osier performed beautifully. Then, I noticed that they were overwhelming the garden scheme by suckering and fountaining. Suckers, as any good gardener knows, are often undesirable because “the plant’s energy is diverted to the sucker rather than to crown growth.” The solution is to prune those suckers and, every few years, reshape the plant to constrain its growth and conform its shape to the desired landscape.

Allison Stanger has the same advice for the U.S. government: get out those loppers. Collaboration with private sector entities in pursuit of national security is essential in this networked world and certain naturalizing of government functions in the private sector is healthy. The foreign affairs landscape is changing organically and cannot be returned to some old-fashioned topiary filled parterre. But, if the national interest and the public good are to be served rather than private profit, principals in the foreign affairs agencies need to get out their shears and prune those suckers!

Rating: 5 / 5

Asia Times

Dec. 19, 2009

BOOK REVIEW

Missing in Action

One Nation Under Contract by Allison Stanger

Reviewed by David Isenberg

Of all the books published about private military and security contractors in recent years, with more coming out all the time, few really understand the phenomenon of outsourcing roles that were formerly the preserve of government.

Either they are academic theses and dissertations rewritten for public consumption, such as Peter Singer’s Corporate Warriors, a rare useful book on the subject; ill-concealed hysterical jeremiads masquerading as dispassionate journalism, such as Jeremy Scahill’s over-the-top fulminations against Blackwater; or breathless “I was there taking fire in the sandbox” memoirs from conflict zones.

Not many authors have paused to consider exactly what is going on. To paraphrase what was said about the US intelligence community after the September 11, 2001, attacks, they don’t connect the dots. Finally someone has.

That someone is Allison Stanger, professor of international politics and economics at Middlebury College in the United States.

Stanger points out firstly that private contractors are working for more parts of the US government than just the Pentagon or State Department. Secondly, contrary to popular assumptions, most private contractors working in areas that used to be the exclusive preserves of government, such as foreign policy, military and intelligence sectors, homeland security, or foreign aid, are not a bunch of unscrupulous greed heads, although they are certainly in pursuit of profit.

Stanger does not only focus on the for-profit private contractors doing military and security work. She also looks at the Department of Homeland Security, and the non-profit players working in the development field. When foreign aid contributions by the private sector dwarf those of the US Agency for International Development, and in any case most of USAID’s work is done by contractors, one wonders what the point of it is.

The ubiquitousness of such contractors is a sign that something both revolutionary and global in scope is happening that can only become more prevalent.

As Stanger recognizes, what is going on is essentially a manifestation of globalization. She notes:

Globalization and our penchant for privatization have transformed power itself, expanding the range of options for individuals to make a difference. When Washington outsources so much of its work in the private sector, the old debate about the size of government is rendered moot. We don’t need big government or small government. We need good government. And good government in the information age will harness all the networks at its disposal to advance the public interest.

Since privatization is intimately connected to globalization, one can’t do away with the former without damaging the latter.

The problem of most commentators, regardless of whether they are supporters or critics of outsourcing and privatization, is outmoded thinking. They are like the old war planners who used to worry about the Soviet Union overrunning Western Europe and not having a clue that the real threat was non-governmental groups like al-Qaeda.

The very definition of power in the 21st century has changed. While outsourcing has its problems, it can also be a source of creative bottom-up initiatives with an undeniable foreign policy impact. With Bono of the rock group U2 fighting AIDS in Africa, Walmart promoting energy efficiency, and Al Gore moving forward the global debate over climate change, foreign policy isn’t just for diplomats anymore.

This post-Cold War collection of actors constitutes a new kind of empire, one that has no ruler or subjects. It is truly a coalition of the willing. While it would not exist without the American contribution, the US does not control it. That makes outsourcing both inviting and unpredictable. It advances its interests through the power of ideals: economic freedom, equality of opportunity and sustainability.

This global empire could, in Stanger’s view, work for the benefit of all. But doing so would have to first acknowledge that the current practice of unenlightened outsourcing creates an enormous accountability vacuum that has enabled gross fiscal irresponsibility, dangerous apathy among the public, and the “inadvertent” militarization of foreign policy. “Inadvertent” likely gives too much the benefit of the doubt to American policymakers, but that is secondary to Stanger’s thesis.

It is a sign of how ideologues have dominated the debate over the role of government in society in the past few decades that her diagnosis of the pros and cons is really quite unsurprising. To argue, as she does, that “outsourcing as presently practiced is scandalous, but turning the clock back and reasserting top-down government control though it is no solution”, something that Ronald Reagan and Al Gore could agree on.

Essentially, Stanger is not just calling for limits on what contractors can do, as do many critics. She is also calling for government to step up to the plate to resume its role as the irreplaceable “chief custodian of the public interest”. Anybody who has even cursorily studied this issue in recent years and read the reports from auditing agencies such as the US Government Accountability Office, the Defense Contracting Audit Agency, the Defense Contracting Management Agency, various agency inspector generals and listened to congressional hearings understands that government has been missing in action.

Stanger correctly notes that it is easy to point fingers. But that risks missing the forest for the trees. She writes:

It is easy to see things gone awry and to scapegoat contractors. But contractors aren’t the problem; the problem is the loss of good government. If the contractors in Iraq seem wildly expensive, it is not because corporate greed has dictated outcomes but because government’s aspirations there have been far too ambitious and its controls far too few. When private security forces overstep moral bounds it is ultimately government’s responsibility for having deployed them in a conflict zone with too little legal recourse if they misbehaved.

None of the above is to say that Stanger thinks outsourcing is without problems. While she recognizes it is here to stay, she is not reluctant to list its shortcomings. In that regard, a section in chapter two detailing the US government’s feeble attempts to keep track of what it is outsourcing and paying for it is revelatory.

Likewise, chapter five, where she demolishes the cost-savings arguments made by advocates of defense privatization, which have been meekly accepted as true without empirical proof for far too long, is worth the price of the book alone.

She also notes numerous examples of contracting run amuck, the difficulties of oversight due to the web of subcontracting (which the government has only recently started tracking) and the way that state secrecy, aided by contractors’ frequent excuse that proprietary business information cannot be released, compounds the problem.

The bottom line for Stanger is that the laissez-faire ideology where government forks money out to the private sector and gets out of the way – so popular among free marketers and recent Republican and Democrat administrations – is not acceptable.

While the private sector is both integrated into and crucial to American foreign policy, it is not entitled to a blank check or a blind eye. Government has a rightful role to play. It can start by not assigning tasks, such as reconstruction, that should belong to other agencies, to the Pentagon. Such actions only further strengthen an already grotesquely militarized US foreign policy. Such a policy plays to American weakness, not American strength, because it is economically unsustainable, alienates allies and denudes the universal values that made America popular in the world to begin with.

One Nation Under Contract: The Outsourcing of American Power and The Future of Foreign Policy by Alison Stanger, Yale University Press. ISBN-10: 0300152655. Price $26.00, 256 pages.

David Isenberg is a researcher at the International Peace Research Institute, Oslo. He is an adjunct scholar with the Cato Institute, a research fellow at the Independent Institute, a US Navy veteran, and the author of the book, Shadow Force: Private Security Contractors in Iraq. The views expressed are his own. His e-mail is [..]
Rating: 5 / 5