Tyler Cowen responds to a comment:
Should we use mercenaries at all?, by Tyler Cowen: Over at Mark Thoma's, Bernard Yomtov asks a very good question:
Why should there be mercenaries at all, given the existence of a large and well-trained Army? The mercenaries are former soldiers. Their functions are military and could be carried out by regular soldiers. The only reason I can see for using them is precisely to have people doing military jobs who are outside the normal chain of command, and not subject to normal laws, rules, and regulations governing the conduct of soldiers. In other words, it is to have people who do not work for government in the way that they should.
Most private contractors today do not serve in the function of soldiers but rather they deliver, ensure, and guard supplies. This should be evaluated on a case-by-case basis, but often the private sector does a better job and without major legal problems.
Security guards, however, are often "mercenaries." A general or top Iraqi official for instance might be guarded by Blackwater employees. The critics have not shown that Blackwater employees misbehave at a higher rate than do U.S. soldiers, so the comparative case against Blackwater -- as opposed to the more general case against the war -- is mostly shrill rhetoric. It is possible to pay Blackwater employees bonuses for good performance rather than just give medals, plus they are on a higher pay scale in the first place. Nonetheless my judgment call is that issues of perception and accountability are important enough in contemporary Iraq that we should be using contractors less in these capacities (as the column indicated), but the temptation to use them is based on more than just sheer political abuse.
Contractors lower the cost of good operations, contractors lower the operational (but not social) cost of bad operations, contractors magnify the costs of mistaken Executive preferences, and contractors can raise new problems of monitoring. If you don't think the first item on this list is at work, there is good reason to cut back on contractors in Iraq.
But if you view the scope and use of contractors as a more general decision, rather than something which can be fine-tuned for each war, it is no longer such a simple choice.
I do not believe contractors should be used as combatants. Supply and support missions are another matter, and if by chance private contractors come under unexpected attack they should defend themselves, but they should not be put into such situations intentionally. Killing, if it has to be done at all, should not be done by contract, government or otherwise. Death is not just another good to be traded in the marketplace and I refuse to treat it that way even if, somehow, we do manage to save a few bucks along the way (and the economics can cut both ways, i.e., there are arguments about externalities that undercut the argument for contractors, e.g. who paid to train the people that Blackwater now uses and how much of the saving comes from taxpayers footing the bill for the training, but that just scratches the surface of externalities such as contractors not fully internalizing the cost of killing civilians or harming Iraqi property).
If I thought that using mercenaries would save lives overall, including the lives of innocent Iraqi bystanders, then I would consider the option even if it costs more, not less - as it does. These are lives we are talking about, not widgets produced by xyz. If pay for soldiers is the problem, if we get better service from Blackwater because they are paid more, then fix it - we're paying the Blackwater employees with tax dollars already and I have no problem at all with paying people willing to enter into combat as U.S. soldiers very, very well for that risk. But it's hard for me to believe that money is the motivating factor in combat when one's life is, very literally, on the line.
For me, it's akin to executions. If we have to have them (and we don't, and shouldn't), it should be the government who does the killing. Period. We might save money by contracting the executions out to the private sector, and probably would, but is that how you want it to be done? If not, how is war different? Again, for me, killing should never be part of an economic transaction between government and the private sector. If we must defend ourselves, if killing must be done, it should not be carried out as a for profit activity. I understand and support the use of contractors in support roles - providing for the needs of people in combat - but war zones are not a place where economic incentives much matter. The institutions that support markets are completely absent for one thing, staying alive trumps all, and the discipline of the military, not the discipline of the market, is what provides incentives to curtail behavior such as shooting anything that moves in order to stay alive. Markets have their places, but war zones are not among them.