What could be, for us, Marxists, progressists involved in the political struggle, the implications that the recent evolutions observed in the defense sector, taken in a broad sense, on our analysis of imperialism, our forms of resistances, and the alternatives for a transition to socialism under the extremely difficult conditions which are those of the Twenty-First Century ? The main question is to understand why, if it is a « public good » even from the point of view of the dominant theory, defence is « privatized », or rather « externalized », to the extend that imperialist war turns out to be partly carried out « by procuration », through a transfer of productions –not only of goods, but also of services, including mercenaries–, from the State to the private sector.

In the dominant theoretical corpus, or the neoclassic mainstream in economics precisely, the technical characteristics of defense make it a public good: obligation and indivisibility of use, indivisibility of supply (because of the existence of increasing returns, leading to monopolistic market structures), no competition in consumption (which is collective), and no exclusion of access by the prices. As prices are null, no private firm will find it profitable to produce such a public good. Theoretically, defense, by nature, cannot be produced and allocated by markets because the mediatization of price mechanisms does not ensure its rationing. Therefore, the neoclassic theory itself admits that defense can be taken in charge by the State, not for political reasons –as a Regalian function–, but for economic ones. Then, in such a framework, only the State is able to ensure the optimality of the so-called « market equilibrium ».

Such are the terms of the academic consensus existing today on this question within the mainstream. This does not mean obviously that there is no problem in the neoclassic literature dealing with defense: there are many serious problems in this literature, at all levels, especially concerning the theoretical and empirical effects of military expenditure on the economy. One of the difficulties to apply the neoclassic theory to defense comes from the presence of « market imperfections », such as problems to access to information (information asymmetries) due to data confidentiality, which complicates a lot the calculation of the optimal spending of the State and that of the contribution to be paid by the agents, but also the dichotomy existing between the externalities of defense (positive for the country itself, negative for its enemies).

In front of these « market failures », underlined by the neoclassic theory itself, the –ultra-liberal– Public Choice current affirms that, even imperfect, the market is always preferable to the State interventions, with its perverse effects: under-optimal prices, inefficient behaviors of public administrations, no appropriability of profits (thus no managerial incentive), abuses of dominant position, bureaucracy... Thus, these authors contest the character of public good of defense –by arguments rather similar to those of the « social capital » theory by Francis Fukuyama, who even contests the public nature of the institutional environment of the private sector. Starting from a radical anti-State position, and in vision where the decision maker is the sole « consumer-taxpayer », these libertarian economists go as far as recommending a privatization of national defense. According to them (for example, David Freidman, Milton Friedman’s son), defense should be subjected to competition, like any other private good, on a new market where security companies would offer goods and services previously provided by the State –the demanding agents having to select them « freely » in function of their needs and of a cost-benefit or quality-price calculus. This analysis, which is very minoritary within the current theoretical debates, and quite provocative, ended up wining in practice.

Why? Of course, because the neoliberal reactivation of the State interventions tends to operate by a marketization of public goods, formalized as privatively appropriable and remunerated categories of capital, and by a anti-public services regulation for an accumulation subjected exclusively to a logic of profit. However, ultraliberalism, which attacks the Regalian functions of the State, is generally reserved to the South –not to the North. Then why? For sure because, since the Reaganomics, the neoliberal wave pressured to privatize more and more defense services (consulting, formation, logistics...) – in general without going until a complete externalisation of defense or a full delegation of this core function. Nevertheless, for a long time, a majority of companies belonging to the militaro-industrial complex are private firms, producing military goods on behalf of the army. As early as at the time of the U.S. aggression against Vietnam, the private sector was indeed integrated into the war effort: Lockheed and General Dynamics for weapon productions, Halliburton and Vinnell for the logistic support, DynCorp for freight transports, Pacific Architects & Engineers for infrastructures…, all that with collusions of interests between heads of the army, congressmen and leaders of armament firms –in order to get contracts of the State agencies.

To go ahead and deeper, let us pass to the political level. In the United States, the end of the conscription and the decision to professionalize the army can be explained by reasons linked to labor division and technical progress in the military sector, but also by a relative loss of political control over the troops after the defeat in Vietnam. However, professionalization rises its own problems, among others those of recruitment and of costs... As a consequence, the State had to externalize some of its activities –including of combat, with mercenaries.

The contemporary history of the private military companies (PMCs) –providing services– could have begun with the creation of WatchGuard in 1967 by former officers of the British SAS; also at the origin of other firms in the 70’s, like Control Risks Group, for military training and consulting. The first U.S. private company to have « sold » a service to a foreign State (to Saudi Arabia concretely) was Vinnell, in 1975. After the first Gulf war, the firm Kellogg, Brown and Root (KBR), until recently subsidiary of Halliburton and at the present time the first contractor of the U.S. army in Iraq (with its contracts for management of bases and training of the troops), obtained –thanks to Richard Cheney, then Secretary for Defense– a contract from the Pentagon (of about US$9 million) in order to organize the integration of the PMCs into the U.S. war scheme. Besides, General Vuono, who led the U.S. army at the time of the first Gulf war, became chairman of a major private firm of this sector, MPRI. From 1994 to 2002, more than US$300 billion of defense contracts, representing a total exceeding 3,000 contracts, were signed with U.S. PMCs, like: Halliburton, Blackwater USA, Vinnell, MPRI, KBR, DynCorp, SAIC, CACI, Control Risks Group, Custer & Battle, ArmorGroup...

In the 90’s, the externalization of defense services under the neoliberal pressure was accelerated by the « marketing » of thousands of officers and soldiers following the reduction of the military personal at the end of the Cold War –and of the Apartheid régime–, giving a strong impulse to private firms. It was the time when florished the South-African firm Executive Outcomes (dissolved in 1998) and the British one Sandline (dismantled in 2004). The sphere of activities of the PMCs widens again with the dismemberment of the Yugoslav federation. MPRI, for example, was very present there, with 7,000 mercenaries, supporting the Croatian army against the Serb forces of Krajina, training the Bosnian army, organizing the Macedonian army –until conflicts of interests with the United States itself, since U.S. veterans employed by MPRI for the UÇK ended up threatening Skopje in 2001.

The « war at terror » after September 11, 2001 gave a new impulse to the PMCs. The U.S. army is their first customer, including for the training of anti-terrorist techniques –teached, in particular, by Blackwater USA in Moyock, the biggest private military training center in the USA, close to Norfolk in Virginia, the greatest naval base in the world, with more than 110,000 sailors and marines. Today, Iraq became the privileged ground of action of the « war market ». Hundreds of firms of this sector carry out together a per annum turnover higher than US$100 billion –more than half coming from Pentagone contracts. The private mercenaries fighting in combat operations would be between 20,000 and 50,000 –that would be the second contingent involved in the conflict, equalizing the total of the troops allied of the United States.

One does not know the exact number of foreigners under private contracts currently present in Iraq for functions previously provided by the army, such as: maintenance of sophisticated weapon systems, training, interrogation, supervision... The Pentagon recognized in Spring 2007 the presence of 130,000 employees of more than 300 PMCs from all nationalities –that is to say as much as the U.S. contingent at the end of 2007. The military authorities justify the assistance of these private firms by their flexibility to do what the armed forces cannot do, by the insufficiency of the soldiers to do everything, by the support of experienced mercenaries, by economic advantages also (lower costs), and by the no-official nature of this armed involvement into the conflict –without speaking about the improvement of the mediatic « image », thanks to the reduction of the number of died during military operations which is made public...

Nevertheless, that implies new problems for imperialism. First of all, outside the army, with the « burs » of the PMCs (tortures in Abu Graib by CACI, assassinations of civilians by Blackwater USA), with scandals of overfacturations by Halliburton or of falsified invitations to tender by KBR, with a « cost plus » for the so-called « consumer-taxpayer », and especially with the inefficiency to gain the war. More than 1,000 mercenaries died in Iraq since the beginning of the war –to be compared to 3,500 U.S. soldiers killed. Furthermore, that also rises problems inside the army, with U.S. regular soldiers delighting by the death of U.S. mercenaries, better paid, without hierarchy, unpunished –to such an extend that the U.S. army is often forced to take again the things in hand, like in 2003, when, under the « supervision » of General Eaton, half of the core of the new Iraqi army trained by Vinnell (for US$50 million) deserted in less than six months.

It is necessary for us to reflect, theoretically, to understand the functionning of the capitalist State today, especially of its repressive apparatuses, whose social and ethnical composition changed and which are also crossed by the class struggle –just like the ideological apparatuses of the State are, but in a another, indeed much more violent manner. Born in 1967, during the Vietnam War, the movement « Resistance Inside The Army » (RITA) had a real impact on the young conscripts in the United States. The relative loss of control by the military leadership over parts of the contingent of soldiers partly explains the end of the conscription and the professionalization of the army. This is a quite global phenomenon, which can be observed –with some differencies from a country to the other– in all the capitalist States, in the North as well as in the South. We need to think deeply about the history of the popular resistances, including inside the armies. However, this reflexion must also concern the fundamental, current role of the armed forces within the revolutionary processes, especially in Latin America and the Caribbean, from Venezuela to Bolivia, for a better defining of the speeches to be addressed to the progressist soldiers and officers in their crucial alliance with the people, in order to consolidate these revolutionary advances on the whole continent –and beyond this continent, for the long transition to world socialism.

Apart from oil –and Iraq has enormous reserves–, what makes these wars « necessary » for the U.S. ruling classes is the hegemonic leadership by the U.S. high finance over the collective imperialism of the triad U.S-Europe-Japan. It is not only Bush, his falcons and oil tycoons, but high finance considered as a class, with its domination system, at a worldwide scale, which can be maintained today only by violence. Neverthelss, the United States will not be able to redynamize by wars capital accumulation in the center of the world system. The destruction of capital caused by these wars is considerable for the countries of the South suffering them, but « insufficient » to impulse a new long-run cycle of capital expansion, in terms of technological impacts –positive only for the militaro-industrial complex– as well as of effects of effective demand –observed only in the short run. The United States does not have even the resources to finance eventual new wars. The military burden (approximately 4% of the GDP) is not absolutely unbearable –it is lower than during the Vietnam war, and much lower than during WWII. But the public deficits and debts are huge, and amplified by the neoliberal management of the capitalist structural crisis. Overendebted, the U.S. economy is at the edge of a major financial collapse. It depends too much on the exterior, grows at low intensity, and is plundered by its own high finance, which submits it to a logic of perpetual wars –at the detriment of all the peoples of the world, but also of the U.S. working classes.

As the State externalizes the logistical support of defense, more and more PMCs pass under the control of high finance. DynCorp was repurchased by Veritas Capital, MPRI by L-3, Vinnell by the financial group Carlyle, then by F Carlucci, former vice-director of the CIA and Secretary for Defense of Ronald Reagan. And when this control includes pension funds, honest U.S. citizens take part, without knowing that, to the capital of private enterprises of mercenaries acting in Iraq…

These firms devote to an aggressive laying off of executives of the Pentagon and the CIA. Examples: the general inspector of the Pentagon, Schmitz, supposed to represent ethics and integrity within the DoD (Department of Defense), resigned to take a position of leadership at Blackwater USA. The vice-director of the operations of the CIA, Richer, has just been recruited as vice-president of the information by Blackwater the USA. But similar evolutions happen in other major PMCs, among them the SAIC, located in Washington D.C.

The Economic and military dimensions of the crisis –profit and war– are narrowly dependent: it is because the U.S. high finance repatriates more and more benefits from the whole world that the U.S. army bombards or threatens to bombard so many peoples of the South. But the world system will not be able to continue to function like this: it will have to change. Thus, we must fight, but by staying conscious that the trajectory of capitalism can become even more destructive.
The next target is Iran –one of the rare States in the South to keep a national « bourgeois » project (by the way, compatible with the capitalist system). We know that the key of the conflict concentrates on the « nuclear problem ». However, the U.S. government refuses the general prohibition of the use of nuclear weapons. Will the « great democracies » never make use of such weapons? Did not « the most perfect » among them, the USA, already use them? Are not « the most civilized » among these « democracies » –including Europe and Japan– responsible for genocides (colonization, slavery, Shoah, imperialist wars...)? The question of the nature of the régime in Iran and of its eventual democratization must be dissociated from the threat of war directed against the Iranian people –which is absolutely unacceptable. Just like the recognition of Saddam Hussein’s crimes (those against our Iraqi communist comrads, among others) will never legitimate the aggression war that imperialism makes suffer to the martyr, heroic, and probably soon victorious Iraqi people.

Following its defeat in Vietnam, the U.S. imperialism turned over against the Latin-American peoples, by imposing neofascist dictatorships on almost the whole continent. Thus, it would be useful to anticipate, right now, that its next targets could be –not only China, but also– the revolutionary advances realized by the people in Latin America and the Caribbean, after the defeat of imperialism –which comes, ineluctably, in Iraq. Consequently, without pessimism, let us be lucid, organized, and above all united in our struggle agaisnt imperialsm and for socialism.