Privatizing Government II

Yale Open Course <Power and Politics in Today's World>

Lecture 5: The Resurgent Right in the West

Notes

Privatizing gov functions in the US

• Bill Clinton Dec 1994 - “stop making govts do what they are not good at”

• Starts in the 1980s and continues throughout the 1990s (Reagan, Bush I, Clinton, Bush II)

• 1993 National Performance Review - “aggressive outsourcing of govt work” → 426K federal jobs eliminated

• By 2001, more contract workforce than civilian employees in the Pentagon

Privatizing the military

• Private contractors have always participated in wars in the past

• Iraq war - almost the same number of contractors & military troops

• Afghanistan war = contractors > troops

• Private contractors do all functions except for front-line/offensive fighting

  • G4S: 625K employees; routine security, heavily-armed security, etc

  • Erinys: mostly in Africa & Iraq; protect energy assets

  • Asia Security Group: Kabul HQ protecting officials

  • DynCorp: policing missions

  • Academi: notoriously aggressive tactics; incidents of uncontrollable contractors

    • Montreaux document: agreement on good military practices for countries employing private contractors

  • Afghanistan - heavy reliance on local populations for employees

• Host Nation Trucking in Afghanistan

  • US in 2001 in Afghanistan to support Northern Alliance (the losing side) in the civil war

    • But the losing side had no good prospect for governing

      • seen as an American puppet government; no real control over the country

  • How to move around the personnel & supplies in an unsecure regions?

    • Used increasingly more contractors than troops → didn't want a lot of American casualties (political costs)

      • For guarding convoys, the locals know the terrain better but also know how to take advantage of their situation

      • Paid the people (the Taliban) who would’ve attacked the convoys

        • Funding the guerilla movement that the US was fighting

Consequences of increased reliance on PMCs (private military contractors)?

• Assuming efficiency gains, it saves money

• Can fight otherwise unpopular wars → good or bad?

  • Undemocratic; gives incentives to fight more wars

• Republican Theory of the US founders

  • should have standing/professional armies (they encourage wars)? wars only if really necessary

    • if you can’t mobilize citizenry, maybe the war shouldn’t be fought

• Democratic peace theory

  • Democratic countries tend not to fight each other

    • and only fight wars they are going to win

    • difficult to get people to fight without a winning prospect

• If it’s easier to start a war with PMCs and pay the war with debt → democratic peace theory might no longer apply

The US prison industry

• the US a huge outlier: highest incarceration rate; accelerated rate starting in the 1980s especially for non-white males

• 60s, 70s - advances in treatment of psychiatric disorders

  • patients released from mental hospitals

    • Also coincides with govt fiscal crises

    • states saved money by de-institutionalizing mental health patients

      • Many of the released patients ended up in the criminal population

• what drove the increase in incarceration?

  • war on drugs

  • 1980s mandatory sentencing shifting power from judges to prosecutors (3 strikes law)

    • more punitive sentencing

• minorities disproportionally incarcerated

• political implication - felon disenfranchisement laws

  • ex. KY, VA - permanently disenfranchised if had felony conviction

  • Disenfranchisement of the black voting population

• Paradox: violent crime has been falling

• why lock up more people when violent crimes are coming down?

  • Locking up people for non-violent crimes

  • Demography?

    • As the baby boom bulge ages, fewer people to commit crimes

  • Roe vs. Wade?

    • Those likely to commit crime are not being born → controversial hypothesis

  • Education of women?

    • Education/labor force participation of women increase → decrease in violent crime

  • no consensus on the cause

• People are not aware that violent crime is actually decreasing

  • being tough on crime - cheap talk for politicians

• Decline of incarceration

  • due to cost

  • BUT private sector prison imprisonment increasing

Weber’s definition of state: monopoly on the legitimate use of force in a given territory

• Military / prison - contracting out government monopoly

• Creates ‘principle-agent problem’

  • Principle contracts out to the agent, the agent has more information that the principal needs

  • nested principle agent problem

    • solution: increase competition; prison industry low competition, currently huge cost to entry

      • military somewhat more competitive; but govts not going to switch contractors

    • Better alignment of interests of the agents with the state?

      • Difficult to do that; industries have very different incentives

        • Ex. need inmates to run prisons

        • increasing prison lobbying for:

        • lockup quotas

        • stiffer penalties

        • immigration enforcement

        • Ex. better for military industry to have long wars

    • monitoring?

      • difficult to do with no visibility and control over the doings of the contractors/subcontractors

From Soviet Communism to Russian Gangster Capitalism

I recently started watching the Yale Open Course series <Power and Politics in Today’s World> taught by Professor Ian Shapiro at Yale University. It seems like a nicely balanced political economy class, and I have so far been enjoying it. I’ll be posting notes for each lecture with diagrams.

The transition from the USSR to Russia seems to have been a process of disintegration, extraction, and cooption. Beset by the US’s containment policy as well as the series of independence movements of former Soviet countries, the USSR was losing grip over its own dominion and populace, eventually collapsing at the end of 1991. The August Coup of 1991, though unsuccessful on its own, was a pivotal point at which the transfer of powers from the USSR to Russia took place in the form of Mikhail Gorbachev and Boris Yeltsin, respectively.

The disintegration was happening amidst a high level of corruption and dwindling loyalty among the elites. State assets were being extracted by former Soviet bureaucrats and oligarchs, and the haphazard transfer of power left room for these individuals to accrue political and economic power through the transition. Throughout the 1990s, the oligarchs further solidified their wealth and influence by taking advantage of the flailing Russian economy and by financing Yeltsin’s reelection campaign in 1996.

Their influence waned with the election of Vladimir Putin in 2000 and his subsequent tax reforms and the crackdown on the oligarchs. However, Putin also began to form his own coterie of oligarchs, placing them in key positions in the government and business sectors. Russia still relies heavily on oil, partly due to the lobbying of these vested interests, although national revenue and geopolitical capital also contribute to the dominance of oil in the Russian economy.

For a more detailed diagram of the lecture, see below.