The US has been continuously outsourcing large segments of its defense, security and intelligence work, including direct on-the-ground war fighting, to for-hire private firms and contractors, known as paramilitary contractors or PMCs.
While many PMCs are ex-military, by offering up their services as a soldier for money outside of the military, they have still crossed a new threshold into a land of marketized contracting: they are now mercenaries working as part of firms and corporations.
Successful firms bestow on their employees a measure of pride and loyalty that functions to provide incentives in the social realm that transcend what money can buy. They make their employees into “insiders.”
The problem is that by taking their skills to the market, PMCs are now more “outsider” rather than “insider” in relation to the nation-state of the United States of America and its government.
People who are “inside” the system of an organization often need less monetary incentive because they achieve a higher utility by contributing to something which they feel they own a stake in. Those “inside” of an organization are essentially loyal, as they are part of the organizational family. Their orbits around the nourishing sun of the organization’s shared identity give them a social utility that is not easily replicated by simplistic incentives.
Conversely, to those “outside” of an organization, their allegiance to it is much more dependent on monetary and other incentives. People on the outside of the organization are not close to its proverbial sun and need other rewards to nourish themselves.
So where does the loyalty of a PMC lie at the end of the day?
To the nation that pays him surely! So the US should be able to retain its contractors as long as it has the most capital to spend compared to other groups on Earth. The danger leaps out! A military is the last line of defense of the nation when all other areas are crumbling, but the US government–in a short-sighted desire for efficiency from some and outright corruption from others–is maneuvering itself into a situation where, if the proverbial ship starts to sink, the individuals it currently calls on to fight on its behalf risk being the first to desert.
Through the 80s to today, the extolled virtue of free-market problem-solving has created an increased marketization of most aspects of life. Now war itself is moving to the market, with money playing a direct role in incentivizing combat activities and actual fighters. This could be disastrous for the security of the United States.
History is filled with examples of mercenaries having flexible loyalty, with Machiavelli arguing against the use of mercenaries for this very reason. As he explained: if mercenaries lose in combat they are useless, and if they win they can become dangerous, since a mercenary force that is stronger than the entity that hired it no longer needs that entity’s financial support, it instead has its own power.
Rome fell because it hired foreign soldiers, but the "mercenaries" were not loyal to Rome. In the year 476 mercenaries under Orestes of Rome revolted under Odoacer and then proceeded to dispose of the last western Roman Emperor Romulus Augustus.
Mercenaries will not a military make. Too many of them is a known liability. If the US government intends to buy itself soldiers on the open market at best price, it will find that some day that market will close; perhaps even might buy them right back at gunpoint.
If a lawmaker is advocating for excessive use of PMCs and continued privatization of the military they are undermining the stability of the very institution they are trying to serve. Some specialized troops for hire are part of the world, but too many risks unbalancing the power of the nation.
Identity Economics http://press.princeton.edu/titles/9108.html
The Prince http://www.constitution.org/mac/prince.pdf