Another great hidden gem of a paper about one of my favorite topics. I also really perked up on the conclusions of the paper. That privateering did not go away because the concept sucked. Nope. It went away, because of competition with government owned Navies who wanted to do it all. It kind of reminds me of the ridiculous fears that popped up when privatized mail and shipping companies came on to the scene.
The post office (government) folks actually had to compete with private industry for the business of the citizenry, and despite the early fears of those folks thinking they will lose their good deal government job, that competition only helped invigorate the innovation and business processes of both groups. And best of all, the PO and private industry are still around and still slinging it out for that business. If you also look at the PO, they are continuing to look more and more like UPS and Fedex all the time.
I also like the lighthouse example listed below as well. I think private naval and military companies can exist along side the militaries and navies they are serving just fine. Hell, we are seeing that right now with the war, with thousands of contractors being used. So to take that one step further with issuing LoM’s to companies, to help even further in the war effort, would not be a bridge too far. It would also provide a pretty nice cost savings for the government, and the military and navies of those governments would now have competition.
That competition would be healthy in my opinion, and with carefully constructed LoM’s and today’s technological advances, it would not be a problem at all to keep tabs on companies issued LoM’s. And like Matt Armstrong mentioned, issuing LoM’s to today’s PMC’s would be a quick fix for keeping them in line. Either abide by the wishes of a congress and their issued contract (LoM), or instantly be turned into a criminal organization for crossing the line. That would be some serious legal control if you know what I mean. It would also cut out inefficient contracting offices and weak laws that fall short of keeping companies under control. Just some thoughts on a different way of doing business.-Matt
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Privateering and the Private Production of Naval Power
Gary M. Anderson and Adam Gifford, Jr.
The early history shows that, contrary to the belief of many economists, a lighthouse service can be provided by private enterprise. The lighthouses were built, operated, financed, and owned by private individuals. … We may conclude that economists should not use the lighthouse as an example of a service which could only be provided by the government. —Ronald Coase (1974)
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Introduction
Privatization and the “contracting-out” of services traditionally provided by means of governmental monopoly continue to attract increasing interest from both politicians and scholars. Many studies have found that private provision of certain goods and services tends to be more efficient than comparable arrangements provided directly by the government.
One of the very few areas relatively untouched by the recent attempts at privatization, or contracting-out, of governmental services is the military. Although some economists have argued that the priva-tization of major elements of the provision of national defense would be both feasible and efficient, in modern times military forces are essentially a pure governmental monopoly. Not only are private military forces illegal, but the military force maintained by the govern-ment is invariably wholly owned and operated by the government. National defense, like lighthouses, frequently serves as a stylized illustration of the need for governmental provision of “public goods” in economics textbooks.
