Few industries profit from war as directly as private military companies (PMCs). Privately employed security contractors provide security services in conflict regions – serving alongside national militaries, but answerable only to their employers.
The United Nations calls them mercenaries, and in 2001, outlawed their use with the ‘International Convention against the Recruitment, Use, Financing and Training of Mercenaries treaty’. There was one problem though; none of the world’s major powers ratified this treaty – China, France, India, Japan, Russia, the United Kingdom and the United States all abstained from the treaty.
The reason is that there are strategic and commercial interests at play. The United States has played a key role in ‘outsourcing‘ warfare in Iraq and Afghanistan.
For 16 years, the United States has been bogged down in the ‘Graveyard of Empires’ that is Afghanistan. The cost of war has been staggering for Washington – $1 trillion and over 2,400 American lives. But over half these casualties have been from PMCs. In the latter part of the Obama administration, PMCs in Iraq and Afghanistan outnumbered the U.S. Army three to one.
The American soldier in the Middle East is increasingly a corporate employee. But PMCs so far have been limited to playing defensive security roles; participating in offensive operations would still constitute a war crime under the Geneva Convention. The ambition of the private military sector was made apparent in a recent interview televised on Fox News.
Erik Prince is the founder of Blackwater (a prominent security firm, now named Academi) and brother of the US Secretary of Education Betsy Davos. Speaking to Tucker Carlson, he said:
We’ve fought for the last 15 years with the 1st Infantry Division model… Now we should fight with an East India Company model, and do it much cheaper.
When Carlson asked him if he envisaged an ‘American South Asian Company’, Prince agreed and added:
If you look back in history, the way the English operated India for 250 years, they had an army that was largely run by companies — and no English soldiers. So cheap, very low cost.
If there is a single precedent to the scale of power that an unhindered private military can enjoy, the East India Company (EIC) would be it. In 1600, the Company was given the Royal Charter; which included the right to collect taxes and “wage war” where necessary.
In 1765, nearly 300 years of colonial rule was set in place in South Asia when the Mughal emperor Shah Alam signed a treaty with Robert Clive, granting the East India Company full control over Bengal’s revenue collection. It was an act of involuntary privatisation, according to William Dalrymple. Clive walked away from these deals with over £234,000 in his pocket, making him the richest self-made man in Europe.
A multinational corporation with a private army of a quarter of a million soldiers, governing the tax revenues (read: looting) of one of the richest provinces in India – and controlled by 35 permanent employees from a boardroom in London. The EIC was the most powerful corporation in history.
But was it really a good idea?
The dark side of private empires
Initially set up as a joint stock company that could maintain a trade monopoly in the East Indies, the EIC gradually annexed its way into empirehood. Its armies, comprised of the Presidencies of Bengal, Bombay and Madras, was the deadliest in India.
Taxation, backed by this tremendous power, was a particularly brutal tool. The great famine of Bengal, which killed up to ten million people in 1770-71, was under the EIC’s watch. Not only did they do little to alleviate the suffering of millions, but the company even raised their taxes during this period. The price of rice had shot up so high that labourers refused to work on the petty wages offered to them, in the building up of Calcutta as a seat of Empire. The EIC’s response was to make them bonded labourers – with no way out of either famine or destitution.
Even as Bengal suffered for want of food, the Company exported grain from the province. The famine was just one of four famines that took place under Company watch – the Bengal Famine of 1771, the Chalisa Famine of 1783-84, the Doji Bara Famine of 1791-92 and the Agra Famine of 1837-38. Tens of millions died cumulatively as a result of these famines.
If this is the model that Erik Prince would like to replicate in Afghanistan, then John Keay, the historian, is right when he wrote that Prince had little idea about the EIC. Unless American intention is to outright colonize Afghanistan (which the EIC tried and dramatically failed to do in 1842). Raising the spectre of a corporate takeover of Afghanistan’s security will only trigger traumatic memories of history.
For one, the EIC was not necessarily profitable to the Empire. In the wake of the famine of 1770, only years after gaining millions from the deal with Shah Alam, the company turned to the crown for a bailout in order to escape bankruptcy. The result was the Tea Act of 1773, which gave the Company a monopoly over the import of tea into the colonies.
The Americans disliked being told what to do with their tea and chucked it into the sea. The Boston Tea Party protest sowed the seeds for the American Revolutionary War – which ousted Britain from what later became the United States of America.
Needless to say, the crown was no longer keen on bailing out its corporates with imposed monopolies. In 1813 and 1833, its monopolies in India and China were removed respectively. The Revolt of 1857 was followed by the Government of India Act of 1858, which replaced the Company with the Crown for good.
This leads to the question, why would the United States try to follow in Britains footsteps in South Asia?
Prince gave the answer in his interview, pointing out the trillion dollars worth of mineral reserves buried beneath Afghanistan – money that could pay for the security personnel that are needed to make this extraction possible in the first place.
Shifting the onus of the American mission in Afghanistan from defeating the Taliban to extracting profit would align well with President Donald Trump’s own vision of Iraq. The President had earlier stated that “we should have taken the oil” and “maybe we’ll get another chance.” Altogether, Trump feels that the United States is “not winning” in Afghanistan.
At present, Trump is considering a proposal to deploy 5,500 private contractors in Afghanistan – who would advise the country’s existing army. This, accompanied by a 90-plane private air force – and all at the claimed cost of $10 billion a year (according to Prince). Prince has even proposed setting up an American Viceroy to lead coalition efforts in Afghanistan.
Is history poised to repeat itself in South Asia? Only time will tell.
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