Thus spoke Erik Prince in 2007.

Looks like my decision to take a look back at Blackwater was prescient. (Well, I had some inside information.) Today the New York Times reported that people within the Trump administration persuaded Erik Prince to try to sell the Defense Department on expanding the U.S. operation in Afghanistan by using private military contractors.
This proposal begs several questions, not least: would it save any money? But let’s punt on that for a moment. Here I just want to briefly review America’s history with private military companies.
The first clear-cut use of American private contractors to carry out a core state function — perhaps the core state function, the use of violence to defend the people — dates back to the Revolution. The fledgling United States needed to interdict British supplies and defend its commerce with its French and Spanish allies. The problem was that the rebel states had no standing navy, and lacked the time to construct one. Congress solved the problem by issuing “letters of marque” to private merchantmen. Once possessed of a letter of marque, private merchantmen would finance the outfitting of their ships with weaponry and proceed to attack British and Loyalist shipping in return for a bounty per enemy ship destroyed. The Continental Navy never numbered more than 40 vessels — Congress commissioned only 64 ships over the course of the Revolution — whereas the number of privateers peaked around 450. Almost 1,700 private vessels conducted combat operations for the United States in 1776-82.
The U.S. again turned to privateers when it again went to war with Britain in 1812, Congress having refused to appropriate money for a standing navy. In that war, privateers earned approximately $40 million — 5.1 percent of the country’s GDP at the time.
Congress again turned to contractors during the Mexican-American War. When the Army needed to make an amphibious landing at Veracruz in March 1847, it chartered 54 private steamships and 249 other boats. The Army also hired teamsters, laborers, and mechanics for service in Mexico. Civilian personnel, however, refused to serve for longer than six months, demanded exorbitant wages, and many proved to lack the skills they claimed. Reports complained of price gouging. [1] An embarrassed Quartermaster-General suggested that the Army establish a corps of enlisted laborers and proposed that the Navy should operate transports: “[I was] constantly embarrassed by the want of that practical knowledge which nautical men only possess.” [2] Congress did not follow his suggestion, and the Army again employed contractors against the Seminole Indians in Florida during the 1850s. [3]
When the Civil War broke out in 1861, both sides found themselves unprepared. Confederate privateers attacked Northern shipping. The U.S. side, however, broke with the past and did not employ privateers. Rather, Congress drafted 600 civilian vessels into armed service, and recruited 70,000 sailors to man them. Congress did, however, contract with civilians to move military supplies. One entrepreneurial New Yorker purchased a used ship for $12,000 and earned $833,000 from the government — the modern equivalent of $1.2 billion. [4]
The U.S. may not have employed armed contractors at sea during the Civil War, but it did on land. The Army of the Potomac under George McClellan hired Allan Pinkerton’s “National Detective Agency” to gather intelligence in the South and conduct counterintelligence operations in the North. A problem arose, however, when the commander-in-chief of the U.S. Army, Winfield Scott, contracted with Lafayette Baker to provide similar services. In at least two cases, agents of one contractor wound up arresting employees of the other. More seriously, when President Lincoln fired McClellan in 1862, Pinkerton also resigned and took with him all the intelligence that he possessed about Confederate operations. [5] The Army eventually wound up bringing intelligence functions in-house. [6]
After the Civil War, military contracting went into eclipse. [7] The U.S. chartered private ships for use in the Spanish-American War of 1898, but only under strict military control. The federal government allowerd merchant vessels to arm themselves during both World Wars, but the centralized structure of the Merchant Marine bore little resemblance to the private contracting of the 19th century. In the Korean War, the South Korean government provided the U.S. Army with 50,000 civilian laborers to move supplies to the front, but the “Civilian Transport Corps” was never really a private organization, and the U.S. and Korean governments soon reorganized it into the paramilitary Korean Service Corps. [8] During the Vietnam War, the Military Sea Transportation Service hired private vessels to transport materiel to the war zone, but their crews were given Naval ranks and uniforms and came under military discipline while in-theater. [9] The Army employed private contractors to construct bases and ports in Vietnam, but military engineers outnumbered civilian ones 2-to-1. [10]
And that was that until the late 20th century. When the NATO occupied Bosnia and later Kosovo, the Clinton administration was reluctant to make the sort of mass reserve call-ups needed to sustain the occupying troops in the field. The figures are rather muddled and they include all sorts of non-support personnel, but about half of all DOD-funded people in the Balkans were technically civilians employed by somebody other than the U.S. government.
Which brings us to the modern era and another post.
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