Stop Blaming Blackwater on the Free Market – No Really

Of all the various talking points espoused by anyone critical of private protection services in place of government police, none are nearly as ubiquitous as the idea that the “private” defense company Blackwater (later “Xe” and now “Academi”) is somehow an example of how the market would handle protection in practice. But any question about whether it is the private or public sector’s fault that the firm even exists can be answered synonymously with the following question: Who is their biggest customer?


In case you have been isolated from current events over the past several years, Blackwater gained infamy through several incidents that involved the death of employees, or Iraqi citizens. The Former CEO (Erik Prince) had tried to downplay much of this by noting that these are just a few missions out of 16,500 or so that they took part in.


Whether or not this is actually the case is does not change the fact that this company still  fought a government’s war of aggression that had no real justification to begin with.  Also given the fact that the task Blackwater was given was to escort persons or equipment rather than directly pursue enemy combatants (which is what the military as a whole does), this incident rate could have been much higher if the company was tasked with the same kind of missions that the army or marines carried out. As a whole, it is nearly impossible to tell what the actual casualty rate was. But there are other criticisms I would have against the firm that go beyond the question of whether or not they were as reckless as our ordinary military (as if there actually was a clear distinction).


Which brings me back to the objection that they are a good example of the free market in action. Naomi Klein and other progressive critics tout Blackwater as exhibit “A” in their war against free markets. There is just one problem with this appeal: Blackwater as we know it would not have existed in the absence of government influence and support.



Let us look at the reasons Blackwater is the cause of the State and not the market:


1. The family fortune Erik Prince relied on to buy the land that later became Blackwater Headquarters was the result of a government-issued patent on lit sun visors. Without this government-granted monopoly, Prince would have lacked the resources to even start Blackwater in the first place. (1)


2. Erik Prince began his interest in military affairs by becoming a Navy SEAL. With this job title gone, as well as the pro-State nationalism that fuels it, it is highly unlikely Prince would have ever had an interest in starting what was essentially a target practice firm that evolved into a defense contractor. (2)


3. The original CIA contract to train the first batch of Blackwater employees was what first turned Prince’s training facility (which otherwise would have gone out of business) into the private military company it later became. This contract came about because an associate of Prince actually knew people in the CIA – an example of cronyism in action and not free market demand. (3)


4. Let us not forget the actual justification for this CIA contract: The war on terror had been launched, and the very event that helped spur that into action (the 9/11 WTC attacks) was the direct result of an interventionist foreign policy that did not make us safer. To get specific, consider why Osama Bin Laden was so upset in the first place:



5. The very conflict Blackwater gained the most notoriety for was a case of a government declaring war against another government. In the end, Blackwater/Xe/Academi exists because of actions by the government. Thus, anything Blackwater did wrong cannot be blamed on a capitalism because free market capitalism never created the firm. (4)


With all this in mind, I was particularly disgusted when Erik Prince claimed that he viewed Blackwater as the “FedEx” of the military. This analogy is wrong on so many levels; for one, FedEx actually acquires it’s wealth primarily by responding to consumer demand and not government mandates. Fedex actually generates value for paying customers by delivering goods – not by participating in the legalized widescale destruction of both resources and people.


If you are still convinced that Blackwater would still exist in the absence of all these government-granted privileges – namely providing the demand for such a firm – then you have placed yourself on some pretty shaky ground. Unlike the private protection services I and other Voluntaryists would advocate, Blackwater did not have to worry about not having a demand for it’s “services” let alone a limited budget.


Despite the government factors listed above that led to Blackwater even existing, the bigger hypocrisy in using Blackwater as an argument against free market protection services is that any atrocities they committed do not come close to that of the US military as a whole. If the abuses committed by Blackwater count against the private sector – which they do not for reasons highlighted above – then abuses committed by all branches of the military as well as the mismanagement of the Executive Branch of our government should be held to the same standard.



1. See page 10 of “Master of War: Blackwater USA’s Erik Prince and the Business of War” for details.

2. Master of War is also a great reference on this, see also pages 290-291 in “Licensed to Kill: Hired Guns in the War on Terror”

3. See 36-41 of “Licensed to Kill”

4. This one is pretty self-explanatory – Blackwater’s primary roles have been in Iraq. They have also been in Afghanistan but the same logic applies: it was the government that hired them.


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