Mises Institute: Understanding the “Private” in “Private Security”

We Should Be Clear about What We Mean by “Private Security”

The word “private” is often used to describe (and conflate) things that are quite different. Your barber’s private business is quite distinct from a “private prison” (which I consider to be more accurately referred to as a “contract prison”). The former is funded voluntarily by people looking to beautify their mullets whereas the only customers of the latter are governments financed through taxation. And while it is surely the case that the institutional incentives of the contract prison are different than those of a prison run directly by state employees, this does not mean that contract prisons are part of a free market.
The same reasoning applies to other state-centric activities: a war does not begin to resemble a free market because it is fought by mercenaries rather than enlisted men. Likewise, with private security, the state contracting the provision of security by a firm is meaningfully distinct on many levels from individuals hiring that same firm to protect their neighborhood, including in terms of legal authority, liability, and accountability.
As Bruce Benson notes in To Serve and Protect, “The term privatization is often used as a synonym for contracting out with a private firm for the production of some good or service that was previously exclusively produced by a public-sector agency or bureaucracy. But contracting out is, at most, only partial or incomplete privatization,” because decision-making remains in the political arena, under the influence of special interests and politicians rather than private citizens acting as individual buyers.
The political economy of different institutional frameworks in which security can be provided contains important distinctions that can be lost when calling anything that isn’t directly funded and provided by the state “private.”

The Real Problem Is Not Taking Responsibility for Our Own Security

It is not economically efficient, nor wise, to contract out all of one’s security. This should be an obvious point. Even billionaires lock their own doors rather than hire someone else to do it. The extent of the division of labor in terms of security provision is limited. This can be due to a number of reasons such as principal-agent problems and counterparty risk. As such, the option to put someone else fully in charge of our own security was never on the table. If we are going to ensure the safety of ourselves, our families, and our neighborhoods, we have to take responsibility. This is what it seems that Morgan is arguing for:

We must form militias again…. Militia is a culture more than a chain of command. The whole point of a militia is to instantiate—to borrow the title of James C. Scott’s 2009 study of the Zomia highlanders in Southeast Asia—the “art of not being governed.” Don’t talk to anyone from the government, keep your powder dry, and if things get hairy, then, well, you know what to do.

That is, the idea is less about a paramilitary structure and more about, in Ron Paul’s words, an attitude of liberty and self-reliance. In light of this, I find it misleading to emphasize “private security” as the object of insufficiency rather than reliance on third parties as such. The state corrupts everything it touches, including militias, as Dr. Morgan acknowledges. We are in a disadvantageous position if our safety plan relies on the benevolence of others, especially the state.
Ultimately, we are responsible for ensuring our own security, and our incentives are aligned with those of third parties who may be our neighbors or others with whom we can contract to assist us. In this regard, security is no different than many other desirable things. In preparing for an economic downturn, the advice of an advocate of liberty is generally not “you can depend on the welfare state’s safety net,” nor is it “hope that voluntary charity will take care of you.” Similarly, our security is not something we want to wait for someone else to provide us.