The Shadow Government

In an era of rampant federal contracting, where does the state end and the private sector begin? Political scientist Allison Stanger has raised a red flag.

Allison Stanger rarely jets to Washington without an agenda. On a warm evening not long ago, the agenda was sushi. Seated at Zentan’s dimly lit back table, a glass of the house red firmly in hand, she was struggling to make up her mind.

Good Asian fusion is in short supply around Middlebury, so every trip to the city is a chance to try a new rice house. This one, a stone’s throw from the White House, promised not to disappoint, even if ordering was agony. After 45 minutes, an otherwise patient waiter selected most of the dishes. But when the 19-ingredient Singapore Slaw arrived 15 inches tall—its architecture supported by fried noodle scaffolding—Stanger was pleased.

Just shy of 50, she retains the qualities of a young Hill staffer. That morning, she’d prepared and delivered a lecture on the interplay of globalization and terrorism for her American foreign-policy course, and then run three discussion sections. On her way to the airport, as is her habit, she detoured through Burlington for a manicure—“When you leave Vermont, you have to clean the mud off your shoes and fix your nails”—only to find the salon closed. Within an hour of landing she had checked in to her hotel, changed, and dashed to the restaurant. The next morning, she would deliver a closed-door talk to a prominent security think-tank before catching a taxi to the Department of State, where she’s an expert consultant to Secretary of State Hillary Clinton’s four-year policy review. By the following day, she’d be gone—on to a different city to promote her new book.

Last fall, Stanger, chair of the political science department and director of the Rohatyn Center for International Affairs, published One Nation Under Contract: The Outsourcing of American Power and the Future of Foreign Policy (Yale University Press), and the trim, provocative book sent tremors through Washington’s wonkier circles. In October, at the behest of Secretary Clinton, Stanger spent a day in exhaustive conversation with State Department officials, eventually winding up in Clinton’s office. And in November, Thomas Friedman, who covers foreign affairs for the New York Times, used her work as the framework for a column on outsourcing.

One Nation Under Contract makes a concise argument: Because the United States government now outsources many of its core functions, it has become a shell of its former self. Key agencies have been eviscerated into little more than clearinghouses for lucrative contracts and grants awarded to private sector firms and non-profits. By 2007, Stanger reports, “the federal government was spending more than 40 cents of every discretionary dollar on contracts with private companies”—meaning that the average federal employee now “oversees” more than $1.5 million in contracts, making robust accountability impracticable. As a result, America lacks a coherent foreign policy, not to mention oversight of its tax dollars and a clear delineation of what roles the state—and only the state—should fill.

“There’s just no ‘there’ there,” she says. “Government is wholly dependent on the private sector to conduct its daily business and pursue its policies.”

In essence, Stanger asserts, we need a new paradigm, one in which the government is able to intelligently unlock the efficiency and dynamism of the private sector through public-private partnerships that “secure the homeland” and assist in international development. Oh—and all the while hold for-profit contractors accountable to the “common good.”

The conventional wisdom on contractors tends to be alarmist. Stanger’s book is less a battle cry than a call to action. While she focuses heavily on the failings of privatization thus far, her consideration of the problem is infused with a can-do American spirit. Had she not studied foreign policy for more than two decades, one would be tempted to call it bright-eyed.

Stanger is adamant that although contracting can be a potential liability, it can also be a powerful asset. “With its emphasis on individual responsibility, privatization is an expression of American values,” she writes. But, she warns, “unenlightened outsourcing—our present standard practice—creates an enormous accountability vacuum that has enabled three dangerous developments: gross fiscal irresponsibility, dangerous apathy among the public at large, and the inadvertent militarization of American foreign policy.”

Consider Lockheed Martin. In 2009, the firm did $45.2 billion in net sales—85 percent of which were to the federal government in the form of contracts. “Lockheed Martin,” Stanger writes, “sorts your mail, tallies up your taxes, cuts social security checks, counts people for the U.S. census, runs space flights, and monitors air traffic.” Annually, it receives more money from the government than either the Departments of Justice or Energy. And yet, even when providing public goods, Lockheed Martin is a publicly traded company, responsible first and foremost to its shareholders. Its corporate tagline reads, “We never forget who we’re working for”—but in the case of government contracting, it’s not clear just who the “who” is.

Worried that we were witnessing the rise of a private sector “shadow government” without understanding its implications, Stanger set about mining online dumping grounds of federal data, searching for statistical evidence. When she found it, she wrote about it. Now, with one foot in the Green Mountains and the other firmly inside the Beltway, she’s trying to bring her paradigm shift to the marbled halls of the Pentagon and the Department of State.

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