the state as a nexus-of-contractors

The revelation that hundreds of articles published in medical research journals were actually written by contractors in the employ of pharmaceutial companies, and fronted by high-status “authors” at fancy universities, seems to be part of a broader movement toward an OEM (“original equipment manufacturer”) format among organizations.  Pet food laced with melamine was sold under over 100 brand names but produced by the same vendor in Ontario, poisoning thousands of pets in the US.  Baxter Health’s blood thinner heparin, manfactured by a Chinese contractor, killed 81 and injured hundreds of others due to toxins in its supply chain (which reaches back to rural pig farmers).  The dream of financial economists, in which the corporation is nothing but a nexus-of-contracts, seems to have come true.

The OEM format has also found traction in the US federal government.  Vigorous interrogation, extraordinary renditions to allies with different cultural traditions around prisoner treatment, you name it — they often turn out to be done by contractors.  Nowadays, you can’t even trust the label on a CIA assassination, as it might turn out to be Blackwater.  Don’t brand names mean anything any more?

The American OEM state in its current version traces back to the Clinton administration.  As part of his “reinventing government” initiative, Clinton sought to emulate some of the best practices of the corporate world to enhance government efficiency.  A principal way this was accomplished was by the use of contractors.  The Federal Activities Inventory Reform Act of 1998 (“FAIR Act”) mandated that every Federal agency and department — including the military — identify any activities they do that could in principle be done by contractors, and put them out for bid each year.  Activities that were “inherently governmental” were supposed to be immune from contracting, but the boundaries around that term proved porous.  (What could be more inherently governmental than assassination programs?)

Federal civilian employment declined every year under Clinton from a high of over 3 million at the start of his term to 2.7 million at the end, and it has stayed at almost precisely this number ever since. At the same time, there has been a burgeoning growth of contractors, with annual spending growing from $200 billion to $400 billion under Bush. This sector is far larger than many of us realize, and contract employees evidently outnumber Federal employees by a big margin. “The biggest federal contractor, Lockheed Martin,… gets more federal money each year than the Departments of Justice or Energy.”  Indeed, the three largest remaining US-based manufacturers are all military contractors (Boeing, Lockheed Martin, and Northrop Grumman).

Organization theorists by and large have not caught up with this model of the OEM state. We’re still accustomed to thinking of states as sovereigns, the source of laws and regulations (although recent work by Joel Baum and Anita McGahan on the growth of neo-mercenary corporations is a great start). Of course the OEM state is not entirely new: Italian merchant states of the Renaissance also contracted out for military and tax services. And many states are in effect run as conglomerate businesses (e.g., Singapore, Dubai). But is there more work out there examining the OEM state? If not, why not? (Can we convince any promising grad students to abandon performativity or actor-network theory for a dissertation on the forms of 21st century states?)