Cost-of-Living Crisis, Contract Killers, and Cobalt Kings: The Global Architecture of Insecurity

PHOTO: Artisanal miners in the Democratic Republic of Congo working with little to no health and safety measures while searching for cobalt, The International Institute for Environment and Development on Wikimedia Commons

It is only human to feel anxious, even afraid of what the future might bring – but to dread the future. To fear the present. To be overwhelmed by a feeling of helplessness – this is far from normal. 

Too poor to afford a house, not enough space in the market to get a job; governments hiring modern-day mercenaries, committing unspeakable acts without any form of punishment; and, in our pockets, goods, made from the suffering of the bruised, bloodied, and broken.

We are living through an insecurity crisis, a global crisis that few are safe from. While there are many factors that have helped sculpt this issue, the hand of exploitation has been a principal architect of this state we find ourselves in.

The Emergence of The Welfare State

For the Western world, this story starts after World War II. Post-war Europe was economically ruined and socially destabilised. In this new world, Western governments sought a way to both stabilise their economies and regain popular support. The West found their solution in the welfare state, a form of governance that tried to ensure equality of opportunity amongst its citizens.

In practice, welfare states would ensure each citizen would have a guaranteed safety net through large amounts of social spending to fund public housing, health, and education. Resources for Europe’s spending came from – and continues to come from – the exploitation of its colonies, building a strong state apparatus through pillage. This plunged much of the post-colonial world into poverty.

This system was guaranteed through the state intervening in its economy, protecting its citizens from the inherent unfairness of the market. Welfare states, and the strong unions they enabled, would also ensure a certain degree of job and income security.

In exchange for these benefits, people would pay a portion of their earnings in a progressive tax system – the larger the income, the larger the proportion of taxes people would pay.

This arrangement, whereby governments expended substantial  amounts of money on its citizens in exchange for taxation, would characterise the social contract of the time.

What is The Social Contract

But what is a social contract? The social contract is the idea that a government and its citizens have a certain set of duties towards one another, and in exchange for keeping these duties, the government and its citizens will receive certain benefits. Taxes, the legal system, and public services are all examples of the social contract at work.

A major assumption of social contract theorists is that the social contract prevents insecurity, anarchy, and violence by ensuring that citizens are protected by, and from, the state.

If a country’s social contract were to break down, or be rewritten, the security of its people could be put in danger. 

Neoliberalism and The Rewriting of The Social Contract

Eventually, the age of economic prosperity was ended by a variety of factors such as the mounting costs of the United States war on Vietnam and the OPEC Oil Crisis in the 1970s. In this climate of economic uncertainty, a new ideology offered a solution: neoliberalism.

In a nutshell, neoliberalism is the belief that continual economic growth through a free market is the best way to achieve human prosperity, and that less regulations and state intervention will allow the ‘invisible hand of the market’ to maximise growth.

Unlike the welfare state intervening for the welfare of its citizens, the new neoliberal state intervenes to promote private interests and sustain the financial economy for the benefit of the free market. This represented a shift away from the old social contract.

The neoliberal social contract would reduce its commitments to its citizens by providing less social, economic, and job protections, and in return the citizen would reduce its commitments to the state, primarily by paying less tax. Once the neoliberals came to power in countries like Chile, the UK, and US, what followed was the reduction of social spending, privatisation of government entities, the weakening of labour protections, and the deregulation of financial markets.

In this new state of affairs, citizens must enter into a host of new private contractual arrangements either by force or by choice, to replace the social protections the government once provided. In place of publicly funded social programs, people would instead enter private contractual arrangements for pensions (replaced by superannuation), healthcare, and job/income security.

However, the supposed benefits of neoliberalism remain elusive. In the Global North, economies are fraught with growing – and extreme – inequality. By way of example, in the UK, it has been found that reductions in government spending are directly linked to greater indebtedness for low-income households, as people are required to take loans in the absence of a strong government safety net.

Australian academics Dick Bryan and Mike Rafferty have argued that the new social contract is better expressed as a “risk-shift”, placing the financial and economic duties that were traditionally managed by the state and corporations onto the citizen, instead of just removing these duties altogether.

In some ways, neoliberalism did unto the West what the West had done unto its colonies – the pillage just became domestic, the state now plunders its public.

So how is this affecting us today?

The GFC and the Cost-of-Living Crisis

As people settled into the increasingly financialised world of the 21st century, an international wave of economic uncertainty would soon arrive – breeding even more insecurity. In 2007, one of the worst financial crises in history hit the globe, starting with the US Housing Market Crash, which quickly precipitated into the Global Financial Crisis (GFC). A principal driver of the crisis was the deregulation of the finance sector brought about by neoliberal policies. 

To tackle this crisis, governments in the Global North would bail-out failing financial institutions to support the free market, using public funds on private interests – yet another example of the rewritten social contract. 

In the long term, the result of these bailouts caused inequality to increase; wealthy households and private enterprise gained the most, at the expense of poorer families.

These small, capital-focused governments did not serve to protect its citizens, but sacrificed them for the benefit of private interest.

PHOTO: Occupy Wall Street demonstrators protesting against U.S. bank bailouts, Mike Fleshman on Wikimedia Commons

In response to the GFC, companies cut staff and reduced salaries to save costs – but the public still had to bear the risk and pay their bills, job or jobless. Recent news of Atlassian, a major Australian-American software company, replacing 1,600 workers with artificial intelligence, makes it clear this trend hasn’t stopped.

As traditional forms of employment no longer provide adequate income, individuals are increasingly relying on ‘side gigs’. The GFC, amongst other factors like the rise of digital platforms and shifting consumer preferences, laid the foundation for what would later be called the gig economy, a term used to describe precarious, short term work. 

This shift towards gig work is part of a larger trend towards increasingly unstable employment, creating far more financial distress due to the uncertain nature of gig income. A long term implication of this is that people’s mental and physical wellbeing is actively getting worse; gig workers especially are faced with far greater risk to their wellbeing.

The Invisible Finger on The Trigger

Not only did the new social contract disturb the public sector, but it also fundamentally altered a long-standing principle of the modern state: the prohibition of private armed forces.

Social contract theorists have long claimed that the only entity that should, legitimately, be allowed to use violence is the state. Irrespective of the truth behind these arguments, the main reasoning is either:

1. If the state monopolises violence, then citizens can be compelled to not attack one another; or
2. Since the state is an expression of the will of the people, it is the people’s will that can regulate the use of violence and make sure it is used in the public interest.

The new social contract violates both principles – allowing insecurity to breed domestically and internationally.

Privately Funded War Crimes

In 2007, Constellis (formerly Blackwater Security Consulting) murdered 14 unarmed civilians in an event later called the Nisour Square massacre. Did the American people want this, was it in their public interest? Our issues start when we consider that Constellis is a private military contractor (PMC), not an official part of the US military – so whose interest matters?

War has become an increasingly privatised affair. There is no better illustration of the shift towards PMCs than a comparison between the First and Second Iraq War; in the First Iraq War, there was a ratio of 100:1 uniformed soldiers to PMCs, whilst by the Second Iraq War, there was 10:1 – a tenfold increase.

PMCs have capitalised on the fact they are considerably cheaper than a standing army, filling in the space between security demands and budgetary restraints. 

There are many advantages that states gain by privatising their militaries: lower expenses, hiding the costs of war, and plausible deniability. Governments have outsourced their military affairs to ensure greater cost efficiency. PMCs are not officially considered part of the military, so they aren’t part of official military casualty statistics, hiding the true cost of conflicts to its citizens and giving governments a way to deny atrocities committed by its contractors.

PHOTO: Aftermath of a vehicle-born IED during Iraq War 2007-2008, Member of the 187th Infantry Regiment on Wikimedia Commons

PMCs are not held to the same legal standards as state-employed soldiers. PMCs have been involved in torture, sex-trafficking, and numerous civilian massacres. Accountability mechanisms remain inconsistent, misconduct doesn’t always result in criminal prosecution,  sometimes the only ‘punishment’ is a contract termination, ridding victim-survivors of an opportunity for real justice.

By privatising the military apparatus, governments are allowing conflict to become a market – violence is profitable. 

So to answer the question we started with, the interest of the American people simply wasn’t part of the equation when Constellis murdered those 14 unarmed civilians. The ability to wield the weapons of war has left the public domain – market morality can now dictate who lives and who dies.

PHOTO: Report detailing those killed in the Nisour Square Massacre with details of the murderers. Dotted lines indicate relationship, italicised name indicates if victim was a child, Google Sheets spreadsheet created by Alejandro José Mariona using U.S. Department of Justice archives

Privatised ‘Police’ Brutality

Violations of human dignity aren’t just a foreign affair either, the frail safeguards around violence extend domestically too.

The police, being an extension of the state, have traditionally held a monopoly as the sole legitimate practitioner of violence – but now private security infringes on this idea.

For example, in Australia, there has been a shift away from police towards private security forces. The main justification for these changes: cutting costs and providing cheaper services to be more economical. Your personal insecurity now has a market price. 

Cost saving measures have come at a different price however; private security forces are far less regulated, often poorer trained, and much more violent than law enforcement. 

The frameworks outlined by the social contract that were meant to protect its citizens from the state are increasingly belittled. 

Exploitation in The Global South

As we see neoliberalism shrivel institutions that provided security in the West, we see a similar – albeit different – situation in the Global South. 

As the West built its welfare state, its colonial occupations would be stripped of their wealth, leaving much of the post-colonial nations underdeveloped with weak government institutions; however, colonialism didn’t end once the West retreated.

Unlike their Western counterparts, much of the Global South was unable to utilise its people and resources to finance extensive welfare programs. Development in the Global South was foreign-owned, and generally extractive, taking the wealth from the state and placing it in the hands of corporations before it ever reached the pockets of the people.

The Global South couldn’t rely on foreign aid to support their development either. International bodies like the World Bank (WB) and International Monetary Fund (IMF) would plunge these states into debt. If a country was to accept aid, they would be forced to deregulate their markets, privatise state-owned assets, and reduce social spending.

The result of this continual exploitation is that much of the Global South hasn’t been able to establish a secure social contract for its citizens.

PHOTO: Specialized Inspection Group conducting an operation to combat illegal mining in the Kayapó Indigenous Territory, Felipe Werneck on Wikimedia Commons

With weak institutions and underdeveloped public services, people are compelled to either leave their country in the pursuit of better opportunities, or take up work in unsafe conditions so they can get the financial means to provide for themselves and their families. 

One form of risk-prone work, artisanal mining, has an approximately 315 million strong global workforce involved in risky, unregulated and sometimes fatal working conditions – this type of work is concentrated in the Global South. If you’re reading this on a laptop or phone, there’s a good chance it has the blood, sweat, and tears of an artisanal worker embedded in it.

Unlike the West that sold off workers rights, lowered public spending, and induced insecurity on its citizens, the Global South never had the chance to establish these institutions. As foreign industries continue to exploit the South, contributing to human rights abuses and continent-scale health crises, they’re not stopped or effectively challenged.

What Is to Be Done

In the shadow of private interests, humanity wilts away under our collective insecurity. This is a global phenomenon. So, what is to be done? 

Should we strive towards the archaic social contract of a bygone era – one built off colonial exploitation? Do we resign ourselves to the privatised state and its neoliberal rationale – insecurity for the many, privilege for the few? Or should we write a new contract, a contract where all can be equal?

The world has entered a new era of instability: a declining American empire, the looming threat of an oil crisis, and the acceptance that the rules-based international order has come to an end. Will we repeat the mistakes of the 70s and enter into a contract whose terms we didn’t know, and whose conditions we didn’t ask for, or will we forge a better path…

…only time will tell.