The history of American business
» Private security industry

Published: 6-03-2011, 09:43

Private security industry

Definition: Enterprises providing policing and protection services to businesses, individuals, and government entities, including the armed forces
Significance: Private security agencies began in the United States during the mid-nineteenth century alongside the public police force, and the industry has grown to be worth around $150 billion.
Private security providers include security guards at banks and retail stores, armed couriers, in-house security, private investigators, and even private military organizations. Although diverse, these providers have certain general features in common. The personnel (full-time or part-time employees or selfemployed) have primarily a security role. They are private, that is, nongovernmental, and act primarily as agents representing the economic interests of their employers, who may be individuals, corporations, and even nation-states. For example, a shopping mall may hire security guards to provide security for its merchants and customers.

Accountability

Private security personnel are not to be confused with the public police or national armed forces, since they are typically accountable only to theiremployers and not to the public. Their actions are not necessarily open to public scrutiny and justice. From a public policy viewpoint, this is often problematic. For example, security personnel from BlackwaterWorldwide were implicated in the killing of seventeen civilians in Iraq in 2007. The resulting U.S. military investigation described this as a criminal event. Some lawsuits were pending against the corporation as of September, 2008, but it was unclear whether the suspects should be prosecuted under civilian or military law.
The central purpose of private security agents typically is to protect the assets of their employers or to advance the employers’ economic interests. This may include safeguarding merchandise, equipment, employees, intellectual property, and proprietary information.
Commenting on major growth in the industry, experts have continually cited a public perception of increased crime and police ineffectiveness. Public policing efforts are mostly reactive, and such efforts are directed mainly at crimes perceived to be threatening to the civil order, such as kidnapping, drug trafficking, and murder. Often, the public police respond only after a crime has been committed, and the commission of the crime may already have resulted in economic loss. Consequently, it is economically prudent that private, proactive security and policing measures be taken that are directed at preventing such losses before they occur. By means of electronic surveillance, drug testing, and physical deterrence, companies hope to protect themselves more effectively than the police can protect them.

History

It is quite likely that a public security industry is as old as human society. Military organizations and hired bodyguards have existed since ancient times. A colorful example of private security in the United States is the famous Pinkerton National Detective Agency, created by Allan Pinkerton during the midnineteenth century. It and other agencies of its kind were formed to fill the vacuum created by incipient public police forces in major cities. These were often tiny and corrupt. Pinkerton agents were employed as spies in the U.S. Civil War in the service of the Union, and they protected President Abraham Lincoln. After the war, they served industrialists in the numerous conflicts between corporate and labor interests during the emergence of the labor movement. Trade unions often were perceived as a threat to business interests. Agents spied on labor leaders and acted as strike breakers, protecting “scabs” (replacements for striking workers). Pinkerton agents were implicated in fatal shootings during the notorious Homestead Strike of 1892.
Henry Ford of the Ford Motor Company used an in-house police force to keep track of his employees’ activities, including their financial and social affairs. The “Ford Patrol,” made up of former convicts, former football players, and retired police officers, patrolled local public houses and bars, using strong arms to keep employees under control. Such thuggery is much less common in the wake of improved labor relations, the establishment of legal protections for workers, the creation of sanctions against wildcat strikes, and a general reconceptualization of the labor relationship from one of physical control to one of personnel management.

Private security industry

William A. Pinkerton (center), Allan Pinkerton’s son, with railroad special agents Pat Connell (left) and Sam Finley in 1880. (Library of Congress)

Numbers and Prospects

Private security is a fast-growing industry. The Department of Labor predicts a healthy double-digit growth rate through 2016. Statistics on the number of individuals involved in this market are difficult to ascertain because of an extremely high turnover rate and because the term “security worker” admits of different interpretations. However, there are some credible approximations.
The U.S. Department of Labor estimated the number of private security workers in 2007 at slightly over one million—about twice the number of police officers in the United States. Private security agencies themselves are often quite large. The largest security firmoperating in the United States is Securitas, whose employees number more than 125,000 worldwide and whose revenues exceeded $7 billion in 2002.HumanRights First estimates that there are almost 180,000 security workers in Iraq alone.
The median wage for security workers in the United States is a relatively low $10.85 per hour ($22,570 per annum)—this might account in part for the high turnover rate. Hospital security workers as a group earn the most, at over $26,000 per year, and the highest-paid 10 percent of workers earns an average of $37,850. Salary seems to be proportional to risk. Blackwater security employees are alleged to have earned close to $1,000 per day to guard U.S. ambassador to Iraq Paul Bremer.
It is likely that the private security industry will continue to grow. Among the many explanations offered by experts is the enduring perception of escalating domestic crime and the perceived need of private security to combat industrial terrorism by supplementing public policing efforts. Additionally, changes in U.S. demographics and property relationships point to growth in the industry. Sociologists have documented a tendency toward privatization in contemporary U.S. society. For example, there has been a decline of public shopping venues in favor of private shopping malls. These require their own security forces, and an increase in private residential communities has similarly created an increased need for private security patrols. Finally, simple economic growth may entail a higher incidence of theft and fraud, necessitating increased surveillance measures and security personnel.


Further Reading
Andress, Carter. Contractor Combatants: Tales of an Imbedded Capitalist. Nashville, Tenn.: Thomas Nelson, 2007. Insider story of the operations of the private American-Iraqi Solutions Group responsible for supplying coalition forces in Iraq by its exuberant cofounder, Carter Andress.
Cunningham, William C., and Todd H. Taylor. The Hallcrest Report: Private Security and Police in America. Portland, Oreg.: Chancellor Press, 1985. Frequently cited overview of the U.S. private security industry.
Morn, Frank. “The Eye That Never Sleeps”: A History of the Pinkerton National Detective Agency. Bloomington: Indiana University Press, 1982. Pioneering work in the field of private policing; traces the history of the Pinkerton Agency from its inception to the twentieth century.
Nalla, Mahesh, and Graeme Newman. A Primer in Private Security. New York: Harrow and Heaton, 1990. Admirably clear and concise review of the private security industry, including discussion of its social history and methodologies. Contains a fine annotated bibliography that includes movies and videos.
Singer, P. W. Corporate Warriors: The Rise of the Privatized Military Industry. Ithaca, N.Y.: Cornell University Press, 2003. Scholarly and comprehensive study of the rise of the modern “for profit” private military industry. Contains a detailed discussion of the political and moral implications of the industry.
See also: identity theft; Iraq wars; labor history; labor strikes; organized crime.

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