"thus he was pointing out how absurd those privatize is the quickfix solution to all our problems philosophy is." - true on a level, but the absurdity of privatized militrary goes even further.

You would continue to have private security contracts operating beyond the law in certain lawless countries; but if the US didn't have it's own state forces and instead paid private companies every time it wanted to go to war then what would stop the Chinese from hiring these same companies to do the same thing?

In some theory you aleady have the US militrary competing with others for success, it is just not financial success. A demonstration that the world is not as simple as 'privatize everything and let market forces decide' - in fact state power would be completely eroded if private companies ran their own armies; you couldn't enforce taxation if they decided to resist, and they could buy land and declare independance very easily (but perhaps there would be no need to)

Also the 'loyalty' of militrary officers speaks volumes to the fact that some people can hld to higher ideals and not be corrupted by the offer of a bribe. (when they buy into the ideal) - hence it is possible to have no corruption in a Communist system IF the people buy into it (not that i'm advocating a complete communist system, just pointing out the fallacies in some anti-communist arguements)