In 2007, an Iraqi civilian from Baghdad filed a claim for damages against the U.S. Army. In the paperwork he completed, he explained that his son Wa’ad had been driving a taxi one February morning and was on his way home to refuel when a passenger flagged him down. Moments later, a U.S. tank stationed half a mile away opened fire, hitting the taxi with two missiles. Wa’ad was found burned to death inside.

The Iraqi asked the United States for $10,000 in compensation: $5,000 for his son’s death, and $5,000 for the ruined taxi.

The claim was more or less typical of the thousands filed by Iraqis against the United States under the Foreign Claims Act since the war there began in 2003. Many were denied, often based on technicalities. But this man was among the luckier ones: The United States paid him $2,800 for son and taxi combined.

Military officials acknowledge that such “condolence payments” don’t capture the full value of a lost civilian life. They are intended, according to a 2007 report to Congress by the Government Accountability Office, as “expressions of sympathy.” They are by no means to be taken as an admission of legal liability or fault, the report notes.

But in an era of counterinsurgency, in which civilian “hearts and minds” have become high-value targets, fair compensation has begun to matter more. That has raised an awkward question for U.S. military leaders: Just how much is an Iraqi or Afghan life worth?

Attaching a monetary value to human life might seem offensive to some. But it’s routine in many nonmilitary contexts. Economists and actuaries have developed sophisticated metrics for assessing the price of a life. Some are based on an individual’s projected lifetime earnings. Others extrapolate a figure based on a person’s own financial valuation of the risk of death. For instance, if an employee requires $700 in hazard pay to assume a 1-in-10,000 risk of death on the job, she is valuing her own life at $7 million.

In fact, $7 million is roughly the “statistical value of life” used by the U.S. Environmental Protection Agency in formulating regulatory policy. Other U.S. agencies use similar numbers. Yet compensation payments for those who die tend to be much lower in the United States and elsewhere. Especially elsewhere. U.S. soldiers killed in battle merit a “death benefit” of $500,000. In contrast, most condolence payments to Iraqi and Afghan families are capped at $2,500. Still, if that seems like a stingy response to the combustion of one’s son, it’s actually pretty generous compared with pre-2003 practices by the United States and other countries. The fact that Washington is offering such payments at all represents a break with hundreds of years of military history.

Under international law, the killing of civilians is not a war crime, as long as they are not the object of the attack—and as long as the expected civilian death toll is not “excessive” compared with the value of the legitimate military target. So for decades, the families of civilian war victims got nothing at all. As novelist Kurt Vonnegut wrote in Slaughterhouse-Five , a reflection on the Allied fire-bombings of Dresden in World War II, “So it goes.”

Not only was such “collateral damage” considered permissible, it may have even been used for strategic purposes in some cases. In 1943, two years before the deadly Dresden bombings, Allied military leaders issued the Casablanca Directive, establishing as a major priority, “the undermining of the morale of the German people to a point where their capacity for armed resistance is fatally weakened.”

More recently, the United States has treated civilian casualties as something ideally to be avoided, though not at the cost of major military objectives.

Marc Garlasco was chief of “high-value targeting” in the Pentagon in the run-up to the Iraq War. He says his superiors would tolerate collateral damage up to a point: 30 deaths, to be exact.

In analyzing which targets the United States could strike in its opening “shock and awe” campaign, Garlasco says he was instructed to authorize anything that could reasonably be expected to kill fewer than 30 civilians. Any more than that, and the attack would require a personal sign-off from Secretary of Defense Donald Rumsfeld or President George W. Bush.

“I don’t know why 30 was considered the high,” Garlasco says. “I don’t know why they picked 30 and not 20, or 40, or 100.”

Yet even that standard has been tightening as the United States comes to grips with the unique challenges of counterinsurgency operations. Leaders have recognized that success in Iraq and Afghanistan requires winning over the civilian population, not bombing it into submission.

In Afghanistan, especially, limiting civilian casualties has emerged as a major priority in coalition forces’ long-term battle for influence. In a working paper issued in July, the National Bureau of Economic Research found “strong evidence that local exposure to civilian casualties caused by international forces leads to increased insurgent violence over the long-run, what [the researchers] term the ‘revenge’ effect.”

In other words, if coalition forces treat noncombatants too callously, some of them will actually become combatants.

“There’s a learning curve,” says Garlasco, who worked as a senior military analyst for Human Rights Watch after leaving his Pentagon post in 2003. “Let’s face facts, the U.S. Army was literally built to fight the Soviet Union, and thank God that never happened. But it had lost its focus on other types of warfare.”

Many experts believe that focus returned with the publication of a new Counterinsurgency Field Manual in 2006. One of its precepts was “first, do no harm”—a maxim more commonly associated with medical ethics than military operations. The goal of a counterinsurgency campaign, it noted, was not only to subdue the enemy but to secure the environment for local civilians.

Garlasco was part of the team that reviewed the manual before its publication. And he wasn’t the only one from outside the military establishment. “Guys like Petraeus hooked up with Sarah Sewell from the Carr Center for Human Rights at Harvard,” he says. “The Red Cross was there, Human Rights Watch was there.”

The new approach has increased pressure on militaries to attach a higher value to civilian lives. Exactly what that value should be remains in dispute.

There is a growing sentiment, however, that a $2,500 condolence payment is too low. A June report by CIVIC, the nonprofit Campaign for Innocent Victims in Conflict, argued that the current system may insult more people than it mollifies. That’s not just a money issue; it’s also the result of opaque procedures and inconsistent implementation, the report found. Many people file under the Foreign Claims Act only to find that it doesn’t cover combat-related damages. Those are handled under the more informal condolence payment system, in which unit commanders have broad discretion to grant or withhold compensation.

It likely doesn’t help when Iraqis hear about things like the recent settlement between their government and American citizens who were abused by Saddam Hussein in the first Gulf War. According to reports, Iraq agreed to pay $400 million to the several hundred Americans who had filed claims alleging torture and psychological trauma.

At first blush, any substantial increase in the payments to families of civilian casualties in Iraq and elsewhere might seem prohibitively expensive. The Defense Department reported spending more than $30 million on condolence payments in Iraq and Afghanistan between 2003 and 2006. Raise the cap to $10,000, and it’s conceivable the United States could have been on the hook for upward of $100 million. That’s a large amount by most measures—though it pales next to the $1.12 trillion the United States has spent on the war effort as a whole.

Yet even CIVIC isn’t advocating spending that much. In a recent phone interview, Executive Director Sarah Holewinski said just standardizing and simplifying the claims process could make a big difference. She bases that on her experiences in Iraq and Afghanistan talking to residents who have lost loved ones to stray coalition fire.

“Obviously they’re incredibly upset, and if they don’t receive any sort of apology as to why their family has been harmed, then they get angry, too,” Holewinski says. “The best thing you can do is apologize, investigate what happened, give some sort of explanation”—and then offer compensation. It doesn’t have to capture the person’s full economic value, she adds. Often it’s the thought that counts.

Not everyone in the military establishment is ready to concede that hearts and minds have become more important than blood and guts. In a Washington Post op-ed last month, retired Air Force Gen. Charles Dunlap wrote that reducing airstrikes in Afghanistan to spare civilians was counterproductive.

“[D]on’t believe the claim that civilian deaths automatically generate more enemies,” he wrote. “The Taliban itself has disproved that theory. Although insurgents caused almost 76 percent of civilian deaths, according to a U.N. report published in August, Taliban strength is reportedly nevertheless increasing.”

If he’s right, then perhaps the United States wasted the $2,800 it awarded to Wa’ad’s father. After all, this was a man who saw his son reduced to rubble by U.S. forces and responded by dutifully filling out some forms. Asked to list in detail what property damage he had suffered, he wrote: “I lost my son without any reason. He was my helper in these hard circumstances.” It’s possible he wouldn’t have held a grudge even if the United States had paid him nothing. Then again, if Wa’ad’s life isn’t worth anything, some might question why American troops are still in Iraq at all.

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