A well-regulated militia
Global Guerrillas says:
PSCAI (Private Security Company Association of Iraq) estimates that there are 35,000 private military contractors (those who are using lethal force) in Iraq. Note that the vast bulk of these contractors are operating outside the realm of any counter-insurgency strategy (and by their actions, defined by their missions, typically undermine it).
I don't think it necessarily follows that "the vast bulk of these contractors are operating outside the realm of any counter-insurgency strategy". Private security companies are large part of societies everywhere, including Western countries. In Third World countries they have an even more extensive role and are not limited to the traditional "security guards". Iraq the Model describes how Baghdad neighborhoods have established local patrols to keep suspicious outsiders out, supported by contributions from the residents. This is a kind of private security. Tribal groups and villages in many countries, and probably Iraq, often preserve a traditional social structure through local militias of various kinds. When a huge foreign army comes in and disarms everyone -- or rather disarms people who are willing to be disarmed -- it can create a lawlessness from which it never recovers.
This is not an argument for replacing the police with private security. But one of the imperatives of 4th Generation Warfare is to create subsidiary and networked ways of dealing with enemy forces at local level. Uncontrolled, this process gives rise to militias. But totally banned it provides the enemy with a vacuum in which to operate.