Tax Farmers, Mercenaries and Viceroys - New York Times
The New York Times

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August 21, 2006
Op-Ed Columnist
Tax Farmers, Mercenaries and Viceroys
By
PAUL KRUGMAN

Yesterday The New York Times reported that the Internal Revenue Service
would outsource collection of unpaid back taxes to private debt collectors,
who
would receive a share of the proceeds.

It's an awful idea. Privatizing tax collection will cost far more than
hiring additional I.R.S. agents, raise less revenue and pose obvious risks
of abuse.
But what's really amazing is the extent to which this plan is a retreat from
modern principles of government. I used to say that conservatives want to
take us back to the 1920's, but the Bush administration seemingly wants to
go back to the 16th century.

And privatized tax collection is only part of the great march backward.

In the bad old days, government was a haphazard affair. There was no
bureaucracy to collect taxes, so the king subcontracted the job to private
"tax farmers,"
who often engaged in extortion. There was no regular army, so the king hired
mercenaries, who tended to wander off and pillage the nearest village. There
was no regular system of administration, so the king assigned the task to
favored courtiers, who tended to be corrupt, incompetent or both.

Modern governments solved these problems by creating a professional revenue
department to collect taxes, a professional officer corps to enforce
military
discipline, and a professional civil service. But President Bush apparently
doesn't like these innovations, preferring to govern as if he were King
Louis
XII.

So the tax farmers are coming back, and the mercenaries already have. There
are about 20,000 armed "security contractors" in Iraq, and they have been
assigned
critical tasks, from guarding top officials to training the Iraqi Army.

Like the mercenaries of old, today's corporate mercenaries have discipline
problems. "They shoot people, and someone else has to deal with the
aftermath,"
declared a U.S. officer last year.

And armed men operating outside the military chain of command have caused at
least one catastrophe. Remember the four Americans hung from a bridge? They
were security contractors from Blackwater USA who blundered into Falluja -
bypassing a Marine checkpoint - while the Marines were trying to pursue a
methodical
strategy of pacifying the city. The killing of the four, and the knee-jerk
reaction of the White House - which ordered an all-out assault, then called
it off as casualties mounted - may have ended the last chance of containing
the insurgency.

Yet Blackwater, whose chief executive is a major contributor to the
Republican Party, continues to thrive. The Department of Homeland Security
sent heavily
armed Blackwater employees into New Orleans immediately after Katrina.

To whom are such contractors accountable? Last week a judge threw out a jury's
$10 million verdict against Custer Battles, a private contractor that was
hired, among other things, to provide security at Baghdad's airport. Custer
Battles has become a symbol of the mix of cronyism, corruption and sheer
amateurishness
that doomed the Iraq adventure - and the judge didn't challenge the jury's
finding that the company engaged in blatant fraud.

But he ruled that the civil fraud suit against the company lacked a legal
basis, because as far as he could tell, the Coalition Provisional Authority,
which
ran Iraq's government from April 2003 to June 2004, wasn't "an
instrumentality of the U.S. government." It wasn't created by an act of
Congress; it wasn't
a branch of the State Department or any other established agency.

So what was it? Any premodern monarch would have recognized the arrangement:
in effect, the authority was a personal fief run by a viceroy answering only
to the ruler. And since the fief operated outside all the usual rules of
government, the viceroy was free to hire a staff of political loyalists
lacking
any relevant qualifications for their jobs, and to hand out duffel bags
filled with $100 bills to contractors with the right connections.

Tax farmers, mercenaries and viceroys: why does the Bush administration want
to run a modern superpower as if it were a 16th-century monarchy? Maybe
people
who've spent their political careers denouncing government as the root of
all evil can't grasp the idea of governing well. Or maybe it's cynical
politics:
privatization provides both an opportunity to evade accountability and a
vast source of patronage.

But the price is enormous. This administration has thrown away centuries of
lessons about how to make government work. No wonder it has failed at
everything
except fearmongering.

Copyright 2006
The New York Times Company

Posted by Miriam V.