SMALLER GOVERNMENT, A RETURN TO THE 16TH CENTURY MONARCHY

Republican presidents, especially George W. Bush, have ordered government agencies to outsource as much as possible. However, in most cases, this does not serve the best interests of the American public. Here is an interesting piece on the issue.


^8/21/06: 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,
ncompetent 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.