Here Thar Be Monsters!

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21.9.16

Removing The Blinders

To start off today's rant, let us first define "government."  Government is a human institution designed to erect barriers to creativity that protect favored entities (regulation), be a parasite that leeches off of the productive parts of society (taxation) and provide life-long employment for those members of society who are unwilling or incapable of being creative or productive (bureaucrats).  Like bacteria, government will grow until it consumes all of the resources available within its jurisdiction.  In other words, there is no such thing as a "good" or "benign" government, and this is true in every form, in all places and at all times throughout history.

What prompts today's tirade is the annual repeating of the Indonesian government mantra, "We are incapable of managing within our limits."  Last year, it was this whining article, this year it's (naturally) even more dire.  In keeping with the character of all governments everywhere at all times, there is no discussion of laying off apparatchiks or scaling back government programs, there is only talk of how to steal more money from the productive parts of society to feed the parasite.

Let's begin with the vaunted government "tax amnesty" program.  This was conceived as a way to get people to fess up and pay in all those taxes they hadn't reported in the past, with the carrot being a 'promise' not to cause grievous bodily harm to those who 'voluntarily' threw themselves on their swords.  Everything was all optonistic at first, as the government crowed that folks would happily deal the government in on their personal wealth if they just weren't afraid of retribution.  In the old days, this was called a "protection scheme" used by mafia and gangs to extract money from local shop owners.

Turns out people really are as broke as they kept telling the apparatchiks.  The program has so far brought in less than 25% of the expected windfall the government originally represented to investors and bankers.  Stocks and foreign investment have duly registered their disappointment with this situation, as the market deflates like a farting balloon.

All of that would be bad enough, but wait!  There's more!

The next example of government beneficence recently in the news is the Natuna Gas Project.  Here we have a case of one of the largest estimated gas reserves in the world sitting under the Natuna Sea, and the Natuna island chain.  Let's forget just for a moment that this rich gas field is sitting right next to the South China Sea, and is surrounded by Malaysia, Singapore, Vietnam, and Brunei, in addition to Indonesia.  If this sounds like a recipe for disaster, it gets better.

The Natuna people have lived in these islands since before records were kept, and certainly longer than the 70-year history of Indonesian independence.  They dwell in relative obscurity, being at the very frontier of national boundaries and receiving attention only because they sit on top of a veritable gold mine.  Can we have a show of hands, how many folks think these people will directly benefit from the wealth under their feet for the past millennium or two?

Let's begin with government regulations, shall we?

Under current Indonesian resource laws (updated during the 2009 coal boom), the government wants to "partner" with a producer to drill and extract the gas.  The government wants the producer to take all the risk and expense, bringing all the necessary equipment to do the job.  The result is that the government will then own all the production and take ownership of all the machinery and infrastructure that was imported to produce the field.  Furthermore, under Indonesian cabotage law, all vessels used to import the equipment and cart off the gas much be Indonesian flagged in national waters.

In other words, you do all the work, cover all the costs, and we get all the benefits.  Such a deal!  Anyone who finds this a fair and equitable arrangement please contact me right away so I can manage your investment for you.

Naturally, the locals will be promised the sun, moon and stars in exchange for their cooperation.  They will be offered government indoctrination centers (schools) and government resource management centers (hospitals) that, if they are worth a damn in the first place, will soon devolved into deteriorating skeletons of empty promises.

Finally, once (if) the money starts rolling in, there will suddenly be layers upon layers of government apparatchiks, brokers and corruptors of all stripes with ladles in hand, ready to siphon off as much of the wealth as possible.  The locals will be forced to join in the festival of slime, or find themselves completely out of the loop, watching as tar balls and trash wash up on their once-pristine beaches.  And all this assumes the government can find a competent sucker to come in under its terms in the first place.

Meanwhile, those companies who were stupid enough to hang a shingle under the government's oh-so-equitable rules are finding themselves under attack with few options for relief or response.  GOOGLE has been hit with a US$400 million tax bill for 2015 alone, with the past five years under the microscope, and its only options for appeal are the Indonesian tax office (good luck) and/or the Indonesian courts (hahaha!).  In other words, their only option is to ask the very leeches who live off GOOGLE blood to stem the flow just a bit.

Don't get me wrong.  I really don't like or trust GOOGLE, but this makes for a great case study of government greed and desperation.  After years of corruption, bloated hierarchy, mismanagement, convoluted and overlapping ministries, waste, sleaze and slime, the government finds itself running out of options to perpetuated itself, with the one obvious option of cleaning up its act being quite far off the table.

Under Indonesian tax laws, GOOGLE has two options: pay the government's tax claim, or face years of audits and court hearings to determine if this money is actually owed.  Given the government's track record, GOOGLE will end up being liable for the money AND being out all the lawyer and court fees, as well as penalties and interest.  Great options, ne l'est pas?

Notice that the article mentions the one tool to which all governments always resort - force (read guns property confiscation and grievous bodily harm).

What all this boils down to, and Indonesia is by far not the only or best example, is that governments are destructive.  They stand in the way of real people making real profits and creating real things.  They are protection rackets that take money for the promise of protection from phantoms, while failing to protect people from the real threat - government itself.  The reason that governments appear to dance so well is their habit of constantly shooting themselves in the foot.

The reason that all governments are corrupt in all places and at all times is that they are collections of people who have been granted exclusive use of force to collect money that pays themselves.  If this is not a classic recipe for disaster, then nothing is.  Corruption and waste are natural by-products of organizations that produce nothing and get paid for it at the point of a gun.

Humans have yet to devise a system of governance on a large scale that does not eventually become its own worst enemy.  It is a parasitic institution that is utterly dependent on its ability to suck the life out of everyone who submits to it.

The only viable option is to have the smallest possible scale so that the 'leaders' are as close to the people being governed as possible.  In this way, 'leaders' can only be as corrupt as the communities they 'serve,' and the ability to escape corruption is as easy as a short move away to a neighboring community.

What we, the real people, must disabuse ourselves of is the notion that there is any such thing as benign government.  It does not, nor cannot exist.  At some point, the parasite always turns on the host in order to promote its interests over all others.  It is always a negative force that produces nothing and offers no rewards.  It simply takes, and when threatened, it takes more, until the host expires and rids itself of the infestation.

It is thus that we part with our new mantra, "All governments are always destructive at all times and in all places."

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