Starving the Monkeys: Fight Back Smarter

by Tom Baugh

  (Each side of each transaction leaves only ninety percent remaining. For the ten sides of this transactional chain, down to the gourds and back, the actual math is 0.910 = 0.349, or 34.9% remaining after the taxes.)

  As the tribal council considered this, he added, "Now, from my perspective I might think that the exchange is only one in ten. But it must necessarily decrease the value of each trade, passing the accumulating costs along each time goods change hands. Worse, increase the chain beyond that and hardly anything else would be left."

  Some in the council thought that the heaviness of this tax was perfect, as they imagined it would ensure unlimited earnings to the tribe. Wiser heads prevailed, and the council agreed instead with the proposal of an account-ant who was in attendance.

  "Tract is right," began the agent-collector. "It is unwise to tax the entire transaction. Instead, let each tribesman pay the tax on only the profit of the exchange, leaving his costs untaxed. In this way, the cost of the tax will not accumulate so quickly, and he who profits most will be taxed the most." The council rose in applause to the wisdom of this idea, and failed to see the trap it concealed.

  Henceforth, in addition to the land tax, which was left unchanged, the tax on inventory was abolished. In its place they instituted a tax on the profits of tribesmen when a trade was effected, one part in ten. Now, a woodmen could hold a stock of wood, and only be taxed when the wood was traded, whether in the summer, the fall or the winter. Similarly, a toolmaker could have as many tools as he wished, but only be taxed when they are traded.

  Merchants and artisans of all kinds welcomed this change with relief, not knowing the horror they had just unleashed. The collective rejoiced. No longer would the guilty hide their stock or prevent the poor from trading as the moon grew full. The account-ants smiled knowingly, their futures assured.

  Production of all kinds increased dramatically during the first month of the new tax. Wood was gathered and carefully stacked. Tools were laid in for sale at any time. Extra crops were planned as the planters cleared land which had laid fallow for years. Bunny hutches long neglected were repaired and prepared with fresh hay for the increase in stock. As these preparations were made, the full impact of the new tax had yet to materialize. And then the first woodman came to the trading hut bearing his load to trade for other goods.

  "One part in ten, the woodman must pay for his profit," the tribal council had decreed.

  "One part in ten, the trading hut which received his wood must pay for its profit," the tribal council had decreed.

  But what did this mean? One part in ten of what? How exactly did one measure profit? No one was sure, not even the tribal council, who had declined to decree the answer, they similarly confused during their debates. But this is what the tribesmen had demanded, to stab at the rich, and so the councilmen complied with the whim of the electorate without reasoning through the consequences.

  The account-ants knew the answer, which is that there is no answer, the precise trap they had laid to ensure their continued necessity. The tribal collectors certainly didn't know, these persons selected for their role as fiat thieves. As for Luth, "Give unto the tribe that which is the tribe's," was the best he could muster. The shaman found himself out of his philosophical depth when time for blame and guilt came to an end and solutions were demanded.

  When Og and Pok had invented trade for the tribe, not even they had thought precisely about what was meant by profit. All they knew was that each walked away satisfied with the result. Now each tribesman was being asked to quantify that satisfaction, and precisely determine what one part in ten now belonged to the tribal larder.

  Recall that Og, by himself, could choose to gather in a single day either a woman-weight of wood or two squirrels. In that same day, Pok could choose to gather either a quarter woman-weight of wood, or eight squirrels.

  If they each traded a day's best work with the other, then Og received eight squirrels, when his own efforts would only have netted two. Was his profit then six squirrels?

  Similarly, Pok received a woman-weight of wood when his own efforts would have netted only one fourth that. Was his profit three-fourths of a woman-weight?

  On the surface, these answers seem fine and reasonable, but there is a hidden destructive implication. Assume now that Pok became lazy, and only trapped four squirrels, spending the rest of the day sleeping. Because there is no better trade available, Og might still be willing to trade his wood for these four. After all, this trade still seems much better than the two squirrels he would have caught on his own. Now, is Og's profit only two squirrels? Did his taxable income go down because Pok, a worker not under his control, chose to spend half the day sleeping? Or does Og get taxed less because he was suckered into a worse, yet still beneficial, deal?

  Even this analysis assumes that Og knows precisely how many squirrels he might catch in a day. But if he did, what documentation might he present to the tribal council to prove his increase? And would they believe it? Perhaps the tribal daily standard published by the collectors admits only one squirrel. Then he would be taxed on three squirrels, instead of the two that would be reasonable for him.

  What if Og became more skilled at squirrellery, so that he could instead be reasonably expected to catch three of them? Then his actual profit from the four squirrel trade is one squirrel, or five for the eight squirrel trade. The definition of profit, when it comes to a man's own work, doesn't survive the definition which is often applied to trade. And yet, a worker trades his time for pay, the entirety of which is considered income, which implies that a productive individual's time is worth nothing to him. To avoid this dilemma, the collective merely assumes that it owns all our lives. In this assumption the worker which creates original value incurs no cost in doing so, and that we merely work to be taxed for collective benefit.

  Another problem arises if Og doesn't gather the wood himself, but instead subcontracts this work out to another. Just as the tribal council imposed this new tax policy, exactly this situation arose with a Brokerog, a descendant of our original woodman hero. Unlike Og, however, Brokerog didn't enjoy labor in the elements. He disavowed his namesake's daily communion with God and celebration of His bounty as decidedly Paganist. This disavowal he learned from Luth as a child. No, Brokerog was far too clever for raw labor.

  On the other side of the valley lived the Cog brothers, also descended from that first mercantile woodman, who were following in his footsteps. They were each also rugged individualists. For years, Brokerog had hired his distant cousins to gather wood on his behalf. Using the economics of the original Og and Pok to keep things simple, each day each Cog brought Brokerog a woman-weight of wood, and in exchange Brokerog paid them six squirrels. Brokerog then received on the wood commodity exchange eight squirrels for each woman-weight. So, in exchange for the service of providing wood liquidity, just as the trading hut did for all commodities, the Cog brothers each surrendered two squirrels apiece to Brokerog. Brokerog then spent his time searching out the best prices for his inventory, averaging about eight squirrels apiece, pricing in that commodity remaining relatively historically stable.

  Under the new tax structure, the tribal council finds that each of the three Cogs owe tax on six squirrels each. Likewise, the two squirrels which Brokerog profited on each trade with each of the three Cogs are taxable on the six squirrel total. Brokerog's profit is now six squirrels, just the same as each Cog who was working all day. But Brokerog may have done this brokerage in only about an hour, yet he benefits as much as the original worker. Clearly, everyone wants to be Brokerog, and no one wants to be a Cog.

  As Brokerog and each Cog are all taxed at the rate of one part in ten, each must pay one-sixth of a squirrel (messy). For Brokerog, this doesn't seem very onerous. He might just have easily negotiated this much difference in the price of the wood in the first place. In fact, he can attempt this anyway by reducing the amount he is willing to pay the three Cogs. Perhaps Brokerog chooses to be generous and split the
difference of his tax with them rather than demanding the entire amount to compensate for what he perceives as his loss. In this case, then, Brokerog reduces the amount he is willing to pay each of the Cogs by one-fifth of a squirrel. The Cogs then each pay taxes on 5.8 squirrels, and Brokerog pays taxes on 6.6 squirrels. After taxes, then Brokerog is nearly back to where he would have been pretax, or 5.94 squirrels. He decides the 0.06 squirrels is not too onerous a tax for him and proceeds with his plan, telling the Cogs that the reduction is due mostly to a change in commodity prices.

  Alternatively, Brokerog might choose to hire yet another Cog brother to collect more wood. In that case, Brokerog gains 8 squirrels each day, which after tax is now 7.2 squirrels, better than he had before the tax was imposed. Of course, he has to manage the larger amount of wood. If he isn't careful at this he could depress prices by generating an oversupply. As we shall see in a moment, there are ways by which Brokerog can avoid this price depression, as well as taking advantage of it if it happens.

  The Cogs are understandably unhappy with this turn of events. But since all the wood brokers are pretty much taking exactly the same approach, they really don't have anywhere else to turn in which they will be treated any better. And, unlike Brokerog, who can hire more workers, they can't create more hours in the day. Nor can they find more strength in their muscles, their stock in trade.

  (This is the same problem faced by all original-value workers, traditionally individualists, who ultimately hand most of the value which they create over to essentially brokers, who take little risk.)

  Now, admittedly, some of these pressures exist even absent the new tribal tax structure. However, as we shall see in a moment, the hidden complexity of the tribal tax structure created unique opportunities for collective enterprises. While at the same time this structure punishes or otherwise limits the individualist.

  Brokerog, having a limited commodity with which he traded, found his record-keeping relatively simple. But the trading hut, which managed a wide variety of trades of all kinds throughout the day, and at differing rates of exchange, found it difficult to determine what exactly was meant by profit. Did that particular stick of wood come from the trade for six squirrels earlier, or the gourd the day before? Although the system of credits which the hut used helped a little, it didn't eliminate it entirely. Under this new tax structure, the operators of trading huts found it necessary to determine who had credits available. But, also they had to know how many equivalent credits the trading hut gained, or lost, on each trade. Every single one of them.

  Just as Ploison was considering this dilemma, in walked an eager account-ant, who offered to help him keep track of this problem each day. In exchange for a reasonable amount of credits, of course. Ploison, until now, had suffered through the tax collection visits alone. He had been determined to not let it force him into hiring a person who he saw as only extracting value, not creating it. But, finally he relented.

  Ploison was not alone. All across the tribe account-ants swarmed the merchants and the artisans, offering their services to help mitigate a problem which they, in large part, had helped create. A problem which even now they were helping to worsen. At each merchant they promised their new master-servants that they would bend the ear of the tribal council to exempt, or promote, or punish, in some special way, some aspect of each merchant's or artisan's trade.

  "Those who hold inventory will be able to exempt from taxation one part in a gross of the portion which has been held for three months or more," offered the tribal council, hoping to increase holdings to ease the winter months.

  "Each worker in the wood, stone or leather industries who earns less than six credits per day shall receive a three part in each gross credit toward their net tax," the tribal council generously decreed the next week. They had sought to ease some of the pain of the Cogs and other workers throughout the tribe. Workers who now found their pain increased by having to now keep track of these fractions.

  "All contributions to shamans shall be exempt from taxation, provided such amounts are greater than one credit per lunar cycle, but less than two parts in ten of the worker's gross income, averaged on a lunar basis over the entire working year," the council bleated after Luth had his say, both on the mount and in their chambers.

  "All planters who sow their fields in alternate wood fuels, including sweet gum, briar wood, pony stripe or pillow wood, but not oak or oakderived varieties, shall receive three credits toward their tax assessment for each two hundred twenty-stride lots so sown," the tribal council pleaded. They had hoped to increase the tribal stocks of wood, but not at the expense of the favored oak and oak-related products lobby.

  On and on, in a never-ending cycle the tribal council was petitioned by account-ants, merchants, the congregation, the workers and artisans to benefit each group in some special way. In so doing, the tribal council itself became overwhelmed, and decided to delegate most of this special work to a tax council. This council was to be overseen by a director appointed by the manager, and confirmed by the tribal council. This tax council would report regularly to a special tax oversight sub-council of the tribal council. But in reality each time a tribal councilman, even one not on the special subcouncil, bent their ear the tax council acted as if decrees had been passed.

  Councilmen found it easier than ever before to satisfy any who passed through their chambers. Their satisfaction was now purchased at a short walk to the tax council hut nearby. These purchases of favor assured their constituents that their special needs would be handled as vital to the interests of the tribe.

  And so, relieved of the necessity of passing each special provision through the vote of the entire council, the tax council merely accelerated the rate of special provisions. The account-ants grew fat, and some learned to petition the tax council directly. Their threats to bring over their too-busy councilman served as sufficient justification for the tax council to leap to the task, knowing that the end would be the same.

  The account-ants were merely one of the first professions to benefit from the complexity wrought by the collective to salve the poor and distressed. As each tax council ruling became known, merchants and artisans and brokers found it necessary to not only handle the accounting for these special provisions, but also to hire workers specifically to ensure compliance with the provisions in order to qualify for the benefits.

  Tree specialists made their rounds with planters to consult with them on how to qualify for the alternate wood credit. Inventory management specialists assisted with determining and tracking what inventory had aged and how much. This in turn spawned an entire industry dedicated to inventory marking tags and accounting methods. That industry then qualified for special credits after its promoters met with a few influential councilmen, which spawned yet a new specialty in managing the credits.

  Workers hoping to qualify for the credits offered them could not afford to hire specialists full-time as the larger merchants and artisans might. Instead, to service their needs special worker-tax kiosk huts sprang up along the tribal population centers. At these huts workers, in exchange for fractions of their meager credits, lined up to get their due. A due which included not only their low-wage credits, but also for any shaman contributions they may have made. Builders who constructed these kiosks, as well as the kiosk workers themselves, applied for special credits enacted to assist kiosk workers who assisted low-wage workers.

  As more and more special provisions were applied, tax revenue dropped. Soon, the council increased the assessment to one part in nine, from one part in ten. The change to an inconvenient percentage alone placed an increased burden on the holdouts. In turn, these holdouts began hiring account-ants from school huts created specifically for the purpose of training them. Beside these school huts sprang school huts for inventory managers. And schools for kiosk workers, who began more and more integrating their work with the tribal workers who passed out the tribal contributions to the poor. Even these schools qualified for their own special set o
f credits, spawning yet another set of specialists employed to track them.

  Throughout all of this pseudo-economic activity, tribal employment was at an all-time high. And yet none of these new workers produced a single tangible thing. Not one additional plant sprung from the ground. Even the special wood fuels credits merely displaced another crop which would have been planted. Their efforts harvested not a single stick of wood, nor crafted a single axe nor tanned the smallest hide nor fermented a drop of juice. Even the increased demand for wood and the thatch to build the kiosks and the schools had to have been taken from another tribesman by force. That original tribesman had then lost the opportunity to use it as he might see fit. Although the economic health of the tribe looked fine on paper, it continued to worsen in real terms for those who actually produced.

  As the complexity of life increased, and the new psuedo-professions arose, the individualists who resisted participation continued to be pressed downward into poverty. Meanwhile, the collectivists who recognized the trends continued to be elevated, riding the expanding bubble of imagined prosperity. This bubble was inflated by the sheer momentum of the efforts of generations past.

  And more and more, cogs aspired to be brokers, rather than improving themselves and their trade. Only the complexity of navigating the tax structure stood in the way of any who might wish to elevate themselves from mere worker to business proprietor. For many, this hurdle alone was enough to keep them in their station, unlike their forefathers, who could become their own businessmen at a thought. The Cog brothers had had enough themselves, and were willing to make the leap.

  "But this could not be allowed," Brokerog thought to himself as he sensed the Cog brothers' dissatisfaction. "I am the broker, not they," he consoled himself, fearing the competition which they might wield in a free market. His salvation was coming in the form of a sacrifice, and the fire for that sacrifice was lit in a hut he had just passed on the way from the wood exchange.