I recently sat down with a person who wants to know more about Bahrain and the region. A question he kept asking and I was comfortably answering with a bit of an embarrassment is, “How does the government pay for all the services it provides to the citizens?”

You see, long time ago, there were a strong group of thieves who went village by village stealing everything that the villagers own. Mostly, it was crops and whatever they grew that had essential value to it. Those groups of thieves were always looking for a good catch, a village that was not visited by other thieves for a long time, they’d have good crops to steal.

With time, this type of ‘business’ was very profitably so many formed groups, armed themselves, and joined the bandwagon. What happened next is something they did not expect. There were no more villages to steal from. They couldn’t go to the same village twice because there wasn’t anything left to steal! So here’s what they did.

The thieves decided to start stealing just enough, to leave what is necessary for the villagers to use and grow more crops so that the next time they come to steal, there would be enough wealth that generated and grew with time to steal again. But this didn’t work, here’s why. As soon as the first group of stealers would leave, another would come and simply take what the first group had left. So how to deal with this?

The villagers found  out a way to ‘institute’ the stealing phenomena, also known as the ‘Roving Bandits.’ They decided to ‘contract’ with the stealers and provide them with goods they want to steal in return for protection, they invited them to stay in the village. So the stealers would stay in the village, steal once a year just enough to keep them satisfied and more to allow the farmers to use and grow more for next year’s ‘stealing’ season. The stealers would provide the necessary protection to those villagers and the leftover wealth from other groups of stealers. This concept evolved through time and today we call it, taxation.

The stealers evolved into government, the farmers into citizens, and in some nations, farmers get to elect stealers every once in a while, just to simply some sense. Because the ‘contract’ developed into electing stealers, the ‘concept’ also evolved into ‘Taxation with Representation.’ This means that you should be represented in the government because you’re paying taxes, or the other way around, you should be paying taxes if you want to be represented.

This goes back to my friend’s question, where is taxation if the government is providing services and the citizens are represented in Parliament? Why is there an attempt to form a stealers vs farmers contract without the taxation concept? Why is the government deciding to spend without thinking of how to generate funds for those services?

The way I see it is that there will be a major collapse in a government system that keeps on borrowing in order to satisfy the citizens and prevent loss of power. Whether it is a democratic, theocratic, or autocratic government, the idea behind satisfying citizens in just to stay in power is fundamentally wrong. We have reached an era that governments are afraid to talk about a ‘redistribution’ mechanism that make the government take money from the rich and use it to service the poor. So, weak governments would allow the rich to get richer, because they’re powerful enough to pitch in a change in government, and allow the poor to get poorer, because they’re not strong enough to cause change.

Today, poorer nations of the Middle East are noticing a major shift due to globalization of ideas. The ‘Stealers’ are not powerful enough to tax the ‘Farmers’ in order to provide services to all citizens. The ‘Poor’ are not wealthy enough to be taxed, yet they demand a ‘contract’ to elect a government that in reality has no strength to keep its promises of equality to all.

So what’s the solution for the Middle East and Bahrain in particular? It is to go back to the basics as soon as possible while noting to the West that representation must come with taxation or else bad policies would easily lead to ‘Greece hitting the fan’ all over the Middle East and all over again. We shouldn’t shy away from a redistribution mechanism, we shouldn’t shy away from enriching the government from local wealth in order to provide the adequate umbrella that supports and regulates internal growth, and we shouldn’t ignore that the key behind a representation ‘contract’ is to institute an economy that expands the middle class at the expense of the rich.

The solution is easy, do we have the guts to do it?

Categories: Bahrain, Economics, Politics, Social

Tags: bahrain, representation, taxation