Representation without Taxation

June 9, 2007

President Putin surprised the G-8 meeting when on June 7 he offered to create a joint missile screen together with the United States in Azerbaijan. Azerbaijan? Does anyone have any idea what conditions are like in that country?

Last week I was in Baku, Azerbaijan, a little country that lies along the beautiful Caspian Sea. Once a republic within the Soviet Union, the Azeris have been independent since 1991 and have recently completed an oil pipeline though Georgia and Turkey. A million barrels a day now stream out to the West and, at somewhere around $60/barrel, the Azeris are getting rich.

Well, almost. Azeri ministers and government elite are getting rich. New high-rise apartments are sprouting above Baku like mushrooms. The beautiful old, early-20th century city is gradually being torn down. From the balcony of a new hotel in central Baku, I could see at least 20 cranes towering over the city around me. Someone is getting rich, for sure.

But reports are that an average Azeri construction worker earns only $3-4 a day and the $60 million of daily oil revenues is simply not reaching down to fund his housing or even social services. Schools and universities are under funded; the health care system is riven with bribery, inefficiency and corruption, water is supplied throughout the city at irregular times and, except for hotels and buildings serving westerners, basic utilities are undependable. Rents are equal to the full amount of old age pensions, leaving the elderly with little or nothing to spend on food. Journalists who have complained that the new president—son of the old president—is incompetent or asleep, have been jailed.

Do not expect, therefore, that the Azeri people will have anything to say about whether Russia and the United States locate a missile shield in their country.

In the last two years, seven Azeri journalists have been jailed for writing words not approved by the president. Another editor was jailed last week, his newspaper shuttered. An independent news agency, Turan, has been evicted from central offices and sent packing to the countryside. Whereas three years ago—during my last visit—nearly every taxi driver or policeman was willing to talk, last week I found them wary and closed mouthed.

Long time friends with whom I spoke in Baku said that the US government has turned a blind eye to all this corruption and mangling of democracy because the Bush administration now counts on dictator-President Ilham Aliev to provide landing bases in Azerbaijan near to Iraq and Iran. Further, the US needs an anchor oil country to outflank Russian oil and to counterbalance Russian reserves. So the US does not support the jailed journalists or protest the laws that make “slandering the president” a jail offense. Certainly if Aliev now agrees to support a joint US-Russian base, human rights activists will get no support from the US.

All of which confirms Thomas Friedman’s recent NY Times article in which he said that when the price of oil goes up democracy in oil-producing countries goes down. That is clearly the case in Azerbaijan. The hope that was in the eyes of my friends as recently as three years ago is now gone. They have seen one dictatorship replaced by another and see no pressure coming from the outside to make any of this change.

Friedman draws an important conclusion: Whether it be in Saudi Arabia, Iran, Venezuela, Nigeria, Russia, or Azerbaijan, when because of the high price of oil, oil producing countries do not need to tax their people, they also do not need to listen to them. When they do not need to listen to them, they oppress them. Representation without taxation, Friedman concludes, leads to tyranny.

Friedman intends that lesson to apply to developing countries. But there is another clear lesson. If governments simply avoid taxing their people—simply go into deficit—they too can avoid paying attention to their people. That, of course, is precisely the formula for George Bush and the Republicans for the last five years.

Not actually paying for the Iraq war—taking it off budget and refusing to account for it— has meant that Bush and Cheney did not have to pay attention to Congress or the people’s complaints. Under the moniker of “no new taxes” they have simply found a way to avoid being responsible to the electorate at all. Just as in the oil producing countries, when oil revenues avoid the need for taxes, here, when the government refuses to pay for its wars but finances these with deficits, democratic government is unnecessary. Witness the long string of legal violations from wiretapping, to torture, to violations of the laws prohibiting aggression, to defrauding the congress.

The American republic was founded upon an outraged objection of the early colonists to taxation without representation. Bush and company have turned the formula around. Since they are not taxing, they are not representing. In this, George W. Bush and Vladimir Putin might be natural allies, after all.