Castle in the Ukraine. In centuries past, a way of obtaining income was to capture territory, control the land, take a share of what was produced, and defend the territory against others. Credit: Черный Максим

Obtaining income

Basic statement. The principal ways in which income is obtained in a harmful economic system are twofold: 1) obtain it through the government, or 2) use the government to obtain and maintain sources of income that are (apparently) obtained in other ways. These are not substantially different, but may appear so at first.

Obtaining income from the government. There are a wide variety of means in which government officials and others obtain revenue from the government. The first thing to recognize is that people at the top of government, or those who have significant control over the government but who are not government officials—often entrepreneurs or corporations—can and do plunder resources coming into the government. Government revenue is often not devoted to productive services but siphoned off by those in control of the government. Such activity is typically referred to as corruption. A nation expects that its national resources will be used for the benefit of the nation. However, very large amounts of such revenue are often used to enrich those who control or have influence with the government. People at lower levels of government can obtain income too, by not providing services which they are paid to provide, by charging for services which they should provide, or by taking goods, such as medical supplies or automobiles/trucks, which should be used for government service.  Avoidance of government taxes of all sorts is common.

Using the government to obtain resources. Privileged groups can often obtain access to natural resources.  The allocation of natural resources such as oil and land and the income therefrom frequently go to international corporations, allies and supporters of high government officials, and government officials themselves. These structures of domination, control and income distribution have been going on for centuries and have resulted in highly unequal societies.  For example, the Spanish conquest of Latin America resulted in a society where land and other natural resources and larger scale economic opportunities were in the hands of a few.  This unequal distribution of land and income has persisted to this day.

Behavior of the type described here has also been referred to as Kleptocracy (Wikipedia 2013) and Crony capitalism (Wikipedia 2013).

Above Photo caption: Castle in the Ukraine.  In centuries past, a way of obtaining income was to capture territory, control the land,  take a share of what was produced, and defend the territory against others.  Credit: Черный Максим

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