When the state becomes a tribe!

The state has been presented to us as such a sacred structure that we, in turn, sanctify it with this belief, and even worship it. 

However, the state is not at all something sacred or worthy of worship; it is merely a modernized version of tribal or clan structures. What I mean is that just as much as a person was a subject in a tribe or clan in the past, they are just as much a subject to the state in a different guise today: 

I can almost hear the criticisms: No, it's not that bad, my dear readers say. Yes, my readers are right in some respects. Yes, the modern state is very different from the tribe or clan of the past. What makes the modern state of our age different from the tribe or clan of the past is not the organizational scale that societies have reached over time as a state, but the progress and evolution of the societies themselves. Let me try to elaborate on this view by leaning partially on the thesis of our famous thinker, the American Daron Acemoğlu, who links the development of societies to institutional developments. However, I would like to note immediately that I do not think it is entirely correct to link the direct relationship between institutions and social development to a causality as if institutions affect society. That is to say, the thesis that institutions affect social development in every case and condition is not absolutely true. In the initial stages, society develops, and in the middle and advanced stages of development, institutions shape societies and carry them to perfection. For example, when we look at advanced industrial countries, the founding dates of universities go back to the 1100s or so; that is, the initial development occurred at the social level. However, the opposite is true for the Athenian Civilization. Namely, while there was almost no positive development in the infrastructure, the fact that philosophers who shed light to this day were raised cannot be explained by any method. 

If we cut this very important discussion here and return to our topic, I can convey my thought as follows. The characteristics of a state structure, such as its commitment to the rule of law and its preference for merit over loyalty, stem from the social structure itself. The degree of virtue in the social structure is equivalent to the degree of virtue of the public servants who have taken office in the state. In short, the structure we call the state is not above society, but a kind of reflection of it. 

So, why did I say all this? If the state structure reflects the people, how is it that a segment of society criticizes the state and politicians due to various practices and policies? This is exactly the point that reflects the crux of who is criticizing today's state apparatus and for what reason. Today's state actions are not seriously criticized by those who make money out of thin air, the black-money rich, or the industrial and bourgeois segment that receives extraordinary tax breaks from the state as industrialists. Of course, the bourgeois segment also has some criticisms; in fact, as happened to TÜSİAD executives in recent months, some criticisms also come from the upper wealthy segment of society. But if one pays attention, the wealthy segment has not brought much criticism other than complaints about the latest tax or interest rate or similar economic decisions, because the state belongs to them. Naturally, there may be criticisms on some points, but when the issue is taken to the ballot box, they cling to the existing political structure again. However, if we look at the middle-income and low-income poor segment, they also cling to the existing political party for two reasons. First, the AKP is comfortable, having effectively tied a significant segment of society to the party with a policy that can be characterized as "impoverish first, then support partially in a way that turns into votes." The second is formed by those who fall prey to the way a segment of society uses the media and the traps of its trolls. The use of media in a politically extremely unethical manner and the feeding of trolls, and the fact that the public believes these wretches, is as much a matter of the public's level as it is a party error. 

Let us consider all these formations in the context of the recent VAT and SCT hikes. As a first reaction, opposing these taxes is both natural and correct. Because VAT and SCT, as indirect taxes, are inversely proportional to income and are therefore not in accordance with tax justice. But when we look carefully, which products have these taxes been imposed on? Not on the essential goods used by the general public, but generally on relatively luxury goods used by upper-income groups. Well, in this case, can we still talk about tax injustice? In my opinion, no! Our people's consumer preference, which is extremely prone to advertising, leads them to take out high-interest loans to buy cars. In fact, our people's love for consumption also leads them to run for loans that they will work for two months to pay off for a two-week vacation. I did not list these justifications to prove that the taxes are legitimate and appropriate. But let us not overlook two points. Public spending, especially waste, is requested to be cut. This demand is extremely correct and appropriate, but what is the public doing? Let me share a piece from my Japan memoir. In the crowded shopping malls in Tokyo, the sections selling foreign brands were empty. When I asked the Japanese about this situation, the answer I received from almost all of them was, "We are rich, we can bring in world brands, but we are not stupid, we don't buy them." Now let's look at us. A part of our people do not know how to board the Marmaray or the Metro. Buses already belong to the public; it is a disgrace for the citizens! Now these people stand up and say, let the state save money. As an economist, I am also in favor of the state saving money, but my preference is for the entire society to save, not just the state.

Let's come to the VAT and SCT on cars. Dear friends, we see such cars on the streets that it is almost like walking on parquet floors in a living room with football boots; they do not even fit the streets. Well, who buys these off-road vehicles, not even a single bolt of which is produced in Turkey, and where do they use them? If the arrival of these cars in Turkey negatively affects our current account deficit and does not reflect Turkey's general income level, wouldn't it be reasonable to restrict such expenditures through taxes? There is also this side of the matter: Some brands are produced in Turkey, but a large part of their inputs are imported. Therefore, it may be desired to restrict the consumption of cars produced domestically as well and to direct them to exports. I don't know if this result will be achieved; some information is needed to be able to talk about this. Up to this point, the issue can be handled in terms of tax justice. Here, VAT and SCT, which are in the nature of indirect taxes, have been imposed not on the public, but on the relatively wealthy segment. In this respect, it can be seen as reasonable. 

It can be argued that fiscal intervention to correct income distribution for the wealthy segment should be done not through indirect taxes, but by avoiding tax advantages granted to the upper-income group, such as tax deductions. This argument is correct, but perhaps the preference of politicians is dominated by the logic of "let's ease the industrialist's hand while creating income, but tighten it when spending is done." This is the logic in Expenditure-Type Taxation, which was once applied in only two countries but is not applied today, yet whose history goes back to Hobbes and has recently been defended by a very famous economist like Kaldor. I don't know, did they copy this view from there?

Anyway, tax is always a socio-economic phenomenon that hurts the public and wears down politics. However, the subject of our Turkey is not at a level that can be reduced to such a more comfortable topic. If politics is used this way and the public supports this course, even if it is decreasing, the state will become a tribe, and a clan too!