The Sole Proprietor in the Utopia of Rules

Each year at the end of June, anyone in San Luis Obispo, California who has a business license must pay their city tax in order to renew it. I have such a license, and as the end of June approached, I tried to do so.

I had not received any sort of notice in the mail to tell me of the impending deadline (I’d left myself a note on my calendar), and I was unsure of the process. So I googled around and eventually found the city government web page for business license renewals:

Coming Soon! Business License Payments Online. We are improving for you. Business owners will be able to pay their business license renewals online starting June 2015.

It being well into by this time, these promised improvements (for me!) gave me mixed feelings. I decided that rather than wait, I would go down in person to renew my license.

As the city had evidently anticipated that their online renewal process would be ready by the deadline, they’d not bothered to put information on their site about how or where to pay in person. But if you were applying for a new business license, you’d go to the Community Development Department, so that’s where I went.

They were closed for lunch, and didn’t open until some time after their posted time (which, as a fan of malingering in government bureaucracies, I was unable to get upset about). When I finally got in, I was told I was in the wrong place; I should go to the offices across the street (one of the benefits of being in a small town; were I still in San Francisco, they’d have probably sent me across the city somewhere).

When I got there, though, they explained that they were late this year in getting their renewal letters out and that I couldn’t renew my license until I got one.

On the same block as the Community Development Department is the local library branch, and so as long as I was in the area, I popped in to pick up the book I’d put on reserve: David Graeber’s The Utopia of Rules: On Technology, Stupidity, and the Secret Joys of Bureaucracy. More on that in a moment.

First, it occurs to me that my tale is not quite told. Why is an anarchist tax resister like me paying the government a Ⅽ-note (more or less; I don’t know the exact amount they plan to ding me for) for permission to do business — particularly a business like mine that could probably stay undocumented and under the radar perpetually?

It has to do with tax stuff, of course. For one thing, municipal taxes don’t bother me quite so much as taxes at the federal level. I’ve got to pick my battles, and fighting city hall over their attempt to tax me for doing business in town just isn’t how I want to spend my time.

But here’s the reason I decided to get licensed in the first place: I am a self-employed sole proprietor; that is to say I have a business, but I’m the only employee, and I’m not incorporated. I’m in part an independent contractor — a “consultant” when I’m putting on airs. I also do independent publishing in which I neither contract nor consult but work more-or-less completely for and by myself.

As such, I am responsible for all of my own taxes, concerning which, in the case of federal taxes anyway, I take my responsibilities quite seriously and refuse to pay a penny of them. My clients just pay me what’s on the invoices I send them (at least when I’m lucky); they don’t give Uncle Sam a cut, as they would if I were one of their employees.

Some businesses really like the idea of managing an army of contractors instead of a bunch of employees (see, for instance, Uber). This is for many reasons, not having to cough up payroll taxes only being one of them. But the IRS doesn’t like it when businesses have employees, call them contractors, and then use this excuse to weasel out of coughing up taxes on their wages. And they’ve hit some businesses with very expensive legal battles and costly fines, penalties, and taxes for trying to play too loose with the rules.

Some unscrupulous contractors have also used this to their advantage. They sign a contract that requires them to pay their own self-employment taxes, benefits, insurance, and so forth in return for an attractive pay rate, and then, after the contract is over, they sue the company, saying that they were employees all along and that the employer should have paid half of their payroll taxes… and given them benefits, overtime, vacation, stock options, and whatever other gravy they’d like to get their hands on.

The actual rules that govern the employee/contractor distinction seem to be of the more-an-art-than-a-science variety. (Here’s a pamphlet in which the IRS tries to describe the criteria it uses.) This has made some businesses understandably paranoid about using contractors. Some companies became so frightened that they gave up on contracting at all when there was any possibility of confusion. (This is another way the government undermines small business and individual entrepreneurs in favor of large corporations and disempowered wage labor, you may note.)

So, my business license and my gratuitous “Doing Business As” aliases (to obtain which, in a hilariously anachronistic way, required me to place an ad in the local print newsweekly for four consecutive weeks to alert any obsessive-compulsive readers of fine print as to my intentions) are in large part meant to soothe my worried clients and reassure them that yes, indeed, I am a contractor and no, certainly, I do not consider myself their employee.

My clients write my checks to my fictitious business name rather than to me, for example. (But even with this amount of bureaucratic prophylaxis, one regular client of mine refuses to contract with me directly, but instead contracts with an agency who in turn contracts with me to get the work done. This agency gets a healthy cut for doing nothing but passing along payments from the company I’m really working with and providing a buffer of sorts against the threat of government shenanigans.)

(I could go on about various other little permits and requirements and such that were involved in getting properly certified to write for money in my town, or to turn checks made out to something other than the name on my birth certificate into money, and which offices I had to scurry around to with which forms back and forth until they were appropriately stamped and signed and attached to one another in the proper order, but enough is enough.)

Where was I? This is a book review, I think.

There are two seemingly conflicting ideas of what it means to be privileged and powerful: on the one hand, it means that you no longer have to bother yourself about the day-to-day tedium of how to get your needs met; but on the other hand, it means that you’re in charge of all of this day-to-day tedium of how people get their needs met — bwa ha ha. You get to decide who owns what and how transactions will get transacted and who gets their cut.

Bureaucracy, according to Graeber, is part of the solution to this conflict. It allows the powerful and privileged to maintain their blissful ignorance of the tedium and the personalities of the hoi polloi they lord over, while giving them the illusion of knowledge so they can be confident in their mastery. Bureaucracy tediously collects data of usually stupid varieties and then summarizes them craftily so as to make it seem the epitome of knowledge — something that someone of privilege can digest in an afternoon and then feel as knowledgeable as though he had spent years among the people learning the lay of the land.

I can relate to this. I was once a low-level manager (more of a team leader) at a software company. Part of what I was supposed to do was valuable: I was supposed to motivate the employees on my team to work productively and to feel good about what they were doing, and to help promote their career goals, and also to help coordinate their efforts. But most of what my new role entailed was wholly bureaucratic: supplying “metrics” to and writing weekly “progress reports” for people further up the ladder that they could use to justify their decisions (decisions I suspect that they would have made in just as slapdash a fashion without my input). I eventually found that my most useful role was to be an insulator between upper management and the people doing productive work — protecting the latter from having to think about the bombastic and erratic pronouncements of the former.

So, anyway, one of the purposes of bureaucracy is to organize ignorance in such a way that it allows powerful people to maintain their hard-earned stupidity while projecting an air of command and control. “Bureaucratic procedures,” writes Graeber, “which have an uncanny ability to make even the smartest people act like idiots, are not so much forms of stupidity in themselves, as they are ways of managing situations already stupid because of the effects of structural violence.”

By “structural violence” he doesn’t mean “metaphorical violence” as in “the ideology of racism is a form of structural violence because of how it demeans its victims” but he means “actual violence” as in “racism is perpetuated by the threat and use of police billy clubs on behalf of the dominant racial group, among other such things.” That violence is stupid is not an insult to violence but a description of it: it is the antithesis of understanding.

Graeber’s analysis of bureaucracy, both in government and in the more-or-less private sector, is also an analysis of how structural violence and bureaucracy support and justify each other, and also how the rest of us become complicit in structural violence and bureaucracy in pursuit of our own little slice of the stupid that we can luxuriate in from time to time.

My advice would be to skip the author’s introduction, which is kind of sloppy, and go directly to chapter one: “Dead Zones of the Imagination: An Essay on Structural Stupidity” (also available on-line in an earlier form as “Dead zones of the imagination: On violence, bureaucracy, and interpretive labor”).

Chapter two, “Of Flying Cars and the Declining Rate of Profit,” is also available on-line. That leaves chapter three, “The Utopia of Rules, or Why We Really Love Bureaucracy After All,” for which you’ll actually have to get your hands on the book, and an Appendix, “On Batman and the Problem of Constituent Power” which is a meditation on the Batman movies and what sort of mythology they constitute.