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From: James Rogers <jamesr@best.com>
Subject: Native American economics (was Re: sed /s/United States/Roman
    Empire/g)
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Date: Fri, 27 Sep 2002 00:23:39 -0700


I wanted to get back to this but didn't have the time.  I actually lived on
a couple different Indian reservations growing up in the Pacific Northwest
and also spent a fair amount time in Lakota/Sioux country as well.  And my
parents have lived on an even more diverse range of Indian reservations than
I have (my experience being a direct result of living with my parents).  I
do get a lot of my information first-hand, or in some cases, second-hand
from my father.

The income figures for the Indians are somewhat misleading, mostly because
it is really hard to do proper accounting of the effective income.  While it
is true that some Indians live in genuine poverty, it is typically as a
consequence of previous poor decisions that were made by the tribe, not
something that was impressed upon them.

The primary problem with the accounting is that there is a tribal entity
that exists separately from the individuals, typically an "Indian
Corporation" of one type or another where each member of the tribe owns a
single share (the details of when and how a share becomes active varies from
tribe to tribe).  In most tribes, a dividend is paid out to each of the
tribal members from the corporation, usually to the tune of $10-30k per
person, depending on the tribe.  The dividend money comes from a number of
places, with the primary sources being the Federal Gov't and various
businesses/assets owned by the Indian corporation.

You have to understand a couple things:  First, a great many Indian tribes
are run as purely communist enterprises.  Everyone gets a check for their
share no matter what.  One of the biggest problems this has caused is very
high unemployment (often 70-90%) for tribal members, who are more than happy
take their dividend and not work.  The dividend they receive from the
corporation often constitutes their sole "income" for government accounting
purposes.  Unfortunately, to support this type of economics when no one
works, they've had to sell off most of their useful assets to maintain those
dividends.  Many of the tribes genuinely living in poverty do so because
they have run out of things to sell yet nobody works.  One of the ironies is
that on many of the reservations where the tribes still have assets to burn,
many of the people working in the stores and such are actually poor white
folk, not Indians.

Second, even though the tribe members each get a cash dividend, they also
receive an enormous range of benefits and perks from the Indian corporation
to the tune of tens of thousands of dollars per person annually.  By
benefits and perks, we are talking about the kinds of things no other
ordinary American receives from either their employer or the government.

It should be pointed out that while many of these Indian corporations are
ineptly run, and mostly provide sinecures for other Indians, a minority are
very smartly managed and a few hire non-Indian business executives with good
credentials to run their business divisions.  An example of this is the
Haida Corporation, which while having less 1,000 tribal shareholders, has
billions of dollars in assets and the various corporations they own have
gross revenues in the $200-300 million range (and growing).  Yet the
dividend paid out is strictly controlled, about $20k in this particular
case, and they engaged in a practice of waiting a couple decades before
drawing money from any of the assets they were granted which has led to
intelligent investment and use.  They don't eat their seed corn, and have
actually managed to grow their stash.  In contrast, a couple islands over,
there is another tribe of ~2,000 people that has a net loss of about $50
million annually IIRC while being regularly endowed by the Federal
government with several billions of dollars in valuable assets.  This
particular tribe has a modest income in theory, but the actual expenditures
per person annually is in the hundreds of thousands of dollars, and many
borrow money against future income.  Incidentally, in this particular case,
the people that ARE working frequently pull in a few hundred thousand
dollars a year, much of which goes back to the tribal corporation rather
than their own pockets.

Somewhat annoying, the Federal government semi-regularly grants valuable
assets to these tribes when they've burned through the ones previously given
where feasible, typically selling the assets to American or foreign
companies.  And the cycle continues.

So what is the primary problem for the tribes that have problems?  In a
nutshell, a thoroughly pathological culture and society.

Few women reach the age of 16 without getting pregnant.  Incest, rape, and
gross promiscuity is rampant.  Inbreeding, heavy drug abuse during
pregnancy, and other environmental factors have created tribes where a very
substantial fraction of the tribe is literally mentally retarded.  Many of
the thoughtful and intelligent tribe members leave the reservation at the
earliest opportunity, mostly to avoid the problems mentioned above.  On one
reservation my parents lived, the HIV infection rate was >70%.  Many of
these societies are thoroughly corrupt, and the administration of the law is
arbitrary and capricious (they do have their own judges, courts, police
etc).

In short, many of these tribes that are still hanging together are in a
shambles because they have become THE most pathological societies that I
have ever seen anywhere.  Because of their legal status, there really aren't
that many consequences for their behavior.  There are many things that I
could tell you that I've seen that you probably would not believe unless
you'd seen it yourself.  There are always good people in these tribes, but
it has gotten to the point where the losers and idiots outnumber the good
guys by a fair margin many times, and this IS a mobocracy typically.  (BTW,
if any of you white folk wants to experience overt and aggressive racism as
a minority in a place where the rule of law is fiction and the police are
openly thugs, try living on one of these messed up Indian reservations.  It
will give you an interesting perspective on things.)

There are only two real situations where you find reasonably prosperous
Indians.  The first is in the rare case of tribes run by disciplined and
intelligent people that have managed their assets wisely.  The second is
where the tribe has dispersed and assimilated for the most part, even if
they maintain their tribal identity.  In both of these cases, the tribal
leaders reject the insular behavior that tends to lead to the pathological
cases mentioned above.

The Indians are often quite wealthy technically, and a lot of money is spent
by the tribe per capita.  And the actual reportable income is quite high
when you consider how many are living entirely off the tribal dole.  It is
just that their peculiar economic structure does not lend itself well to
ordinary economic analysis by merely looking at their nominal income.  The
poverty is social and cultural in nature, not economic.  This was my
original point.


On a tangent:

One thing that has always interested me is the concept of quasi-tribal
corporate socialism.  Many Indian tribes implement a type of corporate
socialism that is mind-bogglingly bad in execution.  That they use this
structure at all is an accident of history more than anything.  But what has
interested me is that the very smartly managed ones do surprisingly well
over the long run.  It is like a Family Corporation writ large.

It seems that in a future where "familial" ties will be increasingly
voluntary, the general concept may have some merit in general Western
society, serving to create a facsimile of a biological extended family with
the included dynamics, but with an arbitrary set of self-selecting
individuals.

Damn that was long (and its late), and it could have been a lot longer.

-James Rogers
 jamesr@best.com 



On 9/22/02 3:53 PM, "John Hall" <johnhall@evergo.net> wrote:
> 
> As I understand it, there is a huge difference between native Americans
> who speak english at home and those who do not.  I don't have figures
> that separate those at hand, though.
> 
> 1989 American Indians (US Pop as a whole) -- Families below poverty
> 27.2% (10%), Persons below poverty 31.2 (13.1), Speak a language other
> than English 23 (13.8) Married couple families 65.8 (79.5) Median family
> income $21,619 ($35,225) Per Capita $8,284 ($14,420).


