The Republic of Penokolis is a huge, efficient nation, remarkable for its frequent executions, ritual sacrifices, and irreverence towards religion. The hard-nosed, hard-working, cynical, humorless population of 589 million Penokolisians are kept under strict control by the oppressive government, which measures its success by the nation's GDP and refers to individual citizens as "human resources."

The large, corrupt, moralistic, well-organized government juggles the competing demands of Defense, Law & Order, and Administration. It meets to discuss matters of state in the capital city of Agartha. Citizens pay a flat income tax of 64.0%.

The powerhouse Penokolisian economy, worth 56.9 trillion Limestones a year, is highly specialized and dominated by the Arms Manufacturing industry, with significant contributions from Information Technology, Trout Farming, and Uranium Mining. Black market activity is rampant. Average income is 96,652 Limestones, but there is a large disparity between incomes, with the richest 10% of citizens earning 454,288 per year while the poor average 12,235, a ratio of 37.1 to 1.

The "war on terror" doesn't seem to be making Penokolisians any less frightened, alcoholics are lauded as national benefactors within the halls of the Ministry of Finance, children are often punished for the sins of the fathers, and the roundel of the Penokolisian Air Force has become an internationally recognized symbol of destruction. Crime, especially youth-related, is totally unknown, thanks to the all-pervasive police force and progressive social policies in education and welfare. Penokolis's national animal is the seagull.

Penokolis is ranked 243,066^th in the world and 2^nd in Naha for Lowest Overall Tax Burden, scoring -5.39 on the Hayek Index.