December 22, 1999
The historical importance of the battle of Seattle at the World Trade Organisation summit was that it said "Bollocks" to those who foolishly felt that capitalism had vanquished all its foes. Seattle doesn't in itself represent a coherent alternative but it does put the burning issue of world poverty on the map.
Despite the democratisation and social improvements that have been forced on our rulers, it remains the case that far too many of the world's people live short, nasty and brutish lives. And key decisions that affect our lives are not subject to democratic influence but taken by a small number of multinational companies which are richer than most countries and act in their own interests, often regardless of the consequences.
Faced with the enormous scale of this task, most people will understandably retreat into more manageable issues. But there is a feasible and credible alternative that can restore democratic sovereignty, limit the operations of international fat cats and raise hundreds of billions for development and peace. It's called the Tobin Tax which is usually greeted by blank looks in the UK but which is the focus of a growing movement of greens, socialists and others throughout Europe and in many places which have suffered at the hands of speculators.
The Tobin Tax began in 1972 as an academic response to the destablising effects of foreign exchange trading which then stood at about $85 billion a day. Tobin argued that a small tax on such transactions would throw some sand in the wheels and enable greater economic stability. The revenues were less important to him.
However, the scale of speculation now stands at $1.5 trillion a day. For those who don't know what a trillion is - it's either 10 to the 12th or 10 to the 18th depending on whether you use American or British definitions.
The other difference between 1972 and now is that the vast majority of these transactions is entirely unrelated to trade in real goods and services. It's about making a fast buck or billion. And this speculation can now move at lightning speed thanks to computers and dealers can destablise governments in literally seconds as they do down currencies and ruin millions of people's lives.
Of course, a small tax of say 0.25% will not completely stop this speculation but may help to reduce it and raise enormous revenues. It's a perfect Blairite tax that hits few but benefits many. War on Want estimates to the tune of £250 billion a year. This is more than enough to begin to eradicate poverty and tackle environmental crises throughout the globe.
Not that it's all plain sailing as Tobin would require a universal regime to minimise dealing houses from migrating to other financial centres. But here's the rub. Traders have devised ways of preventing their partners from ratting on the deals. The details are complex but it comes down to something very simple - the procedures designed to protect the system can be used to tax it.
100% enforcement is probably naí¯ve but this applies to any other tax or law and can be dealt with technically on the basis that where there's a will, there's a way. And this is the most important issue -resistance by international capital and political mobilisation for reining in the speculators.
Support has been growing in the last decade. The late French Socialist Leader Francois Mitterand backed Tobin and there is a growing ferment in France on the issue with about 14,000 people signing up to a campaign in the last year and organising large demonstrations. The Canadian Parliament and the Finnish Government, which currently holds the European Union Presidency, back Tobin.
The UK International Development Minister, Clare Short has said that the idea is an interesting possibility and has called for a battle of ideas. So, the next time someone asks you what you want for the Millennium, you know the answer - Tobin, Now, Now, Now!
Anyone who wants more information on the Tobin Tax can contact Gary Kent through the Fortnight office or via This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Or ATTAC in Ireland This e-mail address is being protected from spambots. You need JavaScript enabled to view it
FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C íŸ 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
