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Monday, November 01, 2010

Under ATTAC- thoughts on the Tobin Tax

Commentary- Joe Carolan

Susan George has been a prominent campaigner against the debts of the Global South, calling for its cancellation in books such as A Fate Worse than Debt, The Debt Boomerang (1992) and The Lugano Report: Preserving Capitalism in the 21st Century. Her books are brilliant exposes of the true horrors of the effects of debt on the poorest countries, and have inspired many people to become involved in the Jubilee Campaign and in her own group, the Association for the Taxation of Financial Transactions for the Aid of Citizens (ATTAC), of which she is vice president. She sees no progressive role for many of the corrupt elites in the Global South who preside over the misery and hunger there. She especially condemns their role in implementing Structural Adjustment Programmes (SAPs) on their populations, slashing health and education spending to pay the interest on World Bank and IMF loans-

“Wealthy and influential people in the debtor countries are not necessarily displeased with the way this crisis has been handled. Structural adjustment has forced down workers” wages, and laws – such as they are – concerning working conditions, health, safety and the environment can easily be flouted ... Having largely escaped debt fallout, their concern is to belong to the increasingly globalised elite to play on the same courts as their counterparts in New York, Paris or London.” [23]

George, a prominent thought leader in the movement, became a leading figure in ATTAC, which looked to a strategy of putting pressure on social democratic governments by creating civic alliances in civil society. This strategy was suggested by Pierre Bourdieu, when he looked for a European Social Movement that would recapture ‘the nation-state, or better yet the supranational state - a European state on the way toward a world state - capable of effectively controlling and taxing the profits earned in the financial markets and, above all, of counteracting the destructive impact that the latter have on the labour market’ [24]

ATTAC re imagined a new reformism opposed to the social liberal, Third Way orthodoxy of Blair and Schroder. Susan George was adamant that
“Neo-liberalism is not the natural human condition, it is not supernatural, it can be challenged and replaced because its own failures will require this. We have to be ready with replacement policies which restore power to communities and democratic States while working to institute democracy, the rule of law and fair distribution at the international level.”[25]

Nearly seven years before the Battle of Seattle, George predicted the kind of alliances that the Global Justice movement would throw up. She believed that these alliances could exert enough moral pressure on social democracy for their governments to change policies. She writes, in The Debt Boomerang, of: “Building bridges in the North between environmentalists, trade unionists …activists for immigrants’ rights, members of Third World solidarity groups or non-governmental organisations (NGOs), and that broadest category of all-taxpayers. We hope that each of these constituencies will see the need to work together for alternative policies and, simultaneously, the need to work effectively with their counterparts in the South.” [26]

ATTAC’s main demand is for (social democratic) governments to implement a
Tobin tax on capital transactions, in order to fund social programmes and strengthen the ability of national government to regulate economic life. First proposed by Nobel prize-winning economist James Tobin in the 1970s, his idea of a currency transactions tax (CTT), or Tobin tax is seen by many to be a concrete demand of the Global Justice movement. According to the Irish ATTAC website, over one trillion dollars ($1,000,000,000,000) changes hands every day on global foreign exchange markets. More than 80% of this trading is of a speculative nature, buying and selling money for profit’s sake. (This speculation was blamed for accentuating the economic crisis in East Asia and Russia, where millions lost their jobs.)

It has been estimated that a tax of 0.1%, collected by Central Banks or regulatory authorities, could raise between $50 and $300 billion a year (see www.attac.org). The US has already spent nearly $100 billion on the war in Iraq. It has also spent around $30 billion on "homeland security". Yet, according to the UNDP report, just $80 billion a year would provide universal access to basic social services, give everyone clean water and reduce poverty enough to eliminate malnutrition.

Even though many individual parliaments and parties have broadly supported the Tobin Tax, it has yet to be implemented internationally. In a climate where overseas aid from the rich countries is actually dropping in real terms, there is a danger that this reform becomes its substitute. The problem is that the structural causes of exploitation and poverty remain intact.

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