Issue 243 of SOCIALIST REVIEW Published July/August 2000 Copyright © Socialist Review


Sand in the wheels of speculation

Jim Wolfreys looks at the Tobin tax and the campaign around it
Demonstrators in Paris against global capital

'Our struggle is stronger than capitalism!' read the banner of the South Korean contingent on an international demonstration organised in Paris last summer by Attac, the Association for the Taxation of Financial Transactions for the Aid of Citizens. The banner highlighted two important features of the new militancy that characterises the present situation in France. Firstly, the widespread backlash against neo-liberalism incorporates a powerful element of anti-capitalism, and secondly, initiatives originating in France have very quickly taken on an international dimension. Attac itself represents one of the most striking examples of this phenomenon.

Set up in 1998 by various trade unions, associations and radical journals following an influential article by the editor of Le Monde Diplomatique entitled 'Disarm the Markets', Attac's initial goal was the imposition of a so called Tobin tax, or 'global solidarity tax', on financial transactions. The tax, which takes its name from the Nobel Prize winning American economist James Tobin, would be imposed on all transactions on exchange markets at the rate of between 0.1 percent and 0.25 percent. The money would then be used to fight global inequality and fund sustainable development. While 1.7 billion individuals live on less than a dollar a day, over 1,500 billion dollars are speculated daily on variations on exchange rates. A tax of 0.1 percent on each transaction would bring in an estimated $228 billion annually.

Tobin's proposal was originally made in the 1970s following the intense financial speculation that followed the oil crisis and the collapse of the dollar. It was intended primarily to stabilise the markets by imposing a charge on speculation. The inspiration for the tax, and the prospect of throwing 'a grain of sand in the wheels of speculation', came from Keynes. Combating world poverty, however, was not part of the original plan. Indeed, Tobin suggested that the tax be collected either by the World Bank or the IMF.

When Attac was set up in the wake of the 1997 collapse of the Asian tiger economies it had two goals. Regulation of financial markets would enable a proportion of profits made from speculation to be redirected towards the fight against world poverty, and it would also bring stability to the system internationally. But as Bernard Cassen, the association's president, has pointed out, the Tobin tax has now become a symbol of the desire to defend democracy against the threat posed by the freedom of capital to circulate. The call to redistribute the funds raised through such a tax has found a significant echo: in the two years since its formation Attac has formed over 130 local committees in France with over 20,000 members, along with an international network covering a total of 18 countries.

The Tobin tax proposal has won support from a broad spectrum stretching from the Finnish government, a sizeable group of French deputies and Tory MP Peter Bottomley to Susan George, Tony Benn MP and the Trotskyist Euro MP Alain Krivine. Its supporters therefore range from those who see the tax as a means to stabilise the markets, those who want to see nation states playing a greater role in the world economy and those who want to see it overthrown.

This diversity reflects some of the contradictions at the heart of the proposal. If, for example, the tax were to be effective in reducing the volume of financial speculation, itself a dubious proposition, then its very success would automatically reduce the amounts raised through the tax which were intended to be redistributed to the world's poor. Moreover, in targeting simply speculation as the principal cause of crisis and instability, advocates of a Tobin tax ignore the destructive role played by the drive for profits of capitalist production as a whole, not just those profits made on exchange markets. Alongside such debates lies a more fundamental question about how those running the world's leading financial institutions can be forced to divert billions of dollars worth of profit into the hands of the world's poor.

Attac is not just a symptom of the backlash against neo-liberalism. Its proposals to combat global inequalities also, in the association's own words, 'feed the logic of resistance' and raise questions about the nature of the economy which go beyond the confines of the original proposal. The scope of Attac's aims has therefore been extended and its targets now include tax havens, the World Trade Organisation and corporate control of pension funds. There is a potential for radicalisation, then, which gives rise to tensions within the association between those who envisage its role as more of a think tank or lobbying group and the more combative elements who see it as a means of actively defying the markets. So, while Attac has played a leading role in the organisation of anti-capitalist demonstrations across France, it has also been drawn into the orbit of mainstream political parties anxious to co-opt the association for electoral purposes.

Like other ongoing initiatives, such as the proposal for an Estates General of the European Social Movement launched by the Raisons d'Agir group around sociologist Pierre Bourdieu, the success of Attac derives partly from the political abdication of European social democracy.

The echo which this proposal has found, winning support from representatives of French, Italian, German and Greek trade unions, along with hundreds of associations, academics, artists and writers, together with the lightning development of Attac, demonstrates the breadth of the audience for those groups which have been able to reflect the growing mood of resistance to the markets. Many thousands of people are drawn into such initiatives and are looking for answers. Associations like Attac, while not necessarily offering answers themselves, nevertheless pose a challenge to socialists to provide them.

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