RN: Tobin Tax


Jan Slakov

Dear RN list,   

Hans Sinn, who has worked over the years on civilian-based defence and
civilian peace service, is interested in the Tobin tax idea. An
international tax such as the Tobin tax could be used to fund some of the
things the world so badly needs: basic services for "undeveloped" areas,
peace professionals to mediate and promote understanding in areas torn apart
by fighting, etc.

However, there are reasons to be wary of efforts to build international

Richard's comments and a couple postings he selected as supporting material
(following the Tobin Tax posting) shed light on some of these concerns.
Further discussion of this issue is welcome.

all the best, Jan

Date: Thu, 10 Sep 1998 09:19:51 -0400
To: •••@••.•••
From: Hans Sinn <•••@••.•••>
Subject: Tobin Tax

Dear Jan,

Let me recommend "GOOD TAXES - The Case for Taxing Foreign Currency
Exchange and Other Financial Transactions", it is a 87 page, very
informative, monograph by Alex C. Michalos, Chair of the Dept.of Politics
and Social Science, University of Northern B.C.. Published 1997 by Science
for Peace, Dundrum Press, Toronto, Oxford. The book can be ordered by
e-mail from the Toronto University Book Store for $ 8.99 Can.

Below some excerpts from pages 23-26

" The United Nations Development Program is laying on quite substantial
research program...looking more deeply into the technicalities of enforcing
it (the Tobin Tax) Inge Kaul, director of the UNDP's Office of Development
Studies, argued for purpose of funding the operations of global governance:

' The most obvious place to look for global funding sources are the use of
global (e.g., oceanic seabeds or the air) and globalized activities (e.g.
foreign currency movements and trade, especially trading in global 'bads'
such as export of arms and dumping of toxic wastes...If there were the
requisite political will among UN member states 'to go global' in terms of
the organization's financing, there would be no scarcity of funds. On the
contrary, there would be much more money than the UN is likely to require
for its own purposes in the foreseeable future (Kaul 1995,pp186-187).....

" In its 1994 Human Development Report the UNDP estimated that the cost of
wiping out the worst forms of poverty in the world by providing basic
energy, water and sanitation for the most needy would be between $30 and
$40 billion a year (Ecumenical Coalition for Economic Justice 1995, p.7)
So, on the basis of Felix and Sau's most modest estimate, the global
revenue of a 0.o5% Tobin tax in 1995 would have been two to three times as
great as would have been required to eliminate the world's worst forms of
poverty. No wonder, then, that in the UNDP's ' Human Development Report
1994 (pp.68-69), a Tobin tax was recommended as one source of funding for
'global human security compacts' regarding things such as natural disaster,
ethnic conflicts and environmental pollution. In Langmore's
view(1995,p192), one of the main benefits of the tax is that ' Part of the
revenue could also be used for establishing a permanent reliable source of
funding for the United Nations system at last.... Revenue received by the
UN could be used for disaster relief, security and development."

Best wishes

Hans Sinn
687 Brooke Valley Rd.
RR#4 Perth ON
K7H 3C6

Phone: (613) 264 8833    Fax:  (613) 264 8605

Civilian Peace Service homepage:  <http://www.superaje.com/~marsin/cps.htm>


From: •••@••.••• (Richard K. Moore)

If the UN could become a focus of _resistance to globalization, if NGO's
and Third-World delegates could shift the direction of UN policies, that
would be great.  But is that what the Tobin initiative is about?  If it was
accomplished over the strong objections of the US and EU, that would be a
good sign.  But if the US supports it, then you know it's a trap.

Consider this analogy...  Western governments get a lot of their revenues
from petrol taxes.  What this means then is that Western governments get
into the business of promoting automobile usage and building highways.
That increases their revenues and helps balance their budgets.  The net
effect is increased environmental destruction and global warming.

If the UN gets general revenues from taxing global trade, that makes the UN
an ally of global trade, which only accelertates concentration of ownership
and power in TNC's.  Generally speaking, while the UN is under the thumb of
the Western powers, any changes in the UN are going to be engineered so as
to promote globalization.

Do you believe in local self-sustainability and in localized democracy?  If
so, then that applies at all different levels.  Power should go to the
locality when possible, and then to provinces, and then to nations, and
finally to global institutions, when absolutely necessary.

Nations are the appropriate level to tax capital and financial flows,
because at that level the taxing system can be used as a tool to nurture
national economies, to fund sustainability, etc.  When implemented at a
global level, the goal will instead be to reform the financial system _just
_enough to continue the smooth operation of capitalist domination.

Capitalist "self reform" has occurred often in history.  It has always
looked good at the time, but has ultimately proven, in each case, to be a
consolidation of elite power.  The IMF is now talking about lower interest
rates, and limited controls on capital flows.  But Malaysia, Russia, and
others, who have ideas of their own for such measures, are condemned by the
IMF as "destroying investor confidence".

The IMF, one of the front-line globalist institutions, clearly puts the
suppression of national sovereignty as its highest priority.  That should
be a lesson to those of us who want to resist globalization and promote
democracy.  It is the national level where the engagement between popular
forces and capitalism is most favorable to popular forces.  That is
precisely why globalization is so eagerly attacking national sovereignty,
before resentment against globalization becomes more widespread and
politically potent.

Another "self reform" that is receiving exposure in the media is debt
forgiveness.  Again, it is a sham.  Instead of forgiveness, what is being
proposed is the rewriting of short-term debt into long-term debt, so that
more short-term loans can be made.  And to secure the long-term debt, it is
propose that national oil fields and other assets be signed over to IMF

It is not debtors that benefit from such measures, it is the lenders, as
usual, who would be bailed out, and into whose hands even more of the
world's resources would be transferred.  Below re snippets from some recent
mailings that illustrate some of these points.

all the best,
From: Henry Garman <•••@••.•••>
Cc: •••@••.•••,[list suppressed]
Date: Wed, 2 Sep 1998 13:38:06 -0600

DEBT". In its Sept 7 issue editorial, entitled, "Needed: A New
Deal on Global Debt", {BusinessWeek} magazine states, "it's time
for a global [debt] write-down." It is one of the first
attempts of a major American publication to address in a
significant way the idea that the current mass of outstanding
debt cannot and will not be paid, and that it is time to "wipe
the slate clean."

{BusinessWeek} writes:
"Central bankers flocking to Jackson Hole, Wyo., for their
annual late-August retreat this year might want to take time to
learn ... something called debtor-in-possession financing. DIP
involves segregating the defaulted loans of a bankrupt company,
wiping the slate clean, and starting the borrowing process all

It is time to
consider a global write-down. The best way may be to swap
emerging-market debt for long-term bonds backed by hard
collateral ranging from U.S., German, and Japanese government
bonds to Russian oil reserves."

GLOBALIZATION HAS BEGUN," and states with alarm, "Hong Kong, the
paragon of laissez-faire capitalism, is openly intervening in the
stock market. Thailand and Indonesia are nationalizing banks.
Now, Russia is taking a giant step backward by contemplating
capital and price controls while printing rubles."

After surveying the loan exposure of American, European and
Japanese banks to Asia and Russia, {BW} states, "{All thes banks
are facing significant write-offs on these loans ranging from 30%
in Hong Kong to up to 80% in Indonesia and 90% in Russia. If the
emerging world recession gets worse, the banks could wind up with
nothing}. Better to save something by taking a hit, exchanging
bad debt for new long-term paper.

New lending and new easing are needed to get
everyone back in the growth game."

[ There you have the main goal: keeping the "growth game" going.  And the
growth game, as we all know, is about the growth of elite-owned capital.
-rkm ]

From: "Janet M. Eaton" <•••@••.•••>
Date: Fri, 18 Sep 1998 13:24:14 +0000
Subject: (Fwd) Facts and figures from the Guardian,

             Key facts and stats on the debt burden, courtesy of Guardian

               Thursday May 14, 1998

                 *The staff budget of the IMF could provide a
               basic health care package for more than 14 million
               people in the poorest countries.

                *Rupert Murdoch's wealth is estimated at $4
               billion, the same as the debt of Lebanon.

                * Infant mortality in Zambia in 1970 was 106 per
               1,000 live births. In 1996 it had worsened to 112
               per 1,000. Since 1990 the country has paid a total
               of $4.8 billion in debt service, about one and a half
               times its total economic output in one year.

                 * US investment bank Goldman Sachs is valued
               at $20 billion, which is $100 million for each
               partner. The debt of South Africa is $23 billion,
               which is $550 for each South African.

                 * In the developing world maternal mortality is still
               the leading cause of death among women of
               childbearing age, claiming 600,000 lives globally
               each year, with 30 times that number left disabled.

                * The world's most heavily indebted countries, by
                  size of debt are:
               1. Brazil $179 billion
               2. Mexico: $157 billion
               3. Indonesia $129 billion

                *The world's most heavily indebted countries, by
               debt as a percentage of national output are:
               1. Sao Tome and Principe 647 per cent
               2. Mozambique 432 per cent
               3. Somalia 406 per cent

               *Britain's contribution to HIPC will be around
               £2.5 billion - less than has been spent on National
               Lottery scratchcards and around one-fifth of
               Britain's annual cigarette bill.

                *Britain spends £579 per person each year on
               health and £355 on the military; Jamaica spends
               £30 per person on health, £7 on the military, and
               £165 on debt service; Malawi spends £2 per
               person on health, £1 on the military, and £6 on debt
               service. Neither Malawi nor Jamaica are eligible for
               relief under HIPC as their debts are not big enough.

                *Voting in the World Bank is based on financial
               contributions. The US has 15.29 per cent of votes,
               Britain 5 per cent, China 2.02 per cent, Brazil 1.63
               per cent, India 3.14 per cent, South Africa 0.28 per
               cent, Libya 0.07 per cent, and Zimbabwe 0.10 per

Note from Jan: To add to this collection of statistics, I will copy out some
I got in a mailing from the Montreal-based group, Alternatives, which funds
social justice projects in many countries (Brazil, Canada, Chile, India,
Nigeria, Cuba, Russia, south Africa, Panama, etc.)

- the 10 richest billionaires have more wealth at their disposal than the 48
poorest countries

- 1.3 billion people earn less than $1 per day

- the CEO of Walt Disney Corp. makes an annual income that is 325,000
greater than a worker employed at one of his company's suppliers based in Haiti.

- the world's 500 largest corporations control 70% of world trade

- $809 billion US is spent on armaments every year. [I assume this is a
global figure.]

- 1.2 billion human beings are already experiencing fresh water shortages
- By 2025 the number of people without adequate fresh water could well be 5
and one last note from Jan:
Richard recently posted a very interesting article by Michel Chossudovsky to
the cyberjournal list. (To subscribe, send any message to
       To see the index of the cj archives, send any message to:

It explains how the current financial crises throughout the world are being
engineered in the interests of the world's biggest financial institutions.
It also explains how the provisions of the MAI may well be imposed on the
world through the IMF:

"The timing was right on course: while the approval of the MAI had been
temporarily stalled [in April, 1998], the proposed deregulation of foreign
investment through a more expedient avenue had been officially launched: the
Amendment of the Articles [of the IMF] would for all practical purposes
derogate the powers of national governments to regulate foreign investment.
It would also nullify the efforts of the Worldwide citizens' campaign
against the MAI: the
deregulation of foreign investment would be achieved ("with a stroke of a
pen") without the need for a cumbersome multilateral agreement under OECD or
WTO auspices and without the legal hassle of a global investment treaty
entrenched in international law." (from cj #835)

It looks like we're getting a form of world government whether we like it or
not, and this world government is extremely unlikely to tax the world's
wealthiest people and corporations to fund the transition to a
demilitarized, more environmentally sensible world.