Re: Re: Tobin tax

[Chris Burford <cburford@xxxxxxxxxx>]

At 19/08/01 14:22 -0700, Jim wrote:
> On this subject, the usual Tobin story (as I understand it) is that:
> transaction tax --> fewer speculative fluctuations (along with revenue flow).
>
> Recently, in the US, competition among stock brokers (including from
> on-line ones) has led to falling brokerage fees (I believe). Doesn't this
> mean that Tobin's story was working in reverse, so that falling
> transaction costs --> more speculative fluctuations, ceteris paribus?
> Might this be one piece of the puzzle of the 2000 stock market bubble (and
> its partial deflation)?
>
> inquiring minds want to know...

That seems highly likely. While the progressive campaigners need some names
and symbols to publicise the case for policy changes, perhaps analysts and
academics need to transfer even more of the focus to the processes of
movement and flow.

When so much is at stake, it could be considered negligent not to evaluate
ways of giving even small positive and negative reinforcement to
spontaneously occurring trends.

Besides if there have been efficiency savings in transaction costs as a
result of new technology (created by the social forces of humanity, and
privately owned by capitalist corporations) why should some of these
relative superprofits not be taxed? Or at least surcharged - of course for
the collective good of the exchanges which fostered them and are in
desperate competition with other international exchanges.) Only ideology
would forbid that consideration.

Who knows? if the exchanges cannot remain competitive while the volume of
business increases, we might find ourselves with more takeovers, and
essentially one major leading global exchange only. How embarrassing for
capitalism. Attempts to impose national anti-monopoly laws to prevent this
would perhaps delay the process but could not stop the pressures towards
this altogether.

It would be more prudent for the jet-set servants of international global
finance capital to explore more sophisticated ways of controlling capital
flow, rather rapidly. Of course they do not have to be so unsophisticated
to talk about a Tobin tax, but if it suits campaigners to do so, why should
they stop?

Chris Burford
London