50
Focus
Patomäki
The Tobin Tax
and the emergence of malnutrition and hunger was a direct result. The crisis spread elsewhere: Brazil, the Russian Federation and South Africa. In the Russian Federation due to the crisis of August 1998 and thereafter, most salaries rapidly fell below the absolute minimum cost of living after a 40–50 per cent drop in real income. In other words, tens of millions of Russians suffered acutely from the collapse of the economy, which was reinforced by the financial crisis. Many more people in Asia, Brazil, the Russian Federation and South Africa have been facing the long-term effects of declining, or simply disappearing, public health care, education, pensions and social benefits. Given the current global financial system and the principles governing it, those who suffer the most typically have the least to do with producing the crisis. ATTAC (Association pour la Taxation des Transactions pour l’Aide aux Citoyens), founded in Paris 1998, is perhaps the most important building block of the movement that emerged from the crisis of 1997–1998. In the context of widespread disillusionment among the supporters of traditional Leftist parties in France, the Asian crisis triggered a strong reaction. Ignacio Ramonet, editor of the Le Monde Diplomatique, published an article in December 1997 entitled “Disarm the Markets”. He stated that there are two closely related problems: the volatility and magnitude of global financial markets that “is causing universal insecurity”; and the threat to democracy posed by global finance. Consequently, he proposed three measures: (i) closing down tax havens; (ii) increasing taxes on unearned income; and (iii) levying a tax on currency transactions. Ramonet also suggested the establishment of a new organization advocating the Tobin tax. As an immediate result of the proposal in Le Monde Diplomatique, which provoked unheard of resonance from the readership, ATTAC France was founded on 3 June 1998. International ATTAC was founded two months later, and by summer 2000, a large number of associations were formed in Europe, Latin America, North America, North Africa and sub-Saharan Africa. Quite independently from the establishment of ATTAC, a number of developmental and/or cosmopolitical NGOs either
took the Tobin tax as a key campaigning tool and a priority in the mid-1990s, or in the wake of the Asian crisis. Dozens of other national and transnational organizations have included the Tobin tax in their platforms, including the Parliamentarians for Global Action and the Commission on Global Governance. Moreover, there have also been civic actors in Asia struggling for the Tobin tax, in particular the Third World Network based in Malaysia, and Focus on the Global South based in Thailand (working also in the Philippines and the Republic of Korea).
process, and was the biggest forum in terms of numbers. In 2005, the WSF returned, successfully, to Porto Alegre; and in 2006, the WSF was organized simultaneously in Bamako, Caracas, and Karachi. In 2007 the Forum was in Nairobi, Kenya, while in January 2008 it was substituted with a Global Action Day. In 2009, the WSF will return to Brazil, and will be held in the city of Belém. Thus far, the WSF has remained an open space and it has not adopted any campaigns in its own name, although it has precipitated campaigning on various financial issues, including the CTT. Meanwhile, the transnational campaign for the CTT succeeded in raising the issue on the agenda of many national parliaments, as well as the European Parliament and a number of international organizations, including the United Nations. The parliaments of both Canada (1999) and France (2001) have adopted motions supportive to the implementation of the tax, and in July 2004 a law was passed in the Belgian parliament. This enthusiasm notwithstanding, the CTT is still far from being realized.
called network society would allow for. Simply put, the Tobin tax is based on the assumption that the emergent “space of global flows” is a product of human actions. This means that it can also be transformed, and in particular, it can be transformed to better fit with morally, economically and politically desirable aims, as judged within a democratic dialogue. By emancipatory, I mean that the Tobin tax provides possibilities for “the transition from an unwanted, unnecessary and oppressive situation to a wanted and/or needed and empowering or more flourishing situation”(5). This implies new global responsibilities and institutional arrangements.
Global Civil Society The campaign for the CTT is also closely associated with the development of a general global civil society. In January 1999, various organizations started preparing a counter-event to the World Economic Forum (WEF) under the banners of “another Davos” and “anti-Davos”. These included both Le Monde Diplomatique and ATTAC. At the first anti-Davos event, which took place in parallel to the WEF 2000, various groups held a seminar in Zurich and then marched to Davos. The difficult geographical conditions and heavy police presence convinced some of the key organizers that it would be difficult to take this route in subsequent years. A concrete initiative for a worldwide forum emerged in early 2000, in Brazil. Calling itself the World Social Forum (WSF), it changed only one key word from its adversary’s name. It was decided to be organized on the same dates as the WEF, partially because this symbolism would be attractive to the media. The first WSF was held in Porto Alegre, a municipality with an interesting history of participatory budget practices, which backed the WSF movement. In January 2001, more than about 5,000 participants from 117 countries and thousands of Brazilian activists attended the events. The figures from the second forum show momentous growth, rising to over 12,000 official delegates from 123 countries and tens of thousands of participants, mostly from Brazil. The third forum in January 2003 attracted over 20,000 official delegates and approximately 100,000 participants in total. The global media impact of the second and third forums was significantly stronger than the first year. The WSF 2004 in Mumbai, India, made the social forum a worldwide
Global Taxation: Towards a New Politics of Globalization? Over the past years, there have been many studies that describe the current situation as a re-emergence of the 1920s-style global financial markets (and perhaps we need no reminder of the global disasters of that epoch). Others document and explain the rapid development of unregulated offshore markets and tax havens. It is clear that these processes would not have happened without state action – particularly by the US and the UK. These deregulatory measures opened the way, and sometimes explicitly encouraged, new financial innovations. The IMF and many central banks have played an important role in pressing for further financial market liberalisation. Once having become material, and of increasing tangible effects, the financial markets themselves steadily accumulated strong influence and an expansive range of interests(4). With this historical perspective in mind, and the state’s role in it, Tobin’s idea seems to be much more emancipatory than what many of the recent accounts of globalization, postmodernisation and development of a so-
Problems of Sovereignty, Governance and Democracy Taxation is a social institution with a long history. It is a deeply political issue which cuts across a number of jurisdictions, so to speak: state sovereignty, surveillance, governance and democracy. Is this a problem for the Tobin tax? The development of the capitalist money economy, a modern bureaucracy and the development of sovereign nation-states provided the preconditions of modern forms of taxation. In 17th and 18th century Europe, taxation became fiscal in the proper sense of the term, as a recognised public domain of finance and expenditure emerged. Moreover, a separate and autonomous field of economy – supposedly following its own laws – was constructed, based on the institution of private ownership. On the other hand, taxation was the means to underwrite the state’s expenses. However, as Giddens correctly observes, with modernisation: … taxation also becomes closely bound up with the surveillance operations of the state. Tax policies come to be used both to monitor and to regulate the distribution and the activities of the population, and participate in the burgeoning of surveillance operations as a whole. Taxes, it has been said, ‘are used as tools to increase population (tax burden on bachelors; tax reduction for children), to reduce laziness and to force people to work, to check certain human vices, to influence consumption patterns (particularly conspicuous consumption) and so forth. The education or social goals of such taxes characteristically prevail over the fiscal goals.(6)