Robin Hood tax: an idea whose time has come?

November 10, 2010 at 8:02 pm (anonymous, capitalism, capitalist crisis, Jim D)

Some unions, NGO’s and sections of the left are presently busy promoting the so-called “Robin Hood Tax” as an alternative to the Con-Dem cuts in  the UK and mainstream capitalist rersponses to the world economic crisis. It’s not a new idea, and traces its origins back to the 1970′s when  Nobel Laureate economist James Tobin  suggested a currency transaction tax , was originally defined as a tax on all spot conversions of one currency into another.

Tobin said:

“It would be an internationally agreed uniform tax, administered by each government over its own jurisdiction. Britain, for example, would be responsible for taxing all inter-currency transactions in Eurocurrency banks and brokers located in London, even when sterling was not involved. The tax proceeds could appropriately be paid into the IMF or World Bank. The tax would apply to all purchases of financial instruments denominated in another currency—from currency and coin to equity securities. It would have to apply, I think, to all payments in one currency for goods, services, and real assets sold by a resident of another currency area. I don’t intend to add even a small barrier to trade. But I see offhand no other way to prevent financial transactions disguised as trade.”^[1]

I’m personally not entirely convinced that the “Robin Hood”/Tobin tax is the panacea some would have us believe. Doubts remain about its practicability and about how easy it would be to avoid. Tobin himself eventually rejected his own idea as unfeasible, though Joseph Stiglitz said in 2005, the tax is “much more feasible today” than a few decades ago, when Tobin recanted.^[34]

And, of course, anything that makes the bankers pay even a tiny amount towards effects of the crisis has to be worth serious consideration.

The “Robin Hood” campaign has put out some rather good little videos, even if they’re produced by that plonker Richard Curtis:

NB: much of the above comes from Wikipedia’s informative (and as far as I can judge, accurate) entry on the Tobin Tax.