Re: Broadening Employee Ownership Transnationally

[Steve Clem <cclem@kent.edu>]

>X-Originating-IP: [213.224.83.2]
>From: "VICTOR THORPE" <victhorpe@hotmail.com>
>To: cclem@kent.edu
>Subject: Re: Broadening Employee Ownership Transnationally
>Date: Mon, 18 Sep 2000 10:35:10 CEST
>X-OriginalArrivalTime: 18 Sep 2000 08:35:10.0357 (UTC)
FILETIME=[5B402C50:01C0214B]
>
>Dear Steve,
>
>I was delighted to find discussion of the Tobin Tax under your discussion 
>group.  As you know, this is something for which I have spent the last ten 
>years arguing inside the international labor community.  Last year, patience 
>was rewarded when the International Confederation of Free Trade Unions 
>(ICFTU - the premier world body linking national labor centers like AFL-CIO 
>or TUC) took the Tobin tax to its bosom as part of its submission to the WTO 
>and World Bank.
>
>The main questions arising are:  who would raise the tax?  would it be 
>equally applied to the speculator and the genuine investor alike? and who 
>would spend it?
>
>In my view the tax would only work if there is a wholesale revision of the 
>international financial institutions - International Monetary Fund and World 
>Bank, for example.  It would be unlikely to work as a function of the 
>current relationship between nation-states and multinationals, under which 
>governments are more intent upon creating a favorable climate for inward 
>investment than in pursuing some longer term goals of social justice.
>
>However, lip service at least is being paid by a number of leading 
>politicians to the need to 'revise the architecture of international 
>finance'.  In my view such a renovation should include the complete 
>demolition of the edifices of the IMF and World Bank as we know them and 
>their reconstruction according to new criteria.  Collection of the Tobin Tax 
>should be the task of a new International Monetary Fund; its disbursement as 
>kick-start funds for local development initiatives in the poorest regions 
>should be the job of a much revised World Bank - one that took as much 
>notice of the social and sustainability impacts of its largesse as it 
>currently does of strict neo-liberal performance criteria.
>
>Your point regarding the use of such funds is also supported strongly by the 
>UN's own World Development Report for 1998, which asks how much it would 
>take to assure universal basic education to age 12, access for all to a 
>clean supply of water and sanitation, basic health care for all and 
>maternity care for all women?  It came up with the (to me surprisingly low) 
>estimate that all this could be assured for an annual cost of just $40 
>billions - which is one third of the current annual debt servicing cost for 
>the poorest countries.  It is also well within the bracket of what a Tobin 
>Tax could bring in to the global civic purse.
>
>Application of the tax would require a more sophisticated approach than the 
>bald taxing of every dollar that moved across borders -impossible as that 
>would be anyway.  The best basis on which to encourage stability of growth 
>is to encourage firmly rooted investment - patriotic capital, if you like, 
>which has latterly been a contradiction in terms, now even among formerly 
>highly loyal capitalist groups such as Germany and Japan.  Thus, the best 
>impact of a Tobin tax would be to tax highly speculative capital 
>transactions (say, less than one month in place) and to phase down the tax 
>towards zero for transactions that fed capital needs for a year, two years, 
>five years and ten years, for example.  In my view, the tax on one month 
>flows should be at a higher rate than the 0.5% level suggested by Tobin, as 
>a disincentive to anti-social investment behavior.
>
>I do hope that the presence of this discussion in the public arena will help 
>to engage a debate on responsible economics.  There is a dire tendency to 
>assume that economics comes without any moral baggage and can be made an 
>excuse for social decisions that would be rejected as grossly unjust in any 
>other light.  Yet, I recall the basic definition of schoolboy economics 
>(admittedly many decades ago) as being "the application of scarce resources 
>to infinite needs" - a moral choice if ever there was one?
>
>Vic Thorpe
>Just Solutions
>Belgium
>
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