Tobin tax etc.

Doug Henwood dhenwood at
Tue Jun 2 10:18:46 PDT 1998

Chris Burford wrote:

>Why with all this accelerated movement of financical assets around the
>world's computer terminals is the net result usually zero in terms of
>transfer of real assets?

That's not true. Sure, the daily trading is vigorous - $1.3 trillion a day on the New York CHIPS wire. And most of that is just furious turnover, with a far smaller net change. But cumulate those nets and pretty soon you're talking about real money. In 1996, Japan had net foreign assets almost 20% of GDP, while the U.S. was in the hole about 12%. At end-1997, U.S. net foreign debt was over 20% of GDP. "Developing" countries have external debts of $1.8 trillion, and "countries in transition" owe another $301 billion.

>And secondly, if that is so, why have these movements accelerated so much
>in the last couple of decades?

Because "developing" and "transition" economies are in such deep balance of payments holes, because First World corporations throw off huge surplus profits that they can't reinvest, because rich individuals have so much more money to play with, because cross-border restrictions on K flows have all but disappeared, because the U.S. has for decades sent more dollars abroad that foreigners have used to lend back to us rather than buy our goods, because these vast pools of money feed on themselves....


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