Mark Jones has challenged me again on the Tobin tax, this time on Louis Proyect's list. I am therefore copying this post there.
On 23rd August Mark had forwarded a report to LBO-talk on the depth of the recession in Hong Kong with the title "Tobin or not Tobin? It's just plain irrelevant..."
When I replied arguing the relevance of Hong Kong in the confrontation that has occurred this year with the substantial defeat of laissez faire neo-liberal doctrines, Mark replied At 12:33 AM 8/24/98 +0100, focussing more specifically rather than rhetorically on the Tobin tax.
[Tax proposed by James Tobin about 20 years ago of perhaps 1% on foreign exchange transactions - now totalling over 1 trillion dollars daily.]
>Chris Burford wrote:
>>>
>> The Tobin tax is of interest IMO as a global tax, discussion of which is
>> censored by Jessie Helms. All the more reason to discuss it.
>
>I suspect you think the hard-left fear it because it might work, but the
>problem is mroe the perception that it's a red herring. Assume for the
>sake of argument that exchange controls were generalsied. Then you would
>be back to Bretton Woods, yes? I would say it's impossible to unmake the
>omelette we now have, but in any case even if you did, whatever
>stability you achieved would only be a short-lived prelude to some mroe
>explosive contradcition down the line. Exchanmge controls are (the
>libertarian/globalist critique is correct) a beggar-my-neighbour kind of
>policy. They work by unloading the problem onto some more vulnerable
>place. And if your assumption is that they work on an optimising welfare
>basis, eg by achieving all-round growth, I think this is the most
>serious error of analysis.
>
>Mark
Well this starts off as an argument about suspicion of motives of other subscribers, and I think it is safer to take arguments on their merits. The most suspicion in this case should be directed towards the motives of US capitalism as represented by Jessie Helms that has censored the debate globally by inserting a clause that any international body discussing global taxation will automatically have its US funds cut off. Should we not be a little suspicious about that, and the distorting effect on how capitalism is going to discuss some reforms, possibly drastic reforms to get out of its present crisis?
My suspicions about the hard left are the same as Lenin, that the hard left on principle is unable to discuss any reforms or any compromises. An infantile disorder. To be more polite, a disorder of early development. And as people start to think how to reapply marxism again, it is not surprising that it should re-emerge.
Would the Tobin tax work? It depends what you expect it to do. Technical and feasability studies would have to be done in more detail, but it looks very likely that it could fairly easily raise a sum of around 200 billion dollars a year from the global economy. The disposal of that sum would be the subject of considerable political struggle, but I would have thought that left-wingers would want it to go on environmental protection, and rational development projects for the poorest of third world countries.
Another effect of this would be a sort of global Keynsianism (Doug's frustration about my imprecise use of this term, which he has studied in much more detail, not withstanding) and pump circulating funds into the global economy at a place of more progressive benefit, I would suggest, than pumping at present into Japanese or US banks in crisis, or into industrial capital by the semi-coordinated moves to get most central banks to lower their interest rates.
Would it solve the fundamental economic contradiction in the world between the need for capital to continue to accumulate surplus value, and the limited purchasing power of the masses. No. It could only moderate the vulnerability to crises, not abolish it. I would submit that it might avoid the world slipping into a pattern of functioning where unemployment or underemployment was 10 or 20% higher than the present level of 30% on a global scale.
What is the answer to this contradiction? The Manifesto still seems to me to be correct that as long as capitalism prevails, the bourgeoisie can only get out of it by exploiting new markets or by the destruction of a significant section of capital.
Which section should get destroyed is what much of the present fight is about.
What are the political gains of campaigning for a Tobin tax or something similar? (The issue has been too poorly discussed for me to wish to say whether we should campaign for a Tobin tax as such. It does seem to me to be right though that the South African delegation at the Non-Aligned Movement Conference this year called for a raising of the costs of currency transfers.)
I think the political gains are significant. It would pose the management of the global economy as a central question for which capitalist advisers would need to be accountable whereas now they are unaccountable because they just plead cuts are necessary in each country because the global economy is unmanageable.
It therefore implicitly makes the point that despite private ownership of the means of production the capitalist process is actually social and on a global scale.
By creating a fund to be dispensed it allows political struggle to take place about the use of that fund.
By slowing the degree of short term turbulence for currencies, it would allow individual countries to plan economic development, whether social democratic, or even to some degree socialist, without having to be totally subservient to what would keep the most short term whims of finance capital happy. I do *not* think this will solve the fundamental contradictions of capitalism but it will allow more discussion in each country as well as the world about what are the aims of economic activity.
It allows the possibility that this fund may be used consciously to counteract the gradient of unequal exchange which continues to concentrate wealth in the metropolitan capitalist countries and relatively speaking intensifies the impoverishment of the "developing" countries.
Mark on Louis Proyect's list has accused me of having "loony ideas about Tobin"
He argues that the Tobin Tax -- "which might look like a tax on capital but would of course be a tax on consumption".
I think this is a simplistic argument that might well come from capitalist opponents of the Tobin tax. In general capitalists always argue that taxes on them will only, sadly, hurt the poor workers more than themselves.
This is a tax on speculative and risk-hedging currency transfers. It is not a tax on industrial capital. If Mark was more analytical about this he would see that the current crisis has intensified contradictions between industrial and finance capital. These can and should be exploited.
He accuses me of "then (b) petitioning our masters for the right to spend SOME of the fruits of this levy on social needs. This kind of 'reform' is known colloquially as grovelling."
Every reform while the bourgeoisie is in power is in the form of a demand or request to them. Demands which are designed simply to denounce them for the bastards they are may sound revolutionary. But a revolution is a mixture of many classes, strata and issues, and at a time when the capitalists are forced to argue about reforms because they have been shaken into believing that the system cannot go on as it is, then any reform will be presented most powerfully in terms not that are grovelling but which show the reasonableness of the proposal. If this is rejected then there should be protests.
One of my aims that we should use our resources to analyse exactly what is going on with the contradictions within capitalism is so that protests can be informed and effective, build up confidence, and weaken the power of the capitalists. Without struggle of this sort a few hundred can demonstrate militantly at the airports of every country in the world whenever the delegation from the IMF arrives to tell them to tighten their belts, and they have absolutely no influence whatsoever. So the tone and presentation of a particular demand is one of tactics and politics. I am offended by Mark's assumption that I think any demands of this nature should be put in grovelling terms, but I suggest that damages his credibility more than mine.
Mark seems to imply that the crisis on a global scale is so bad that the capitalists will not be able temporarily to stabilise, and that discussion of the reforms they are exploring (or interestingly not exploring) is inherently reformist.
I have to assume he thinks that this crisis is so severe it is terminal. That what is important now is to build groups of people who deeply believe that there is no alternative to revolution, and will shun muddled headed democrats who want to discuss reforms. I think that is a profound misunderstanding of the complex processes that go into revolutions.
I would ask Mark perhaps under a different thread title to clarify how he thinks revolution is going to come about on a world scale if it is a sign of impurity to discuss significant reforms like the Tobin tax?
Do six billion all converge on one place in the world within the same week and then we know that the World Revolution has occurred and capitalism is dead forever?
If not, then what?
Chris Burford
London.