>Chris Burford wrote:
>
>> As far as we are concerned it would be more progressive to have a central
>> global bank which could be accountable. To whom it is accountable could
>> then become explicitly open contested territory. If financial movements of
>> a short term nature are so turbulent, (and really a form of insurance
>> against risk which just makes the whole thing even more risky) why not
>> propose for example a Tobin tax not at a modest 1% but at 5% or even 10%?
>> This would generate central funds of the order of $1000 billion a year, and
>> could plausibly stops stampeding finance capital, and might have some other
>> uses.
>>
>> Chris Burford
>>
>> London.
>
>Chris, did you take into account what would happen to Capital flows if the
tax
>wasenacted. I think the volatility of Capital would go way down so the
Tax would
>not
>raise the revenues you expect.
Sure, An options appraisal was published in the last UNCTAD annual report which I referred to quite a lot, at 1%. Who is going to do an options appraisal at 5%?
Much of this Capital flow is based on true casino
>capitalism.
>Options, Futures, Derivatives ....
Much of this would disappear. This is great
>but its also quite
>lucrative to the players who know how to play this game. You might deprive
>Citibank of its Major
>source of Revenue!
Well it depends how we approach this. I am a bit doubtful of radical rhetoric that talks about speculators. Ultimately, as I have to say, Lou P points out (I think on his list) capitalism is not capitalism just because they set out to be nasty. I do not think we have a way of distinguishing the hedging against currency movements by sound and responsible (!!!) giant international companies, from Soros, or from a travel company, that is trying to calculate what time of the year to buy its foreign exchange. Capitalist are just trying to play by the existing rules of the game (as well as routinely trying to bend them).
What is shifting in the whole debate (yes for *capitalist* reasons) is the need to manage the insecurity of turbulence. It is now being official recognised that some economies have been wise to insulate themselves from turbulence. The question is how to manage risk. That is an achilles heel of capitalism.
>
>1. This always seemed a nice idea but a but Utopian, in particular who
would
>enforce the tax.
A Utopian idea ignores class forces. But these developments are going on under our eyes, and arise from the reaction of class forces (mainly different sections of the capitalist class) to major challenges. Who will enforce the tax? Well it may be respectable now for closet leftists to do an options appraisal. If Soros and the IMF say more regulation is needed, how is it going to be done?
In the course of this, closet leftist may still wish to conceal that some of their motivation may be that in the end the people of the world will take over the cookhouse, probably in reponse to a whole series of jolts and disasters. But they can now step forward to contest the ground of debate.
>As I understand it, these days the US can't even get the German Central
Bankers to
>agree to lower interest rates. There doesn't seem to be all that much Unity
>among international Capital. Given this is the case you might have to see
the a
>credible threat of revolution or some such before this in in place. You are
>saying that Finance in the Industrialized World is lobbying to make the
game more
>predictable and
>are in "agreement" on controls like the Tobin Tax.
No, no. the Tobin tax is interestingly left out of all the lists of possible reforms. It has surfaced officially recently only to my knowledge in the South African government at the Non Aligned Movement Conference arguing for "raising the cost of currency trading". The IMF report may be saying something a little like it indirectly in referring to Chile's tax on short term inward investment. (How do you tell the difference between that and currency hedging? I do not know, but someone will presumably research and debate this.) Soros is of course the last person to propose a Tobin tax. But he opened the debate up. And Blair, applauded on the NY Stock Exchange this week, has said there must be a year's debate. What could be more respectable than to join in?
A premise of the whole debate must be that the capitalists are all in disagreement with each other, but what reflects forces above individual conscious decision is how the debate is moving.
This would be very hard to
>believe. A good person
>to be queried on this is our Treasury Secretary secretary, after all he
should no
>he is the ex-CEO of Goldman Sachs.
All sorts of penetrating questions can be attempted to be put to all sorts of sources of evidence. This helps to move forward what I think is not just a capitalist demand, but even more a demand of the people of the world, that their lives should not be wrecked by the invisible hand of the capitalist market. At least Hurricane George can now be visualised on the internet screens. Let's have a bit of service here!
>
>2. If you wanted an institution which could fulfill a credit monitoring
>function and a financial policeman,
>I wouldn't want an institution like the IMF which is cannot at present print
>currency and awaits
>handouts from the US and other developed customers to mainly bail out
developed
>lenders.
You assume I "want" this. That poses the question all wrong, and leaves me vulnerable to dogmatic sectarian attacks from people like Louis. Look, there is a process going on in front of our eyes over which we have either zero control or 0.0001% chance of influencing. But sometimes the ruling class cannot go on the same way, and certain issues enter a time of change. All sorts of class forces and different interest groups will wade in. I am not fundamentally asking what "I want". That is ridiculous unless we say in the words of the old song, "Our demands most moderate are, we only want the earth!".
Yes I want the earth. But in terms of this tornado that has just swept over the world's economy all sorts of reforms are now coming under debate. Instead of remaining closet leftists under the dicatorship of the bourgeoisie, there is now a chance of increasing our ability to influence the momentum of events to 0.01%, with the multiplicatory effect of the internet. From this point of view it occurs to me we should consider the merits of posing the demand really for a world bank of last resort. Why not?
Now different leftist or liberal bodies could discuss different models at competing seminars. But I suggest any together sort of economics department gets in on the act quickly. And someone makes sure the ideas get leaked to the internet because that is in the collective interest as it will accelerate the process of the debate.
More
>convincing would be an institution like the World Bank which at least is
Market
>Capitalized. See how
>much luck you would have in persuading the Industrialized world to cough
up 5% of
>its Tax Revenues
>for the World Bank.
Hang on. I was not so utopian as to suggest the transferring of ordinary tax revenues to the world bank. I was saying lets have an option on a *5* % Tobin tax on currency transactions, which everyone knows are a sort of froth.
>Better yet simply allowing them to print currency!
Printing currency is not utopian. They did it in their own class and national interest in the 70's by issuing SDR's to keep the global economy (*their* global economy) going at the time of the oil price hikes. Let's expose this secret. It is the stain on the dress of international capitalism. Let's reconstruct a videotape of that time. Let's have a little presentation about this. Problem: the world economy is facing 2 years of low oil prices (and all that means). How did it respond when oil prices shot up?
Rather than a reformist campaign on Congress against invasion of sexual privacy, what would be progressive is to demand Congress moves on the international economy and concentrates on dialogue with the president. Millions of individual investors in the USA are getting worried that they can no longer pay for a new car if the Stock Exchange goes down further. Even half a dozen placards at the right place in front of the media could start another current to this turbulent conflict. Citizens for economic reconstruction. (RRRevolutionary MMMarxists kindly keep away. Continue to admire yourselves in front of the mirror.) My experience of economic campaigning was that it was invaluable to have street theatre.
For
>heaven sake you can't even
>get Sweden and Britain to join the EU.
The DM:pound rate is drifting very *very* quietly down to 2.80 and may reach in due course the sort of 2.60 position where currency alignment becomes a real possibility. This is not going unnoticed by the managers of capitalism. The quietness of the process is all to the good from their point of view. RRRevolutionary MMMarxists have permission to ignore that detail. But it matters.
This is a tiny step. Despite the
>rhetoric, world wide Capitalist Solidarity is probably not much stronger
these
>days than Labor Solidarity.
RRRevolutionary Marxists have an aversion on principle to identifying tiny steps. But we must look for crevices in the enemy camp, analyse them in detail, and decide which ones we can best enlarge. There comes a time however when detailed analysis of small steps which is undoubtedly necessary, may be helped by someone posing a macro strategy. A true world bank, a *real* world bank would not be a tiny step.
When is Monthly Review, with the help of its friends, going to host that conference? If it takes place in New York I shall try not to be sectarian about the venue.
Chris Burford
London.
PS. I must now unsubscribe for probably about 3 weeks. So people must curse me behind my back if they think this is important for advancing the debate on this list, which I wish well.