The Robin Hood - Tax -
This idea is not new — it used to be called the Tobin Tax, after the economist James Tobin, who first proposed it in the 1970s.
And it’s not fringe-y freaky: No less than the Nobel laureates Paul Krugman and Joseph Stieglitz have thrown their support behind it — not to mention Pope Benedict XVI and the Archbishop of Canterbury.
The idea is this:
Flash arbitrage — speculative, superfast stock and foreign-currency trades — is one of the big drivers of the mayhem in the markets. So you cool things down by slapping a tax on every transaction.
A Robin Hood tax.
If your game is high-frequency spot arbitrage, you must cough up a tiny amount for the privilege of making a trade. So now you actually have to think about what you’re doing, whether it’s worth it. You can’t just let loose the algorithms like attack dogs.
This scuttles the whole business plan of the highballers, and it would, if not stop highfrequency arbitrage in its tracks, at least meaningfully reduce it by making it less profitable.
Even scalping a miniscule 0.05 percent off the top of each foreign-exchange transaction would put $100 billion a year in the kitty, a redistribution of wealth that could be used to all-but eradicate extreme poverty, provide universal health care, slow global warming and deal with unexpected global crises.
Raising it to one percent and now you’re generating a whopping 2 trillion a year.
Nobody loses but the swashbuckling ultrarich profiteers, and everybody wins as a little stability returns to the markets, and the fortunes and fates of small countries are no longer thrown around like craps dice.
Half a century this idea’s been on the table. Half a century and nothing’s come of it.
In the 1980s, Sweden actually implemented a kind of Tobin Tax. But speculators simply routed around it, moving their money to other markets. After seven years, Sweden had no choice but to give it up.
The Swedish experiment made it clear that no one country can do this alone.
If only a few countries stick their necks out, they will suffer disproportionately. A tax on stock and currency trades will only work if it’s introduced globally. We have to do this together. And that will only happen if there’s a mighty public will, fed by a gigantic global grassroots effort.
We, the people, have to figure out a crusade to get the Robin Hood Tax implemented.
It’s going to take a global Big Bang Moment, another Occupy Wall Street, or a Global Pot-Bang, or a Worldwide General Strike, with the full might of the Third Force behind it.
Bang the drum!
Bang the drum!