Banks Can Provide the Ammo to Hit Lots of Targets
A new video just released from the Robin Hood Tax Campaign, featuring Sir Ben Kingsley (amongst others, if you can recognize them), a follow up to their first video featuring Bill Nighy. This is a post growth policy if there ever was one!
It works rather simply, too, with a minuscule tax of 0.05% on all financial transactions by big banks. Barely a drop in the bucket for the banks, yet adds up to quite a sum for the people – upwards of $500 billion or more a year. That tax would help discourage speculative investing (the kind that promoted the recent Great Recession), put the banks in check (those guys we just bought out with taxpayer money that made $5 million bonuses), and could be used to assist in eliminating poverty and hunger, fight climate change and help transition our country (potentially the world) to greener energy.
It should be done on an international level, but could easily be applied to the country level as well. The Robin Hood Tax is a UK-based campaign that has been gaining momentum, both with political support (Gordon Brown, for instance) and celeberity support (see the videos), not to mention citizen support (43,506 supporters on the site and 150,000 facebook fans).
Thanks to Duncan Green for showing this video to me. Also, if you’re near London, be sure to join the Robin Hood Merry Men (and women) on April 10th for their Day of Action.
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This post was written by Joshua Nelson
Joshua has written 17 posts on Post Growth Institute. Contact Joshua
{ 8 comments }
Hi All,
The one thing holding me back on supporting this campaign fully is that I am yet to see where, exactly, it is envisaged the tax will go. There are a whole lot of public service and international ‘aid’ organisations I feel have a lot of deep questions to answer with respect to their operations and I worry that this could end up a nice way for the banks to have their corporate social responsibility without any significant change in the mainstream paradigm.
Thoughts?
Donnie
Donnie,
You raise a good point. I would respond with another question: would you rather we didn’t take this opportunity? That money is already being wasted in ways we can’t control (extremely wealthy bankers getting wealthier). If we grab hold of this moment in time, when we are probably the most likely as any other point in history to get such a tax passed, we can then have some sort of control of the funds. How much control would yet to be seen, but if even a fraction of it went towards the right groups it would be a step in the right direction.
Worse case, the funds get mis-managed and less productive organizations get the funding – but at least the tax will help stabilize the banking system by discouraging speculative trading and such. Perhaps we find that 0.05% isn’t enough and we increase it. I think the tax rate should be publicly decided, and the funds publicly controlled. This get a little hairy in the international application, but I think the overall concept can still be applied (place the money in an international general fund specifically ear-tabbed for combating climate change and supporting developing nations).
I think it’s worthy to support. Once passed we can fight to ensure the funds are publicly controlled and provide the help to the world we envision.
Cheers,
Joshua
Hi Josh,
I’m not sure about taking this opportunity. I’d certainly like to see a lot more critical thinking from progressives on the topic (a friend is driving the campaign in Australia – http://robinhoodtax.org.au/ and it seems he had not had these kind of questions put to him before).
I agree that history presents us with moments for the taking, I’m just not sure this is one of them. I see too much of a global power inequity at the moment and think some more fundamental changes need to happen before we start tinkering ‘at the edges’.
I’ll reiterate/expand my ‘worst case’ scenario: this becomes great CSR for the banking sector to the point that it wards off further, deeper reform (rather than opening up the discussion we ideally hope might arise). Some of the aid organisations who are receipients of the tax become further believers in the growth-based system and big banks (more aid organisations become compromised by sponsorship/partnership agreements with big banks). I think this could be a step towards an impenetrable ceiling as outlined in my article on social business and the limits to growth: http://steadystaterevolution.org/social-business-and-limits-to-growth/
I don’t see how a 0.05% tax is going to discourage speculative trading.
How would the tax rate be publicly decided? What platform to use for making this decision – I’d say the closest you could get would be to ask Avaaz to do a global survey!
Re: “Once passed we can fight to ensure the funds are publicly controlled and provide the help to the world we envision” – I’d say history suggests it is too late to try and control something of this nature after it has been set up – you would need to build accountability into the system from the beginning.
Donnie
Donnie,
I can see your point. I guess I feel as though perhaps I have more… optimism? I agree that true reform should be implemented for sure. And the campaign is definitely not suggesting that this would solve problems in the banking system, as I have alluded. You’re right, there is a definite possibility it would be a big smoke screen for continued misconduct by banks and the money could be mis-used. However, this is an opportunity to make something possibly good from something definitely flawed.
I don’t think we are at a point where we can build a new system (yet) – we’ve got to work to improve the system we have. If we take this route, then a tobin tax or robin hood tax would be a good step. I believe we can make a transition to a steady state economy in the world we live without a complete reset of society. To this affect I am willing to take the small victories in hope of building to bigger victories.
We should definitely push for harder reform of our financial sector, as well as our larger economic policies. I see this as a way to expand the public dialog in these more alternative policies.
I hope we’re not fighting, Donnie! We’re on the same side, you know!
Cheers,
Joshua
Amidst all the excitement over the large sums of money that this tax may divert towards better uses than enriching bankers and their bonuses, remember that another powerful effect is that it will dampen down the lightning fast trading and re-trading of financial instruments 1000′s of times a second, done by computers. It is this kind of “leveraged” hyper fast trading that is a fundamental cause of the craziness that international globalised finance has become… A minuscule tax on each trade won’t harm classic “buy and hold” investing but will eliminate computer assisted “greed is good” speculation.
Nick,
Thanks for the comment! I’ve been following your blog for sometime, happy to see you here! I agree that this sort of high-speed, computer trading is definitely in need to regulation. Hopefully a tax like this help discourage it at least. I think further reform is needed to make it illegal, but this will no doubt prove to be a much more difficult battle politically.
Of course, I hold to the believe that money is a medium of exchange, not a store of value that can be created by trading money for more money. Money should not appreciate, value in goods should appreciate. Herman Daly touches on this a lot in his work.
Cheers,
Joshua
Right! Herman Daly is one of my heroes!
British Prime Minister Gordon Brown in the pre-election warm up talked about an international levy on the banks but warned that it would be a no go if it wasn’t applied globally so that the “playing field” would be level.
http://www.channel4.com/news/articles/business_money/missed+chance+on+robin+hood+tax/3610007
The Liberal Democrats and the Conservatives are also pleasingly warm towards the idea of a Tobin type tax.
http://www.independent.co.uk/news/uk/politics/clegg-takes-on-the-banks-with-robin-hood-tax-1942099.html