Last month’s NATO protest in Chicago may have been decentralized to the point of riotous incoherency, but that was not the case for another protest that took place a few days before, put together by National Nurses United in support of the so-called “Robin Hood Tax”. Organized and outfitted to communicate an incredibly clear message, the NNU’s protest was quickly overshadowed by the more sensational and less newsworthy protests that took place a few days later.
Their message – in support of a “tax on the financial sector [that] has the power to raise hundreds of billions every year” – was one that requires protestors taking to the streets, especially when referring to the international versions of the Robin Hood Tax. There is no official international governing body that controls the global economy (as if such a thing were possible), nor has the opportunity been effectively communicated into the public imagination, so democratic means of voting and such are largely ineffective. Instead we need images, the widespread and visible public support that the nurses provided, that transmit across national borders and function as the seeds of effective change.
I usually back away from taking strong political stands. Probably because I like making and keeping friends and my irrational side fears that if I make political statements I will somehow lose friends. But this is something I need to publicly vocalize my support for, although I prefer to refer to the “Robin Hood Tax” as the “Tobin Tax”, named after Nobel Prize-winning economist James Tobin.
(Besides, I was like, what, one of eight people who took North Park’s course on the global political economy. As much as I enjoy being part of that exclusive group, knowledge is meant to be shared.)
The way our global economy is set up, banks and others with large amounts of money to grow can move funds around, from one financial asset to a marginally more dynamic financial asset, resulting in easy profits but without any structures of accountability or guarantees of resulting economic growth.
One simple, hypothetical example. Adam’s fund has $100 US dollars, but with his high-tech forecasting devices Adam knows that the Japanese yen is about to become stronger. Adam turns his $100 US dollars into 8000 yen, and lets it sit there for a week (for no transaction fee of course, because Adam has the appropriate insider connections). But of course Adam eventually needs his dollars back. So at the end of the week, Adam turns his 8000 yen back into dollars, but now Adam has $110 US dollars. Adam just made $10 by clicking a few buttons.
In good economics, profits come from providing good things. When most of us make $10, it is because we can say “look here at this product or service I just provided” that is worth some amount of money to somebody else and who is willing to buy it. But, unless we’re interested in magic tricks, Adam got $10 by doing something that is of rather dubious benefit for anyone else. And, of course, in real-world terms, that $100 looks more like $100,000,000 – a vast flow of international money getting bounced around at the particular whims of financiers, and their half-sophisticated computer algorithms trying to multiply profits of half-a-penny at lightning speed, potentially causing whiplash to vulnerable economies.
From a theological point of view, my hunch is that financial hyper-speculation of this sort is just not permissible. When we try and create money out of nothing (see: no work attached), we are trying to create ex nihilo, something reserved for God and Genesis 1. Whenever we think we have created free money for ourselves, we are wrong at best and self-idolatrous at worst.
The church fathers through Thomas Aquinas grappled with the ethics of loaning out money at interest. Use a little bit of imagination and think about how unnatural it must have seemed that money could be used to make more money. What we call an investment used to be decried as usury. It became accepted – with certain caution – that some loans were beneficial for helping successful individuals help enterprising individuals become productive members of their communities and societies.
But whereas long-term investments took place in networks of trust, today’s short-term speculation seems to take place in a glorified casino where anyone who can squeeze in through the narrow doors is liable to win big. Past centuries of church leadership would be crying foul.
Granted, speculative financial transactions are not necessarily the root of all evil. In fact, they often do very good things for the global economy, like opening up investment capital to economies that have a profitable good or service to offer the world but just need a boost to really get things going.
This is why there is a justifiable call to put only a slight tax on financial transactions, instead of an outright ban. A 0.1% tax, for example, will not be a hindrance to healthy finance: long-term investments with large returns. But what a financial transaction tax will do is provide the friction required for the invisible hand to steer the vehicle of the global economy on the icy roads of 21st-century speculation.
And, oh yeah, such a tax, if implemented in the United States alone, could raise hundreds of billions of dollars. How is that for reducing a deficit?
It is far from a radical proposal. Plenty of experts have proposed well-thought out models for how to implement this idea (although there are certainly faulty versions that hopefully will not get passed!).
George Soros, Bill Gates and Warren Buffet support the Tobin Tax. Think what you will about these men, but they probably have a better understanding of how money works than either you or me.
Independent experts at the United Nations support the Tobin Tax.
Since I did bring the church into this, I should mention that the Vatican supports the Tobin Tax. So does the Reverend Jesse Jackson, Archbishop Desmond Tutu, and the Archbishop Rowan Williams. Quite frankly, I wish there was a statement of public support for the Tobin Tax by either Sojourners or perhaps even the National Association of Evangelicals. If any of you have or know of a direct line to Jim Wallis or Galen Carey, let me know.
You can support the Tobin Tax. There is a group trying to get the ball rolling here in America and also in the UK called The Robin Hood Tax. Become a supporter. Really. By referring to the Tobin Tax as the Robin Hood Tax, this group is emphasizing who receives the funds from who (the poor from the rich) instead of the improved structure of incentive the tax constructs. Different sides of the same coin – but what a valuable coin!