Thursday, September 1, 2011

Will they also take over “alternative” sources of financing, such as the “Tobin tax,” intended for the fight against hunger and poverty?

We must not allow it.

That would be the last straw. With the present balance of power, particularly in the West, we have been forced to reluctantly accept that our weakened States have yielded to the “great domain”, to prevent serious insolvencies that objectively shouldn’t have been allowed, using funds for social projects to pay the debt, deficit reduction… to, in short, satisfy the demands in quantity and time of a system that has lost its course and is in its final death throes.

But now, in addition to the present ones, what we can’t allow is for new “actors” to take the stage to sacrifice themselves in the mob of speculative trading prices, incited thoughtlessly by rating agencies that obey their master’s voice. No: alternative sources of financing must be used as soon as possible to fulfill the duties of international solidarity that the States have neglected, and to be applied to the Millennium Goals. This is a matter of international justice. As long as we continue to be absorbed with stock market fluctuations… while we continue to spend astronomical amounts of money on out-dated war materiel… while we are still at the mercy of the great oil producers without adopting urgent measures concerning the renewable energy sources that our responsibility to future generations demands… while we continue to blindly follow the biased and partial information offered us by the immense stifling and standardizing powers of the media… we will fail to exercise the influence that democratic citizens should, so that our representatives may counteract the hounding from the markets and make policies based on justice and human rights.

Somalia is dying

This distressing photography was published on the first page of “El País” on August 14:

Safia Adem, a refugee in the Cathedral of Mogadishu, mourns the death of her three-year old son. This is the image that we should all bear constantly in mind. These are the real needs that frenetic stock market fluctuations cannot hide.

If these funds are devoted to helping so many people who currently live below the poverty level all over the world, including in the United States, there would be more potential “clients”, there would be a true mobilization of resources to transcend from an economy of speculation, exploitation and war to an economy of global sustainable development.

Not long ago, Marco Schwartz quoted President Franklin D. Roosevelt when he defended his New Deal social program in October of 1936: “We had to struggle with the old enemies of peace –business and financial monopoly, speculation, reckless banking, class antagonism, sectionism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know that Government by organized money is just as dangerous as Government by organized mob.”

It’s time to make some key decisions

One of the results of the recent French-German Summit was the proposal of a tax on financial transactions to resolve the depletion of the European countries’ treasuries and, thus, to be able to address the enormous deficit and resulting debt that has lead us to this current crisis and, especially, the rescue of the international financial system initiated in 2008 at the irresponsible prompting of the G-20.

Faced with this situation it is extremely urgent to remember that the proposal of this type of taxes has been a central issue of discussion in civil society and in academia over the last few decades and with a very clear goal: the fight against poverty and in favor of sustainable development for the less fortunate, as well as contributing toward achieving the Millennium Development Goals.

This was originally a proposal that the American professor and Nobel Prize in Economics James Tobin made in 1972 after having developed a series of mechanisms to levy a minimum tax at the international level (between 0.05% and 0.3%) on all transactions involving currencies and financial instruments (shares, bonds, derivatives)… Thus, on the one hand a significant amount of funds would be generated to be devoted to the fight against hunger, poverty and the great pandemics (AIDS, tuberculosis, malaria, etc.). On the other hand, that tax would in part help reduce the speculative nature that currently characterizes the majority of these operations.

We have tirelessly defended the adequate implementation of this type of alternative financing for years and from different institutions, but particularly from civil society: the Ubuntu Forum , the ATTAC movement or the recent "Robin Hood Tax"…

It is important to underscore that since 2004 these ideas have been echoed by a considerable number of associate States in the Pilot Group on Innovative Financing for Development. This group is lead by France, but enjoys the direct participation of other countries such as Japan, Brazil or Chile, and is presently presided by Spain. It also works in designing other proposals for innovative financing, and has conducted studies by groups of independent international experts that demonstrate their viability from a technical standpoint.

In addition to the foregoing we might mention the support received this March from the European Parliament and the letter published this April signed by over 1,000 economists from prestigious institutions such as the Universities of Harvard, Columbia, Oxford, Cambridge o MIT, among others.

Thus, this is a matter of political will and, above all, justice.

For the reasons indicated, it is indispensable and urgent to take measures to address the debt crisis, not only on the part of France and Germany, but on the European level as well. But we absolutely cannot allow this initiative to be implemented, once again, at the cost of continually breaking our promises of aid and solidarity.

A tax on currency transactions and other financial products is an imperious and just necessity, as the previously-mentioned terrible images arriving from the Horn of Africa remind us.

Thus, let’s undertake to work to ensure that the decisions and measures taken in Europe in the short and medium term are not guided by the same instincts of greed and short-sighted vision that has led us to the brink. For once and for all, let us act sensibly and firmly.

This must be stopped, resolutely and with the strength that the conviction of the great majority of citizens affords (and to certain political leaders: please ignore for now your partisan and electoral interests), because as Irene Lozano wrote, “the greatest threat to individual autonomy resides in the weakness of democracy vis-à-vis financial power”.

Don’t trust the G-20 or the WTO… whose “rounds,” such as the one recently held in Doha, have proven to be totally ineffective. They are another bitter fruit of globalization. Let’s return urgently to a strong, democratic, non-plutocratic and united United Nations!

It was already in the news in September, 2010 that the European Union was considering the possibility of levying a tax on transactions to improve its tax collecting capabilities. A European Commission document proposed two types of taxes: a financial transaction tax (FTT) and a financial activity tax (FAT) levied on business volume. A more restrictive version (FTT2) would only tax trading in stocks and bonds.

Now, in October, the European Commission will present a legislative proposal prior to the G-20 Summit, applying a 0.05% to transactions, together with a new Community VAT “to finance the EU budget for 2014-2020, with a view to reducing direct contributions from Member States”.

The Netherlands and Ireland have asked that it be applied not only in Europe, but globally, to avoid “the enormous distortion that this would produce”.

Not long ago, Antonio Valdecantos warned that “adjustments made in the crisis are going to constitute a permanent state of siege. The crucial decisions are no longer made by the citizens or their governments, but by those transnational economic agents known as “the markets”.

We can’t attempt to promote growth when the major objective is to reduce the deficit, urgently and at all cost.

The 255 greatest fortunes of the planet are equivalent to 40% of the most disadvantaged of the world’s population (2,500 million people) . It’s clear that we can’t allow this new action on the part of the insatiable markets.

Civil society must raise its voice through institutions such as ATTAC, which have been created precisely to promote this new type of alternative financing mechanisms, and especially the tax on financial transactions…

We won’t allow this. It would be other dream that they’ve taken from us… and since 15-M we all know that “if they won’t let us dream, we won’t let them sleep”.

1 Schwartz, Marco, in “Público”, 20/08/2011.
2 Forum created by the Culture of Peace foundation in 2000. I wish to express my appreciation to its director, Manuel Manonelles, for his collaboration in the preparation of this blog.
3 Missé, Andre in “El País”, September 7, 2010
4 News from “El País”, August 19, 2011.
5 Valdecantos, Antonio in “El País”, June 2, 2011
6 Población, Félix in “Público”, August 19, 2011.