Robin Hood could be the answer

Since the economic crash of 2008, governments of the world have shored up their own economies by bailing out the financial sector including banks and large companies. This has been a large factor for contributing to the emergence of enormous budget deficits seen amongst nation states. In order to counter the large budget deficits of many nations other actors such as, financial institutions, politicians and economists have advocated austerity measures, the freezing of pay combined with the lowering of corporation tax. However, the recent stagnation in the global economic recovery has sparked a new enthusiasm amongst some for the concept of a Tobin tax or Robin Hood tax. Some of Europe’s most important leaders, German Chancellor Merkel and French President Sarkozy ,  have come to the conclusion that, a simplistic prescription as highlighted above, in eradicating these public deficits should be combined with  ‘Robin Hood’   style of tax, on financial institutions such as banks.

robin hoodThis is not an original idea, since the collapse of the financial system many different actors, mainly on the left, have described such an approach as a symbolic and reasonable in countering the budget deficits of nations. Putting the emphasis on a global taxation on those who orchestrated this crisis so they can contribute towards its recovery. This is opposition to the current discourses advocating that nation states and citizens within them should be left with the responsibility to stabilise an internationally  failing financial sectors on one hand while accepting cuts in pay, freezing of wages and destruction of pension on the other. Furthermore, this idea has been continually dismissed as economically naive and unnecessary with many actors and governments themselves advocating a type of financial levy instead.

However, recently there has been a shift in momentum in favour of the sentiment of an international tax. This has led to even some of the richest in Europe calling for higher taxes  as the future of the world economy looks nothing short of bleak. Morally the argument in favour of an international financial tax seems obvious; during a tougher economic climate; those who profited from the ‘good times’ can and should help during ’bad times’.  Moreover, what seems to be emerging is that the richest in society are realising the long-term consequences of this crisis acts as a hindrance to the opportunity to make profit. As poor growth continues, the future does not look any brighter for financial markets and those connected to them, including ordinary people.

Many on the right argue that increasing taxation or implementing a ‘Tobin tax’ or ‘Robin Hood Tax’ will ultimately fail due to one country not signing up to such an agreement, offering that nation an comparative advantage over others.  This would allow companies to search for countries which seem more ‘attractive’ (those without a Robin Hood tax) and setup operations there. This may be so; however, what is needed is an international implementation of a Robin Hood tax or at least to start with a European wide ‘Robin hood’ tax, which is supported by an array of different economic, political and social actors not just states and governments. This would stop companies and individuals ‘rooting out’ tax havens in order to dodge these forms of taxation.

The recent occupation movements around the world characterised a shift in this debate around the global economic recovery and global governance of it. “Global Democracy now!” banners have joined with the usual; “Capitalism is crisis” or “end globalisation now” amongst the other anti-capitalist favourites. This would indicate that an idea such as the Robin Hood tax or international Tobin tax would be a move towards a more global democratic approach in solving this crisis. Where decisions around finance, trade and structure of society are no longer issues for a specific nation state but for the globe, so should the economic recovery be. As boundaries become blurred and crisis seems internationalised, the idea of an international taxation to contribute to the recovery seems logical.  If capital, trade, finance and to an extent humans can be globalised, can’t a Robin Hood style of tax?

All of the examples above, be it the globalised cooperation of civil society groups protesting together or the complex organisation and liberalisation of trade and finance, both hinge on the ease and incredible cooperation between all concerned in order to organise the financial system or oppose it. Globalisation should not be a term just concerned with markets and trade but a concept that can be understood as a mechanism for organisation and participation  in the international processes of it.

This shift in the debate should not go unnoticed, as people around the globe organise in opposition to the crisis and being lumbered with the bill for it. People should start to question the automatic dismal of an international Robin Hood style tax. It seems that those who originally dismissed the idea of a Robin Hood tax have warmed to the idea as the economic recovery continues to be ‘sluggish’ at best.  People are starting to realise the potential of this globalisation deal. If we combine these two elements together, what emerges is that the idea of recovery will not and should not be a burden for one group alone.  Austerity measures alone will not achieve a recovery or fulfil the desire for a change in global governance. The internationalisation of the ideas of a tight-wearing bowman could be the start to a new period for global democracy, one in which we can play a part in. 

About Henry Fowler

Unite Branch Secretary. Labour Party. Trade Union officer.

Posted on October 28, 2011, in Comment, Foreign Affairs and tagged , , , . Bookmark the permalink. 1 Comment.

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