Democratizing Globalization: The Leverage of the Tobin Tax: Heikki Patomaki
Review
‘A commendable attempt to give concrete answers to the question of what could and should be done to implement the Tobin Tax. This book should be read by all those who want to see effective measures taken to counter the negative effects of globalization in general and the instability of international financial markets in particular.’ - Erkki Tuomioja, Minister of Foreign Affairs, Finland ‘This important book addresses two of the most powerful ideas being debated at the dawn of the 21st century — democratizing governance and the Tobin Tax. The book’s value lies in making the conceptual, political and practical linkages between these two ideas to show that the most serious obstacles to their implementation do not lie in technical or organizational problems, but in the lack of political will of some of the world’s most powerful countries and institutions.’ - Kamal Malhotra, co-founder, Focus on the Global South and co-editor, Global Finance: New Thinking on Regulating Speculative Capital Markets ‘Heikki Patomäki’s clear-minded book is an explanation of how and why a democratically administered Tobin Tax on flows of hot money is not only feasible, but also how it would help to develop, strengthen and democratize our institutions of global governance. I recommend this book to anyone interested in an articulate, alternative, radical perspective on key challenges facing the globalization project today. Based on a thoughtful and painstaking analysis of the nature and contradictions of the new era of globalized finance, Patomaki’s book serves as a primer that explains and demystifies questions of money, finance and taxes in the global economy today. Using a combination of neo-Keynesian economics, critical political theory and a well-grounded perspective on international relations, Patomaki makes powerful and persuasive analytical and normative arguments for the democratization of globalization. Because this book is so clearly written, it will be equally useful for the general reader as well as specialists in money, finance and the political economy of globalization.’ - Professor Stephen up0Gill, author of several leading works on international political economy ‘Heikki Patomäki has produced an extraordinary portrait of finance capital, its irrational behaviour, the endemic instability it introduces in the global economy and its negative consequences for people’s wellbeing and the stability of democratic states. His discussion on the prospects of the Tobin Tax is enlightening, because he skillfully avoids falling into the trap of those who believe it is either a universal panacea or a meaningless initiative. Instead he realistically explores what the Tobin Tax could do to regulate the financial markets and persuasively underlines the political viability of this proposal, dismissing the arguments of neoliberal ideologues who speak of the “inevitability” of current financial arrangements.’ - Atilio A. Boron, Executive Secretary, Latin American Council of Social Sciences (CLACSO)
In the 1970s Professor James Tobin proposed a very modest tax on currency transactions. This would make much speculative movement of funds unprofitable and the world financial system less volatile. The Tobin tax, if implemented with other regulatory measures, would be emancipatory. Global finance would be subjected to a process of deliberate control. It would bolster the autonomy of states. And it might transform the politics of globalization in the direction of more democratic control, social responsibility and justice. But, the major problem has aways been the lack of political will. Tobin and his supporters have always assumed that the only feasible way to implement the new tax would be for all major financial centres to agree to it simultaneously. Dr Patomäki demonstrates that it is possible to proceed without universal consensus, and develops the idea of a Tobin tax organization (TTO) that would implement and supervise the process. The potentially huge annual revenues - eventually as much as $1 trillion - could be used for economic and social purposes determined globally, reviving the prospects of humanity moving towards a more just world order.