3071-The political economy of new slavery

204 Strategies for Change
in Argentina are often quoted as resulting from such activity (Patterson,
2002, p. 3). Financial crises in South-east Asia, Russia and Latin America
have led to increased unemployment and inflation as businesses came
under pressure. In attempts to stabilize the economy, national governments
were forced to reduce their spending. Health care and the provision
of education were the inevitable casualties and there have been
considerable increases in child labour, prostitution and malnutrition.
In particular women, who form already the majority of those in precarious
forms of low-paid employment, were more often than not the
first to be laid off due to the traditional notion of women’s wages as the
second income of a household. Furthermore, because of the conventional
conception of the woman as the nurturer or carer, it is the woman
who has had to assume the traditional burdens that surface as a result
of the reduction in state services. In Mexico, following the devaluation
of the peso in 1994, wages fell by 30 per cent and 2.2 million people
were forced into unacceptable living conditions, raising the number of
Mexico’s poor to 40 million. The devaluation of the Russian rouble in
1998 led to the doubling of living costs, thrusting 22 million people
into poverty (Hayward, 1999, p. 2). Neighbouring countries also felt
the detrimental effects of financial crises through their economic and
political links. Additionally, the increased levels of public debt meant
that the foreign ownership of these economies was increased. Even if
these economies begin to make recoveries, as is seen now in Asia, social
conditions will lag behind for a considerable period as it takes far longer
for social infrastructure to recover from such shocks.
Before continuing, however, I would like to stress that currency speculation
is not the root of all evil; many domestic fiscal policies and other
political factors affect the value of currencies in a way that speculation
does not bring about and a tax cannot remedy (Wahl and Waldow, 2001,
p. 10). Contemporary slavery has many complex origins and modelling
single causal links can lead to an oversimplification of the issue. Nevertheless,
I would argue that speculative activity does not help to prevent
any of these processes either and more often than not might even
intensify the problem. Likewise, an analysis of how poverty is increased
and sustained within the global economic system can help us identify
desirable solutions to it.
Characteristics of the Tobin tax
The prestigious American economist James Tobin first proposed the
Tobin tax in 1972. Any Tobin-style tax is an ad valorem charge on the