3071-The political economy of new slavery

208 Strategies for Change
North do not want to release Third World countries from their dependency.
However, the reality is more complex. Individuals shape norms
and are in turn shaped by norms. Powerful discourses affect reality and
people’s perceptions of what type of society or change for the better is
indeed possible, both on a theoretical and practical level.
Objections to the Tobin tax
As is to be expected, there are numerous objections against the Tobin
tax. Many are technical and range from concerns about more volatility
in the presence of a Tobin tax to warnings that a Tobin tax might not be
enough to solve the problem. Further questions involve, for example,
how high or low the tax rate should be and whether or not all participants
should be taxed or whether governments and central banks should
be ‘trusted’. An additional set of questions asks what the tax base should
be and to what extent evasion of it could be curbed; what if speculators
move their transactions ‘offshore’ to non-participating countries, or
trade in assets that are not covered by the tax, such as swaps, forwards,
futures and treasury bills? Issues to be decided, further, include the
problem of comprehensiveness: do all countries have to join, or does
it suffice if countries with major financial centres join? There are fears
that governments will not come to a consensus on the issue, meaning
the tax would be too difficult to enforce. Problems could also occur
around the effects of losses on companies. What would companies do
to compensate for losses – would there be a knock-on effect on wages
and employment? And practical issues, such as who should collect
and distribute the tax and in what way, need to be settled. Should it be
national governments, international institutions such as the IMF and
the World Bank, should there be a new institution to avoid the pitfalls
of existing governance structures reinforcing present unequal power
structures within international political and economic relations? The
beneficiaries of the tax fund also need to be established. Should developing
countries get to keep all the revenue and developed countries
give it away, should there be a halfway solution? And to what extent
should specific circumstances be allowed to influence the level of the
tax? Should there be a two-tier system whereby a minimal tax is levied
at all times to generate the revenue desired but a surcharge levied in
times of extreme volatility to deal with issues of instability, as proposed
by Paul Bernd Spahn in 1996? Would it work? Finally, the question has
been asked whether or not we should employ other forms of capital
control such as direct capital controls on outflows or inflows, or the