Friday, November 04, 2011

Labour can't woo Occupy London while defending the City

My latest for The Guardian:


Even though some voices within the Labour party have been trying to woo the Occupy London protesters recently, the recent comments of Ed Balls on the "Robin Hood" or Tobin tax reminds us that his party isn't necessarily on the side of the 99%. The idea of taxing financial transactions at 0.05% – hardly a radical proposal – is to give national states some leverage against the power of international financial markets. Back in the 1990s, it was a demand taken up by the radical French group Attac, and was debated in the anti-capitalist movement. But it was opposed by leaders such as Gordon Brown on the grounds that it would restrain growth.
Things have moved on since then. Following the credit crunch, only the intervention of national states prevented the complete collapse of global capitalism. There is no doubt that doing so would have been easier had the Tobin tax already been in place. Thus, Brown declared his support for the tax in 2009, as did the chair of the Financial Services Authority, Lord Adair Turner. The United Nations approves the tax. And just this week, trying to save the moral high ground for the Church of England, Rowan Williams reiterated his endorsement. Recently, it is leaders of the European right such as Merkel and Sarkozy who have argued for a version of the tax to apply across Europe.
Yet, this is apparently too radical for Balls, the shadow chancellor, who timorously suggested this week that "we must be careful not to throw the baby out with the bathwater". While he supports the tax in principle, he has intervened in the debate over an EU-wide Tobin tax, arguing that "doing it only in Europe and not including major financial centres such as New York risks real damage to the City". In this, he is offering nuanced support to the government's position, which is to reject the tax unless it is implemented on a global level. This is a far cry from the "euthanasia of the rentiers" that Keynes prescribed...