speculation in stock markets is reaching its historical
peak. The abandonment, in 1971, of the Bretton Woods
pegged currency exchange system led to a considerable
increase in the cross-border exchanges of currencies
1500 billion dollars are exchanged every day whereas
thirty years ago it was only 70 billion. Most of these
transactions do not correspond to any real exchange
of goods but are driven only by the search for instant
and often huge-profits.
evolution is particularly harmful to humanity because
it is a major cause of the instability of the currency
system which leads to serious and contagious economic
crises. These crises, like those in Mexico (1994), Southeast
Asia (1997), Russia (1998), and Brazil (1999), ruin
years of productive labor in a matter of days. Nations
are forced to buy investors confidence by granting concessions
to attract capital, often at the expense of workers,
citizens, and the environment.
freely circulating and unregulated capital destabilizes
democracy This is why regulatory mechanisms are necessary.
One such mechanism is the Tobin tax, named after the
American economics Nobel prize winner. James Tobin proposed,
in 1978, to tax, at a low rate, all the transactions
on the currency markets in order to discourage speculation
and, at the same time, provide the international community
with resources. With a rate of 0.05% the Tobin tax is
estimated to bring in more than 100 billion dollars
per year, which could be utilized for currency stabilization,
economic development, emergency relief, or other national
and international crises.
the world, numerous civil society and non-governmental
organizations, linked with trade unions, social, ecumenical,
and environmental causes are acting in solidarity to
request that their governments support multilateral
cooperation in the enactment of Tobin-style taxes.
and legislators support the leadership of civil society,
and the emergence of strong public opinion. New levels
of multilateral cooperation are needed to tame currency
speculation and utilize the revenue for urgent global
and local needs.
and legislators, ask our respective legislative bodies
and governments to seize the question of the Tobin tax
so that each government will strive for its implementation
at national and international levels and explore other
options for reforming global finance.