Tax to the rescue

By Hazel Henderson

Reforming the unregulated global casino must be addressed at the summit of the Group of 20 (G-20) countries in London next month. The communique from the November 2008 summit of G-20 leaders in Washington, DC, clearly cited increased cooperation between nations as essential, particularly oversight of global banks and other financial players. Cooperation is necessary to avoid "beggar-thy-neighbor" policies.

Yet, no mention was made at the November summit of the most urgent priority: tackling the up to US$3 trillion of daily currency trading, over 90% of which is speculation. Bouncing currencies have caused much of the turbulence and excessive volatility in world markets as contagion spreads in minutes in this around-the-clock trading. A small tax (less than 1%) on all trades has been advocated since the 1970s, when it was proposed by economist James Tobin. The idea was also floated in 1989 by now US National Economic Council head Lawrence Summers, who also attended the Washington summit.