ATTAC- Restifying a Media Manipulation

Rectifying a Media Manipulation
James Tobin, the Tobin Tax and Attac

Press Release

12 september 2001

Amanda Galbe & Leah Brumer, volunteer translators. André Intartaglia coorditrad@attac.org

The publication of James Tobin’s Der Spiegel interview in the United States and in several European magazines offers a prime example of how information can be manipulated for political ends.

The interview confirms that the answer is "yes". The Nobel prize winning economist continues to support the proposal. Literally: James Tobin stated its merits in a long interview published in the Spring 1999 edition of Politique internationale (no. 83). And in May, 2000 he reaffirmed his position by joining hundreds of the world's economists in signing the World Economists' Call launched by the Washington-based Center for Economic and Policy Research (CEPR).

What does the Call say? "Taxes on speculative financial activity, such as the so-called "Tobin tax" on currency transactions, make speculation more expensive and therefore reduce the volume of speculation. This can contribute to stabilizing financial markets. The record of financial transaction taxes in the past and long-standing evidence of the success of other forms of financial regulation demonstrate that taxes on financial speculation can be implemented successfully."

2.- With his tax, James Tobin seeks to help to stabilize the international financial system. Is he also interested in the proposal’s redistribution aspects?

His answer to this question is not as categorical as has been reported. On one hand, in the September 11th issue of Le Monde, he states "the fiscal revenue is only a secondary consideration for me", but adds "I would be pleased if these funds reached the planet's poor". The Washington Call which he co-signed states explicitly "in addition, this type of tax provides an opportunity to raise significant levels of revenue which can be used to meet important social needs".

Never. In all their articles, books and speeches, Attac's leaders have always been extremely careful to distinguish the Nobel Laureate's goal, which our organization shares (we know that financial crises strike the poor the hardest), from our two other goals. These are:

- to make funds available for development needs in the South, such as providing access to drinking water for the billions of people who lack it, the fight against AIDS and malaria, etc.;

- to allow governments, and therefore citizens, to reclaim part of the democratic space given over to the financial markets. We believe that this is the main reason for opposition to the Tobin tax from financial circles and their political spokespersons. With good reason, they see it as a precedent that Attac and other citizen movements would use to demand even more economy and capital-flow controls.

No. Attac stands for "Association for the Taxation of Financial Transactions for the Aid of Citizens". When, in his Le Monde diplomatique article of December 1997, Ignacio Ramonet, its director, launched the idea of Attac, he included "Tobin tax" in the association's name. However, he invented the acronym before defining its full name. He certainly had in mind articles on the Tobin tax that Le Monde diplomatique had published during previous years.

However, when the association was created in June 1998 and its articles registered, "Tobin tax" did not appear in its full name. The two Ts referred to Taxation of (financial) Transactions. This was done for two reasons: so as not to implicate Tobin, even indirectly, and more so to avoid limiting Attac's field of action to the tax. As Attac's constituent platform makes quite clear, taxing financial transactions is only one way of fighting neo-liberal globalisation. We are equally involved in fighting the WTO, debt, tax havens, multinationals and so on. Limiting Attac's actions to the Tobin tax shows total ignorance of the association.

Attac has never identified Tobin among its supporters. Indeed, in his speeches on this topic, Bernard Cassen, Attac's President, regularly refers to Tobin's comments during a telephone conversation they had in the Winter of 1998. Cassen had invited the economist to a conference on the Tobin tax, which took place in Paris on January 25th, 1999.

The conversation was quite cordial. James Tobin said that he was delighted to learn that Attac's membership (just over 5,000 at the time) already exceeded the number of North Americans who knew his name! He made it clear that he was not a "revolutionary" - no secret to Cassen - and said that he would not be able to attend the conference, both due to his wife's state of health and so as not to be linked personally to an association whose goals he did not share. He recalled that, for him, the Tax's appeal was limited to its role in reducing exchange-market instability. Cassen assured him that he understood and respected the economist's position perfectly.

However, Tobin's name is one thing, and that of the Tax another. Indeed, generations of economists - not Attac - named the proposal for taxing speculative financial activity. The Tobin tax has become a concept in the public field. Like the Gauss curve or Pythagoras theory, its existence is independent of its creator. Like many other organisations, Attac promotes and has broadened it - a fact that we assume fully - to cover issues that were not in Tobin's original aim.

"Unfortunately, it won't be", he says. "International decision-makers are opposed to it." Attac's very fight is to make these decision-makers, in France and Europe initially, change their minds. To twist Tobin's words so that they support a result that he would be the first to deplore is intellectually very dishonest.

7.- Does the fact that Tobin has distanced himself from the movement against neo-liberal globalisation pose a problem?

Not at all. We were aware of his position and have communicated it from the outset. However, we would point out that in the May 1999 Appeal that he signed, Tobin stated "for these reasons, we support the development of the international movement that seeks to implement legislation to impose appropriate taxes on financial speculation".

8.- James Tobin does not seem very familiar with Attac, especially as regards its position on violence during demonstrations

That is correct, as he has said himself: "I am not really familiar with the details of their proposals. The demonstrations you refer to have been somewhat inconsistent. However, I do not know whether they reflect Attac's stand."

The fact that James Tobin associates Attac with violent groups can only be the result of current disinformation in the U.S. press, particularly the Wall Street Journal. Our writings and activities refute these unfounded charges. However, we do not blame Tobin for believing what he reads in his country's newspapers.

Following his telephone conversation with Bernard Cassen, it was clear to us that James Tobin did not wish to be associated with Attac. We chose not to bombard him with regular press releases or our weekly English-language email newsletter. This was a mistake that we will remedy so that the Nobel Laureate, whom we regard most highly, can learn about our positions and activities directly.

Given the extent of the movement in support of the Tobin tax in France, Germany and other European countries, it was obvious that the press would want to know the Nobel Laureate's position. We are delighted about this, and even more so that Tobin confirmed his desire to see the Tax implemented, even if he does not believe it will happen, given government hostility.

The problem is therefore not the text's publication, but its manipulation. Tobin is quoted here and there as being "against" his own tax (e.g. Libération of 9th September, 2001 and other self-interested columnists' comments). Through disinformation, they are seeking to undermine the position of Tobin-tax supporters on the very eve of the meeting between Attac and Laurent Fabius and above all of the 22nd-23rd September meeting in Liège of the EU finance ministers (Ecofin) that has the proposal on its agenda.

While visiting Athens, the Prime Minister said he thought he could detect a "new element" in James Tobin's declarations. At best, this proves that he is not properly informed by his advisors. However, he inspires a rather different analysis when he goes on to say "The fact that the tax's originator remains faithful to it but has his own opinion on those who nurture and defend it religiously is still an element for intellectual discussion. You know, I do not like magical thinking that much, so I would like a number of instruments and ideas to be looked into in depth".

Since Lionel Jospin takes an “intellectual” tone, Attac would like to point out to him that:

- we do not see how Tobin's assessment of Attac, acknowledged by himself as being approximate, could in any way affect the Tobin tax's legitimacy;

- Attac does not either worship the Tobin tax or invest it with magical properties. Firstly, our extensive texts prove that we do not consider it a cure-all, and we have many proposals for regulating capital flow. Furthermore, the Tobin tax is only one of Attac's demands. The Prime Minister is well aware of this, as his government has shown at Parliament that it is hostile to several other of the association's proposals, on a self-financed retirement system and profit-driven job cuts.

In reality Lionel Jospin, currently in total agreement with Laurent Fabius, instead of defending Tobin-tax implementation in Europe, intends to rid himself of it by passing it on to the IMF or OECD where it will be promptly buried. It would be more honest for Jospin to state his intentions openly rather than, in a burst of false naivety, seeking comments from the Nobel Laureate to justify his own elusiveness.