The WTO : a threat to Economic Justice, worldwide

The WTO

The hurricane that has hit the money markets in Asia poses a threat to the rest of the world. The globalisation of investment capital is causing universal insecurity. It makes a mockery of national boundaries and diminishes the power of states to uphold democracy and guarantee the wealth and prosperity of their peoples.

Financial globalisation is a law unto itself and it has established a separate supranational state with its own administrative apparatus, its own spheres of influence, its own means of action. That is to say the International Monetary Fund (IMF), the World Bank, the Organization for Economic Cooperation and Development (OECD) and the World Trade Organization (WTO). These four powerful institutions are unanimous in singing the praises of "market values", a view faithfully echoed by most of the major organs of the media.

This artificial world state is a power with no base in society. It is answerable instead to the financial markets and the mammoth business undertakings that are its masters. The result is that the real states in the real world are becoming societies with no power base. And it is getting worse all the time.

The WTO, which took over from GATT in 1995, is now an institution with supranational powers, subject to none of the checks and balances of parliamentary democracy. If a case is referred to it, it has the power to declare national legislation on employment, public health or environmental matters "contrary to the interests of free trade" and insist that it be repealed. And, in OECD, beyond the reach of public opinion, a very important agreement called the Multilateral Investment Agreement (MIA) has been under negotiation since 1995 and when it is signed, it will give investors full powers vis-à-vis governments.

The task of disarming this financial power must be given top priority if the law of the jungle is not to take over completely in the next century.

Some $1,500 billion change hands on the world's money markets many times every day in speculation on exchange rate variations. This instability is one of the main causes of the rise in real interest, which acts as a brake on consumer spending and industrial investment. It increases national debt and encourages pension funds handling hundreds of billions of dollars to insist that firms pay ever higher dividends. The first victims of this quest for profit are of course the employees. They are laid off in shoals to improve their erstwhile employers' ratings on the stock exchange, which go up by leaps and bounds. How long can society continue to put up with this intolerable situation? The time has surely come to put a stop to these destructive movements of capital. There are three ways to tackle the problem: close down the "tax havens", increase tax on unearned income, and levy a tax on financial transactions.

Tax havens are enclaves where the banks' code of confidentiality reigns supreme, providing a convenient cloak for embezzlement and other criminal activities. Hundreds of billions of dollars are stashed away out of reach of the tax authorities for the benefit of powerful individuals and financial institutions. All the major banks in the world have branches in tax havens and make a tidy profit out of their activities. Why not, for example, declare a financial embargo on Gibraltar, the Cayman Islands or Liechtenstein by prohibiting banks that do business with the public authorities from opening branches there?

The power to levy taxes on unearned income is a sine qua non of democracy. Such income should be taxed at exactly the same rate as earned income. But this is not the case anywhere, least of all in the European Union.

Absolute freedom of movement for capital undermines democracy and we need to introduce machinery to counter its effects. One such mechanism is the Tobin tax, named after the Nobel prize-winning American economist who suggested it back in 1972. The idea was to impose a modest tax on all exchange transactions, to stabilise the markets and generate revenue for the international community. At 0.1%, the Tobin tax would bring in some $166 billion a year, twice the annual amount needed to abolish the worst poverty by the end of the century.

Many experts have said there would be no particular technical difficulty about introducing this tax. It would spell the end of the liberal dogma subscribed to by all those people who love to tell us that there is no alternative to the present system.

Why not set up a new worldwide non-governmental organisation, Tobin Tax Principles.

Tobin Tax Principles

With the trade unions and the many social, cultural and ecological organisations, it could exert formidable pressure on governments to introduce this tax at last, in the name of universal solidarity.

Why not create a non-governmental
"Action for a Tobin Tax Organization" world-wide, to bring assistance to citizens ?

Attac?
It is simply a question of taking back, together, the future of our world.

Financial globalisation increases economic insecurity and social inequality. It bypasses and devalues people's choices, democratic institutions, and sovereign nations responsible for the common good. In their place it puts a logic that is purely speculative and only expresses the interests of multinational corporations and financial markets.

Against the background of a global transformation presented as inevitable, citizens and their representatives find themselves fighting to maintain the power to determine their destiny. This weakening and impotence nourishes the growth of anti-democratic political parties. It is urgent that this process should be halted by creating new regulatory and monitoring instruments, nationally, in Europe, and internationally. Experience shows that governments will not do that unless we encourage them. To face up to the dual challenge of a social implosion and political despair, it is necessary for citizens to take militant action.

The free movement of capital, fiscal paradises and the explosion in the volume of speculative transactions have forced nations to compete fiercely in attracting big investors. In the name of modernity, 1,500 billion dollars come and go each day on the exchange market in search of instantaneous profit, without any relation to the state of production and trade of goods and services. Such an evolution results in a constant increase in capital revenue to the detriment of revenue from labour, and increasing precariousness and poverty.

In the disguise of security, employees are now being invited to trade their retirement systems against a pension fund mechanism which results in subjugating their own companies even more to the only goal of immediate profitability, aggravating working conditions, extending the sphere of influence of the world of finance and persuading citizens of the obsolescence of solidarity arrangements between nations, people, and generations.

On the pretext of economic development and employment, OECD member countries have not abandoned the signing of the Multilateral Agreement on Investment (MAI), which would give investors all the rights and impose all the obligations on nations. At the same time, the European Commission and certain governments intend to pursue their free-trade crusade through the New Transatlantic Market (NTM) agreement, which openly seeks to assure the hegemony of the United States in the audio-visual industry and dismantle the common agricultural policy.

Most of the gears of this machine of inequality, between North and South as well as inside the developing countries themselves, can still be stopped. All too often, the fatality argument feeds itself through the censoring of information on the alternatives. This is why international financial institutions and the mass media (the owners of which are often the beneficiaries of globalisation) have been silent on the proposal of the American economist James Tobin, awarded a Nobel prize of economy, to tax speculative transactions on the exchange market. Even fixed at a particularly low rate of 0.05%, the Tobin tax would gather close to 100 billion dollars a year. Collected, primarily, by industrialised countries, where the largest financial centres are located, the sum could be redirected to international organisations for activities aimed at fighting inequality, promoting education and public health in poor countries and food security and sustainable development. This kind of mechanism would put sand in the gears of speculation. It would feed the logic of resistance, give citizens and nations back some room to manoeuvre and in particular it would show that politics can be restored to its proper place.

With this goal in mind, the signatories have proposed to create the association ATTAC (Action pour une taxe Tobin d'aide aux citoyens), which would allow them to produce and spread information to act together, in their respective countries as well as at the European and international levels.

With a view to preventing international speculation, taxing capital revenue, punishing fiscal paradises, stopping the extension of pension funds and, more generally, recapturing the spaces of democracy lost to the financial sphere and to oppose any new abandonment of the sovereignty of states on the pretext of ensuring the "right" of investors and merchants. It is simply a question of taking back, together, the future of our world.

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Attac? It is simply a question of taking back, together, the future of our world.

Attac?
It is simply a question of taking back, together, the future of our world.