26 October 2011

The Pope supports a Tobin tax

In 1972, Nobel Prize-winning economist James Tobin suggested his now famous currency transaction tax as a way to manage the volatility of exchange rates. He believed that governments were not capable of adjusting to massive movements of funds across foreign exchanges without causing hardship to their people and sacrificing their economic policy objectives. By imposing a small tax (he suggested something around 0.5 per cent) on each exchange of one currency into another, volatility would be reduced as would the effects on national economies.

The idea of this tax was then seized upon as a means of providing revenue for dealing with poverty and environmental issues throughout the world. It appears that the Pope has become a supporter. In a document entitled Towards Reforming the International Financial and Monetary Systems in the Context of a Global Public Authority, released Monday by the Pontifical Council for Justice and Peace, the Vatican recommends "taxation measures on financial transactions through fair but modulated rates with charges proportionate to the complexity of the operations." Pretty much what Tobin suggested 40 years ago.

The council went even further to recommend a central world bank that "regulates the flow and system of monetary exchanges" to help restore "the primacy of the spiritual and of ethics ... and, with them, the primacy of politics—which is responsible for the common good—over the economy and finance." These instruments would "nourish markets and financial institutions ... which are capable of responding to the needs of the common good and universal brotherhood."

So will we find Benedict XVI camping out with the Occupy movement? Probably not, but his heart seems to be with them.


  1. Because the national central banks plus the present World Bank and IMF have done such a great job...

    Somebody will get their hands on the levers of power represented by a global central bank. It can be promoted as being for the best interest of the greater good of the greater number, but will be co-opted eventually even if it isn't at the start. It's too much of a danger.

    National sovereignty is important because the people at least have a hope of influencing their government. They have no influence with shady, centralized, global organizations.

    Why can't the Pope speak up against usury and central bank debt-money instead?

  2. Thats why we need a world government that is democractically elected with both individual charter of rights, a charter of rights for counties to restore soveriegnty to countries that have lost it to corporate blackmail.