James Ryan on Tue, 25 Jan 2000 00:08:37 +0100 (CET) |
[Date Prev] [Date Next] [Thread Prev] [Thread Next] [Date Index] [Thread Index]
RE: <nettime> The Asian Crisis: Need for the Tobin Tax |
Don't you think it is slightly oversimplifying matters to claim that the recent crises in Asian countries were caused entirely by currency speculation? Speculation is a tiny fraction of overall international currency transactions and can hardly be blamed for the recent crises. On the contrary, excessive real-estate speculation by the local financial institutions in question, risky lending practices, inefficient business practices and over-reliance on the regulation of the state to protect institutions and industries from competition were the primary culprits. The bloated, government-protected chaebol in Korea were more victims of their own failure to prepare for competition with more efficient local and international companies than the few currency speculators buying and selling won. Furthermore, speculation in any market is an inherently risky business, you lose far more often than you win. The number of people out there with the wallet and stomach to play that game is very, very limited compared to the number of legitimate currency transactions that happen every day. Even if you were to get every nation in the world to agree to such a tax and devise a fair mechanism of distributing the tax revenue, taxing every transaction in the world would only increase the cost of all international trade and hurt the very countries you propose to protect. Also, having lived and worked throughout Asia for the past ten years, I can say with conviction that the influx of foreign capital has done more to help local workers and companies than any other force. Foreign investors insist on transparent financial reporting, sound fiscal management and efficient operations. In the past, Japanese companies were able to hide huge losses by passing them around various subsidiaries and hopefully paying them down over time. However, when the losses just wouldn't go away, entire companies could disappear overnight (i.e. Yamaichi Shoken). The employees of Yamaichi, who suddenly found themselves out of jobs and on the unemployment lines, were not victims of "currency speculation" they were victims of poor fiscal management, corruption, government regulators "winking and nodding" at clearly illegal practices in return for bribes, and an attitude that no matter what happens, the government will protect them. The same can be said for the Korean chaebol. It is ironic that the labor unions in Korea are insisting that the chaebol continue the same inefficient practices that caused the crisis in the first place. Yes, as you have described, the financial crises of recent years have had a devastating effect on the average worker. However, let's put the blame where it really lies-on the executives of the companies themselves who let down their employees through shady and irresponsible business practices. Believe me, I've lived here ten years and I have seen things that would make your eyes pop out. Your hypothesis blaming the "evil foreign speculators and investors" only plays into the hands of the nationalists who insist that nothing is their own fault and propose to "fix" their economy by driving out foreign capital and putting up barriers. That is a sure road to eternal poverty. Foreign capital is an excellent means for local companies to finance business investment and expansion, provided it is used responsibly, and your "tax" would only make that more expensive. # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: majordomo@bbs.thing.net and "info nettime-l" in the msg body # archive: http://www.nettime.org contact: nettime@bbs.thing.net