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Advice for Gordon Brown: get in touch with your Robin Hood side

by James Graham 

Posted: 27 May 2007
Word Count: 868


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Advice for Gordon Brown: get in touch with your Robin Hood side

When Margaret Thatcher left Downing Street, she shed a tear. I remember I wept a little too, but it was for joy. Now her natural successor is going too. 'Oh, I don't think we need worry about Tony,' she is reported as saying after the 1997 election, meaning among other things that Tony would continue to support the Americans in their world-wide adventures. Meaning too, no doubt, that Tony would never dream of interfering with the now well-established system of redistributing wealth from the poor to the rich, according to which corporate or individual wealth is measured in aggregates of poor countries - a celebrity business man is worth three poor countries, a corporation twelve. Tony has been, on the whole, a good Thatcherite, and there might well be tears at his departure too.

Let's be generous to Gordon Brown, and not presume that he will simply trundle along the same tracks as Tony. There might be a change of direction. He has not been short of advice from the media and others, but I have no hesitation in offering him a little more. The gist of it is this. At moments in his many pre-Budget and Budget speeches, we have glimpsed the Robin Hood in him - as he triumphantly announced the raising of the winter fuel allowance (or was that King Wenceslas?) or the introduction of pension credits. He seems to enjoy giving to the poor. Now he should cultivate the other side of his Robin of Sherwood persona: the art of taking from the rich.

Wealth inequality has reached grotesque levels. Throughout the world there are still a billion or so people living on a dollar a day or less. Sweatshop workers producing polo shirts or stuffed Disney characters - even though they are somewhat better off than dollar-a-day people - earn as little as 50c an hour, while the salaries of the chief executives of the companies they work for range from $1000 to $10,000 an hour. Of the 100 most wealthy economic organisations in the world, just under half are countries, and just over half are transnational corporations. This is where the world's wealth has gone. If world poverty is to be alleviated, we must get the money from where it is to be found in the greatest quantities.

The twenty-first century way of taking from the rich is to impose a Currency Exchange Development Levy (CEDL). The volume of speculative transactions on currency markets is such that a levy of 0.1% on profits would bring in $62 billion (31.25bn) every year, if the UK alone were to implement the tax. A UN study has estimated that about $150 billion per year is needed to meet the Millennium Development Goals, including halving the proportion of people living in extreme poverty and hunger by 2015, ensuring primary schooling for all children, and reversing the spread of HIV/AIDS, malaria and other major diseases. If the UK were going it alone, it could raise over 40% of the MDG target sum. If the whole of the EU were to join in, the target could almost be met.

To say that 0.1% is not much to ask is an understatement. If Robin Hood had stopped a coach on the highway to Nottingham and had taken a farthing from each passenger, it would be daylight robbery by comparison. Yet the revenue even from such a low-level CEDL would, if properly applied, make substantial inroads into poverty in the developing world.

The tax would, of course, have to comply with the 'development' concept in its title. It could not be used to purchase nuclear submarines, or pay for the occupation of other people's countries, or even finance the Olympics. It would have to be 'ring-fenced' to finance projects related to world poverty reduction.

As soon as possible after the departure of Thatcherite Tony, Gordon Brown should take steps to implement a British CEDL on sterling transactions, and press for similar measures in the EU and even - through the G8 perhaps - in other parts of the developed world.

In the longer term, the government should go much further and consider how to set up a permanent global contract with business, a treaty between state and corporate powers, whereby sufficient wealth would always be redirected into vital projects. These would always include alleviating poverty, making safe water and essential medicines available everywhere in the world, and developing renewable resources.

That's for the long term - meanwhile, a UK-only CEDL is almost immediately feasible. It's a reasonable proposal which has been supported by leading experts such as the Nobel Prize winning economist Joseph Stiglitz. (Though, like every other progressive idea, it's opposed by the Sheriff of Nottingham, George W. Bush. Gordon should refuse to sign up as his deputy.)

One thing you can't deny about Gordon - he has a good head for economics. He will be very familiar with the concept of taxing financial speculation. If he were to take it on board, we would know there was a real change of direction.



Gordon, if there's anything you still don't know about CEDL, try these:

http://www.stampoutpoverty.org/
http://www.globalpolicy.org/socecon/glotax/currtax/index.htm






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Comments by other Members



V`yonne at 17:20 on 27 May 2007  Report this post
So when can I vote you in?
Oonah

Richard Brown at 19:15 on 28 May 2007  Report this post
Beautifully crafted, James, and very interesting. How about sending it to The Guardian for that slot where they let people have their say? Could give a much-needed boost to the anti-poverty camp.

Richard.

Cornelia at 07:18 on 30 May 2007  Report this post
As someone who buys the Guardian but despairs at its watered-down liberalism, I'd agree with Richard - this has its heart in the right place and speaks with the authority of someone who has apparently researched the subject.

I love these political commentary articles and this makes a convincing case, although it got a bit statistical in the paragraph about the revenue that could be obtained from the monetary-exchange tax. A nice catchy title which at first made me think it was going to be more about domestic spending policy. You do make the point that lavish war scenarios are funded at the expense of things like education and health at home, but rather too subtly for my taste, similarly the hope that George Brown won't be as much in Bush's (or his successor's) pocket as Blair was.

I'm always a bit sceptical, too, of the 'dollar a day' argument as applied to foeign workers, partly because why should we be so US-centric that we use their currency as a measure, and partly because, having worked in China, I think it it doesn't really translate into anything meaningful.

A very clearly written and enjoyable piece that pulls its punches a bit too much, but which argues well and captures a broadsheet style.

Sheila


James Graham at 20:23 on 30 May 2007  Report this post
Thanks for commenting, Sheila. Yes, the references to the Iraq occupation and Brown's possible relationship with Bush aren't very strong to say the least. But I think I wanted to focus on the main idea, the currency exchange tax, and contented myself with a couple of snide remarks on these other issues. Maybe something stronger - e.g. if Brown wants to win the next election he should pull troops out of Iraq and dissociate himself from Blair's lies and illegal war - wouldn't have been too distracting. Shame to pass up any chance to fire off something like that!

Possibly 'dollar-a-day' (or 50p a day) is bandied about too much. It seems to oversimplify the complexities of people's lives - the ways people live and make a living. On the other hand, I do think a straightforward, fairly simple statistic (provided it's backed up by some reasonably accurate statistical research) can be very telling.

I would imagine 'dollar-a-day' doesn't generally apply in China, where some of the old Communist welfare-state values must still survive.

*

Richard, which slot in the Guardian is that? Is that in the print edition rather than online? I haven't bought the Guardian for some time (started having Guardian Weekly sent out to me) and I don't recall a column in which readers are invited to submit articles. If there were one, I would definitely submit.

*

Thanks, Oonah. Funny how people who really know what should be done aren't in government!

James.


Cornelia at 09:26 on 01 June 2007  Report this post
James, I forgot to tick the reply box, so this response is a bit late, which I hope you'll excuse.

I must say I'm a but surprised you can't get the ordinary Guardian in Scotland. On the other hand, as I hinted, you are not missing much in terms of political commentary. In some ways it's easier to take the frank establishment-oriented Times, etc than the pretend radicalism of the Guardian.

Anyway, yes, about China - my experience is limited to the northeast region formerly known as Manchuria, which is probably one of the more backward areas, although in 2000 I spent a month at the opposite end of the country,working in Zhejiang, also a rural backwater. However, from my research and reading I'd say these areas are more representative than the rapidly-developing cities we see on TV.

One widely reported abuse in China is the non-payment of wages. Before I lived there I wondered how this could be possible. However, once I knew that it is customary for employers to provide accommodation, meals, transport to work, medical attention, etc for workers it all became clear. In fact, by witholding all or a percentage of wages employers can ensure workers tolerate poor conditions.The more money they are owed the less likely they are to decamp.

some of the old Communist welfare-state values must still survive.


Yes, that's why the 'dollar-a-day argument' doesn't really apply, although it may be (loosely) relevant to other countries. Unless you have the cultural context it's difficult to make meaningful comparisons, especially as the cost of basics like housing and food vary considerably as do acceptable forms of employment.

I assume, though, your article refers to less developed countries. It seems to be in the economic interests of wealthy nations to keep poorer countries economically viable but not too competitive in terms of trading, and that seems to me what the arguments are about, given the usual rampant capitalism practised by world leaders(oops - very non-Guardian- kindly redraft as something like 'safeguarding living standards at home'). Presumably they want to avoid the mistakes of the last two centuries and the kind of imbalance that led, for instance, to the Opium wars.

Thanks again for a thought-provoking article.

Sheila




James Graham at 12:15 on 03 June 2007  Report this post
A slight misunderstanding re the Guardian - we can buy it in Scotland, it's just that I got fed up buying it every day and started taking the Guardian Weekly instead. I still like some of the feature writers, e.g. Seumas Milne and Gary Younge.

Your description of the situation with non-payment of wages in China is familiar - not from any first-hand experience that I've had, but from reading about the Stalin era. Workers in the big new industrial centres such as Magnitogorsk were provided with these things - free transport, free meals, etc - but actual wages were low. The major problem in the Soviet system wasn't so much non-payment of wages, though, it was the chronic shortages of consumer goods, even clothes, shoes, pots and pans. As for present-day China, if we're talking about Congo or Haiti the term 'developing country' is pretty meaningless; but in the case of China it surely applies for real. I imagine development might be more real, even more egalitarian, in China because they have had continuity in political leadership, not a sudden collapse like that of the Soviet Union.

Thanks again for your comments - thought-provoking for me too!

James.


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