Technology that allows a contract to move from one trader to another 27,000 times in 14 seconds may sound impressive but it begs the question: How does this benefit society?
A recent report from the Robin Hood Tax Campaign, entitled Financial Crisis 2: Rise of the Machines, has highlighted how an activity called High Frequency Trading is effectively making it impossible for regulators to police and intervene in the market when necessary. High Frequency Trading is computer driven trading that uses algorithms to facilitate shares being bought and sold hundreds of times a second and has the unfortunate innate ability to drive up prices and cause market volatility.
Making matters worse is the fact that such trading is increasingly being used for trading commodities, meaning oil and food. Wild volatility in these areas would not only cause havoc in the market, but more importantly will impact directly upon people's lives.
So once again, though impressed with the mathematical equations embedded in such technology, I must ask how this benefits society? And if the answer is that it doesn't, well then it's time to once again reiterate and intensify the call for a financial transaction tax - which would throw some much needed sand in the wheels of these technological trades.
Showing posts with label robin hood tax. Show all posts
Showing posts with label robin hood tax. Show all posts
Wednesday, August 31, 2011
Wednesday, February 10, 2010
Robin Hood Tax Campaign Launched
A new campaign has been launched in the UK which has galvanised the support of a coalition of charities, trade unions, aid agencies and hundreds of economists.
Calling for a tax of 0.05% to be applied on international banking transactions, the Robin Hood tax could raise up to £250 billion per year. Ideally half the proceeds would remain in the country to address domestic problems and the other half would be spent on tackling global poverty and climate change.
Financial transaction taxes already exist in many countries but none are as bold as the proposed Robin Hood tax. However, some world leaders including Angela Merkel and Gordon Brown have expressed support for the proposed tax alongside philanthropists such as George Soros.
The organisations involved claim that the minute tax would not damage the sterling market or impact negatively on the business of traders and so should prove relatively palatable. The tax is also not designed to hit the pockets of the public - though ensuring that banks and financial institutions do not pass on the cost may be hard to regulate. In addition, this new innovative source of funding should not be seen as a mechanism to relieve rich countries of any existing or future aid promises which they are committed to.
The only negative that immediately jumps to mind when this new campaign is considered is that the tax does not address the problems of the unregulated capitalist market that caused the recent global economic crisis but rather simply purports to benefit from it on the premise of helping those trapped in poverty. But, baby steps first...
Calling for a tax of 0.05% to be applied on international banking transactions, the Robin Hood tax could raise up to £250 billion per year. Ideally half the proceeds would remain in the country to address domestic problems and the other half would be spent on tackling global poverty and climate change.
Financial transaction taxes already exist in many countries but none are as bold as the proposed Robin Hood tax. However, some world leaders including Angela Merkel and Gordon Brown have expressed support for the proposed tax alongside philanthropists such as George Soros.
The organisations involved claim that the minute tax would not damage the sterling market or impact negatively on the business of traders and so should prove relatively palatable. The tax is also not designed to hit the pockets of the public - though ensuring that banks and financial institutions do not pass on the cost may be hard to regulate. In addition, this new innovative source of funding should not be seen as a mechanism to relieve rich countries of any existing or future aid promises which they are committed to.
The only negative that immediately jumps to mind when this new campaign is considered is that the tax does not address the problems of the unregulated capitalist market that caused the recent global economic crisis but rather simply purports to benefit from it on the premise of helping those trapped in poverty. But, baby steps first...
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