RE: <nettime> The Asian Crisis: Need for the Tobin Tax

["James Ryan" <james_ryan@attglobal.net>]

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. 


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