Democratizing globalization : the leverage of the Tobin tax /

Patomaki (Nottingham Trent Univ. and Network Institute for Global Democratization) advocates a currency transaction tax originally proposed by James Tobin. Patomaki claims that the primary cause for financial market instability and volatility of recent years has been foreign exchange market manipulation and speculation. A "Tobin tax" would reduce such undesirable market behavior, and the revenue derived from such a tax would yield sizable sums for development finance. However, the author exaggerates the potential benefits of a Tobin tax and minimizes its potential shortcomings. He acknowledges major technical problems to implementing such a Tobin, but his solutions are not convincing. He proposes having capital controls as surrogate backup of the Tobin tax, confirming its limitations. Patomaki is critical not only of the functioning of foreign exchange markets but of markets in general, financial market liberalization, and international financial organizations. His agenda goes substantially beyond advocating a Tobin tax and is a small step to achieving his ultimate objective: to "democratize global governance and facilitate the setting up of more efficient and just practices." Mahbub ul Haq et al.'s The Tobin Tax: Coping with Financial Volatility (1996) presents more balanced and less shrill arguments for and against a Tobin tax. Appropriate for upper-division undergraduate through professional readers. C. J. Siegman formerly, Federal Reserve Board/International Monetary Fund