Versione di lingua italiana
Deutsch Sprachenversion
English language version
Choose language:

» Economics » Globalization » Globalization criticism » Rave-in-expensively

Page modified: Wednesday, July 13, 2011 03:14:22

Rave-in-expensively the idea of a tax is on international foreign exchange transactions, more exactly the taxation of short term speculations with foreign currencies for example in the interbank trade, which 1972 were suggested by James Tobin, for economics. In this way it should be made possible to contain financial speculations which prepare above all large problems or disasters for smaller economic systems with "weak" currencies.

The control item for, it devised by Tobin, lies extremely low (between 0,05 and a per cent). All transnational money transfers with this uniform fiscal charges were taxed. For the layman the control item suggested by Tobin may appear too low, in order to be able to really cause something. Actually are for foreign exchange dealers however four places behind the comma (called Pip) relevant. Since it often concerns with the speculative foreign-exchange trading in such a way specified second trading or minute trading, a taxation affects the business of a Traders thus strongly.

The earlier demand rave in after a rearrangement of capital by means of the taxation of the foreign-exchange trading was taken up by the globalization critics, particularly by Attac. Attac suggests the mechanism of a supranational organization, which is to promote environment projects with the incomes in the developing countries.

Tobin in the last years of its life from that rave-in-expensively dissociated itself, among other things because he takes in his name of the globalization-critical movements saw and because the discussion in substantial points and objectives deviate from its original concept, that the control of foreign exchange stream in the view has and not the financing of development assistance.


Analysis that rave-in-expensively

Paul Bernd Spahn, owner of the chair for public finances at the University of Frankfurt, published 2002 on behalf the Federal Ministry for economic co-operation and development (BMZ) a feasibility study regarding rave-in-expensively. It was limited thereby to the aspects of the income achievement and rate of exchange stability. The system-oriented changes by rave-in-expensively it touched briefly and came to the result that - often idealistic colored - the political aspects that rave-in-expensively often ignored and did not note the economic consequences that the foreign exchange transaction tax in the exchange rate system of the Bretton Woods was devised. Likewise the proponents ignored the dangers for the liquidity of the national economies. Its recommendation was the introduction of one politically feasible Tobin Tax (dt. politically feasible rave-in-expensively, briefly PFTT). This sits down from the actual rave-in-expensively, focused on the aspect of the income achievement, and a speculation delivery, the Exchange rate Normalization Duty (ERND), together. The ERND particularly aims at swelling and transformation countries, which are dependent on other currencies. Euro and US Dollar are to be excluded be able themselves to only move explicitly and in a fixed range. The BMZ evaluated the study critically and feared negative effects on the development policy. For Spahn those represented rave-in-expensively however no suitable instrument of the development policy. For it the political implementation of human rights, democracy and education is more helpful than the uncontrolled supply of capital.


Rave-in-expensively is, so the proponents, whom prevent short term trade with foreign exchange, since this has according to its opinion negative effects on national economies, not however for this harmless long-term foreign-exchange trading.

The incomes resulting from it are to be passed on by the World Bank. The incomes are to come the public to property and work against the too high taxation of small incomes. Very popular also the idea is to use the income from rave-in-expensively for the increase development assistance and for the dismantling of the burden of debts of the poorest developing countries.

An example of the effects of short term foreign-exchange trading, which would be rave-in-expensively limited by, offers Thailand. Financial speculators the country, which flourished up to this time economically, drove center of the nineties into a deep crisis. The national currency, the Baht, purged (the relationship dollar to Baht changed from 1:25 on 1:56). In Thailand lost hundredthousands humans their work and many social mechanisms were closed (on operation of the IWF). For the sake of completeness it must be mentioned that Thailand, when a highly developed country found, the way from the crisis. The numbers are still clearly nevertheless under the level before the crisis.


It is frequently criticized critically that a large part of the short term business with small profit margins unequal weights at the foreign exchange markets repair (see: Arbitrage trade) and thus positive effects on the economy have. Rave-in-expensively also these business would disturb.

Additionally exists the fear, the goal of the tax is only an increase of the tax receipts and the argument to support development assistance or environment projects is only advanced.

The largest problem that rave-in-expensively lies however in the world-wide negotiability, thereby no drift of capital into non-taxed areas (tax havens) develops.

Deep-going criticism gives it on the part of liberally oriented radical capitalism proponent like the representatives to the Austrian school of the political economy, the Libertarismus and the Anarchokapitalismus. To its view those goes rave-in-expensively not far enough. It aims only at a symptom off, not however at the fundamental cause, international Fiats the Money monetary system. This should be replaced by a free market for currencies, at least however by a full gold standard.

Empirical economic research to the effectiveness that rave-in-expensively

In the international economic research there is meanwhile a set of case studies, which examine the connection between transaction costs and of the financial courses empirically. These case studies are based on regulations changes of the electronic market process, which were made in the 90's at numerous stock exchanges for the decrease of the transaction costs. The research results show a clear a positive connection between transaction costs and the (instability) of the Marketpreises (e.g. Ronen and Weaver (2001), Bessembinder (2001), Bessembinder and Rath (2002), strike (2006)).

Rave in hypothesis of the stabilizing effect of higher transaction costs (by taxes) can be regarded therefore than empirically disproved. Is exemplary the investigation of strikes (2006), The Role OF Transaction Costs for Financial Volatility: Evidence from the Paris Bourse, publishes OF European Economic Association (June 2006) in the journal:

Panel involution controlling for market wide volatility effects show RK high level OF statistical significance that the hourly rank volatility OF individually stick of increases by more than 30% for A 20% exogenous increase into transaction costs due tons ticks size variation into the French trading system. Into the OF light this evidence, more higher transaction costs in general, and security transaction taxes in particular, should considered as volatility increasing.

(English-language) a discussion to the state of research findete itself likewise in strikes (2006).


Both the parliaments of France and Belgium decided the introduction that rave-in-expensively, only however, if all European Union member countries introduce these. At the end of January 2005 first of France president Chirac and afterwards also ex Federal Chancellor for the first time for a taxation of international foreign exchange transactions in favor of of developing countries expressed themselves. Critics mean, this is to be seen before the background that such a tax is internationally not consentable, since it is rejected particularly by the American government and thus no prospect insists on realization of such suggestions.

The Austrian Federal Chancellor dish suggested in July 2005, which may introduce European Union those rave-in-expensively (S. Web left). Thus the European Union is to be able itself to provide own means. And - that was the actual goal - thereby the budget planning of the European Union would be substantially more conflict-free. The European Union commission expressed itself nevertheless against the introduction of one rave-in-expensively.


  • Matthias Rave-in-expensively. In: Dieter Nohlen (Hrsg.): Encyclopedia third world. 12. Edition, Rowohlt, Reinbek 2002, P. 792-793, ISBN 3-499-61468-5
  • Andreas Thiemer: Tobin Tax. In: The restaurant study (WISU), 27. Jg., number 3 (March 1998), P. 235.

Page cached: Friday, May 27, 2016 14:15:31
Valid XHTML 1.0!  Valid CSS!

Page copy protected against web site content infringement by Copyscape