World Economists Urge G20 Ministers to Accept Robin Hood Tax
1,000 number-crunchers have written to policymakers asking them to impose levy on City speculators to help poor
If the nine economists on the Bank of England's monetary policy committee can never agree, it should be harder than herding cats to round up a thousand practitioners of the dismal science and get them all saying the same thing.
But 1,000 eminent number-crunchers from more than 50 countries have written to G20 finance ministers, urging them to slap a tax on City speculators to help the world's poor.
They may not have spotted the credit crunch coming, but academic economists from top universities including Harvard, Cambridge, Kyoto and the Sorbonne now agree that bankers should pay the price.
In a letter addressed to policymakers from the G20 countries, the economists urge them to impose a "Robin Hood tax", which would emulate the English folk hero by robbing from the rich to give to the poor. Signatories include Jeffrey Sachs, director of the Earth Institute at Columbia University who is an influential adviser to Ban Ki-moon, secretary general of the United Nations; Dani Rodrik, from Harvard, and Ha-Joon Chang, from Cambridge. Nobel prize winners Joseph Stiglitz and Paul Krugman have also backed the letter.
They argue that if a tax were levied on transactions such as currency trading at just 0.05%, it could raise hundreds of billions of dollars to be ploughed into international development and climate change projects. Some of the proceeds could also be retained by governments in the countries where the transactions take place, including the UK, helping to repair the hole in governments' coffers.
"The financial crisis has shown us the dangers of unregulated finance, and the link between the financial sector and society has been broken," the letter says. "It is time to fix this link and for the financial sector to give something back to society." It adds that a financial transaction tax is "technically feasible" and "morally right".
The G20 finance ministers are meeting in Washington this week to discuss the state of the world economy on the fringes of the spring meetings of the International Monetary Fund.
The French president, Nicolas Sarkozy, who is chairing the G20, has commissioned Bill Gates to examine innovative ways to fund development, and France and Germany are known to be keen on the idea of a financial transaction tax. Staff from the Gates Foundation have been shuttling between G20 capitals trying to muster support for a tax, which could be imposed by a small group of countries if worldwide agreement proves impossible.