Cosmopolitan justice and the Tobin tax

The opening chapters laid the groundwork for continuing a conversation about cosmopolitan ethics in global finance. The Introduction established the prime concern of the book: to analyse critically the possibilities and limits of cosmopolitan ethics in global finance via a case study of the Tobin tax. Chapter 1 set out the theoretical framework, a pragmatic praxis, which treats cosmopolitanism as a contingent contribution to ethical conversation. By engaging this conversation with ironic critique, it is argued that new possibilities can be explored. Chapter 2 cleared the historical ground. By charting the history of the campaign for a Tobin tax in terms of three vocabularies – economic, political and ethical – it was suggested that the content and implications of the proposal have shifted in recent decades. Ethical arguments for the Tobin tax are increasingly deployed. This represents an important touchstone for the conversation about cosmopolitan ethics in global finance. This chapter explores the potential synergies between cosmopolitan justice

and the Tobin tax. It introduces the emerging vocabulary of cosmopolitan justice by presenting the arguments of those cosmopolitans who locate their work in a critical line following John Rawls (Beitz, 1979; Buchanan, 2000; Pogge, 2002). Their key agenda has been to undermine the state-centrism at the heart of John Rawls’ theory of justice and make it applicable ‘internationally’ or ‘globally’. For his part, Charles Beitz (1979) has highlighted the importance of interdependence in the modern world economy. Similarly Allen Buchanan (2000: 705) has argued that patterns of capitalist accumulation in the global polity represent a ‘global basic structure’ that can found principles of global justice. And, finally, Thomas Pogge (2002) has stepped outside statecentrism to begin his theory of justice from the point of view of human rights and cosmopolitan responsibilities regarding global poverty. The discussion, then, highlights the importance of such arguments for a

discussion of the Tobin tax. On the one hand, they illustrate the limitations of state-centric approaches that either deny justice to large groups of people or privilege certain states. It is argued that this basic principle of justice has motivated many in the NGO campaign for the Tobin tax. On the other hand, they illustrate the kind of potentials that exist within contemporary global arrangements to build ethical agendas against world poverty. There is a fruitful

synergy between cosmopolitan justice and the Tobin tax. Thomas Pogge (2002) argues that global poverty is removable via the allocation of a very small part – 1 per cent – of the income of the richest citizens. For him, to ignore this fact and to ignore the role of the current global capitalist system in producing poverty is against all broadly acceptable principles of cosmopolitan justice. Likewise, Tobin tax proponents state that a small, feasible tax on the richest financial speculators could generate enough funds to address the issue of avoidable severe poverty. However, the final part of the chapter identifies a number of ethical ambiguities and contradictions pertaining to the Tobin tax. These call into question the cosmopolitan belief that ethical concern can be expanded by material redistribution. First, to levy the tax in all states requires a level of capital account con-

vertibility that is not unambiguously desirable in partially or undeveloped financial systems (Kim, 2003). It is argued that such a requirement enforces a structure of financial universality that risks silencing alternatives (see De Goede, 2005: 147). Simply stated, as a technical proposition the Tobin tax requires a well-developed and open financial structure to operate, thus silencing the question of whether such structures are themselves universally desirable. And, second, even if feasible, it is not clear that developing states could levy a major amount from trade in their own currency. Thus an inevitable reliance on Northern states to generate the majority of the resources implies a cash-based approach to global redistribution that may reproduce relations of dependence. Based on this analysis, it is argued that a core failure to undermine the structure of global capitalism, in both standard accounts of the Tobin tax and in Pogge’s schema, implies some deep ambiguities within cosmopolitan global justice. The problem is not that global justice is hard to realise. Rather, the ethical dilemmas arise when ideal theories of cosmopolitan justice construct the world in their image. Thinking through the specific case of the Tobin tax illustrates how a well-intentioned cosmopolitan proposal can reify a level of financial universalism and a cash-based conception of justice. Recognising such ambiguities does not mean succumbing to relativism.

First, one course of action is to construct a democratic argument for the Tobin tax (Patomäki, 2001). As Chapter 4 argues, the discourse of cosmopolitan democracy can help to situate and, where necessary, contest the problematic aspects of global finance reform via a Tobin tax. And, second, as Chapter 5 argues, perhaps the problem is not one of overcoming, but of learning to live with the ambiguities of cosmopolitan global finance via a Tobin tax? In this sense, the civil society campaign may be seen in terms of broader efforts at sentimental education that can support the development of cosmopolitan sensibilities in global finance.