Connected Research

Union policy research in the 21st century

Currency speculators: turkeys or Marxists?

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Against a backdrop of:

– today’s currency speculation news focusing on the euro and also, yesterday, on sterling (although today’s announcement of a successful sale of £2bn in 30-year gilts – of the sort called for by the NAPF – is welcome news both as regards financial stability and as regards pension fund security)

– yesterday’s ‘advice’ to shell-shocked Greece from EU Commissioner Olli Rehn that it needs to make deeper cuts than those already envisaged if it is to get its economy back on track

– and the concerns of Lord Turner, chair of the Financial Services Authority, appearing before the Treasury select committee, on credit default swaps,

the dropping into my inbox today of the monthly Newsletter of the European Trade Union Congress, containing a number of features on financial speculation, couldn’t have been better timed.

Highlighting the ‘shameless’ activities of speculators betting on the collapse of countries hardest hit by the crisis, at a time of their vulnerability arising from needing to support economies hit by the failures of financial institutions, John Monks, General Secretary, uses his Editorial to argue for stronger powers for market oversight authorities; the regulation of hedge funds, ratings agencies and private equity; the scrapping of tax havens; and for a tax on financial transactions. Further on, the ‘Dossier’ section looks at whether financial speculators are the real winners out of the crisis and contains links to a number of sites including Regulate Global Finance Now! where there is a useful section of links to documents on a financial transactions tax (though not yet to the Robin Hood site).

There are of course, real and immediate worries as to the results of all this currency speculation as regards economies, jobs and livelihoods. However, it seems to me that one of the potential outcomes is that a financial transactions tax appears sooner rather than later. If that’s the case, then either currency speculators really are turkeys getting ready to vote for Christmas; or else they are laying down some sort of a direct challenge to policy-makers ahead of further consideration of this issue, not least ahead of the next G20 later this year; or else, for one reason or another, they are simply not bothered by whether such a tax exists or not. The timing of this bout of speculation is supremely arrogant – that is, perhaps, not a surprise by itself, but the current behaviour of those involved, against the background of high-level discussion of some sort of co-ordinated activity on a transactions tax, is quite extraordinary.

Alternatively, perhaps they are just playing the role allotted to them in the final downfall of capitalism…


Written by Calvin

02/03/2010 at 6:41 pm

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