Financial power, democratic corruption and lies
It is good to see the IMF come round to the
idea of a wealth tax as a way of resolving the current crisis. We suggested this
three years ago in these pages (Let's be really in it together, 16 August
2010), and the IMF has now made a similar calculation that a 10% levy could
return European countries to pre-crisis public debt/GDP ratios (The moral case
for a one-off wealth tax is compelling, 5 November).
But the issue is not simply moral.
The problem policymakers have still not faced is that the intense concentration
of wealth at the top of society creates a mobility of private capital seeking
rapid profitable investment. This is often in speculative activity,
in commodities such as food, or as we are seeing once again in the frenzy
gripping housing markets. Such capital needs to be recirculated into the economy in productive areas for social use
but instead is destabilising in its effects, whether in the disaster of
financial derivatives, or in producing the next housing crash.