The Tobin Tax and the Libertarians

Written on the bathroom wall at a Libertarian convention in France in July 2001:  “Defy Authority!”

 Next day below that:  “Who are you to tell me what to do?” 

The Tobin Tax came up on financial TV the other day. It brought back memories.

I gave the keynote address at a conference in Dax, France  in 2001, celebrating the 200th anniversary of the birth of Frederic Bastiat, most easily described as the French Adam Smith. The conference was by Le Cercle Frederic Bastiat and was sponsored by the International Society for Individual Liberty and Libertarian International. I titled my remarks, Why Bastiat is My Hero.

(According to the notes I wrote on my text, I was asked to stay within 40 minutes or the moderator would “agitate a cow bell from the Perinese.”)

During the afternoons we took field trips to places associated with Bastiat, including the dedication of his bust in a local village square, a visit to his country home, and a visit to his birthplace.

At the bust dedication, we encountered hostile demonstrators who had covered the bust with a drape. They chanted slogans and helped themselves to the outdoor buffet that the locals had prepared for our group. Small groups formed and engaged in debate, and the violence that seemed inevitable was avoided.

The demonstrators showed up again the next day for another tense encounter. They had covered the plaque signifying Bastiat’s birthplace on a narrow street–more like an alley. Given the close confines, I was sure violence would break out, especially when a female member of our group climbed up to remove the cover from the plaque. It occurred to me that I had missed the sixties, so now was my time. Also, I wasn’t sure how I would find my wife during the melee as she was shopping in one of the little shops facing the alley, oblivious to the violent clash of ideologies about to occur.

What was this ideological clash all about? Well, we were individuals from several countries, but mainly Americans, many of whom considered ourselves libertarians, paying homage to a French lover of liberty born 200 years earlier. They appeared to be French socialists whose primary cause was some version of the Tobin Tax. They wanted to tax financial transactions (stock, bonds, foreign exchange?) and give the proceeds to the poor.

The alpha male in the group was dressed in all-black — pants, shirt, coat and hat — and appeared to be a professional actor. He led the chants with great volume and gusto. The main epithet he and his mob used on us was “gangsters.” They were calling us gangsters. We thought of ourselves lovers of liberty, but they were calling us gangsters. I couldn’t figure it out.

There are several versions of the “Tobin Tax,” named after James Tobin, Nobel-prize winning economics professor at Yale University. We never know who our fans will turn out to be.

I later learned that the protesting group called themselves ATTAC, and the tax they had in mind was a one percent tax on international currency transactions. They considered their “Tobin Tax” to be a tax on globalization as well as a source of tax revenue for the poor. I understand they had some subsequent success in French politics.