James Tobin, a Nobel Prize winner who served as an economic adviser to the Kennedy administration in 1961 and ’62, has lived in quiet retirement for more than a decade in New Haven. Yet thousands of French demonstrators are likely to invoke him as their intellectual champion next month during protests at the coming summit meeting of the European Union. They are members of a new organization formed expressly to promote the so-called ”Tobin tax,” a tax on foreign currency and international financial transactions that came within six votes of being adopted by the European Parliament this year.
In Britain, the Labor Party is contemplating a proposal to give $14,000 to every 18-year-old to invest either in his education or in a house — a modified version of an idea proposed by Bruce Ackerman, a law professor at Yale University, in his book ”The Stakeholder Society.”
Meanwhile, ”The Access Society,” the latest book of Jeremy Rifkin, an outspoken American critic of genetically modified food and what he calls the new ”hypercapitalism,” is the No. 1 seller in Italy and No. 3 in Germany, even though it failed to make national best-seller lists in the United States.
The three men are examples of a curious trend: the popularity in Europe of left-of-center American economists and thinkers who are largely ignored at home.
With a mixture of puzzlement and amusement in his voice, Mr. Tobin said, ”There are probably more members of Attac in France than people who know my name in the United States.” He was referring to the Association for the Taxation of Financial Transactions for the Aid of Citizens, an organization — now 27,000 members strong in France — created to promote his tax proposal.
In the view of some American conservatives, Europe is simply behind the times, picking up ideas that have been discarded in the United States, in an effort to save the old European welfare state. ”It’s retrograde and reactionary mushy-headed liberalism,” said Rudiger Dornbush, a professor of economics at M.I.T. ”Europe tries to defend the status quo against the better sense of the free-market revolution.” The European Wall Street Journal recently compared the resurgence of the Tobin tax in Europe to a vampire that keeps rising from the dead.
But others, like Bernard Cassen, the president of Attac, argue that Europe is in the vanguard of an effort to ensure that the current economic boom of globalization serves social ends. ”Globalization was supposed to be the answer to everything,” he said, ”and what we see is growing inequality of wealth between nations and within nations, reduction of health and social benefits, greater job insecurity.”
Europe is searching for alternatives to what it calls winner-takes-all capitalism, often referred to as the American model, and Mr. Cassen believes there is enormous symbolic value in linking a prominent American economist like Mr. Tobin to the growing movement to redirect the boom of globalization toward social ends. It shows that the movement is not anti-American, he said, and it gives what might otherwise appear like pie-in-the sky idealism grounding in the very specific proposals of a world-class economist.
To David Spector, a French economist teaching at M.I.T., one reason for American progressives’ popularity is that they function as ”American dissidents” serving France’s critique of a phenomenon that is widely perceived as American in its origins. Thus, being able to cite American critics of globalization and contemporary American capitalism — among them, besides Mr. Rifkin, the economists Lester C. Thurow, James K. Galbraith and Robert B. Reich — is, for the European left today, a bit like the anti-Communists of the 1970’s quoting Russian dissidents like Andrei D. Sakharov and Aleksandr I. Solzhenitsyn.
Mr. Rifkin agrees. ”Generally,” he said, ”what they hear from us is: ‘If you don’t get with the program — efficient markets 24 hours a day, 7 days a week — you are going to get steamrollered. They are worried about being left behind economically, but they are also worried about keeping the quality of life in Europe, which in many ways is better than ours. For them to hear — from other Americans — that it’s all right for them to be suspicious of the American model is very welcome.”
Even more significant from an American perspective is that after taking the European tour, some of these ideas are finally getting a hearing in their birthplace. Mr. Rifkin said that after the protest against genetically modified food became big in Europe, major American companies like McDonald’s and Archer Daniel Midland changed their policies. Similarly, he said, Washington was pressured to respond to the European campaign to forgive third-world debt, and objections from the European Community forced significant modifications in the proposed merger of America Online and Time Warner. ”Europe is not the mouse that roared,” Mr. Rifkin said, ”it’s become the elephant that roared.”
Next month, on a hectic schedule of European appointments, Mr. Rifkin will be meeting with the leadership of the French parliament. Mr. Rifkin’s 1995 book, ”The End of Work,” with a 20-page introduction from the former French prime minister Michel Rocard, pushed the idea of a 35-hour work week, which is now French law. Italy’s prime minister, Massimo D’Alema, dedicated most of an hourlong press conference to Mr. Rifkin’s 1998 book, ”The Biotech Century,” when it came out in Italy last year.
Another reason American progressives are playing such a conspicuous role in Europe’s efforts to come up with a ”third way” between socialism and American-style capitalism, said Mr. Ackerman of Yale, is that they are not Marxists. The European left has been traditionally dominated by Marxism, and as it seeks to create an alternative kind of capitalism, it looks to left-of-center American economists have been working within the capitalist paradigm for their entire careers. ”I think something we all have in common is that we accept the basic structure of capitalism while trying for a more democratic and egalitarian form of capitalism,” Mr. Ackerman said.
The idea behind Mr. Ackerman’s notion of giving every 18-year-old $80,000 is to create a contemporary version of the 19th-century homesteading notion of 40 acres and a mule. This, he reasons, would promote equality not by increasing government services but by making everyone a potential capitalist.
”There are a lot of people interested in a kind of realistic utopianism,” said Mr. Ackerman, who recently returned from a conference in Germany at which he delivered the keynote address.
His ideas, he said, have attracted expressions of interest from politicians in such countries such as France, England, Germany and Brazil but nothing of significance from American politicians.
All the same, he maintains, his idea of giving people an $80,000 stake to invest is in certain ways not that conceptionally different from Gov. George W. Bush’s proposal to allow young people to create investment accounts with their Social Security contributions, what Mr. Bush referred to in his campaign as ”prosperity with a purpose.” Mr. Ackerman said that in Alaska, each year, every citizen gets about $1,900 from oil revenues — ”and it’s a Republican idea.”
Mr. Tobin, who originally proposed the so-called Tobin tax in 1972 as a means of reining in unproductive currency speculation, has mixed feelings about his sudden burst of popularity abroad. ”My name gets associated with some proposals that I never actually made,” he said. ”I was trying to stabilize the international monetary system and penalize speculation, since most foreign exchange transactions are reversed within the week if not within the day. Of course, the revenue it generates can be put to good purposes, and I have no problem with that, but I’m not against globalization. I’m a free trader.”
Some $1.3 trillion changes hands each day in foreign currency transactions. The suggested Tobin tax of 0.25 percent would raise about $250 billion a year — more than five times the current level of all international aid. But the idea is almost impossible for any single country to adopt on its own because currency traders would simply shift operations elsewhere. The French treasury minister, Laurent Fabius, a Socialist, rejected a proposed Tobin tax in August.
But Mr. Cassen argues that the plan will work only if all of Europe adopts it. ”We see Europe as a Tobin zone,” he said.
Mr. Dornbush said he considered the tax a bad idea but acknowledged that it does have a chance in the European Parliament: ”They are the rear-guard of the future, the home of government intervenionism. They will tax anything that moves.”
While the Tobin tax is unlikely to make headway here, there is evidence of a feedback loop between Europe and United States. Although Jeffrey D. Sachs, a professor of economics at Harvard, doesn’t see Europe as in the vanguard, he said his own recent experience as chief economist to Jubilee 2,000, the movement to forgive third-world debt, confirmed the general notion that Europe is acting as a kind of testing ground for ideas that have then caught on in the United States.
”The thing that I found,” he said, ”is that something that is of only the most esoteric interest here — forgiving third-world debt — is a matter of everyday discourse in Europe. It became a genuine mass movement with huge demonstrations and became part of mass culture, showing up in movies and songs and then caught on here. The message came from Europe, but then it transferred to church groups and other groups here who then called and petitioned Congress.”
Subsequently, Congress and President Clinton agreed to cancel some $435 million in debt, a measure signed by Mr. Clinton this week.
– November 11, 2000
Published at The New York Times