Archbishop Rowan Williams’ long-held distain of Capitalism has surfaced once again—this time on the grounds of St. Paul’s Cathedral in London. The leadership of this prestigious church in shambles, Williams has stepped in to offer his support for the “moral agenda” of the protesters who have taken over the church grounds. In his letter in the Financial Times,Williams offered several specific ways the government can help to turn back the “disastrous effects of global capitalism.” The most destructive and far-reaching proposal to win the Archbishop’s stamp of approval is the Financial Transaction Tax (FTT), or more popularly known as the Robin Hood Tax.
The source of the Archbishop’s renewed interest in taxation and financial regulation comes from a recent report from the Pontifical Council for Justice and Peace in its report “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority.” The Pontifical Council proposed the formation of a “supranational authority” that would be set up gradually and not “imposed by force, coercion or violence, but should be the outcome of a free and shared agreement and a reflection of the permanent and historic needs of the world common good.” This authority with “universal jurisdiction” should apply “taxation of financial transactions” which would be used for “promoting global development and sustainability.” This proposal was sweet sounding for Williams, one of the co-founders of the anti-capitalist Jubilee Group.
Many years before his ascension to Canterbury, Williams was a leader in the Christian Socialist movement of the United Kingdom. In 1974, in his co-authorship of the Jubilee Group Manifesto, Williams wrote, “We must above all revive the prophetical office of the church. Now that we are in the death-throes of late capitalism, which threatens to inflict even greater violence on mankind than it has done before, we must make our stand with the oppressed, with the movement for liberation throughout the world.” Fortunately, for the oppressed and the rest of the world, Williams’s vision for liberation never materialized. It was and is through globalization that a billion people moved out of extreme poverty over the last twenty years, not through the redistribution of wealth envisioned by Williams and his friends.
The Financial Transaction Tax as is being currently discussed by the G20 in Cannes, France and recommended by the Archbishop would levy a “small rate of tax (0.05 per cent) on share, bond, and currency transactions and their derivatives, with the resulting funds being designated for investment in the “real” economy, domestically and internationally.” Proponents argue that the tax would generate an estimated $410bn globally.
In the story of Robin Hood, evil King John leverages additional taxes on top of the already onerous ones being paid by the poor folks of Nottingham. Robin Hood and his noble band of thieves attack the tax collectors, taking the money and distributing it amongst the poor. For the advocates of the Robin Hood Tax the irony of a corrupt and wasteful government taxing pensioners to give to other poor seems to have been overlooked. The advocates of the FTT argue that they are taxing rich bankers who caused the economic crisis in the first place. According to a thoughtful report by the IMF, since the high percentage of the financial instruments targeted for taxation are owned by people over 65, not the “evil bankers,” who will be most affected by the tax.
According to the Archbishop, George Soros, Bill Gates, and even German Finance Minister Wolfgang Schäuble have joined Robin Hood’s merry band of thieves. Soros and company can ride out the tax with very little personal cost, but soon to be and current retirees will face the greatest burden from this new tax by seeing diminished return on their retirement portfolio that they so diligently planned to enjoy.
Undeterred by the concerns of the IMF and others that the tax would lead to higher unemployment and greater economic hardship, Williams dismissed the warnings as “exaggerated and sharply challenged projections.” Going further he argued, such warnings “ignore the potential of such a tax to stabilize currency markets in a way to boost rather than damage the real economy.” This statement, perhaps above all, shows how truly uninformed the Archbishop is about the nature of global financial markets. It was the chief architect of the FTT economist James Tobin who once said, “My proposal is to throw some sand in the wheels of our excessively efficient international money markets.”
The Archbishop rightly affirmed that “the Church of England and the Church Universal have a proper interest in the ethics of the financial world and in the question of whether our financial practices serve those who need to be served – or have simply become idols that themselves demand uncritical service.” But unfortunately the Archbishop fails to show how taxing pensioners will lead to a more ethical financial services industry.
Ethical financial markets will never come about when the leaders of the church preach the politics of envy, but rather when they preach the gospel. The gospel teaches that generosity and not covetousness is the mark of the Christian and that true generosity comes not through compulsion by government, either local or supranational, but from a glad and cheerful heart. Perhaps something the Archbishop might keep in mind next time he is down at St. Paul’s.
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