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Social consequences of contemporary financial markets and the case for a financial transaction tax


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Willans, PS 2013 , 'Social consequences of contemporary financial markets and the case for a financial transaction tax', PhD thesis, University of Tasmania.

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This thesis considers the social effects of unprecedented growth in financial trades and speculation. The key claim is that speculative finance capital markets have caused widespread economic and social pressures. An argument is advanced that socio-economic inequalities are resultant of overleveraged, unregulated finance, and market integration over the last three decades. Pressures on civil society have arisen through governments transferring state-based funds to bail out private institutions, and stimulate economies. Socialisation of debt is used to strengthen the private sector.
Central to this argument is the consideration that two economies have emerged in parallel throughout the developed world. The "real economy" of developed nation states has been depleted by protracted global economic crises. The second, "shadow economy", has re-emerged as a concentrated economic force with speculative daily global financial trades of over US$ 4 trillion, including AU$41 billion in trades, every day, in Australia. The majority of trades are enabled by sophisticated high frequency trading corridors between Wall Street and the City of London. The consequences are felt worldwide.
Two key questions are addressed in this thesis. First, given the social consequences emanating from global financial markets, and the concomitant socialisation of debt in developed economies, is the introduction of a financial transaction tax a feasible, progressive economic and social reform to partially ameliorate the negative effects of speculative finance capital on nation states? Second, could a miniscule tax on trades, recalibrate the relationships between governments and markets and provide accountability, oversight and stability? This thesis concludes in the affirmative.
Additionally, this thesis posits an argument that transaction tax revenues in Australia, the eighth largest derivatives transaction-trading nation in the world, should be used specifically to strengthen national social policy commitments to homelessness, and provide a targeted resource for sustainable social housing provision.

Item Type: Thesis - PhD
Authors/Creators:Willans, PS
Keywords: global financial markets and their social consequences
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Copyright 2012 the author

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