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Pay-as-you-go finance

We'll never get rid of booms and busts. But a Tobin tax on capital transfers would at least help us pay for the bad times

By Clive Cowdery   November 2008

James Tobin: a Nobel prize-winning economist

A free market economy, combined with income redistribution and a responsive welfare state, remains a successful and attractive model. Indeed, it has the best record in history for combining economic growth with poverty alleviation. Add a careful bias by government towards the working poor and the socially excluded, and such a model gives western economies a fighting chance of tackling their common challenges: how to accelerate social mobility, fund an aging population and maintain international competitiveness.

Most of the imminent market reforms will be useful. Capital ratios for financial companies will be stronger, some…

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