Wednesday, July 8, 2015
H401 (28 rue des Saints-Pères)
The current debate about the tax on financial transactions is often presented as new. It is not. At the end of the 19th and beginning of the 20th century, such a tax was debated in Europe and the US. Sometimes, the tax was established. In pre-WWI capitalist societies, financial actors were powerful, both in structural and instrumental terms. Yet, they sometimes lost. Why? This paper argues that the tax was established because strong, but diffuse and highly heterogeneous public hostility against finance at some point focused on the specific and explicitly politicized issue of the tax. Strategic moves by political entrepreneurs were responsible for putting the tax in the spotlight. The political salience of the tax on financial transactions disrupted the logics of ‘quiet politics’, allowing nonfinancial organized interests to step in and angry constituents to pressure their elected representatives on this issue. In order to test the argument against alternative explanations, I use process tracing, based on systematic archival work and newspapers content analysis in three cases: France and the state of New York, in which a tax was established in 1893 and 1905; and the state of Illinois, in which no tax was established, despite the presence of factors that should have led to the adoption of the tax according to the alternative explanations.
