James Tobin died on 11 March 2002. He was born in 1918. Just like the tax with which his name has become associated, a lot has been written and said about Mr Tobin. A Nobel prize winner in 1981 for his analytical work on financial markets, and Yale professor from 1950 until his retirement in 1988, Mr Tobin has been described by many as a man whose influence reached well beyond the circles of many of his contemporaries.
This, according to some, caused some of his ideas to be hijacked, sometimes by interest groups whose views he did not necessarily support. The Tobin tax is one of these. He had an illustrious public career. As a member of President Kennedy’s Council of Economic Advisers in 1961-62 – working with what economist Paul Krugman describes as one of the most remarkable collections of economic talent to serve the US government – Mr Tobin helped bring in a tax cut that some say started the 1960s boom. “Work at the Council was demanding, exciting, and sometimes frustrating”, Professor Tobin wrote. “But our advice gradually gained a large measure of acceptance.”
He was profoundly influenced by the experience of growing into adulthood during the Depression. “The miserable failures of capitalist economies in the Great Depression were root causes for worldwide social and political disasters,” he wrote in an autobiographical statement when he won the Nobel prize. Explaining why he chose economics as a career, Mr Tobin wrote in 1981 that “it offered the hope, as it still does, that improved understanding could better the lot of mankind”.
©OECD Observer No 231/232 May 2002
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