The Ambivalent State - The Taxation of UK Labour Government on the Eurodollar Market, 1964~1970 -

• This paper examines the relationship between nation-states and transnational finance by analysing the taxation policy of UK’s Labour government on the Eurodollar market in the 1960s. The scholarship concerning the globalisation of finance in the late 20th century has assumed the dichotomy of ‘state versus capital’ and suggested the ‘retreat of states’ and the neoliberal order of finance. However, this paper pays attention to the inherent feature of taxation – an expression of the sovereignty of nation-states and a means to check the unfettered rise of global finance. That is, the taxation renders the state respond to global finance for its own political and economic purposes. The Labour Government faced challenges of the perennial balance of payments deficit and the sterling crisis of 1964. At the same time, global finance re-emerged in the City of London with the Eurodollar market, an offshore market for US dollars. The taxation policy of the Labour expressed the ambivalence of state in response to global finance within its territory. The Inland Revenue opposed the tax treatment on capital gains, a prerequisite for the establishment of a Eurobond clearing market, to prevent the City becoming a tax haven. At the same time, the government allowed nationalised industries and local authorities to borrow Eurodollars and granted appropriate tax treatment for the domestic capital formation. As a result, the City was able to channel capital into the British industry, which conferred legitimacy on the financial centre in the local economy. From the ambivalence of state, this paper argues the agency of nation-states in the re-emergence of global finance and problematises the assumption of ‘gentlemanly capitalism’ in the scholarship of International Political Economy.

Ämnesord

HUMANIORA  -- Historia och arkeologi -- Historia (hsv//swe)

HUMANITIES  -- History and Archaeology -- History (hsv//eng)

Nyckelord

Ekonomisk historia

Economic History

Publikations- och innehållstyp

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