This delinking of money from place and productive investment is not the inevitable result of technological advances or economic evolution. Money is a human invention and rules that control its dynamic are also a human invention. To slow down the speculative and destablizing flow of money, John Maynard Keynes proposed a small financial transaactions tax in 1930. In the 1970s, Nobel Prize winning economist James Tobin proposed a tax on international financial transactions. The modest tax could dampen volatility and encourage longer term investment.
Today traders hold assets for a few hours, or even a few minutes.
They are happy with a very small return on each trade Financial transactions taxes are in place in more than 15 countries. The U.S. had a financial transactions tax from 1914 to 1966 but then reduced it to a trivial .004 percnet tax only on stock transfers to generate revenue to support the operations of the Securities and Excahnge Commission. Recently there has been renewed interest in such a tax on international financial transactions. In March of 1999, a Canadian resolution calling for a Tobin tax passed in the Canadian Parliament. A similar resolution was narrowly defeated in the European Union's Parliament.