Some say a transaction tax could put humans back in charge of financial markets. Photo: RoGb77 (flickr)

As lightning-fast computer programs replace human brokers on Europe's virtual trading floors, anti-poverty warriors want to slow things down.

There's never been a better time, they say, for a redistributive "Robin Hood tax," which would slap a fee on each financial transaction, deterring meaningless trades and putting the revenue toward fighting poverty and climate change. The center-right leaders of France and Germany called for such a tax last month, Reuters reported, and leftish outlets like The Guardian have happily joined their choir: "Even if such a tax was levied at just 0.05%, it could raise hundreds of billions of dollars, which could be ploughed into development projects," the paper wrote of a petition signed by 1,000 economists from around the world. The EU plans to gather support for a tax at November's G-20 summit, says Reuters.

Political attacks on money-changers are nearly as old as money itself. What's new is that the usual arguments against such a tax – that it'd reduce trading volume and hurt the economy by making financial markets more volatile – may be getting weaker. In fact, people like former London Stock Exchange executive Martin Wheatley now argue that computer-driven trades make volatility worse.

Exhibit A: Wall Street's May 2010 "flash crash," in which computer algorithms temporarily wiped 10 percent off major stock indexes in a squall of rapid transactions, apparently because they saw one another doing the same thing.

On the Robin Hood Tax website, spokesman Richard Gower called this "casino capitalism cyborg-style" and suggested that humans could tax irrational computer programs out of the market.

Others use less colorful language.

"For the first time in financial history, machines can execute trades far faster than humans can intervene," Bank of England executive Andy Haldane said in July, according to The Telegraph. "Grit in the wheels, like grit on the roads, could help forestall the next crash."

Haldane was speaking in favor of internal or regulatory changes, not a redistributive "Robin Hood" tax. But with Western economies in a skid, some think financial markets might be safer with Robin behind the wheel. After all, at least he's human.

Previous posts have examined how private enterprise can fight poverty through "creative capitalism" and corporate social responsibility. But one old idea made the rounds this week, albeit with a new spin: helping the poor by taxing global financial transactions.

The plan, proposed by Stephan Schulmeister of Austria's Institute of Economic Research, would tax global financial transactions — such as stock trades — at a rate of around one-hundredth of a percentage point. Even at this miniscule rate, Schulmeister estimates that such a global micro-tax could bring in revenue of up to $230 billion a year. Theoretically, this money would be used to finance development aid and projects aimed at helping the poorest cope with problems like climate change and rising food prices.

But the idea is not without its critics. Research from the World Bank notes that while the basic philosophy behind such taxes is economically sound, determining how to redistribute the revenue is likely to be politically problematic. An essay on the Organisation for Economic Cooperation and Development's website also wonders whether micro-taxes are administratively feasible or whether political leaders would actually use the tax revenue for development.