Governments have frequently attempted to control speculation by outlawing its tools and practices. Yet on each occasion, speculators have found ways to circumvent regulations. They have also interpreted laws against speculation as a sign of weakness on the part of governments, which has caused them to step up their activities. Keynes whimsically proposed that speculation might be discouraged if people were forced to make investments, like marriage, for life (a solution which would have produced a lifetime of frustration for those unfortunate enough to make a poor initial choice). More seriously, he considered a penal rate of capital gains tax on short-term holdings. As we have seen, however, high rates of capital gains tax on short-term property investments in Japan actually stimulated the Tokyo property boom in the 1980s by reducing liquidity in the market. It is arguable that taxes on capital gains actually contribute to stock market bubbles since investors with large profits become reluctant to sell even when they believe stocks are overvalued. Keynes also suggested that a transaction tax be levied on U.S. share purchases on the grounds that “casinos should, in the public interest, be inaccessible and expensive.”

According to the text, governments

Item 1 - outlawed speculation;