The political economy of pensions : power, politics and social change : a comparative study of Canada, Britain and the United States

Abstract

This thesis suggests that the pension systems in the advanced capitalist countries of Canada, Britain and the United States are on the verge of a crisis and that the problems associated with the marginalization and immiseration of the elderly, the universal and specific limitations of employer-based occupational pension plans and the underdevelopment of the state pension system are inherently and organically linked to the structure of private pension fund power. The impending pension crisis in these countries is explained by four converging structural considerations: first, the inadequate level of retirement income of the elderly; second, the increasing proportion of elderly in the population and the costs associated with an aging population; third, the general and particular limitations of the private pension system; fourth, under conditions of advanced capitalism, the corporate sector and state appropriating the occupational and state pension systems as a source of investment and social capital respectively to meet their finance requirements. The pension system now occupies a strategic position in advanced capitalist economies. The increasing economic power of pension funds is based on their role as financial intermediaries and institutional investors, with significant control over the economic surplus and reserve capital. The structure of pension fund power exhibits itself through formal and informal linkages to financial capital. The private pension system's investment and capital accumulation function has been transformed from a latent to a manifest function to supply the investment requirements of the economy and private sector. The private pension industry, characterized by a high degree of concentration and centralization of capital, increasingly facilitates the systemic fusion of the finance and industrial sectors of advanced capitalist economies. The symbiotic relationship between the corporate sector and private pension industry is identified as the primary economic and political obstacle to reforming and expanding the state pension system in the countries studied. It is concluded that the dynamic of the conflicting structural interests underlying the pension crisis may generate a heightened awareness of power and politics in capitalist countries by transcending the traditional limitations of economism and welfarism. The pension issue, both in the short and long-term, may generate increased social tension manifesting itself through intergenerational, sectoral, political and industrial relations conflict. This may result in increased politicization and progressive alternative economic strategies based on the pension system's investment and capital accumulation function. Public policy towards aging and pensions identifies personal problems and structural issues which may have significance in terms of power, politics, and social change in the future