With the relaunch of New Left Review in 2000, Perry Anderson unfurled his panoramic survey of the global balance of forces and clear-eyed assessment of the left's prospects in a justly famous essay -"Renewals" - that drew upon the magnificent gloom that has become his stock-in-trade. Unsparingly, he set out the retreats, failures and reversals of the left over the last years of the twentieth-century. But he also made a prediction and identified an avenue of hope worthy of further investigation: "if the human energies for a change of system are ever released again, it will be from within the metabolism of capital itself. We cannot turn away from it. Only in the evolution of this order could lie the secrets of another one. This is the sense of enquiries like those by Robin Blackburn in NLR into the trend of financial institutions. There are no certainties here; so far, all that is possible are proposals and conjectures."
Blackburn's subsequent explorations in NLR of "grey capitalism" - the developments "within the metabolism of capital itself" that had their analogs in the shifting class positions and demographics of advanced capitalist countries - were the genesis for this monumental book on "the boring world of pension provision" that also manages to set forth the lineaments of an alternative pattern of socialist political economy for the twenty-first century.
Originating from a mixed parentage in the Baroque and Puritan traditions of eighteenth-century Europe, first promoted to workers by patrician corporate managements in the Fordist postwar period, and then spread widely across many sectors of the economy as retirement security was gradually assimilated into the demands of labor unions during collective bargaining rounds, employee pension funds have grown exponentially to the point where they now represent one of the largest pools of investment capital in the world. A new and unusual form of wealth, neither public nor private, pension funds are now one of the primary drivers of financial markets. Pension fund capital, Blackburn explains, "fuels the glamorous world of high finance, property speculation, rogue traders, media and technology mergers, and stock exchange bubbles ...so much of the investment which shapes our future is undertaken by pension funds ... At present the pension funds are integral to the globalised economy which decrees that shopping malls and shiny office blocks will proliferate while parks, swimming pools, libraries and theatres open to all will not, that some regions will boom while others decay, that commercial gain will displace the ethos of public service, that the poorest will have to tighten their belts if economic 'adjustment' is required, that natural resources accumulated over millennia will be consumed in a few short years, and that the abundance of the oceans will be poisoned and destroyed."
It is the immense value of Blackburn's book that he argues convincingly that it need not be this way. "Banking on Death" excavates a set of proposals for what has been termed (originally by management theorist Peter Drucker) "pension fund socialism," an alternative path forward in which workers' retirement savings are directed away from speculative casino capitalism and toward long-term investments that rebuild communities and secure jobs. Tony Benn had made a similar argument in Britain in the 1980s in his "
Arguments for Socialism
": "These days the bulk of potential investment funds comes not from individual rich men, but from the financial institutions such as the insurance and pension funds, who do not necessarily use the huge sums at their disposal in a manner compatible with the public interest. This is one area where there will have to be change. The trade unions have for some time been arguing that the pension funds are one area where democracy could be applied without disturbing the even flow of management and industry. These savings belong to the workers, they are their own deferred earnings. Workers want them not only as income when they retire, but to sustain and create jobs while they are at work, and so to guarantee that they will retire in a buoyant economy."
With an increasing share of workers' savings tied up in volatile capital markets, Robin Blackburn's key point is unarguable: "If there are to be government-mandated, government-devised and government-guaranteed pension funds owning decisive chunks of the economy, why should not the generality of citizens exercise democratic oversight and ensure that these arrangements benefit them and their families rather than the financial services industry?" This need not imply breaking the cardinal rule of diversifying risk by putting all workers' eggs in the same basket: "A socially responsible industrial policy should not commit workers' savings to keeping afloat businesses in a declining sector. But such a policy could very well use those savings to diversify the regional economy or enhance its facilities."
Such a reorientation of "labor's capital" could alter entrenched power relationships in local communities by creating important institutional alliances of state and local governments, public workers, and labor unions. This in turn holds out the prospect of a very different pattern of political economy that could address deeper systemic challenges concerning spiraling wealth inequality and the long-term health of the economy. Add in demographic changes and the building crisis of retirement security across the Western world and things start to get very interesting indeed.
Looking ahead, the issues wrapped up with the operation of pension regimes are a ticking time bomb at the heart of the current economic system. Obama's 2013 budget proposal placed Social Security cuts on the table, and the difficulties are only going to multiply with the shift to an older population in years to come. The issue of pre-funding may soon arise, although even if it doesn't, pay-as-you-go systems can soon accumulate a surplus, as has been the case with the Social Security Trust Fund. Then the question becomes, as with existing pension funds, where and how to direct the investment. This scares the hell out of conservatives, who fear the economic muscle it could give to public agencies, a route to nationalization of large companies by stealth. As Blackburn observed: "A national debt, giving financiers leverage over the state, [is] one thing. A national investment fund, giving government leverage over business, quite another."
In the context of a general crisis of the left and wholesale retreat of social democratic possibilities, the issues raised by Blackburn in this far-too-neglected book go back to the central economic question of control over the means of production. It is high time that these assets - the largest single pool of investment capital in the world - were put to work for their real owners, the workers. "Banking on Death" resurrects the vitally important conversation about just how this might be done.
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guido franzinetti
Excellent and prescient title
Reviewed in the United Kingdom on March 13, 2021Verified Purchase
