An academic who works both sides of the Atlantic takes a serious look at the dire condition of Anglo-Saxon pensions.
Blackburn (History/The New School; Sociology/Univ. of Essex) surveys the support of oldsters through history with some attention to the contributions of Gladstone, Bismarck, and the French Revolution. What’s new, of course, is the cheery report that most of us are living longer, an actuarial certainty that heralds scary demographics for national and private pension schemes. Just as menacing is the “accountability deficit” that places control of capital in the hands of managers rather than owners. Blackburn calls it “grey capitalism”: pension assets trapped in a web of interlocking relationships among fund managers, trustees, advisors, investment bankers, and union and corporate sponsors, who all reap real profits. It should be no surprise that the hope of privatization is constantly pleasing to rogue entities (think Enron and Arthur Andersen) as well as firms in a louche financial industry always blowing bubbles. Pensioners, the nominal beneficiaries, are commodities like Gogol’s dead souls. Whether “defined benefit” (like many union-sponsored plans) or “defined contribution” (like the ubiquitous 401[k]), the plans naturally fall prey to excessive self-dealing and meager returns. After much investigation, Blackburn suggests pre-funded “asset based welfare”: in summary, a dollop of capitalism wrapped in socialized pensions to be paid from college, employer, and locally based funds to which employees, employers, and the government would contribute, all supervised by a board or two. It’s neither a simple nor an easy sale. The author supports his study with global illustrations, giving particular attention to Wall Street and the City of London. The British-American comparison is undeniably useful, but it tends to bloat the text with material from one side of the pond that may hold little interest to those on the opposite shore.
Thoughtful and massive: too much for any but the most serious public-policy wonk.