The social system which runs the world – capitalism – cannot offer the human race a future.
It is dragging us through an endless spiral of wars. It is poisoning the natural environment, leading to one catastrophe after another. It condemns millions to unemployment and poverty. And now, in the central countries of the system, it is telling us that it can no longer afford to support us after a lifetime of toil.
According to the official line, the pensions crisis is a result of the fact that we are all living longer. But this is only a problem because the capitalist economy is bankrupt.
Faced with the world economic crisis, the response of the capitalist state is to reduce as much as possible the amount it spends on ‘social’ benefits. This is why it has been cutting the NHS to the bone for example – it’s not because people are getting healthier! And it’s the same in all countries: the ‘welfare state’ is being systematically dismantled. This is taking place both in countries which follow the neo-liberal ‘Anglo-Saxon’ model, like the US and Britain, and countries where the state is supposed to have a more ‘interventionist’ policy, like Austria, Germany, or France: all these countries have proposed big ‘reforms’ in their pensions provisions as well as other drastic reductions in social spending.
Turner versus Brown: either way, we pay
The basic issue facing the British ruling class is thus how to make the working class pay for the economic crisis. The debate between critics (in particular, Gordon Brown) and supporters of Lord Turner’s 460-page report on pensions is basically about what kind of sacrifices are needed: longer working lives, higher taxes, cuts in other public services?
This question of what it’s prepared to spend on keeping proletarians alive once they have stopped producing surplus value has always preoccupied the British bourgeoisie.
When old age pensions were first introduced in Britain in 1908 it was a generation after Bismarck had launched them in Germany. Even British capitalism at its peak was cautious about such expenditure, and the Boer War and preparation for the First World War were greater priorities. Even then pensions were only available for those over 70 – at a time when male life expectancy at birth was only 48.
In the 1940s the Beveridge report recommended a “universal but very basic state pension. It should only be at ‘subsistence’ level: just enough to live. It should be paid for by national insurance contributions as, Sir William Beveridge says, the British people disapprove of ‘something for nothing’, and he hates the idea of a ‘Santa Claus’ society” (Financial Times 1/12/5) . Attlee’s Labour Government acted on this principle and the working class footed the bill.
In 1978 Labour made a second pension compulsory for many people, a clear admission of the inadequacy of the basic pension. In the subsequent Conservative governments the real value of the basic pension continued to get smaller.
Raising the retirement age to 68 is among Turner’s main proposals. This applies to the basic state pension, but at the recent CBI conference there were growing demands for an end to public sector pensions coming in at 60. We were told that the ‘privileged’ public sector workers will just have to accept longer working lives like workers in the private sector. And it seems that local authority workers are already being singled out as being the first ones to be asked to give up their ‘cushy’ retirement schemes. This is a disgusting attempt to divide the working class: many private sector pensions also begin at 60, not 65, and even if they didn’t, it would be in all workers’ interests for everyone to retire sooner, not later.
In sum, we are being told that we will be expected to work until we drop. This applies especially to the poorest sections of the working class, whose life expectancy is well below the national average. And even then, this ‘solution’ won’t produce the wealth required, since already in Britain, the majority of over-55-year-olds are out of work.
As for the prospects for saving for retirement, this would be laughable if it wasn’t so serious. Millions of people, of all ages, are already having problems with crippling debts that preclude the possibility of significant savings. If you’re paying off a student loan, or out of work, or in irregular or part-time work, or on a low or minimum wage, or overextended with a mortgage, you’re unlikely to be saving. And if there really was any substantial movement towards saving on a significant scale it would lead to a collapse in consumer spending and an impact beyond the retail and manufacturing sectors. Some people have illusions in investment in property, either directly or through inheritance. Already the current retired generation of home-owners has massively turned to equity release for income, leaving less and less to be inherited by their children. In any case, the rise in housing prices is a bubble that will not survive future economic storms, and workers looking for other ‘safe’ areas of investment will be equally disappointed.
A new society is needed
Remember the ‘leisure society’? Not so long ago we were being told that with the increase in automation we would all have much more leisure time. Unfortunately things don’t work like that under capitalism, which can only squeeze profit from living labour power, and which uses technological developments to intensify its exploitation. Far from having a laid-back leisure society, we have seen massive global unemployment on the one hand, and a brutal lengthening of the working day on the other. The current attempt to lengthen working lives is just another prong of this same attack.
None of it is justified on the criterion of human need. If we could end the gigantic waste of human labour power that capitalism pours down the drain of unemployment, of military production, and a whole host of useless unproductive activities (advertising, bureaucracy, etc…); if new machines could be used to reduce the burden of work rather than speed it up – then there could be massive reductions in the working day, or the working week, or the working life. And if, in Marx’s words, labour was transformed from “a means of life to life’s prime need”, to a truly creative activity, there would in any case be no more need for this rigid separation between work and leisure and work and retirement.
All this, however, can only come about through the overthrow of capitalism and the creation of a world communist society. This in turn will only become a real possibility through a vast development of class struggle and of class consciousness. But the capitalist crisis and the attacks on workers’ living standards provide the material foundations for this development. The attempt to ‘reform’ pensions, in particular, has already led to large-scale mobilisations of workers in France and Austria, and it could equally have the same effect in Britain. These attacks are directed against all workers: they can thus help workers see the need for a united response. They are being spearheaded by the state: they can thus help workers see that the state is not their protector but the boss of all the bosses, their principal enemy. And they are an assault on our very future: they can thus help workers see that they must make their own future.
In 1880, when Germany’s ‘Iron Chancellor’ Bismarck introduced a national insurance system, he said: “Whoever has a pension for his old age is far more content and far easier to handle than one who has no such prospect” and will “put up with much more because he a has pension to look forward to”.
What the pensions crisis is showing is that workers have less and less to look forward to from capitalism.
WR, December 05