The Contradictions of Pension Fund Capitalism ed. by Kevin Skerrett et al. (review)

Published in 2017 as part of the Labor and Employment Relations Association Series, The Contradictions of Pension Fund Capitalism assembles an international cast of researchers that bridge financial capitalism with the crude reality of employment entitlements that are increasingly under threat. The editors begin with a concise introductory chapter that captures the focus of subsequent contributions. "Invested across the planet," Skerrett, Weststar, Archer, and Roberts write, "in every conceivable industry, commodity, and asset class, pension funds are today leading agents in, and beneficiaries of, liberalized and globally integrated markets." (1) The narrative throughout the book is one that follows an unraveling of the post-war class compromise and the various features that have jeopardized pensions coverage and benefit entitlements.

Andrew Pendelton and Howard Gospel's treatment of the UK experience in Chapter 2 similarly claims that the development of an employer-based or occupational pension scheme contributed to financialization through the marshaling of a "large and liquid stock market and financial sector." (10) From here the authors examine today's reality in which, as a neoliberal policy agenda that launched in the 1980s, individualized self-invested personal pensions (SIPPS) have become fashionable. SIPPS have, of course, failed to fill gaps in provision, instead leading to pockets of pensioner poverty whereby retirees must rely on other means-tested and universal benefits in order to survive. Financialization has also provoked firms to respond to competitive pressures by adopting human resource requirements that rest on flexible and less costly labour forces. Financial capitalism is advancing this objective to a point where, the authors conclude, defined benefit schemes "have 'fed the beast' that eventually turned on them." (24)

Chapter 3 moves from the political economic structure of finance capitalism to investigating the effects on workers across industrialized countries. Specifically, the extent to which the reduction of benefits in the pay-as-you-go (paygo) state social insurance plans and the emphasis on savings and personal wealth as a source of retirement income defines the lived realities of financialization and the erosion of formerly collective entitlements. What Teresa Ghilarducci and Amanda Novello recognize is that life expectancy, leisure time, and health outcomes are not shared evenly across classes and that, ultimately, higher-income workers "are most likely to have the economic lives that dovetail well with a financial retirement system." (49) Dick Bryan and Michael Rafferty further engage with the outcome question in Chapter 4, concluding that the "defined contribution superannuation is one of the starkest expression of the risk shift from states to citizens, and the associated role of finance." (80) A reversal, they point of out, of the Keynesian macroeconomic policies that dominated the political arena for decades. What the authors go on to query is the extent to which labour's capital represents a check on capital's power. Their resolution: labour's capital, manifested in pension funds, has behaved just like "capital's capital," providing little hope of wielding these massive pools of wealth to advance workers' interests. Indeed, their contribution is punctuated by the realization that labour is not just a working and consuming class but exists also as a financialized asset for capital. (93)

To these points, Michael McCarthy addresses the social investment framework - or, concerns about environmental, social, and governance (esg) factors - that took off following the 2008 Great Recession. His conclusion here is that workers' retirement capital mirrors that of Wall Street investment trends, as conservative law makers and employers have blocked unions from "democratizing their funds and advancing an alternative approach to finance." (115) Contradictions also reveals the role of fiduciary responsibility in disciplining union pension trustees who might look to labour's capital as a venue to advance non-financial interests.

Bernard Mees reflects on the realities of financialization in Australia and what impact this has had on the running of union-sponsored pension schemes. Part of the lived reality is how labour has responded to the growth of infrastructure privatization and subsequent investment...