Freedom, Ownership, and Social (In-)Security in the United States

Introduction

Since the 1980s, a growing number of middle-class Americans have become increasingly reliant on the stock market to augment and protect their old-age pension savings. Through its recent bid to partially privatize the Social Security program, the administration of George W. Bush (2001–present) is seeking to widen the scope of its Main Street investor base to include the United States' working class. For the government and the free-market Right, the establishment of voluntary personal retirement accounts for all workers under the age of 55 will not only be more efficient in terms of costs to taxpayers but also more socially just than the existing state-managed system.¹ In its efforts to persuade Main Street America that privatizing Social Security is a viable and, indeed, desirable strategy, the Bush administration has leaned heavily on the conceptual battering ram of the "Ownership Society." The ideology of the Ownership Society seeks to create conditions in which individuals are empowered "by freeing them from dependence on government handouts and making them owners instead, in control of their own lives and destinies. In the Ownership Society, patients control their own health care, parents control their own children's education, and workers control their retirement savings."² The ideology of the Ownership Society thus aims to replace what is considered to be an unproductive and costly state-sponsored mechanism for the social protection and management of old-age pensions with a more efficient, market-based strategy. Up until now, the ideology of the Ownership Society and its linkages to the wider attempts to privatize Social Security have been undertheorized. It is doubtful that the Bush administration will be able to implement its Social Security reforms, given the political opposition to the campaign; however, Bush's project is more than a short-term, neoconservative exercise in rhetoric. As the following analysis reveals, the underlying premises of the Ownership Society not only represent a heightened expression of past attempts to privatize Social Security but also provide deeper insights into the social and political implications of the ongoing commodification of old-age security and its links to the wider restructuring of neoliberal-led capitalism in the United States.³

I suggest that the Ownership Society represents two broad tendencies in the restructuring of capitalism. First, it seeks to expand financial markets by widening the investor base to include working-class Americans, while legitimizing further privatization of pension savings through stock market investments. In effect, this class-led strategy creates the conditions to expand what Richard Minns refers to as "social security capital." This pertains not only to U.S. Social Security savings but also to the wider investment power of pension savings. More specifically, social security capital may be regarded as deferred wages or salaries that enter the credit system in the form of company stocks and bonds. "Social security capital is now as important as other sources of capital, if not more so as larger numbers of people are encouraged in one way or another to save privately for their retirement. It is a key element for fuelling the expansion of financial markets."⁴ Seen from this perspective, Minns argues that the extension of private provision of pensions and social security is not so much about pensions per se but about the extension and growth of stock markets and liberalized financial markets. The astronomical rise of financial markets vis-à-vis production is connected to the wider restructuring of capitalism. Many observers have pointed out that U.S. financial markets play an integral part in defining economic strength, both at home and abroad.⁵ Furthermore, the primary beneficiaries of the privatization of pension savings have been financial institutions (insurance companies, pension and mutual funds) and corporations. As Enron-style debacles have made clear, U.S. corporations have been employing financial flows derived from the billions of dollars of American pension assets to buoy up their high, and indeed unsustainable, levels of debt.

Building on Minns's insight, I would like to suggest that there is another significant component in the overall restructuring of capitalist [End Page 93...