The first advances in the struggle for pensions in Britain came in the form of concessions from the Liberal government of Herbert Asquith in 1908. A pension for the over-70s (a very small group amongst the working class at that time) was introduced and paid for out of general taxation. This reform was built on by the establishment of the welfare state after 1945.
The retirement age was lowered and life expectancy was considerably extended via improvements in housing, working conditions and healthcare. This meant that, when state provision was combined with the pensions provided by employers, millions of workers were able to retire from the labour force in their sixties and to live independently through their retirement years.
These were extremely positive developments, of course, and transformed the lives of millions. But concessions wrung from the capitalists are often double-edged. Any concession made by capital will always lead the capitalist to look for ways either to claw back the money spent or to turn the concession to their advantage in other ways.
One way that the capitalists have found to turn pension provision to their advantage is by forcing pension funds to become investors in multinational corporations via the stock market. This has really taken off since the 1970s, having been greatly encouraged by successive British governments. Public-sector pension funds handle a huge amount of money, which makes them a great potential source of investment. Moreover, pension fund managers today have a legal responsibility to ensure the maximum possible return on investments – a recipe for risk-taking.
This means that if those in charge of investing the funds money make a good bet and get a big return on this investment then the pensioners win and the fund managers get extra-large bonuses. Everyone’s a winner. Except, of course, when we consider the question of the people on the receiving end of these ‘highest-paying’ investments.
Let us take, for example, the case of the Merseyside Pension Fund. This handles the pensions of many thousands of public-sector workers in the region and (according to a report by the Oakland Institute) has been found to have significant investments in a company called NCH Capital.
Formed in 1993, NCH has made billions in profits from the privatisation of land in the former socialist countries of eastern Europe. Before the counter-revolutions of 1989-91, land in the USSR and socialist bloc countries was considered to be the property of the whole people – that was a clause in the Soviet constitution. The land was worked by collective farms, cooperatives and some small-scale farmers.
Following the counter-revolutions that destroyed the socialist systems, the land was sold off to companies like NCH Capital, which picked up the land at knock-down prices and profited massively thereby. One of their big targets was Ukraine, known as the ‘bread basket of Europe’ on account of its highly fertile soil. NCH Capital’s deals with the Kiev dictatorship led to its becoming one of the largest landowners in the country.
Such business deals enrich NCH capital and bring a huge return to investors – all on the back of robbing the Ukrainian people blind. When Ukraine became ‘independent’ in 1991, it was still governed by a constitution that declared the land to belong to the people as a whole. But this was steadily subverted over the following years, and the country was sold off piece by piece, Ukrainian agriculture becoming dominated by a handful of domestic oligarchs and US agribusinesses.
This is but one example of many which shows how, for as long as capitalism continues to exist, even our hard-won retirement funds are caught up in imperialist rackets and serving the interests of our exploiters. The Merseyside Pension Fund is hardly alone in having made such dubious investments. Since it is a legal requirement to ensure maximum returns, other public-sector funds are bound to be investing in similar ways — propping up corrupt regimes around the world that systematically rob the working people and promote the interests of foreign corporations, including by the use of fascist death squads against those who try to resist such regimes.
What this really shows is that there is no concession made to workers that the capitalist class will not try to exploit for their own ends. Moreover, they will always try to force us into considering that our fates are bound to their system’s continued profitability. This was, after all, the Faustian pact that the British working class signed up to in 1945: you provide us with a raft of concessions and we won’t ask where the money is coming from and we’ll stop fighting for socialist revolution.
Those who have worked for decades deserve a dignified and secure retirement, but the current system is a trap that provides neither security nor dignity. Under a planned economy, in which all surplus value created by industry is either reinvested in updating the productive forces for the benefit of all or allocated to catering to society’s collective needs, pensions would be paid for in the same way as any other socially-necessary expenditure.
A decent retirement would be secured in other ways too, such as by ensuring guaranteed housing for all with minimal rents. The poverty and insecurity that afflicts so many pensioners today is entirely unnecessary – one more indication of the present system’s unfitness for purpose. This will not only be done away with under socialism, but so too will the obscenity of a situation where the security of one group of workers – in this case, the retired – is dependent upon the immiseration of workers elsewhere.
