Robin Blackburn: Banking on Death or Investing in Life: The History and Future of Pensions.

Author:Messkoub, Mahmood
Position:Book Review

Robin Blackburn Banking on Death or Investing in Life: The History and Future of Pensions Verso, London, 2002, x + 550 pp. ISBN 1-85984-409-X (pbk) 15 [pounds sterling] ISBN 1-85984-795-1 (hbk) 20 [pounds sterling]

Barely a week passes without a news headline of one kind or another related to pensions, whether it is the threatened takeover of Marks & Spencer and the question of who should plug the hole in its pension fund, or the trade unions trying to protect their long-established pension rights rights that should, perhaps, be called deferred wages.

Pensions have become the natural next target for the political Right, following its successes against the State in other areas such as privatisation, deregulation and the imposition of legal restrictions on trade unions. The apparent reason for this interest in pension reforms is the 'sudden realisation' that the world population, particularly in economically developed countries, is ageing, and that the cost of supporting this growing old-aged population will put unbearable pressure on state finances and require higher taxes.

The popular appeal of this position has been based on the assertion that future generations of working people will have to pay for the retired and other members of the non-working, and therefore dependent, population. At first glance this looks very persuasive; especially since, in Europe, the proportion of over those over sixty years-of-age in the total population will increase from one-in-five in 1999 to one-in-four in 2020, and to one-in-three in 2040. Obviously then, the ratio of those who are over sixty to those of working age in the population will increase.

However, what we consume has to come out of what is produced at any given point in time--there is a limit to how many cans of baked beans we can stash away for future consumption. At the most general level, claims over the output of any economy are fundamentally related to the social and legal frameworks that govern its production and distribution, with property rights at the heart of the economy. Any meaningful analysis of the social and economic implications of demographic ageing has to get a handle on the good old-fashioned class struggle over the ownership of national resources and the distribution of national output and income. Moreover, output is produced with the accumulated capital, knowledge and skills of both the past and the present generation. Production depends upon the inherent logic of intergenerational solidarity, something that is so wilfully missing from the literature on intergenera-tional conflict.

Blackburn's book is a welcome and long overdue intervention from the Left on this complex subject. Banking on Death is unique for its blend of historical, sociological, as well as plain discussion of the economics of retirement. It is very well researched, based on the author's work over many years, and will remain a standard text for anybody who wants to develop a knowledge of the multifaceted pension debate and the links between...

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