Three weeks ago, this column identified George W. Bush’s “ownership society” as “actually a Wall Street expropriation, foreclosure-and-indenture scheme.” The column warned that Bush’s Wall Street masters, impelled by a crisis of their system, were using individual “ownership” promises as a cover to plunder savings, homes, pensions and Social Security.
Bush’s plan, the column continued, “depends on further atomizing the population and weakening or destroying of unions and the labor movement. It promotes ugly competition of each against all.”
To our surprise, one response to the column came from the Cato Institute. Cato, a Libertarian think-tank, champions the “ownership society” and privatized Social Security. Jaycee Dempsey, an intern at Cato, wrote, “The portfolio that the private-account social security money will be invested in will be HIGHLY diversified. [Emphasis in original.] Never, over a 20-year period, has the stock market declined, so there is almost a 100 percent guarantee the investors will receive a much higher payout. … You also mentioned ‘ugly competition.’ Competition is what makes this world function. It is the natural checks and balance system that we all live by, keeping prices low and insuring more high quality service than would be present otherwise.”
The May 31 issue of Fortune reported that the highly diversified, professionally managed pension funds of U.S. states and municipalities flipped from a $245 billion surplus in 2000 to $366 billion in liabilities in 2003. Fortune blamed union “greed” for this sudden $611 billion reversal!
But a separate article in the same Fortune reported that Citigroup, the biggest U.S. financial monopoly, was setting aside $9.8 billion to cover litigation costs for its role “in the corporate and stock market scandals of the past few years.” For what? For plundering those state and municipal pension funds, among others, although Fortune neglected to mention that. Now Citi has its eyes trained on Social Security funds.
But let’s forget money for a minute — it may not be worth the paper that steel industry pension contracts were written on. Think resources instead. Retirement benefits effectively mean consumption — of food and housing, entertainment and medical care. That in turn requires ongoing production of goods and services.
Do the resources exist to produce them? Easily. As this column has pointed out, the world economy today is barely producing at 5 percent of its potential because of capitalism’s profound and deepening contradictions. With equality and collectivized production worldwide, living standards can rise eightfold on a 20-hour workweek.
The resources exist to support decent retirement for all. But capitalism is choking on its own production. As far as Wall Street’s monopoly families are concerned, there already is “too much” food, “too much” housing — too much, that is, for them to profit from. The productive potential exists to support retirement, but capitalism is unable to profitably organize the necessary production. So Wall Street and President Bush are impelled into attacking pensions, here and worldwide.
Cato’s supporters long for a society of owner-producers competing in a market free of government interference. But that possibility is irreversibly behind us, if ever it existed. Recent “Surveys of Consumer Finance” by the Federal Reserve consistently indicate that just a few families now monopolize financial assets. The majority of workers and self-employed have been expropriated, with zero financial assets or net debt. Capitalist governments run interference and debt collection on behalf of the wealthiest few.
Furthermore, production is irreversibly socialized on a world scale; millions of workers worldwide contribute to economically produce even a shirt button. But ownership is extraordinarily privatized. The way out is through the expropriation of the expropriators, and collective organization of production to meet human needs.
Certainly, competition can be good — for example, competition for particular scientific theories, or for the best literary writing. But competition today can be good only on a foundation of broad social cooperation and collective production. The kind of competition that capitalism encourages in its decline is a terrible “race to the bottom.”
Cato’s longings lead it to support the “ownership” scheme, privatization of Social Security — and not to oppose Bush. For us, the way out lies in defeating Bush and his masters, defense of democratic rights, defense of Social Security, and the principle that none of us is secure unless all of us are secure.
The author can be reached at economics@cpusa.org.
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