Cooking the Books 1: Pensioned Off
According to the government and the capitalist media, there is a “pensions crisis” in that, given the growing proportion of retired people in the population, the capitalist class is not going to be able to afford to maintain pensioners at the same level as existing ones. Therefore, the argument goes, people must set aside more of their current income to purchase future pension rights. And they must retire later.
It seems to make sense. If there are more retired people compared to those at work, surely that must mean that those at work have to work more and/or consume less? This would be true but for one thing: it ignores the point that over time productivity increases, even if only fairly slowly. This means that more wealth can be produced by a workforce of the same size, out of which, in theory, both current wages and future pensions can be maintained at the same level as today.
“In theory” because the fact that this could happen is no guarantee that it will. But it does show that the capitalist class can’t plead poverty here. They can afford to maintain pensions at current levels.
That this is so was confirmed in a report, The Ageing Population, Pensions and Wealth Creation, released on 31 October by a pro-business think-tank, Tomorrow’s Company. According to the BBC News of that day:
“One of the report’s authors Philip Sadler said there was no ‘ageing crisis’. ‘As a society we can afford to grow old,’ he said. ‘Rising productivity will outweigh any negative influence on living standards from an ageing population.'”
The report asked “how can a working population that is expected to remain around 27 to 28 million create sufficient wealth over the next 35 years to support an additional five million pensioners?” and answers:
“The main factor affecting our ability to afford an ageing population without the erosion of living standards is the
impact of rising productivity. More than anything else, rising productivity explains the paradox that ageing societies have simultaneously become wealthier. At a mere 1.75 per cent productivity growth peryear, by 2045, an average British worker will be about twice as productive as today.
In other words, a doubling of new value and resources being produced while the number and share of over 64s
grows by less than 50 per cent.” What is interesting in a report from a pro-business lobby is that it acknowledges that it is the “working population” who are the “wealth creators” rather than the usual guff we get from such groups about entrepreneurs being wealth creators.
Wealth can only be created by human beings applying their mental and physical energies to materials that originally came from nature.But they do write as if there was a direct transfer from the “working population” to the pensioners. In fact, this only happens indirectly, as the wealth is taken from its direct producers, the workers, by the capitalist class and then transferred by them, via the state and pension funds, to pensioners. So pensions come out of profits, not wages.
Which is why how to pay for pensions is a problem for the capitalist class.
However they solve it, what we get will never be enough to compensate for a lifetime of exploitation.