(OPE-L) pension funds (was "production shifts")

From: Gerald_A_Levy@MSN.COM
Date: Wed Nov 10 2004 - 08:43:37 EST

Jurriaan wrote:

> As I have mentioned before, in Marx's time taxation and social insurance
> was a much more marginal phenomenon. The claims of taxation on current
> income & revenues were not so large. In reality, however, the data show
> that stock ownership is not very dispersed (see e.g. Edward Wolff's work
> on this) and that the amount of stocks directly owned by ordinary workers
> is small.

Right.  My question primarily concerned _indirect_ stock ownership
in the form of pension funds.

> If ordinary workers directly receive profits from stocks, then they
> obviously do participate in the share-out of surplus-value, but as
> mentioned, this phenomenon is quantitatively not so significant. If
> workers pay into pension, mutual or insurance funds, however, the payout
> they get later is normally a cost to the pension, mutual or insurance
> business, not a direct disbursement of the income of that business, which
> proceeds to invest these funds.

Depending on the specific nature of the pension plan, workers don't
necessarily have to "pay into" pension funds.  Whether workers should
or should not pay into pension (and health insurance) funds is an issue
that is hotly contested between corporations and unions.  In the US
historically, workers who received pensions via collective bargaining
contracts generally did not have to pay into these accounts; it was only
with the "concessions movement" of the 1980's, that mgt. was able to
shift some of the burden for pensions to workers. [NB:  a significant
% of workers in the US have no pension plans.]

> Hence it should be seen not as part of
> surplus-value, but as a distribution of revenue. In principle, the Marxian
> economic concept of surplus-value applies to the valuation of the output
> of production; though surplus-values can of course be realized in
> exchange. Only the payout from insurance funds can be considered part of
> the real wage, assuming that the worker is earning a wage.

Some definitions of pension funds refer to pensions as "deferred
compensation" (see below). From that perspective then pensions
could be viewed as deferred wages.

Even though pension fund investments are not directly controlled by
individual workers, unions have a say (often limited) in how these
funds are to be invested in the stock market.

If individual workers invested in the stock market and made gains
would that represent a claim on a (very small) portion of the
surplus value?  If so, then when workers' pensions are invested
on the stock market, why can't the gain be thought of as a
claim on s?

The reason why pension fund monies are invested in the
stock market is connected to the subject of *inflation*.  I.e.
during inflationary periods the rate of interest offered by
banks is generally less than the rate of inflation.  Hence, if
pension funds were invested in bank accounts then real
savings would diminish over time.  This forces the trustees
of benefit funds to search for the greater rates of return
that are often found in the stock market.  Although
these funds usually invest monies in (so-called 'blue chip') stocks
which are deemed to be more 'safe' and although the stock
investments are in the form of  very diversified
portfolios, this exposes workers' pensions to a higher
level of risk than is the case with federally insured bank accounts
or government bonds.  In a crisis if there is a crash in
the stock market then  the workers' pension plans are at risk.
(NB: on a related note,  the Bush administration's plan
for the reform of social security would expose workers'
SS accounts to greater risk as a result of  fluctuations in the
stock market.  Yet -- and this is why it is being pushed by
Bush -- it would inject funds into the stock market and
thereby benefit corporations.)

In solidarity, Jerry


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