In the eye of the ‘perfect storm’: the final salary pensions crisis and financialisation of Anglo‐American capitalism

Click to increase image sizeClick to decrease image size Notes The author would like to thank Louise Amoore, Marieke de Goede and two anonymous reviewers for their constructive comments on an earlier version of the text. 'American pensions: in the red', The Economist, 13 September 2003, pp. 84–5. Richard Minns, The Cold War in Welfare: Stock Markets versus Pensions (Verso, 2001), p.xii. On the prospects for convergence of pension arrangements in continental Europe with the Anglo‐American 'model', see the exchange between Clark and Engelen: Gordon L. Clark, 'Pension Security in the Global Economy: Markets and National Institutions in the 21st Century', Environment and Planning A, Vol. 35, No. 8 (2003), pp. 1339–56; and Ewald Engelen, 'The Logic of Funding European Pension Restructuring and the Dangers of Financialisation', Environment and Planning A, Vol. 35, No. 8 (2003), pp. 1357–72. Chris Daykin, 'Experience and trends in occupational pensions—tour d'horizon in OECD countries', in: OECD (ed.), Regulating Private Pension Schemes: Trends and Challenges, Private Pensions Series No. 4 (OECD, 2002), pp. 10–11. Randy Martin, Financialization of Daily Life (Temple University Press, 2002), p. 9. See, for example, Giovanni Arrighi, The Long Twentieth Century: Money, Power and the Origins of Our Times (Verso, 1994); Robert Boyer, 'Is a Finance‐led Growth Regime a Viable Alternative to Fordism? A Preliminary Analysis', Economy and Society, Vol. 29, No. 1 (2000), pp. 111–45; and Stephen Gill, Power and Resistance in the New World Order (Palgrave, 2003). Arrighi, The Long Twentieth Century, ch. 4. Boyer, 'Is a Finance‐led Growth Regime a Viable Alternative to Fordism?'. Samir Amin, 'The Challenge of Globalization', Review of International Political Economy, Vol. 3, No. 2 (1996), pp. 238–44. Bob Jessop Michel Callon, 'Introduction: the embeddedness of economic markets in economics', in: Michel Callon (ed.), The Laws of Markets (Blackwell, 1998), pp. 1–57; Paul du Gay and Larry Ray and Michael J. Clowes, The Money Flood: How Pension Funds Revolutionized Investing (Wiley, 2000). Martin, Financialization of Daily Life, p. 3. 'American pensions: in the red', The Economist, pp. 84–5. Danny Hakim and Florian Gimbel, 'Big pension funds buoy corporate performance', Financial Times, 28 July 2003, FTfm section, p. 3. Mary Williams Walsh, 'New rules urged to avert looming pension crisis', New York Times (www.nytimes.com/todaysheadlines), 28 July 2003. Mary Williams Walsh, 'Discord over efforts at valuing pensions', New York Times (www.nytimes.com/todaysheadlines), 1 May 2003. Mary Williams Walsh, 'Pension reserve: what's enough', New York Times (www.nytimes.com/todaysheadlines), 22 June 2003. Minns, The Cold War in Welfare, p. 154. Engelen, 'The Logic of Funding European Pension Restructuring and the Dangers of Financialisation', p. 1367. Robin Blackburn, Banking on Death, or Investing in Life: The History and Future of Pensions (Verso, 2002), p. 130. Clark, Pension Fund Capitalism, p. ix. Clowes, The Money Flood, pp. 12–13. Clark, Pension Fund Capitalism, pp. 31–2. Clowes, The Money Flood, pp. 7 and 13; and Leslie Hannah, Inventing Retirement: The Development of Occupational Pensions in Britain (Cambridge University Press, 1986), pp. 73–4. Callon, 'Introduction', p. 22. Confidential interview with a representative of the Investment Management Association, London, 1 September 2003. Jan Toporowski, The End of Finance: Capital Market Inflation, Financial Derivatives and Pension Fund Capitalism (Routledge, 2000); and Adam Harmes, Unseen Power: How Mutual Funds Threaten the Political and Economic Wealth of Nations (Stoddart, 2001), pp. 83–119. Blackburn, Banking on Death, p. 177. Confidential interview with a representative of a US‐owned asset management firm, London, 4 September 2003. Ibid. Engelen, 'The Logic of Funding European Pension Restructuring and the Dangers of Financialisation', p. 1366. See, for example, Silvia Ascarelli, 'Equities get the boot', Wall Street Journal, 16 January 2002, available at http://www.johnralfe.com/displayArticle.php Alex Skorecki, 'LSE pension fund dumps shares for bonds', Financial Times Weekend, 13–14 July 2002, p. 2. Williams Walsh, 'New rules urged to avert looming pension crisis'. Kate Burgess, 'Don't fall for Victorian values', Financial Times Weekend, 15–16 March 2003, FT Money section, p. 1. Williams Walsh, 'New rules urged to avert looming pension crisis'. UBS Global Asset Management, Pension Fund Indicators 2003, p. 52. Marieke de Goede, 'Repoliticising financial risk', unpublished paper presented to the British International Studies Association 27th Annual Conference, London School of Economics, 17 December 2002. Cf. Charles P. Kindleberger, Manias, Panics and Crashes: A History of Financial Crises (Macmillan, 1978). Nigel Thrift, ' "It's the Romance, Not the Finance, That Makes the Business Worth Pursuing": Disclosing a New Market Culture', Economy and Society, Vol. 30, No. 4 (2001), pp. 414–15. Blackburn, Banking on Death, p. 175. Hengyi Feng, Julie Froud, Johal Sukukdev, Colin Haslam and Mary Williams Walsh, 'Xerox settles pension suit with retirees', New York Times (www.nytimes.com/todaysheadlines), 15 November 2003. DC plans in the US are also often so‐called 401(k) plans as a wide range of DC plans use the 401(k) tax code. 401(k) plans permit employees to reduce current tax liabilities by taking income in the form of contributions (within limits monitored by the Internal Revenue Service) to a pension plan. Hannah, Inventing Retirement, p. 22. Ibid., p. 79; and Tony Cutler and Adam Tickell, 'Pensions and Politics', Environment and Planning A, Vol. 35, No. 8 (2003), pp. 1381–4. Richard Murphy, Colin Hines & Alan Simpson, People's Pensions: New Thinking for the 21st Century (New Economics Foundation, 2003). Additional informationNotes on contributorsPaul Langley Paul Langley, School of Arts and Social Sciences, Northumbria University, Newcastle‐upon‐Tyne NE1 8ST, UK. Paul Langley, School of Arts and Social Sciences, Northumbria University, Newcastle‐upon‐Tyne NE1 8ST, UK.