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Issue #1733      June 1, 2016

Editorial

Come July 2

When capitalism was still relatively new, workers who grew too old – or too ill – to work were dependent on the charity of their families or the Church for food and a roof over their heads. Later, as workers grew aware of their power when they organised, they were able to force employers to accept that after a lifetime of contributing their labour to the enrichment of capitalism workers were entitled on retiring to receive back as a pension a portion of what they had produced.

Being the system it is, capitalism soon arranged that payment of workers’ pensions should come out of government revenue rather than directly from the boss’s profits. Government revenue under capitalism derives mainly from the earnings of publicly-owned enterprises as well as corporate and personal income tax. Capitalists, however, hate sharing their profits with governments, who they know will only use it to provide services (including pensions) to working people.

They sustain an army of accountants for the sole purpose of finding ways to avoid paying tax commensurate with the real level of their income. At the same time they use all their political clout to get governments to sell off their state-owned enterprises, which enriches the capitalists who take them over while seriously reducing government income, since the revenue previously raised by those state enterprises no longer goes into government coffers.

The result, as we have seen recently in Australia, is governments slashing pensions on the excuse that “we are living beyond our means and can no longer afford them”. As usual, it’s the workers whose incomes suffer. The bosses, the ruling elite, go on getting richer.

And they have another lurk that has contributed greatly to their financial well being: by promising a higher pension payment they have been able to shift most people from government-paid pensions to superannuation schemes. For capitalism, superannuation schemes are a way of gathering funds (“contributions”) from masses of workers that are then available to be used as private investment capital.

A proportion of the income from those investments is used to pay the workers’ pensions, an arrangement however that leaves unsuspecting workers at the mercy of “the market” as their investments are buffeted by the chaos that is the essence of capitalism.

To know the retirement future gestating here for workers look to the USA. In October of 2008, while the US economy was in the early stages of yet another severe recession, the Washington Post reported that the “stock market’s prolonged tumble has wiped out about US$2 trillion in Americans’ retirement savings in the past 15 months, a blow that could force workers to stay on the job longer than planned.” It was of course a blow that could also have other, far more dire, consequences.

And in April of 2016, the same paper reported: “More than a quarter of a million active and retired truckers and their families could soon see their pension benefits severely cut – even though their pension fund is still years away from running out of money.” It seems that the truckers’ Pension Fund suffered heavy investment losses during the global financial crisis that cut into the pool of money available to pay out benefits. Even without the financial crisis, the truckers would eventually suffer significantly when their fund ran out of money. Only under capitalism can the money for workers’ pensions disappear because of “market forces”.

For millions of Americans, their “super” is their only form of savings. In other words workers who were promised a secure retirement are cheated out of the benefits they worked hard – for decades – to attain.

The working people – and the poor – must then endure lectures on the virtues of personal responsibility, self-sufficiency, and free enterprise – self-funding in the free market – from the same people who have been feeding greedily at the public trough through corporate welfare; a system that gives the rich a free ride while forcing the public to clean up the mess and suffer the consequences – a system from which the former merchant banker and current Prime Minister secured his millions.

Short of a revolution, there are steps we can take: one will be your vote on July 2.

Next article – It’s not refugees destroying jobs

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