Pensions myth (2006)

Book Review from the forthcoming August 2006 issue of the Socialist Standard

Phil Mullan: The Imaginary Time Bomb. Why An Ageing Population is not a Social Problem. (IB Taurus.)

 

There are too many old people. They are becoming an unsupportable burden on the pensions and health systems. If nothing is done about it there will be a generation war between pensioners and the decreasing proportion of those of working age.

So runs the argument consistently put over by the media. But, according to Mullan, it’s a myth based on faulty statistics, disguising a hidden agenda by people who want to cut pension and welfare benefits for other reasons and/or want to make money by selling private pensions.

He points out that while the proportion of over-64s in the population is indeed rising this is mainly a reflection of a reduced birth rate in the past, which has meant a fall in those now in the 16-64 age range. This has happened before in the last century without the dire consequences now being predicted. Most estimates, he says, don’t take into account the reduced expenditure on the under 16s that a fallen birth rate means nor the fact that a significant proportion of the 16-64s are also not working, not just the disabled and the recorded unemployed but also many who are on “incapacity” benefit as early retirees to whom capitalism denies a job.  Nor does it take into account the fact that over time the productivity of those at work rises nor that the health of the over-64s is improving.

 So, for Mullan, the “pensions time bomb” is an imaginary threat, but not just a panic cynically stirred up by vested interests. It is also a reflection of what he calls the current “age of anxiety” where : 

“The feeling of uncertainty and insecurity influences discussion and debate in all sphere’s of life. Politicians have lost popular authority and have tended to limit their objectives. The main idea coming out of political think tanks on both sides of the Atlantic seems to be that there are no more ‘big ideas’. Most Western governments have adopted a narrower agenda of managing what exists rather than seeking to intervene in society in pursuance of more ambitious aims. . . Interacting with the élite’s loss of nerve, the erosion of previous collectivities is a major source for this popular mood. The demise during the 1980s of trade unions and of less formal mechanisms of support, solidarity and community have left people more on their own than ever to face the problems of everyday life. The social fragmentation and individuation thas made life seem more insecure”.

This pessimism, bred (we would add) by the inability of capitalism to meet needs and by the failure of reformism last century, is the fertile ground on which the vested interests concerned have been able to sow this particular panic.

Adam Buick