Several entries of the Social Security Bibliography give reasons for jibbing at the proposal to privatize social security. One of the best is that social security's overhead is now a slim 1 percent of the system, whereas finance and management fees for private accounts could run as high as 20 percent of each account. That's a lot of money heading into Wall Street instead of into the pockets of our aged parents and grandparents.
Perhaps because I'm still rather green and naive, I just stumbled upon another reason that the right is probably pushing for privatization. It comes from Chomsky's Hegemony or Survival (p. 120) (now online here):
Privatization has other benefits. If working people depend on the stock market for their pensions, health care, and other means of survival, they have a stake in undermining their own interests: opposing wage increases, health and safety regulations, and other measures that might cut into profits that flow to the benefactors on whom they must rely, in a manner reminiscent of feudalism.Posted by Paul at January 18, 2005 03:52 PM
Hmmmmmm. Chomsky's claim seems a bit strong to me. For one thing, having "a stake in undermining their own interests" doesn't seem quite as sinister as it first sounds if it turns out to simply mean, "having interests that they would be tempted to balance against other interests." All things being equal, that doesn't necessarily seem evil. All things being equal, I think it's great when people have an investment in the success of commercial ventures, and share some of the spoils. To compare this with feudalism seems sort of hysterical and overwrought.
The other point is that it isn't clear whether opposing wage increases, health and safety regulations, etc. is or is not an essential part of having mass ownership in the stock market. If Chomsky thinks that it in fact is, he seems to implicitly accept (here, I mean) that either we have mass ownership or we have the other things, an assumption that is damaging since given the choice a lot of people would go with mass ownership. But if it isn't, then the solution is surely to point out that we can have both sets of goods (mass ownership AND other social goods), and the idea that we can't is a right-wing myth. Since I don't think that these things are incompatible with mass ownership, I'm uneasy with what I take Chomsky to be suggesting.
Posted by: Chris at January 18, 2005 04:14 PMbe careful paul, a certain segment of the population loses their mind whenever they see the name "chomsky."
Posted by: upyernoz at January 18, 2005 05:24 PMOh, and I hope it goes without saying that I think Bush's "ownership society" position is crap, that I dread what they're going to do with social security, etc. etc. etc.
Posted by: Chris at January 18, 2005 05:36 PMChris, I agree with you that the analogy with feudalism is overwrought. The passage's appeal to me had nothing to do what that analogy.
And you are also right to say that
having "a stake in undermining their own interests" doesn't seem quite as sinister as it first sounds if it turns out to simply mean, "having interests that they would be tempted to balance against other interests."If "their own interests" had the sort of normative regulative control of other practical deliberations that we think "real" or "true" interests ought to have, then it would be wrong to think that anyone ever had a genuine "stake" in undermining those interests.
With that said, however, there does seem to be a sense in which Chomksky's position can be made less absurd than you rightly show it can appear. If we interpret "stake" instrumentally, as that which would conduce to the regulative interests, then Chomsky's view becomes: A new strategy opens up for people to pursue the interests that they've always had; but this particular strategy has its downsides, including the down side of making it rational to want corporations and Wall Street to do even better than they did before. And while this is not necessarily a bad thing (as you, Chris, explain), it is a bad thing given the world we live in. For the world we live in is one in which the President can dupe citizens into believing anything.--And it is certainly a world in which he (along with savvy PR firms) can dupe people into thinking that citizens need wal-mart to exploit employees, lest their nesteggs not be all they can be.
If we can interpret Chomsky's claim along those lines, then I think he's right, and that privatization does make certain strategies newly expedient for the very people that will be harmed by those strategies. You are right that there is a possible world where justice as fairness (or whatever) is the law of the land, and in which privatization would not give rise to the problem Chomsky here highlights. But that is not the world we live in, and it seems clear that my mother will want Wal-Mart to make even more profits than they already do if her prescription drugs in 2020 depend upon it.
Posted by: Paul at January 19, 2005 10:38 AMIt occurs to me that the last line of my last comment is open to a clear objection: But your mother's prescription drugs depend not only upon her private social security account, but also upon the wages she receives as an employee of the very sorts of companies she's got in her private account portfolio. So I am still open to the claim that I am painting an incomplete picture of what people will want from their corportations in 2020.
This is a good criticism. Here's why I left myself open to it in the first place: It is my impression--having been raised in a household of lower-middle class factory workers--that working class folk already have a sort of deferential view toward the corporations they work for. They look at their decisions as the decisions of a parent who, when bonuses don't come and when pay-hikes are frozen, believe that the company must make economies or else... So part of my response above depends upon a psychological thesis about the sort of worker who will be most affected by Wal-Mart type economizing. That thesis is that they are less likely to feel exploited when they don't receive the wages, benefits, and bonuses progressives think they should; yet they are just as aware as the rest of us of how well their portfolio is doing, and how quickly or not it rises.
OK, so now it turns out that my agreement with Chomsky rests upon that empirical and, I imagine, rather controversial assumption. Nevertheless, it does seem to me to have a ring of truth to it.
I need to read more social science!
Posted by: Paul at January 19, 2005 10:50 AMOh yes, I think the real world/ideal theory issue is crucial here. But I also wonder how best to fix things. Even starting from where we are, it might turn out - might - that the best solution was to expand public ownership of companies while pushing very hard for more open, accountable and transparent corporate governship, less deferential attitudes among workers to companies, etc. etc. etc. There seem to me to be a range of plausible, practical ways to leverage broad ownership into something really socially useful - quite the opposite, of course, of what most on the right intended when talking crap about "ownership". So that might be a sensible direction to take activism - co-op the rhetoric on the right into something genuinely progressive. "If we do own it, why can't we . . ." "If this is supposed to be for our good, why must you . . . " Etc. etc.
Might. Might. But I truly suck at political strategizing.
And, once again, I am of course highly, highly suspicious of any plan dressed up in this kind of rhetoric coming from the American right.
Posted by: Chris at January 19, 2005 11:24 AM