Cannibalistic Capitalism: The Paradoxes of Neoliberal Pension Securitization

Workers have become increasingly dependent on the economic performance of corporations for the value of their retirement savings as pension funds across the OECD area have ramped up investment in corporate stocks and bonds. This phenomenon, known as pension securitization and wrapped in the discourse of the ‘empowerment’ of the worker as a shareholder, has become a defining and highly problematic feature of the neoliberal era. Neoliberalism -- and, by extension, securitization -- needs to be understood not as an end state but as an ongoing and contradictory process aimed at deepening and widening the marketization of society. This process demands that the manifestations of crises of capital accumulation, including struggles that threaten to delegitimize neoliberal rule, be absorbed or displaced, spatially and temporally. It also necessitates that states and capitalist classes continually engage in the construction, naturalization and social reproduction of highly paradoxical neoliberal accumulation strategies such as pension securitization. Cannibalistic capitalism captures the processes by which workers’ savings in the form of pension funds feed off both their own increased indebtedness and that of other workers, a condition driven largely by stagnant real wages and unemployment. As has especially been evidenced in the US, which shall be the focus of this essay, due to the dependence of pension funds on high-risk investments, their investment strategies mutilate the value of pension savings with the advent of more frequent and deeper financial crises that serve to wipe out gains made during a speculative run. Instead of serving to weaken cannibalistic capitalism, crises have had the effect of deepening neoliberalisation by allowing financial corporations and their shareholders (which include pension funds) to prey on those dispossessed workers, who, in the absence of a safety net, strive to maintain basic living standards through the credit system. It is critical to understand the securitization of pension savings and the increased reliance of workers on financial markets as a result of complex forms of struggles between workers and capitalists, mediated by the state. Generally speaking, the dependence of labour on the market has been accomplished through ongoing and intensifying attempts to discipline workers -- both inside and outside the reserve labour army. As forms of state intervention, financial fetishism and the marketization of labour reveal that securitization, and its intensification in the form of cannibalistic capitalism, is neither a natural nor neutral phenomenon. Cannibalistic capitalism serves the capitalist class in at least three interlocking ways. First, due to their reliance on Wall Street, workers (i.e., ‘Main Street’) have a strong stake in the preservation of the system that exploits them because the destruction of the capitalist system entails the annihilation of their savings. Second, with each crisis, dispossessed workers become increasingly reliant on the credit system, thus exposing themselves to the disciplinary, demobilizing, and individualizing tendencies of debt (collection agencies, bond rating agencies, prisons, courts, and so forth). Third, workers have been relegated to the ever-growing reserve army of underemployed and unemployed labour. This, in turn, serves to erode solidarity, weakening collective action against the class-based and capitalist nature of securitization