Pension Reform and Economic Theory

Pension Reform and Economic Theory

A Non-Orthodox Analysis

Sergio Cesaratto

The book is the first of its kind to attempt to deal with the economics of pensions and ageing on the basis of a rigorous theoretical framework alternative to neoclassical economics. Sergio Cesaratto breaks the dominant conformism in the current pension debate and explains that the strength of the various reforms proposed depends on the validity of the economic theories on which they are respectively based. He also illustrates the relevance of the Sraffian criticism to undermine the theoretical core of the mainstream proposals.

Chapter 8: The Viability of an Ageing Society: A Classical Exploration

Sergio Cesaratto

Subjects: economics and finance, public sector economics


It seems to be correct to begin with the real and the concrete, with the real precondition, thus to begin, in economics, with for example the population, which is the foundation and the subject of the entire social act of production. However, on a closer examination this proves false. The population is an abstraction if I leave out, for example, the classes of which it is composed. These classes are in turn an empty phrase if I am not familiar with the elements on which they rest. For example, wage labour, capital, etc. The latter in turn presuppose exchange, division of labour, prices, etc. For example, capital is nothing without wage labour, without value, money, prices etc. Thus, if I were to begin with population, this would be a chaotic conception of the whole, and I would then, by means of further determination, move analytically towards ever more simple concepts, from the imagined concrete towards ever thinner abstractions until I had arrived at the population again, but this time not as a chaotic conception of a whole, but as a rich total of many determinations and relations. (Marx, [1857–58] 1973, p. 100) 8.1 INTRODUCTION The final chapter explores from a classical point of view the future of social security organized along PAYG lines in an ageing society. Rather than presenting definite results, the chapter may better be regarded as a bridge to future research. The preceding chapters have shown the shortcomings of the two major pension reforms under discussion....

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