- New Directions in Modern Economics series
Edited by John Grahl
Chapter 9: Financial Markets and Social Security
9. Financial markets and social security John Grahl INTRODUCTION 9.1 The increasing salience of financial markets and the rapid growth in many countries of institutional investors channelling household savings onto these markets have been pointed out in earlier chapters. These developments form the background to a political project to transfer responsibility for important welfare functions from the state to the market. The two most important examples are probably health care and retirement pensions. In both cases, throughout Europe, provision today is very largely a public function. But there is a strong drive to limit or reduce public responsibility both for health care and for pensions, and to make households, using private insurance companies and privately managed pension funds, take over a large part of the responsibility. The argument for this kind of change is one aspect of a general assault on public services and social security which tries to call many public goods and social services into question and to privatize broad areas of the public sector. The present chapter concentrates on the pensions issue. It makes a critical assessment of the moves towards market-based provision in the European Union and of the arguments on which these moves are based. It is suggested that these arguments fail in three key respects: firstly, they are conceptually incoherent in that they do not address the resource issues involved; secondly, they fail to recognize the efficiency of public provision and the inefficiency of most private provision in the field of pensions; thirdly, they...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.