Abstract
Unlike much of the pensions’ literature, we regard the design of retirement systems as a matter of justice, as articulated by political philosophers. Characteristically, scholars of social policy endorse the deployment of state power to realise a particular conception of “the good”, emphasising the importance of social solidarity and altruism. But liberalism endorses “institutional neutrality”, a principle that rules out the possibility of such action. The nature of “the good” should be regarded as a private matter, subject only to each agent’s sovereign preferences. Rather than endorsing social solidarity, justice requires the state to uphold the primacy of liberty, including the possibility of individual choice around matters of work and retirement. Several variants of this general argument are explored here.
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Notes
- 1.
The consequentialist mainstream of classical liberal economics, for example, tends to criticise the welfare state on the grounds that it is financially unsustainable, increasingly incapable of supporting people in their old age (Tanner 2004; Booth and Niemietz 2014). Collectivists have rejected this negative appraisal, arguing that the issue of financial support for older people is merely one of political will. As a society, do we put people before private gain? The state has the power and authority to make this a reality, what it lacks is the commitment—or so we are told (Ginn 2004; Ghilarducci 2008).
- 2.
But see a special edition of the Journal of European Social Policy, particularly the lead article by Schokkaert and Van Parijs (2003), which develops and applies an egalitarian liberal theory of distributive justice to pension reform. Sunstein and Thaler’s seminal work on “libertarian paternalism” (2003) makes the case for automatic enrolment in terms of liberty, which has become increasingly prominent in public debate around pension reform. Kelly (1998) develops a compelling set of arguments in favour of laissez faire—premised on natural rights—while Barry (1986) argues the case for limited state intrusion in retirement planning on utilitarian grounds.
- 3.
One of the best scholarly works on the instantiation of normative principles through pension design has been Shapiro’s 2007 monograph, although it is limited by its emphasis on egalitarian principles, and defined contribution pensions. Esping-Andersen (1990) discusses different approaches to the design of retirement schemes, but his exposition fails to consider private pension schemes in sufficient detail. Perhaps the most thorough treatment of pension scheme design is Dixon’s cross-national comparative analysis of retirement provision (1999), but it is largely devoid of philosophical content. Our own work in this area has of course been ongoing (Hyde et al. 2006, 2007; Hyde and Dixon 2009), including two Special Editions of the Journal of International & Comparative Social Policy (2009, 25/2; 2012, 28/2).
- 4.
Where people’s economic fortunes depend substantially on their capacity to generate preferential treatment by the state at the expense of their fellow citizens (Tullock 1976).
- 5.
Or at least those that existed for much of the twentieth century. Several Northern European countries have introduced compulsory fully funded pensions, which are anathema to the mainstream of social policy analysis (Hyde et al. 2006).
- 6.
- 7.
Though we should acknowledge that “anarcho-capitalists” reject any role for the state in public life (Rothbard 1973; Friedman 1989). Public officials and political leaders cannot be trusted to take appropriate action in pursuit of justice, only their own immediate interests. The business of protecting liberty should be left to the market.
- 8.
That is, pre-political society.
- 9.
Which means of course that it does not endorse the “primacy” of liberty, merely its pivotal importance.
- 10.
Factors that agents cannot control through their own effort, such as unequal starting points, prejudice, discrimination and differences of natural ability.
- 11.
Defined benefit pensions confer retirement income security by giving plan participants a “promise” of entitlements in the future (Hyde and Borzutzky 2016).
- 12.
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Hyde, M., Shand, R. (2017). Liberty, Equality, or Fraternity? A “Liberal” Approach to the Design of Pensions?. In: Retirement, Pensions and Justice. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-60066-0_1
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