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Interview with Eric Laursen on Social Security and The People's Pension

Infoshop News interviews Eric Laursen, independent journalist, activist, anarchist, and author of the new book The People's Pension. Laursen's book examines the history of the Social Security program in the United States, attacks on the program, and recent efforts to dismantle it. Laursen also looks at the origins of the program, which are rooted in radical social movements of a century ago. He was recently a guest on Democracy Now (link below)

Interview with Eric Laursen on Social Security and The People's Pension

Infoshop News
September 6, 2012

What prompted you to write a book about the U.S. Social security system?

Initially, I just found it interesting. In the mid-90s, I was editing a magazine for pension fund executives – my day job as a financial journalist. That was when the movement to privatize Social Security was first gaining traction in Washington, and I found the debate fascinating – politicians were actually contemplating making severe cuts in a program that keeps millions of people out of poverty – that's one of the foundations of the American middle class – ostensibly because they were concerned about projections that the program might run out of money decades from now. So why did it make more sense to cut Social Security than, say, the Pentagon budget or stop reducing taxes for multibazillionaires? It certainly didn't make sense to me! I wanted to know what this was all about.

Pretty soon after I went freelance and started devoting more time to writing about the Social Security wars, though, I began to have a more personal interest in the subject. I'm an independent journalist in my early 50s. My retirement account took a huge hit in the dot.com collapse. It took another huge hit when Wall Street took another dive in 2008. The value of the home that my partner and I own is eroding. The income I earn from the work I do isn't keeping up with the cost of living. I'm in the same position as tens of millions of workers who are starting to think about their old age: I can't afford it. The so-called “ownership society” that Republicans and center-right Democrats have been pushing for years is, for me, a bust. Social Security and Medicare are the only things I can really count on. Unless, of course, the politicians decide to take them away.

Why would an anarchist want to write a big, long book about a government program like Social Security?

Because Social Security has its roots in 19th century anarchist and socialist thinking – socialist in the broad sense, that is. Even though it's organized as a government program, and as such it's got its share of defects, Social Security is still basically a form of mutual aid. Everybody contributes to a common pool, out of which they receive benefits as soon as they qualify. It's the same structure that Proudhon and Kropotkin and other pioneering anarchists observed in newly industrialized cities, when they formed mutual aid societies to provide themselves with health care and death benefits for their families and so forth. The anarchists saw this as the basis for a whole new form of social organization. In his final major work, On the Political Capacity of the Working Class, Proudhon included insurance against “illness, old age and death” as one of the basic services that should be provided in a collective manner in a mutualist or anarchist society.

Pretty quickly, it was picked up on by social democrats and then by politicians like Bismarck in Germany as a way to tamp down class warfare and Make working people think they had a stake in the state-capitalist system. When they set up government-run forms of mutual aid, funded through taxes, they called it “social insurance.” Today, that's the category of programs that includes Social Security, Disability Insurance, Medicare, and Unemployment Insurance. What sets them apart is that they're not “welfare,” something Washington gives us out of the goodness of its heart and that can be revoked at any time. We paid for Social Security, directly and collectively. It belongs to us, not to the government. The government merely runs it in trust from us.

When social insurance programs like old-age insurance and universal health care were first being proposed in the U.S. in the early decades of the 20th century, a lot of people on the left and in the labor movement actually opposed them. They argued that the State couldn't be entrusted with these programs because its first loyalty was to the propertied classes and that it would inevitably break its promises. Working people should devise systems to provide these things for themselves, collectively. In the New Deal era, labor put those kinds of misgivings aside and became a big supporter of social insurance. Today, with politicians gaining ground who want to restructure Social Security out of existence, we need to look back and consider that maybe, in the long run, those earlier activists were right.

What's the biggest threat to Social Security today?

Not the right, but the center-right. In researching The People's Pension, I was amazed to learn how close Washington came to drastically restructuring Social Security during the second Clinton administration. His aides collaborated very closely with Newt Gingrich, behind the scenes and even after the Monica Lewinsky scandal hit, to figure out a plan to do it. Then the Republican Congress went ahead and impeached Clinton, and it was basically all over. But what struck me was how determined the leaders of both parties were to make a deal. In a way, the people who are most dangerous to Social Security aren't the Republicans, people like Gingrich and Paul Ryan. Their views are pretty well known, and they usually don't go all-out against Social Security because it would be too dangerous. The real threat is from center-right Democrats like Erskine Bowles, Sen. Mark Warner, and – at times – Barak Obama. They're protected by the fact that the Democratic Party created Social Security under Roosevelt. So voters and the national media tend to assume whatever they do must be with the best of intentions. And they're treated as heroes in the Washington media, which loves anyone who describes themselves as “bipartisan.”

What would be the most interesting things that you learned while researching and writing this book?

Hard question. A lot of this history had never been written before, and I was uncovering all kinds of fascinating facts and connections. From a people's point of view, the most interesting thing I learned was just how powerful an impact Social Security has had on this country. At one time, the elderly were the poorest subgroup of the population here. More than 50% were classified as living in poverty during the Great Depression. Now, it's about 9% – and most of the improvement came in the 1960s and 1970s, when Medicare was created and Social Security benefits were indexed to inflation.

It's not supergenerous – $2,000 a month is about the highest level of payment. Nobody is getting rich off Social Security, in spite of the skewed coverage you see in the media. But it keeps some 20 million people out of poverty every year. Working households benefit, too, because their aging relatives are able to live independently, don't become burdens on their children. This was a huge transformation in American society. And as an anarchists, it's important to remember, first, that it came about because of a large mass movement of people in the Depression years who demanded it; and second, that it's still, fundamentally, built on mutual aid principles. That's how powerful anarchist ideas are – even though the government runs it.

How does the U.S. system compare to other countries in terms of benefits paid out to the average participant?

Not all that well. The U.S. was a latecomer in setting up an old-age income support system, and Social Security is less generous than comparable programs in almost every other industrialized country. (The UK and Australia are the exceptions.) This was partly because it was assumed that Americans would have other resources for their retirement, from personal savings to pensions from their employers to the value of the homes. But all of those things are eroding today. So if anything, this country needs to be talking about ways to improve and extend Social Security, not how to cut it and shift more of the burden onto working households who can't afford it. But it's not happening. That's how unresponsive the political system is to the needs of real people these days.

Which direction do you think the system is most likely headed in the future?

I'm pessimistic. The People's Pension really tells the story of a period in which conservative think-tanks, Wall Street, and business lobbyists convinced Washington that cutting “entitlements” – as they call social insurance programs – is inevitable, and set about patiently working to make this happen. They haven't succeeded, so far. Social Security hasn't been cut since 1983, and it's still regarded by a lot of people in Washington as the “third rail” of politics – touch it and you die. But even though they've lost lots of battles – George W. Bush pretty much wrecked his presidency in 2005 by trying to sell Social Security privatization – they may be winning the war.

It probably won't happen in the very near future, but looking another 10 years out, it's quite likely that Congress will vote a plan that will cripple Social Security. The Democratic Party leadership is slipping steadily to the right. Beyond that, it's just becoming more and more expensive even to run for office. So members of Congress aren't just bought and sold by the 1%. Increasingly, they are members of the 1%. The main political aim of the 1% is to maintain and extend the low-tax regime they've created for themselves, dating back to the Carter administration. They understand that to do so, they must shift the cost of caring for the elderly from Washington onto the shoulders of working households. Otherwise, given the fact that the population is aging, they'll eventually have to pay higher taxes. They didn't buy control of American politics, crush unions, and destroy almost every other part of the social safety net, just to let that happen.

What are the current candidates for U.S. President saying about the future of social security? Isn't Paul Ryan an advocate of privatization schemes?

Ryan's been one of the most vocal supporters of privatizing Social Security for the better part of 10 years now. He has a well documented record on this. Mitt Romney's also spoken approvingly of chopping up Social Security into private investment accounts. But in a way, the Democrats are the most troubling. Obama nearly made a deal with the Republican House Speaker, John Boehner, last year to cut the formula used to compute benefits for people when they enter retirement. That would amount to a huge cut in benefits over the next 20-30 years, meaning that people who are in their prime working years today would get hit the hardest. All to gain a few very minor tax concessions from Boehner. The only reason the plan didn't go through was that the Tea Party caucus in the House revolted. They didn't think it went far enough!

That's the kind of bizarre twist that Social Security politics can take. But friends of Social Security need to keep a very close eye on Obama and the other Democratic candidates in this election. Another big budget deal will probably be concluded in the months after the election, and if they're not watched very carefully, a lot of those Dems will be very tempted to sacrifice Social Security.

What does the Obama administration plan to do with social security? How prone are they toward “reform” such as privatization in a second term?

Right now, not very, because they're in the middle of an election. Social Security is the Democrats' ace in the hole at election time, because Republicans are so vulnerable to charges that they want to dismantle it. But after November 6, it'll be different. If Obama's reelected, he'll be entering his second term, when presidents generally start thinking “legacy” and “big landmark bipartisan deal.” Just like Bill Clinton did after he was reelected, and immediately started hatching plans for Social Security with Gingrich. Obama will feel less beholden to progressive Dems who oppose dismantling Social Security. Whatever he says on the campaign trail, he'll be very tempted to include Social Security in some sort of Grand Bargain centered on cutting the deficit. Even though it would sell out millions of younger working people.

Which organizations are involved with lobbying for and spearheading Social Security dismantlement?

I couldn't begin to name all of them here. They generally fall into two categories: the hardcore privatizers, and the groups that just advocate slashing Social Security over time until it's reduced to irrelevancy. The biggest privatization advocates are the Cato Institute, which is a libertarian think-tank; the Heritage Foundation; the American Enterprise Institute; and the Hoover Institution. They're funded by rich, ultra-right donors groups like the Scaife family and the Koch brothers. Then there are the just-cut-it groups, which include the Concord Coalition, the Urban Institute, the Committee for a Responsible Federal Budget, and pressure groups like Third Way and No Labels. Their major sugar daddy is Pete Peterson, the hedge fund billionaire. Also in the mix are some of the major Wall Street investment banks and mutual fund companies.

The main thing to take away from all this is that cutting Social Security isn't part of the political discourse because it's a good idea or something that just has to be done. It isn't. It's been bankrolled for a very long time by some very wealthy, very tenacious people who are used to getting what they want. This gives it an aura of inevitability that politicians are very susceptible to. Which is why it's so dangerous.

You would think that senior citizens would be up in arms about changes to a basic program that supports so any people in that demographic. What kind of activism has there been by senior citizens? What mechanisms have been used to tamp down activism?

Elder activists and other groups that work on their behalf, a lot of them funded by organized labor, have been saving Social Security from severe cutbacks going back to the Carter administration. Some of the most effective groups have been the Alliance for Retired Americans (formerly the National Council of Senior Citizens – the photo on the cover of The People's Pension is of a rally they held against Reagan's cuts in 1981), the Gray Panthers (their visionary founder, Maggie Kuhn, deserves a special mention), the Campaign for America's Future, and the National Committee to Preserve Social Security and Medicare. They know how to get people out in the streets, to deluge lawmakers with letters and emails, and to bird-dog politicians when they're out campaigning and holding town meetings.

Opponents of Social Security have attacked them in a number of ways. The AARP, which is the biggest seniors' group, is fairly moderate politically and open to deals. But conservatives and center-right Dems attack AARP relentlessly, just to keep it in line. They've also tried to set up conservative clones of AARP, like 60 Plus and USA Next, to create the impression there's support among seniors for cutting Social Security. Astroturf groups claiming to represent Gen X sprouted up in the 1990s, funded by wealthy backers like Peterson, but they faded. There's a new one trying to get launched now, for “millennials,” called The Can Kicks Back (don't ask!). So it goes: As long as there's money behind the campaign against Social Security, these projects keep popping up.

How has the book been received so far?

So far, so good. The interest in this topic is huge, because it affects so many people. The Social Security wars are one of the most pivotal political struggles of our time, even though a lot of it has taken place in Washington instead of out in the streets. It's a big story, but people want to know it. AK Press, which published The People's Pension, is being incredibly helpful too. Amazing that it took an anarchist press to publish the first comprehensive history of the struggle over what's thought of as a government program. But considering the origins of Social Security in mutual aid, and its possible future, maybe not so surprising.

As anarchists, is there any way the upcoming elections themselves can be of use to us – without, of course, actually participating in the electoral process?

Yes. Elections are when the political class are most open to scrutiny. That's why the corporate media always takes care to turn them into incredibly silly spectacles, focused on trivia. But they can also be a golden opportunity to expose so-called electoral politics, and the political class, for what they really are. The general direction of domestic politics in the U.S., as I've tried to show in my book, is to dismantle social protections of all kinds and lower or eliminate taxes for the 1%. Behind all the obfuscations and distractions, that's what's really happening. This year's elections are likely to push this process forward like nothing else. Everything these candidates say and do – from whichever party – should be scrutinized and exposed to reveal this agenda. I recommend bird-dogging: following individual candidates from place to place and confronting them over and over with their words and deeds.

Have you read David Graeber's book, Debt: The First 5,000 Years? What kind of impact do you think it will have on economics?

David's books are always revealing and insightful. And entertaining! I like his distinction between the two kinds of debt – the social obligations we owe to each other as human beings, parents and children, on one hand, and debt as a form of state-capitalist enforcement or even enslavement. Today, we're told by many in Washington that we're not really entitled to our Social Security benefits – that this is a debt the State doesn't really have to pay, in effect. And yet, the debts that millions of people incurred from fraudulent mortgages and blatant manipulation of markets, must be paid back or the moral order of the universe will somehow be violated. David's book reminds us to always look very closely at who benefits.

What is your take on the current state of the U.S. economy?

Also pessimistic. The economy isn't going to truly recover – meaning that it starts to again produce good jobs with good pay – without some major intervention from the public sector. That's not going to happen. The right and the center-right have tightened their control of the political process, and they have no interest in investing in that kind of recovery. The people who pay their bills make most of their money overseas now anyway, and the profits they make here – in energy, health care, agribusiness, etc. – are already heavily subsidized by government. You'll hear all kinds of arguments about how long-term State investment in clean energy, infrastructure, and education is wasteful and inefficient and so on, but the truth is that the 1% don't consider it necessary for them to earn a profit. So they're against it.

How do you think Americans will react to ongoing economic depression, precarity and a reduced standard of living?

With anger, I hope. The state-capitalist system has been lucky that some elements of the safety net, such as Social Security, still exist, or the misery in this country would be leading to considerably more anger already. But as we learned from the collapse in Argentina a few years ago, it can take a few years before people's tempers really boil over.

Barring that, I see a continuing decline in working people's standard of living in this country, collapse and abandonment of many communities, and a steady erosion of the safety net. The dismantling of Social Security, which was the capstone of the system put in place by the New Deal, would be the coup de grace. That's where our work as anarchists begins. The problem with the New Deal system was that it was a top-down, bureaucratic model for how to provide the social conditions that people need and desire. Granted, it accomplished a lot. But disillusionment with the State, which began around the Vietnam War era, is permanent, I think, both on the left and right. If the current logic continues to play itself out, we'll need to recreate the large-scale mutual aid network that was translated into a State-run system under FDR – only outside government, according to a directly democratic model, as the 19th century anarchists envisioned. I say “need to” because it's a necessity. We can't do without it. In the Epilogue to The People's Pension, I discuss how this can be done, a little bit.

What are your next projects?

There are too many to go over quickly. One of them I hope will be a contribution to anarchist thinking on the nature of the State. Most immediately, I'm hoping to travel around the country, observing and reporting on how communities are creating cooperative initiatives to provide care for the elderly where government funding has disappeared. It's what we've always done as anarchists – observe how working people are creating economic and social resources for themselves, and figure out how to build on these initiatives, rather than prescribing solutions for them, top-down.

What are you reading these days?

I'm reading Property Is Theft!, Iain McKay's fantastic new anthology of Proudhon's writings. Also from AK Press. It's the closest thing English-speaking readers have to a 360-degree view of Proudhon's thought, and I'm enjoying it. Every so often, it's good to go back to the classics.

# # # # #

Eric Laursen is an independent financial and political journalist, activist, and commentator. He is co-author of Understanding the Crash (2010). and his work has appeared in a wide variety of publications, including The Nation, The Village Voice, Z Magazine, The Indypendent, and the Huffington Post. He lives in Buckland, Massachusetts.

Blog: The People's Pension

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Interview with Eric Laursen on Social Security and The People's Pension | 1 comments | Create New Account
The following comments are owned by whomever posted them. This site is not responsible for what they say.
Interview with Eric Laursen on Social Security and The People's Pension
Authored by: ISHI on Monday, September 17 2012 @ 01:32 AM CDT

the only issues i have with this discussion are

   1) saying social secuirty has its origins in anarchist/socialist kinds of organizations in the 18th century.  that was not said, but there is a tendency to interpret it this way.   (similarily, i have seen some people to interpret indigenous 'stateless' socieites as deriving from 'anarcho-primitivism', just as columbus helped discover that indigenous americans were in north america and were 'indians'. i guess it could be---i was thinking of explaining to this ringneck snake i had what speciies it was and proving my point by showing it a book on the subject, but it wouldnt listen and didnt even speak standard english.  probably it was educeted in chicago.  the watersnake wouldnt even get the toad out of its mouth to discuss 'meat is murder').

   i think kropotkin, proudhon, bakunin sortuh had it down (though bakunin was of course the rabble rouser type (now termed 'insurrectionist') and i'm not sure he ever finished translating marx).  they were observing what they saw.  mutual aid goes way back before the 1800's.  africa had ubuntu. etc.  i have even heard some families feed their children and elders (who may do some work such as childcare, storytelling etc) using informal 'rules' (eg chomsky's 'government and binding' grammar of the 60's or the more recent 'principles and parameters'----a bit like the 'epicyles' of copernicus (?) in which one keeps adding formalism to a broken record so  it can still play in the game).

     so, its nothing new.   even animals may have social security. ('group selection'---see steven pinker in edge mag on this, proving again he's an idiot).

2) then one can ask, while one can imagine  mutual aid societies operating in the future if, say, social security gets privatixed and everyone loses all their cash to goldman sachs---the 'truly needy' (i am needy too, true, but i'd even have a hard time spending a billion dollars a day---maybe since i dont like shopping), whether this institution, like 'government' or 'technology' or 'states' on 'language' are irreversible.

   that gets you into possibly 'complex systems' theory, or s j gould's evolution (spandrels).  its hard to know the dynamics of the future (assuming such exists---i sometimes thinks its conveniant to follow einstein and assume time is an illusion, as apparently some indigenous cultures also do. follow your bliss as they say---tho i prefer following the path of least action---eg feynamn- kac path integrals with a wick rotation if needed (see wikipedia).