Dismantling Solidarity: Capitalist Politics and American Pensions since the New Deal

by Michael A. McCarthy

Overview

Why has old-age security become less solidaristic and increasingly tied to risky capitalist markets? Drawing on rich archival data that covers more than fifty years of American history, Michael A. McCarthy argues that the critical driver was policymakers' reactions to capitalist crises and their political imperative to promote capitalist growth.Pension development has followed three paths of marketization in America since the New Deal, each distinct but converging: occupational pension plans were adopted as an alternative to real increases in Social Security benefits after World War II, private pension assets were then financialized and invested into the stock market, and, since the 1970s, traditional pension plans have come to be replaced with riskier 401(k) retirement plans. Comparing each episode of change, Dismantling Solidarity mounts a forceful challenge to common understandings of America’s private pension system and offers an alternative political economy of the welfare state. McCarthy weaves together a theoretical framework that helps to explain pension marketization with structural mechanisms that push policymakers to intervene to promote capitalist growth and avoid capitalist crises and contingent historical factors that both drive them to intervene in the particular ways they do and shape how their interventions bear on welfare change. By emphasizing the capitalist context in which policymaking occurs, McCarthy turns our attention to the structural factors that drive policy change. Dismantling Solidarity is both theoretically and historically detailed and superbly argued, urging the reader to reconsider how capitalism itself constrains policymaking. It will be of interest to sociologists, political scientists, historians, and those curious about the relationship between capitalism and democracy.

Product Details

ISBN-13:	9780801454226
Publisher:	Cornell University Press
Publication date:	02/01/2017
Pages:	240
Product dimensions:	5.90(w) x 9.10(h) x 0.90(d)
Age Range:	18 Years

About the Author

Michael A. McCarthy is Assistant Professor of Sociology at Marquette University.

Table of Contents

1. The Retirement Puzzle 2. Capitalist Crisis and Pension Insecurity 3. Reconversion and the Origin of Bargained Plans 4. Turning Labor into Finance Capital 5. Toward the 401(k) Ownership Society 6. Conclusions

What People are Saying About This

Richard Lachmann

Over the past half century, Americans' retirement pensions have become more subject to market risks. Michael A. McCarthy offers an innovative and rigorously constructed explanation for this change, linking it to politicians’ efforts to manage crises while the balance of class forces shifted. This book advances our knowledge of recent political history and offers a model of how to understand the interaction of legislative and class politics.

Greta R. Krippner

Michael A. McCarthy marshals original historical research to get deep into the institutional details of pension financing and to trace the shifting alignments made possible by those institutional arrangements. The resulting work is a valuable contribution to the literature on the development of the public/private welfare state that should be consulted by any serious student of American political economy.

Ira Katznelson

When a fresh voice is open to surprise reports on original research about a subject of fundamental importance, intellectual and political illumination can follow, as it does in this challenging and compelling book. This is policy history of the first rank.

Wolfgang Streeck

Liberalization and privatization have many faces and come in a wide variety of ways. Michael A. McCarthy shows how Social Security, originally a public, nonmarket institution, is gradually penetrated by market forces and turned market-compatible in a capitalist context. The book makes an important contribution to the political economy of the welfare state and its transformation under the impact of liberalization.

Cedric de Leon

In Dismantling Solidarity, Michael A. McCarthy argues that policymakers drove the gradual privatization of retirement security. They did so, however, within two key constraints, namely, the structure of capitalism itself and the balance of class forces. McCarthy walks us through three periods in the transformation of American pensions: the initial drive to privatization after World War II; the initial financialization of pensions with Taft-Hartley and ERISA; and finally, the enormous shift from defined benefit plans to defined contribution or 401K plans. McCarthy offers a highly sophisticated, historically sensitive alternative hypothesis that turns on the interaction of multiple sets of actors. More sociologists should do work like this.

Editorial Reviews

Offers not only an excellent and comprehensive overview but also a critical discussion of how the retirement security system has developed in the United States since World War II. With [McCarthy's] in-depth understanding of the U.S. welfare state, labor relations in general, and old-age security in particular, the author has written a coherent and informative book.... A great book that gives a masterful overview of howold-age security has developed in the United States, and it explains these developments with convincing arguments.Without any hesitation, I would recommend Dismantling Solidarity to a broad readership, including researchers and students in sociology, history, political science, and economics as well as stakeholders and policymakers.

American Journal of Sociology

McCarthy navigates his theoretical terrain deftly and efficiently, taking the heavily dog-eared body of structuralist-Marxist state theory (Block, O’Connor, Offe, and Poulantzas) and makes it feel fresh.... Dismantling Solidarity joins a welcome influx of new scholarship that, in its framing and focus, calls attention to the fact that ours is a political moment that hungers for smart class analysis.

International Journal of Comparative Sociology

As McCarthy rightly points out, the connection between developments of the welfare state and state management of economic crises has been drawn before. McCarthy's contribution, apart from skillfully tracing the history of the private pension system... is his explanation for and analysis of the contingency of retirement income. Dismantling Solidarity is an excellent account of the history of private pensions, but it is also a window into the future.

Political Science Quarterly

As McCarthy rightly points out, the connection between developments of the welfare state and state management of economic crises has been drawn before. McCarthy's contribution, apart from skillfully tracing the history of the private pension system... is his explanation for and analysis of the contingency of retirement income. Dismantling Solidarity is an excellent account of the history of private pensions, but it is also a window into the future.

-- "Political Science Quarterly"

McCarthy navigates his theoretical terrain deftly and efficiently, taking the heavily dog-eared body of structuralist-Marxist state theory (Block, O'Connor, Offe, and Poulantzas) and makes it feel fresh.... Dismantling Solidarity joins a welcome influx of new scholarship that, in its framing and focus, calls attention to the fact that ours is a political moment that hungers for smart class analysis.

-- "International Journal of Comparative Sociology"

Offers not only an excellent and comprehensive overview but also a critical discussion of how the retirement security system has developed in the United States since World War II. With [McCarthy's] in-depth understanding of the U.S. welfare state, labor relations in general, and old-age security in particular, the author has written a coherent and informative book.... A great book that gives a masterful overview of howold-age security has developed in the United States, and it explains these developments with convincing arguments.Without any hesitation, I would recommend Dismantling Solidarity to a broad readership, including researchers and students in sociology, history, political science, and economics as well as stakeholders and policymakers.

-- "American Journal of Sociology"

From the Publisher

"When a fresh voice is open to surprise reports on original research about a subject of fundamental importance, intellectual and political illumination can follow, as it does in this challenging and compelling book. This is policy history of the first rank."

Ira Katznelson

"Over the past half century, Americans' retirement pensions have become more subject to market risks. Michael A. McCarthy offers an innovative and rigorously constructed explanation for this change, linking it to politicians’ efforts to manage crises while the balance of class forces shifted. This book advances our knowledge of recent political history and offers a model of how to understand the interaction of legislative and class politics."

Richard Lachmann

"Michael A. McCarthy marshals original historical research to get deep into the institutional details of pension financing and to trace the shifting alignments made possible by those institutional arrangements. The resulting work is a valuable contribution to the literature on the development of the public/private welfare state that should be consulted by any serious student of American political economy."

Greta R. Krippner

"Liberalization and privatization have many faces and come in a wide variety of ways. Michael A. McCarthy shows how Social Security, originally a public, nonmarket institution, is gradually penetrated by market forces and turned market-compatible in a capitalist context. The book makes an important contribution to the political economy of the welfare state and its transformation under the impact of liberalization."

Wolfgang Streeck

"In Dismantling Solidarity, Michael A. McCarthy argues that policymakers drove the gradual privatization of retirement security. They did so, however, within two key constraints, namely, the structure of capitalism itself and the balance of class forces. McCarthy walks us through three periods in the transformation of American pensions: the initial drive to privatization after World War II; the initial financialization of pensions with Taft-Hartley and ERISA; and finally, the enormous shift from defined benefit plans to defined contribution or 401K plans. McCarthy offers a highly sophisticated, historically sensitive alternative hypothesis that turns on the interaction of multiple sets of actors. More sociologists should do work like this."

Cedric de Leon