Socio-Economic Review , my Political economists have often drawn a hard line between the interests of owners of capital and the interests of labor. Yet over the past 30 years in Anglo-Saxon countries in particular, workers have become increasingly invested in capital markets activity through the privatization of pension systems and other incentives for market-based savings.
Using three separate datasets on the US population, we find evidence that financial asset ownership is associated with lower support for more stringent financial regulatory policy, and higher support for financial sector bailouts. Such effects on individual preferences are modest on average, but persist even when controlling for indicators of social class and a range of other conditions, circumstances and time periods. Library Services. Publication Type: Article Additional Information: This is a pre-copyedited, author-produced version of an article accepted for publication in Socio-Economic Review following peer review.
The use of land to produce commodities or as a financial asset will happen within this worldwide logic. Attila: Eastern Europe is an interesting case, as it has experienced a failed communism on one side, under which private lands of peasant farmers were forcefully expropriated and put under state run control and exploitation, and capitalism where in most cases land was re-privatized and competition was left at the mercy of the so called free-market.
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Both failed and the gradual disappearance of millions of Eastern European peasant farmers can be seen as a collateral damage of all these political and social experiments. Presently, land use is being rapidly transformed from being a resource supporting food production and rural stability to a financial asset and speculative commodity.
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Trick question: in which place would investment funds sitting on millions of EURO invest first under this scenario? Indeed, once lands have been transformed into an affordable speculative merchandise, land grabbing has unfolded rapidly in Eastern European countries like Romania. This has led to a scene where multinational companies and investment funds have managed to accumulate a little less than half of the total farmland surface of the country.
Indeed, several millions of hectares of land are controlled and put into the service of agroindustrial production or pure real-estate speculation. Mary: The report exposes the way in which pension funds in North America and Western Europe are implicated in these land grabs, and contributes to the campaign to influence the investment practices of the TIAA Teachers Insurance and Annuity Association pension fund.
I understand that these funds are in control of more investment capital than the largest hedge funds. This is quite interesting, as pension funds are quite often seen as a victory of the left. How can we think about the consciousness or praxis of workers who seek security in old age in precaritizing conditions and the effects of these funds on workers elsewhere?
If these pension funds decide to allocate even just a small fraction of their portfolios to farmland, the impacts are huge.
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This is why we feel it is critical to apply pressure now, when most pension funds are still debating the merits of farmland as a speculative investment. In theory, since pension funds are based on worker contributions, these funds should be more susceptible to social and environmental concerns, and indeed many of them have guidelines for socially responsible investment, and some have even developed such guidelines for farmland.
The reality, however, is that pension funds are deeply entrenched into the capitalist system. With farmland, this means that their investments will inevitably promote real estate speculation and bubbles, as well as industrial forms of agriculture, which are based on the exploitation of labour and the environment and corporate supply chains.
The guidelines can only mitigate the most egregious violations — but as we see in Brazil, even this is not happening. This points to deeper questions around pension funds. In much of the West, pension funds were indeed a big victory for workers, but they have also played a dual role by supporting the growth and power of global finance, which has been hugely destructive to working people. And today, few workers have any pension security and most fall out of the defined benefit plans that were successfully fought for, and which people are today struggling to maintain. We are at a necessary moment where these two strands of activism have to converge: the struggle for a universal retirement system that provides adequate financial security to all of the elderly and a savings system that makes social investments in the interests of working people everywhere including farmers.
How can workers be responsible for overexploiting other workers? This sort of reality workers overexploiting and evicting other workers has to do with the core contradiction of capitalist society.
We only can grasp that with critical theory and this is only a suggestion here. It is impossible, in this short opportunity, to scrutinize in a deep way the problems capitalism brings to society as a whole nowadays. Attila : What I can add to the conversation started by Devlin and completed by Fabio is that in Eastern Europe, pension funds are still largely state-controlled.
As outlined above, due to the political processes suffered by countries from this region, there is a blend between capitalist and post-socialist approaches. Pension funds and other welfare services fall more under the latter one. So, as pension funds are still feeding the state budgets, rarely are political decisions made to put that money into land investments largely also because the funds have barely enough to assure the actual purpose.
On the other hand, Western Europe is a different story…one best illustrated by the case of the Dutch based multinational bank, Rabobank discussed in Eco Ruralis Factsheet no. Is there some way to use these reports to question the financialization of everyday life more broadly? This can target laws at the local or national level that block corporations from buying farmland, as exists in a number of US states for example.
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It can also involve supporting organising efforts with local communities where the land grabbing is occurring, to make it more difficult for corporations to throw people off the land. This means exposing the pension funds that are involved in land grabbing, showing how their investments are bad for rural communities and the environment, and getting this message out as much as possible in the media and amongst their clients workers.
The idea is to scare off pension funds that are considering investing in farmland and to make it more difficult for TIAA and the other big pension fund managers that are spearheading the pension fund investments into farmland globally from attracting further investment.
Land was one of the higher investments on the last years around the world. TIAA has almost 1 trillion dollars to invest in anything that brings good return. Funds are competing against each other and it has to do with capitalist society again and the merchandise form of relationship between people as the form of this society. I would say that there is no other way to criticize pension funds investments without giving emphasis to financialization of everyday life.
The more theoretical parts of the report have to do, again, with a global process in which everyone of us is inserted. To give just one concrete example. Beyond this increase, they can contract through indebtedness new investments and produce more bombs. Financialization of capital is at the core of such a movement and it has the same social logic regarding investments in land, food or anything else.
In the text World Power, World Money , Robert Kurz relates what I called above the crisis of labor with the existence of a mass of superfluous empoverished people capital enterprises are no longer able to overexploit the workers that need jobs to survive all around the world. The necessity of social repression is a promise that drives up stock option prices of military industry, refueling structural unemployment and overexploitation of labor and social exclusion.
Stephen Graham, in his book Cities Under Siege , shows how militarization is related to financial capital nowadays. The rating is about personal default, crimes, and other characteristics that can classify people as a sort of financial asset. This article in Portuguese talks about China forbidding citizens who score badly to use trains and airplanes.
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This is happening right now. When I was in Detroit in , the impacts on families were very clear. People had bought houses with mortgages when there was lots of money to be lent, either to enterprises, either to families; either to construct houses or to fund families consumption. This whole process inflated house prices and allowed families to take out new loans on the inflated prices of their houses. The process refueled itself for a while.
When the bubble burst families owed a lot of money, they lost their houses, and the price of the houses dropped precipitously. College loans, auto loans, and wealth insurance are also directly related to the asset price inflation logic I am trying to describe here. Mary: Formerly state socialist Eastern Europe is subject to land grabs of this sort.
Can you tell us about some cases and conditions and effects of these? Attila : The geographical distribution of farmland grabbing in the EU is uneven and is particularly concentrated in eastern European member states. Our data shows that already more than 4 million hectares of land have been grabbed in Romania alone, with the strong presence of banking institutions and investment funds like Rabobank, Generali or Spearhead International.