Fascinating

Charles Adams says:
November 10 2019 at 3:43 pm
Wow I was shocked by those wealth numbers and went away to read the ONS report which shocked me even more.

Private pensions must be the biggest financial deceit ever inflicted on the majority of citizens without them realising the injustice.

Over 5 trillion in private pension wealth with 50% owned by the top 10% of households. The bottom 40% with nothing. And those top 10% got their 2.5 trillion tax free! And there it sits invested in fossil fuel companies that spew carbon carbon that is increasingly disrupt the lives of those 40%.

I am sure you have called for this Richard but we really need to make sure that no pension funds can invest in direct polluters or at least to remove their tax break and fast.

Longer term we really need to look at a fair and ethical way to redress the inequality in private pension provision. For example, is there any good reason why the private pension gini should be allowed to be higher than the income gini? Tax policy could be used to engineer a democratically agreed distribution.

Reply
Richard Murphy says:
November 10 2019 at 5:43 pm
Charles

I see this as a big direction fo travel for my work – and am having meetings on possible academic tie-ups for it this week

Generally, I am moving away from tax. I will still use it but the research focus is moving to green / accounting / investment / capital allocation / decision criteria

After 7 academic papers this year (six approved, one in resubmission), five chapters and four working papers I seem popular as a research partner

Dop you ant to join in Charles? That Gini thinking is neat and could be developed into something quite neat

A social policy journal might like it. I have some stuff heading in tat direction right now

That last typo is just lovely.

But what’s truly gorgeous is how neither of them have woken up to lifecycle effects. Pensions wealth will be greatest at the moment of retirement. The young generally have saved little toward one, the old are spending it down.

So, what concentration of pensions wealth would we actually expect? That is, because people both age and save, what should the gini of the pensions distribution be?

28 comments on “Fascinating

  1. At the level I read about wealth inequality – i.e. shrieking in the papers – I notice that nobody ever tries to correct for the effect of age.

    So here’s my contribution: when my daughter was 22 she had £20 in her pensions and no rights to any State pension. I had much more. (Though how they would calculate the equivalent capital value of my DB and State pensions I don’t know.)

  2. “there it sits invested in fossil fuel companies that spew carbon carbon that is increasingly disrupt the lives of those 40%”

    As it says on Wikipedia, citation required. It seems rather implausible unless insurance companies, banks, pharma count as fossil fuel companies. Murphy attracts strange bedfellows: they make him seem intelligent

  3. Regarding the 7 papers and the chapters, does anyone know how many people contributed? I cannot imagine any paper written solely by him could ever be publishable

  4. @Diogenes

    A mystery indeed. On the one hand, anything produced solely by Spud is likely to be rubbish and any proper peer review would pull it to shreds, on the other hand, he has shown himself time and again to be incapable of working with anyone else.

  5. people both age and save
    Unless they don’t and just age without having savings, in which case they live alone with their train set in Ely and indulge in fibs like:
    I seem popular as a research partner
    which is to say tell me more and I will nick your idea and pass it off as mine.

  6. ‘And there it sits invested in fossil fuel companies that spew carbon carbon that is increasingly disrupt the lives of those 40%.’

    Their food is delivered by that carbon carbon (sic). Adams demands they die.

    ‘Tax policy could be used to engineer a democratically agreed distribution.’

    The problem is so bad we should transition to bad government. Let the people vote on whose wealth they are going to take. Whose Golden Goose to kill.

    This is the politics of envy. It is insideous.

  7. @Greenbank

    Thanks, an interesting link.

    Not that I’m going to waste time reading them in full but a quick skim of one of them just shows a re-hash of stuff he’s written before. I suspect that’s most of what he does these days.

  8. 1.
    The business model is not to “spew out carbon dioxide” but to sell fossil fuels to their customers. Any spewing happens at that end.

    2.
    The classic “we have three forms of X, I will ignore two of them and measure inequality”. State pension rights, defined benefit pensions (unfunded), and defined contribution assets. Why are 2 excluded?

    3
    And measuring pension wealth as opposed to all wealth is stupid.

    4
    Or that any inequality measure which suggests that things have improved when richer retirees up sticks and leave is a metric that will steer you the wrong way.

  9. @tmb – perhaps he’s popular due to his impression of Max Bialystock – able to con money out of various organisations (including a rich widow) Perhaps they are hoping some of the Murphy “stardust” rubs off on themselves (LOL) or perhaps it’s just down to his intellectual rigour, friendly demeanour and all round personality (nearly choked even writing that) ?

  10. There is a lot of money in pension plans. It draws attention from those who think they ought to control it and how unfair it is that it might be in the accounts of the “unworthy” whose interests might lie in protecting or growing those assets or a combination of both. Perhaps a looming battle of the ages will be one of trying to protect one’s retirement assets vs those who would dissipate them on social engineering while telling you how undeserving you were of those assets in the first place.

    This is not really new. A generation ago Bill Clinton was musing about why couldn’t the government direct pension investments into whatever projects he might deem worthy.

  11. @moqifen – believe me I’ve tried but the image of Capt. Potato seducing old dears on a casting couch refuses to gel, if that’s the right word (which I’m afraid it might be).

  12. The government urges us to save for retirement in pension schemes. They even run public service announcements telling us to do so. So like good little citizens, we put money away. Collectively the pension pot grows into trillions.

    Suddenly, the socialist gadflies see all this lovely money sitting there not under their control where it could be doing socialist Important Things. The cry goes out to bring that money under government control and use it for buying votes Important Things. “Those people are rich, see how much money they have? They would only waste it on themselves.”

    The politics of envy are indeed corrosive.

  13. There is a lot of money in pension plans. It draws attention from those who think they ought to control it and how unfair it is that it might be in the accounts of the “unworthy” whose interests might lie in protecting or growing those assets or a combination of both. Perhaps a looming battle of the ages will be one of trying to protect one’s retirement assets vs those who would dissipate them on social engineering while telling you how undeserving you were of those assets in the first place.

    Very well put.

    In his heart of hearts (as well as his foot-thick skull) Richard Murphy knows perfectly well that his Green New Deal cannot come close to paying for itself. Were these projects worthy of consideration as investments, investments would already have been made. So, he is now at the stage of thinking he always circles back to: Command and control. And, unsurprisingly, an essential part of command and control is trying to establish that those from who you are extracting (most often unwillingly) are unworthy of possessing that which the extractor wants.

    It’s also worth noting what part envy and resentment plays in all of this. I have no doubt he is aware of lifecycle effects; he simply chooses to ignore them. Murphy’s of retirement age and is still scrounging. If he has any assets set aside for retirement, he clearly believes them to be insufficient. Given that he cannot blame himself for this, envy and resentment of others sets in.

    That’s what we have from both Murphy and Adams: Envy and resentment masquerading as social conscience…

  14. “a looming battle of the ages”

    It’ll be a hard one to organise. Most youngsters like to party late and get up mid-afternoon.

    Most older people get to bed early and rise early.

    Combat will only be able to take place between about 4 p.m. and 6 p.m.

  15. “he cannot blame himself for this, envy and resentment of others sets in.”

    Socialism in a nutshell.

    They think they are ‘worthy’ and can’t stand that others, clearly less worthy, have done better then them.

    And all their justifications for all they claim boils down to “wah, it’s not fair”.

  16. Andrew C, in the self defense world, you reach the point I have:

    I’m too old to fight you; I’ll just have to kill you. I can’t fight, so I carry a gun.

  17. I wonder who will need to pick up the tab when the investment performance of woke pension funds means they can’t pay out to their pensioners?

    From https://gofossilfree.org/uk/press-release/mps-call-for-divestment-of-fossil-fuels-from-pension-fund/:

    It’s time MPs joined the majority of UK universities, numerous faith groups and a growing number of local authorities in saying we can no longer use our pension funds to gamble with people’s lives and with the future of the planet.

  18. @ Mohave Greenie November 11, 2019 at 3:12 pm

    Suddenly, the socialist gadflies see all this lovely money sitting there not under their control where it could be doing Socialist Highly Important Things. The cry goes out to bring that money under government control and use it for buying votes Socialist Highly Important Things. “Those people are rich, see how much money they have? They would only waste it on themselves.”

    Fixed it for you.

    DP

  19. Combat will only be able to take place between about 4 p.m. and 6 p.m.

    Hmmm. That’s happy hour. Perhaps retirement assets will be safer than I thought

  20. ”It’ll be a hard one to organise. Most youngsters like to party late and get up mid-afternoon.

    Most older people get to bed early and rise early.

    Combat will only be able to take place between about 4 p.m. and 6 p.m.”

    Funny how our punishments when younger are now our life goals, go to bed early, eat healthily, exercise more etc

  21. @bis
    Agreed. I have finally reached the stage of life when I can afford fine alcoholic beverages, excellent cuts of meat and a life of considered indolence. Then the doctor (and the wife) say no. Sigh

  22. True. Filet mignon is the only cut of steak I buy (I do wait for it to go on sale. It freezes quite well.).

    My first wife (The Good One) and I would buy 20 pound NY strip and have it cut into 1 pound pieces. I spent many a Sunday grilling them up. Now, it’s just filet mignon. I’m too old and rich to trim steak.

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