I would have liked this article better if it had been a 'straight news story' from the Monitor, which I respect for its objectivity, and not from an associated blog with a strong bias to libertarianism, even though I might sympathize with many of their ideals.
I cannot help but notice that reforming the financial system or taxing the windfall profits from financial fraud are never considered as alternatives. Still, it brings forward some interesting facts, and touches on deep concerns held by individuals in many nations.
I suspect this search for the remnants of the people's wealth will continue by the same ravenous corporations and their friends in governments around the world.
The solution to official corruption is not burning down city hall and firing the police force. This just makes it easier for the white collar criminals behind the corruption to operate in the anarchy that follows. This is the modus operandi that has been practiced by these same institutions throughout the third world for the greater part of modern history. And now they come home to eat their own.
It is the dying ember of the efficient market hypothesis that is backed by Wall Street and its demimonde in the press and the academy, and the romantic fantasies of what used to be called 'useful idiots' who would knock down the laws to chase the devil.
The solution is in the hard work of restoring the rule of law, and taking the crooks and throwing them in jail, and their friends out of public offices. History informs us that freedom for the individual is never natural or easy given the reality of human nature in all its manifestations. Corruption is resilient. People band together for their common protection against danger, both natural and of human invention. The destruction of those bonds of commonality are always the objective of the predator class.
The Adam Smith Institute Blog
European Nations Begin Seizing Private Pensions
By Jan Iwanik
January 2, 2011
People’s retirement savings are a convenient source of revenue for governments that don’t want to reduce spending or make privatizations. As most pension schemes in Europe are organised by the state, European ministers of finance have a facilitated access to the savings accumulated there, and it is only logical that they try to get a hold of this money for their own ends. In recent weeks I have noted five such attempts: Three situations concern private personal savings; two others refer to national funds.
The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.
The Bulgarian government has come up with a similar idea. $300m of private early retirement savings was supposed to be transferred to the state pension scheme. The government gave way after trade unions protested and finally only about 20% of the original plans were implemented.
A slightly less drastic situation is developing in Poland. The government wants to transfer of 1/3 of future contributions from individual retirement accounts to the state-run social security system. Since this system does not back its liabilities with stocks or even bonds, the money taken away from the savers will go directly to the state treasury and savers will lose about $2.3bn a year. The Polish government is more generous than the Hungarian one, but only because it wants to seize just 1/3 of the future savings and also allows the citizens to keep the money accumulated so far.
The fourth example is Ireland. In 2001, the National Pension Reserve Fund was brought into existence for the purpose of supporting pensions of the Irish people in the years 2025-2050. The scheme was also supposed to provide for the pensions of some public sector employees (mainly university staff). However, in March 2009, the Irish government earmarked €4bn from this fund for rescuing banks. In November 2010, the remaining savings of €2.5bn was seized to support the bailout of the rest of the country.
The final example is France. In November, the French parliament decided to earmark €33bn from the national reserve pension fund FRR to reduce the short-term pension scheme deficit. In this way, the retirement savings intended for the years 2020-2040 will be used earlier, that is in the years 2011-2024, and the government will spend the saved up resources on other purposes.
It looks like although the governments are able to enforce general participation in pension schemes, they do not seem to be the best guardians of the money accumulated there.
