Structural Contingencies: The Rise and Fall of Pensions

Michael A. McCarthy


Prominent accounts of policy change have too limiting a view of the constraints imposed on policymakers by capitalism itself. This paper shows how capitalism bore on pension marketization in the US by comparing two periods since the New Deal, between 1945 and 1960 and since the late 1970s. In the first episode, collectively bargained private pensions were adopted as an alternative to Social Security expansions. And in the second, defined-contribution plans, such as 401(k)s, came to replace these traditional plans. Both developments significantly elevated the role of market forces in the distribution of retirement income. This article reformulates the neo-Marxist approach to the welfare state by identifying three interrelated causes of both shifts. First, in each episode policymakers were motivated to intervene because of a structural condition – to manage perceived crises in capitalism, not to secure a certain vision of old age retirement. Second, state intervention into labor-management relations triggered the changes in the private pension system. And third, the particular way they intervened and how their policy choices spurred pension marketization was driven by the historical characteristics of the balance of class forces in each juncture. Pension development in the United States followed a path of structural contingency.

Capitalism - Political Marxism - state theory