‘Pension Fund Socialism’

This chapter focuses on the political response to the institutionalization of saving and investment that took place in post-war Britain. It demonstrates that it was only in response to the acceleration of industrial decline in the 1970s that the influence of pension and insurance funds over the national economy was fully appreciated. The Heath government, perturbed by the divorce between ownership and control engendered by institutionalization, encouraged the financial institutions to take an interest in the firms they invested in. Meanwhile, figures in the Labour Party and trade-union movement recognized the immense power wielded by the institutions and sought to bring them under some form of public control. They hoped to use pension funds, as workers’ savings, to invest in the ailing industrial economy. In the crisis decade of the 1970s, these attempted reforms represented a struggle to adapt and reformulate social democracy in a changed material context.