Rutger Bregman’s “Utopia for realists”

 

Rutger bregman

I hadn’t heard of Rutger Bregman till this weekend and I still haven’t read his book “Utopia for Realists”. But I am drawn to a man who quotes the ideas of Thomas More , believes in a Universal Basic Income and understands that radical change comes from the bottom up.

In short, Rutger is my idea of an idealist. And idealism is just what we need right now as the idea of a “win-win” has gone behind a big cloud called protectionism where “I win because you lose”.

Over the weekend I’ve also been struggling with a big idea to pull together a talk I’m giving later in the month on the state of our pensions. It’s quite clear that our pensions are not ideal and that idealists are generally branded as promoting a “magic money tree” (John Ralfe) or living in Lah-Lah Land (Kevin Westbroom).

Bregman’s idea of a win-win is very simple. Eliminate poverty by paying people a Universal Living Wage and you make people happier, smarter and healthier. You can read him explaining this in the Guardian article I picked up on.

https://www.theguardian.com/commentisfree/2017/mar/06/utopian-thinking-poverty-universal-basic-income

The economic theory is simple, by making a promise, you create the conditions to pay for the promise. The productivity dividend created by taking people out of poverty pays the bills for the Universal Living Wage.

This optimistic way of looking at problem solving is vey Dutch; it argues you can have a cake and eat it which is what the Dutch, to most people’s annoyance, generally do!

The Dutch have an exceedingly optimistic approach to pensions which allows most people to have a high degree of certainty that they will have a decent retirement income, so long as they keep on living! I know of no better incentive to live than the promise that I can be like an elderly Dutch person (of whom I know many!).

By contrast, we have allowed ourselves to believe we cannot afford our pension system and then spent a very large amount of money ensuring this will be the case. In case anyone hasn’t noticed, the experiment in immunising our pension system from risk has left us with a system in (notional) deficit and with the cash flow of our major pension sponsors in permanent hock to the demands of pension scheme trustees.

Instead of pension schemes giving the economy the money to generate income (as Bregman would advocate), the pension schemes have taken back money that they had previously invested and bought ludicrously expensive Government Bonds.

In Bregman’s world, the money invested for our futures would be invested in the means of production, the real economy in which we work (which is a world without borders).

Last Wednesday, I made what was (for me) quite a radical move to disinvest the money I have in the Legal and General Multi-Asset Fund and reinvest in their 50:50 fixed weights global equity fund. It cost me a fair bit in transaction costs and I am now no longer invested in bonds, property or cash. This was a decision I should have taken some time ago.

I invested this way because I felt embarrassed to be needing the security of diversification into asset classes that I did not believe in. And because I really believe that pension schemes should be investing in the means of production, the real economy.

I will have the opportunity to track whether this decision proved to be good or bad over the next ten years (my anticipated timeframe before I start spending more than I save).

It wasn’t until I read Rutger Bregman’s article that I understood why I had made the switch and understood the point of speaking to a group of people about being optimistic about pensions.

So Mr Ralfe and Mr Westbroom, my money is down, Mr Bregman, I salute you and have – before I found your book “Utopia for Realists”, decided I would rather live with the prospect of utopia than die never having hoped! I will read this book of Mr Bregman’s as soon as Amazon delivers!

And now I have a theme for my talk, which is the hope that those who run the small schemes that my company advises, will listen to what I have to say and resist the temptation to consolidate into the supertrusts of Mr Gupta and his DB taskforce.

“Small is beautiful”, the great ideas Mr Bregman recounts come from a generosity not a poverty of spirit. This is how he concludes the Guardian article (above)

We’ve got the research, we’ve got the evidence, and we’ve got the means. Now, 500 years after Thomas More first wrote about basic income, we need to update our worldview. Poverty is not a lack of character. Poverty is a lack of cash

I am (I hope) an utopian realist, someone who believes in the world’s capacity to eliminate poverty. I see pensioner poverty being removed in the United Kingdom.

I see the possibility that we can do better than our wildest imaginings by harnessing our nation’s latent wish to save. I think that long-term savings are the best way to generate the productivity we need to pay our pension promises. I think that we can promise more by working together through the collective endeavour to provide a proper state pension and decent employer sponsored retirement income plans.

Bregman.png

Rutger Bregman

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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