It is not surprising that the PSA system in Chile has proven so popular and has helped promote social and economic stability. Workers appreciate the fairness of the system and they have obtained through their pension accounts a direct and visible stake in the economy. Since the private pension funds own a sizable fraction of the stocks of the biggest companies of Chile, workers are actually investors in the country's fortunes.Some time ago, I recall seeing some gloating about how the elimination of Social Security, by making workers more reliant on the stock market, will make workers more business friendly. Does anyone here have a better memory than I do?-- Michael Perelman
When the PSA was inaugurated in Chile in 1981, workers were given the choice of entering the new system or remaining in the old one. Half a million Chilean workers (one fourth of the eligible workforce) chose the new system by joining in the first month of operation alone--far more than the 50,000 that had been expected. Today, more than 90 percent of Chilean workers who had been under the old system are in the new system. By 1995, 5 million Chileans had PSA accounts, although not all belonged to active, full-time workers, and therefore not all contribute in any given month.
The bottom line is that when given a choice, workers vote with their money overwhelmingly for the free market--even when it comes to such "sacred cows'' as social security.
full: http://www.cato.org/pubs/journal/cj15n2-3-1.html
Louis Proyect, Marxism mailing list: http://www.marxmail.org
