Pensions and retirement in harmony with 'Doughnut' principles

Hello Doughnut Dialogue community,

I recently read the book for which this forum is named, and since have had a recurring thought experiment doing the rounds in my head. It’s about wellbeing in old age, so I hope it is the correct forum area :slightly_smiling_face:

I wanted to share it and see where it leads. All suggestions welcome!

(1) A person is just starting to earn a wage and be able to begin some kind of retirement planning.

(2) Under the present model, this almost always (it seems) entails some kind of pension arrangement. Unfortunately these are linked to continued growth over 40+ years, which may not be feasible for the planet to sustain.

(3) This person wishes to try to reshape and retell the prevailing economic story to be more doughnut-like, including by being conscious and proactive about their financial decisions.

What strategies could this person (or indeed more generally the next generation of economists) do now to act to provide for themselves once they are no longer able to work far into the future?

To put forward an opening thought:

One idea would be to invest into their support community now, and that their community will look after them when they need it (pay it forward). Questions about this are:

(1) How does this fit in the 21st Century where we are increasingly mobile and it is common for individuals to be part of communities all around the world?

(2) Does this necessitate ‘selecting’ a community within which we wish to retire now, multiple decades ahead of time? If so, how might we go about making this decision.

If a doughnut-type world comes to pass, it would seem that we will all be provided for and this kind of thing will not really be necessary, or it will be integrated such that we don’t concern ourselves with it very much. As such, this thought experiment is specifically trying to think about the stepping stones to get there, and the actions that could be taken now.

Thank you for your time and I look forward to reading and considering ideas from the community.

All the best and keep safe!

Joe

2 Likes

What an interesting and important topic. I’d offer a suggestion that well-being in old age may also come from developing social equity in addition to economic equity. There’s certainly the idea of funding the ability to live with dignity when one is no longer able to contribute fully, and I believe there might also be room for leaning into the harder side of caring for each other, which might entail navigating the “messiness” of human relationships and developing a sense of obligation for each other that kind of doesn’t exist in our current social vocabulary (in the US). I have seen some interesting experiments that have started in the past few years with “intentional communities” designed to include more communal care of sorts. It will be interesting to see what happens with this.

1 Like

Maybe we look further at that idea of “just starting to earn a wage.” If there was some type of earned ownership in the business, perhaps this could start off a retirement plan. Cooperatives and Benefit Corporations are gaining ground in the U.S., where employees at least are on the list of stakeholders.

There’s an ebb and flow in market economics which retirement finds out. For the majority in the UK, for example, those in fixed income roles, with workplace pensions, there’s a solid foundation based on the end of mortgage payments and the start of pensions a third lower than income, both of which can be described as JOB or just over broke.

This compact had been broken by disgusting individuals, breaking regulatory controls with almost no recall, like Green and his payment of dividends to his wife and taking money he didn’t need, that made paupers of the workforce, putting the onus of those in earlier generation rent in the South East, on benefit top up.

Lehmans turned over a generation of new businesses by undermining investment for a decade, lengthened by government incompetence in the pursuit of a worse economy by a Conservative Party Trojan Horse, that lost us our home in 2010 with no hope of recovery in time for retirement for the big numbers born in the early to mid 50s. Left on the worst pension in Europe, paying rent, the option of retirement is denied us. Eventually we will need benefits for rent.

Next is the deaths of people who have used all their liquidity in Covid 2020. I know how they feel. They will lose their homes to predatirs in the housing rental market in 2022, if of experience a little over a decade ago is anything to go by. Again they will need benefits.

We now have generation rent at the bottom and Generation Benefits at the top. AI coming to get the delivery jobs.

Your appraisal is then absolutely correct as the idea of Basic Income becomes the need of the market to sustain consumers for anything. The current situation, where fools vote in billionaire funded Libertarians, the price of their careless vote is negating themselves and their neighbours.

Fortunately, Covid-19 arrived in time to save the US as people wrote up and dumped Trump, rendering the focus on super wealth and it’s impact on Donut resource excesses, bringing a plethora of real green promises and a load of greenwashing cobblers.

Here in the UK its not clear how enough Conservative MPs will stop Johnson’s expert cabal from promising anything for a headline, only to file it under long grass immediately.

Hello Joe,

I think your post is very relevant to many people now, and undoubtedly the subject of directing the vast amounts in pension investments in a way that helps give people the prospect of having a reasonable quality of life in their retirement through investing in activities that contribute to improving the social and environmental background that one is going to draw that pension in is very important. With that in mind the following links which I have come across might be of some interest.

Kind regards, Dorian

I grew up in a rural area in Iowa, USA, between 60 and 80 years ago. It was only in 1955 that Social Security was extended to farmers. Before that time everyone did what they were able to do to support the family, and the community. The community and the family took care of its own, including its elders. Everyone pitched in including children. Retirement did not exist as a formal ‘right’. Savings consisted, if at all, mostly in buying a home and land.

Is that a possible response in the future? It requires that all communities be able to provide most, if not all of their basic needs. This admittedly won’t work in big cities, but if serious breakdown happens, it may be all that is left…

The doughnut or circular economy of our social system has been around since the time when Adam shared his gathered fruits for a kiss from Eve. All traded items involve a return to complete the circuit, but with the beginnings of barter and the introduction of money in exchange for goods, this circular feature really began to roll.

Today it is more complex (but not as difficult as all that, see my SSRN 2865571 “Einsteins Criterion Applied to Logical Macroeconomics Modeling”) and what is expressed here as the doughnut is actually a well organized set of entities that exchange money for goods, services and other utilities.

Having got some idea of what this comprises from the above reference, the interested reader would do well to read more about this expression of the national economy including of what it consists and in particular about how it works. My 310 page e-book has at last managed to turn what was a confused pseudo-science into a true one through the use of good basic axioms, sensible assumptions, proper definitions and logical analyses. I offer it for free as an e-copy to all those who wish to explore more about this multi-circular feature of our social system—write to chesterdh@hotmail.com and clear you past confusion.