The Boundary of the State: The Non-Financialization of U.S. Social Security

Joonsik Kim, University of Toronto

Studies often treat the United States as the archetype of financialization. However, they often overlook U.S. Social Security, the world’s largest pension fund, which has remained non-financialized by investing exclusively in nonmarketable U.S. Treasury securities. Why has U.S. Social Security remained untouched by financialization, even as the broader U.S. economy and other pension programs embraced it? Extending studies of boundary work, this article examines the financialization of Social Security as a contested process that redraws the symbolic boundary between the U.S. federal government and society. When the Clinton administration attempted to invest the Social Security Trust Fund in the stock market, business representatives and congressional Republicans successfully framed Trust Fund equity investment as falling beyond the boundary of what the federal government should do. As some labor unions and congressional Democrats also shared these concerns, the Clinton administration’s initiative became isolated and ultimately failed to crystallize into policy. The findings of this article contribute to studies of financialization by showing that symbolic boundaries separating sectors such as the state, business, and labor can shape financialization even before it is fully set in motion.

No extended abstract or paper available

 Presented in Session 44. Where Markets End and States Begin: Institutional Boundaries, Military Spending, and Neoliberal Networks