ABSTRACT
This chapter indicates how specific legal choices can either ameliorate or exacerbate the political problem associated with large institutional ownership of capital through corporate pensions. The principal thesis of the chapter is that the passive and paternalistic mode of ownership that the pension system has created diminishes the degree of personal responsibility that classical liberal ownership required all individual owners to take. The chapter describes both the pension economy and the corporate pension system, and briefly refutes the thesis of "pension fund socialism." It explains how the system of American pensions fosters paternalism and passivity. The chapter develops the paper's major normative premise: that an active, participatory form of individual ownership is usually desirable because it enables individuals to develop a sense of both personal and civic responsibility. It considers practical constraints on realizing a more participatory form of pension ownership. The chapter argues that the developing market economies of East-Central Europe can draw important lessons from the American experience.
