Pensions and Tontines

Folks,

The reason I keep an eye on pensions is long ago I read a scholarly article on the causes of the French Revolution, a most dreadful affair, in which I was introduced to the term "tontine." In a tontine, a group of people will agree to make regular contributions of money to a fund (which is in turn lent out by bankers for a return), and if you die you lose your contributions (at that point, you do not need them). If you live to an old age, beyond the others, you have money for your old age. If say 4 sixty year old survivors of an original group of 20 unanimously agree to liquidate the tontine for their immediate benefit, they may do so. Tontines are as flexible as letters of credit. Tontines were a good example of free market insurance.

Of course, in time, governments ruined this. Specifically, French kings borrowed all the money for luxuries and wars, and could not pay it back. This theft was the proximate cause of the French Revolution.

In 1982, during the Master Contract Agreement with the Longshoremen in San Francisco, the issue of "unfunded pension liability" was the one strike issue. (Meaning the union would shut down the coast if their demands were no met.) The Longshoremen got theirs, Jack.

So as I watch our government ruin our savings, borrow money from China to make war in the middle east, and play shell games moving wealth to thieves and impoverishing the industrious, I worry.

The solution is savings and industry, but there is a war on both by government here in USA. The war in the middle east is fake, a distraction. The real war is right here in USA, a struggle to restore commerce and industry here. Happily the vast majority of soldiers in the middle east are eager to come home, as are the middle easterners eager to see them leave. Of course this struggle here is necessarily a nonviolent struggle, a matter of speaking truth to power, a matter of just starting a business, in spite of the challenges you'll experience if an when you do.

In this time and place in history there is nothing more effective in establishing peace and prosperity than starting a business.

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