Working Capital: The Power of Labor’s Pensions edited by Archon Fung, Tessa Hebb, and Joel Rogers, Ithaca, N.Y.: ILR Press, 2001, 273 pp., ISBN 0-8014-3901-9.

This 273-page edited collection makes an important contribution to understanding the role of pension funds in the U.S. economy and the potential for social investment of pension funds. The book synthesizes three traditions: pension-fund investment, the role of unions in pension fund investment, and social investment. It bears mentioning that these are distinct traditions because the field of social investment has proceeded largely independent of both unions and of pension-fund investment. This book succeeds in creating a synthesis between these traditions. Not only does it describe how unions are becoming increasingly involved in pension-fund investments, it also envisages how this role might be expanded further. The book reflects the change of the union movement’s traditional role of bargaining labour rights only and broadening its mandate to become interested in issues related to capital. There are many manifestations of this change: the growing employee-ownership movement, including unionized firms; the growth of union-based capital investment strategies, including economically targeted investments and, in Canada, labour-sponsored investment funds; and increased interest in pension funds, both their governance and investment. With the exception of the employee-ownership movement, these issues are discussed in some depth in Working Capital. Appropriately, the papers for Working Capital are drawn from the Second National Heartland Labor Capital Conference in 1999. As explained in a foreword to the book by Leo Gerard, the International President of the United Steelworkers of America, the Heartland Labor Capital Project, which led to the conference, came about because of the difficulty that he had in raising $5 million for a “small but productive steel plant” in Pennsylvania. “I thought that it would be easy to find $5 million for investment in a solid U.S. company, generating a good rate of return. It wasn’t. I found others equally concerned that the current operations of financial markets undermined the very workers whose savings they deployed.” Gerard’s views reflect a growing sentiment by the union community in countries such as the U.S. and Canada to influence the investment of capital, and particularly, pension funds, since these are the deferred earnings of workers, a portion of whom are unionized. In Canada, for example, in 1986 the Canadian Labour Congress adopted a resolution that “endorse[d] the goal of organized Canadian workers achieving greater control and direction of the investment of pension funds” and followed this with a similar resolution at its 1990 Congress. In the U.S. and to some extent in Canada, the United Steelworkers of America have taken the lead in utilizing worker ownership strategies to save jobs; for example, the buyout of Algoma Steel in 1994. The book skirts around some problematic points. For example, in the U.S. in particular, the portion of unionized workers is small and declining. Therefore, much of the “$7 trillion of deferred wages” that are pension fund assets are not associated with unionized workers and also includes the deferred earnings of management personnel as well. In addition, with the exception of the chapter by Tessa Hebb and David Mackenzie about labour-sponsored investment funds in Canada, the book also skirts around divisions within the union movement about becoming involved in investment policies. In Canada, for example, the Canadian Auto Workers have fought a bitter battle against worker capital strategies in part because they are seen as undermining labour’s traditional role in bargaining for workers’ labour rights. However, one of the interesting points made in Working Capital by Marlene O’Connor, a law professor, is that “union pension power can also assist workers in strike settlement intervention” (p. 72). She also provides examples of how “union-shareholder activism benefits workers by ensuring that anti-union managers do …