In his paper, Gordon Clark touches upon important issues, which are relevant to citizens worldwide. Basically, what he is saying is that in the world today there is no refuge from insecurity. Because the time-honoured solution for old age poverty on the European continent ösolidaristic old age insurance through pay-as-you-go systems (PAYGo) öhas become increasingly precarious because of demographic developments (`greying') as well as hard governmental budget constraints (European Monetary Union criteria), there is no longer a viable alternative to capital market investment and the exigencies market investment implies. This means that European governments will ultimately have to renege on the long-standing social contracts with their populations, and will not be able to guarantee predictable, stable, long-standing, and comprehensive pensions. As such, Clark appears to be arguing for `diminished expectations', were it not for the glimmer of hope he offers in the form of a tentative argument against stock market pessimism. However, this argument hinges on a number of presuppositions, as he readily admits. First, that the excessive investments in TMT (technology, media, and telecommunications) have not merely been squandered but have resulted in real and sustainable productivity effects. Second, that real corporate incomes will continue to grow, if not as quickly as during the 1990s, in the next five years. Third, that higher incomes will result in higher profits and dividends, leading to a `normalised' price/earnings ratio ofless than17%, against over 35% now. Fourth, that investors and consultants will return to fundamental analysis rather than mere `graph reading' and will hence stop adding to the market turmoil. Although all four premises are controversial, even if they do occur, for Clark, uncertainty remains [``real rates of returns may be `planned' but are only resolved over time in particular circumstances'' (page 1349)], while ``the windfall gains of the 1990s are unlikely to be repeated over the coming decade'' (pages 1349^ 1350). So Clark's optimism is in the end not offering much, while being based on huge expectations. My paper offered both a more pessimistic assessment of the future fortunes of market-dependent pension incomes and a more optimistic assessment of labour- dependent ones, arguing both against a careless pension regime change on the European continent and for a broadening of the policy debate with measures aimed at enhancing labour productivity. I will not restate my argument. Much more funda- mental is my disagreement regarding the main driver of the processes Clark is describing. For the underlying reason why there is no refuge from insecurity is the continuing integration of financial markets. Basically, what Clark is arguing is that financial liberalisation and the global integration of financial markets are posing insuperable fiscal constraints on the ability of European states to fulfil their pension obligations, while the very same processes of liberalisation and integration generate the institutional possibility of introducing funded alternatives to the PAYGo systems Comment on Gordon Clark: The false necessities of state retreat Ewald Engelen Department of Geography and Planning, Faculty of Social and Behavioural Sciences, University of Amsterdam, Nieuwe Prinsengracht 130, 1018 VZ Amsterdam, The Netherlands; e-mail: eengelen@fmg.uva.nl Received 24 February 2003 Environment and Planning A 2003, volume 35, pages 1377 ^ 1380 DOI:10.1068/a3662