Download The Enlightenment of the Western Social Security System to the

The Enlightenment of the Western Social Security System to the
Building of Chinese Harmonious Society
TAN Baiying
Economics and Management School of Wuhan University, Wuhan, Hubei,
430072
Abstract: The basic sign of the harmonious society is the stability of society, and it is a basic function
of the social security system to safeguard social stability. The welfare mode and the insurance mode of
the western social security system have played a positive role in social stability and economic
development, but there are some drawbacks. The enlightenment of the western social security system to
China lies in : Guaranteeing basic life demands of people effectively are the primary condition of the
harmonious society; Promoting the development of social members, which makes the society stable, in
order , and full of vigor, is the embodiment of the connotation of harmonious society. Advancing and
perfecting the wide-covering, multi-level, impelling-functioned social security system , which develops
in harmony with social economy in China, is not only a basic content of constructing the harmonious
society, but also one of the effective ways of realizing the goal of harmonious society in an all-round
way.
Keywords: social security system; enlightenment of the western mode; harmonious society of China
The Fourth Plenary Session Of the 16th Central Committee of the Communist Party of China adopted
a resolution to set up a socialist “harmonious society”. The social security system is a voltage stabilizer
of the harmonious society. The social security system of the western developed countries has been
playing an essential role in social stability for more than one century, but there also exist some negative
effects in the course of implementing. Therefore all the western countries devote themselves to the
constant perfection of the social security system. The basic western modes of social security system
include welfare mode and insurance mode. It provides important enlightenment and reference meaning
for building the socialist harmonious society of China by analyzing the characteristics, advantages and
disadvantages of different modes.
Ⅰ. Characteristics, advantages and disadvantages of the welfare social security
system represented by Sweden
The typical representative of the welfare social security mode is Sweden. The Swedish social security
system demonstrates the following basic characteristics:
First, the social security object covers the entire people. After World War II, Sweden set up the social
security system for the entire people basically, and the population coverage rate is very great, nearly
directing at all social members, including the foreign citizens who obtain the right of residence. In
Sweden, the social security is not merely a social relief measure, but it is the citizen's fundamental right.
Second, the social security content is comprehensive. The Swedish social security projects include
pension and old people's welfare , health insurance , unemployment insurance , industrial injury
insurance , parental insurance , children welfare , labor welfare , social relief , the family replenish etc..
The government has offered sufficient social security to people , thus they can enjoy various kinds of
social security " from cradle to grave " with no need to pay much social security expense normally.
Third, the social security level has high growth feature. After World War II, the social security levels
of the Northern European countries are improving constantly, but before 1980s, the growth level of
Sweden was all the time higher than other Northern European countries, though the increasing degree is
reduced after this time, the social security level still occupies the high position, which is an important
sign of its welfare state.
Fourth, the social security is mandatory with the unity in management. Swedish social security
management is to rely mainly on country, complemented with the public organization. A unified
standard is implemented nationwide, according to which the fees and social security pensions are paid.
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Offering and organizing management of social insurance has become a function of government
guaranteed by law.
This type of welfare mode of Sweden plays an essential role to the stability and development of the
society, which is represented by the following aspects:
First of all, it ensures people's basic living standard, improves people's life satisfaction, helps to build
the stable and happy and auspicious social living environment , makes people's normal life not
influenced by social issues, and it is unlikely to cause poverty.
Next, overall and sufficient social security makes medical treatment , educational undertaking become
decisive factors of enhancing laborers' quality, and healthy laborers who have experienced good
education and training, become the decisive factor of improving economic efficiency. The undertakings,
such as education and medical treatment and health care, etc. have obtained a good return as a kind of
manpower capital investment.
Moreover, the implementation of the Swedish social security system mainly depends on that the
government reallocates the wealth of society through the high welfare and high tax policy, thus, uneven
wealth is restrained to some extent, and the social fair principle is fully reflected. Therefore the gap
between actual income of people and living standard is narrowed obviously, social contradiction is
relaxed, and the equality together with the steady development of society is promoted.
In light of the advantages of the welfare mode of social security system represented by Sweden, it is
really a regulator to the harmony of the society. However, with the forming of the aging society and the
decreasing of the economic growth rate, Sweden loses the foundation of the social security capital
source mode, meanwhile, the drawbacks of the welfare social security system comes out prominently,
the first exhibition is to weaken the motive of work and competition consciousness, urge the laziness of
people, cause the waste of human resources. The welfare system of Sweden "evens up" rich and poor
unconditionally, so that "unemployment trap " and " poor trap" have appeared where the social security
suppresses employment to increase. The net income got from employment is less than the relief of
unemployment, people with work are poorer instead, so some people are unwilling to work. And second,
it is difficult to coordinate the contradiction between the infinite hope of improving the degree of social
security with the finite super-addition of economic resources invested. The overall and high-level
guarantee of "from cradle to grave " is maintained by the high tax revenue, it not only influences work,
deposit and investment to increase the tax revenue , but also influences the distribution of the income
and people's purchasing power , making domestic consumer market weak , and causing economic crisis.
In this way, the high welfare is impacted by low growth of economy, causing the financial crisis of the
social security. The embarrassment Swedish social security system has confronted after 1970s is like
this. In the economic crisis, on the contrary, people are more dependent on the social security, the social
security level is hard to drop, and the state financial revenue and expenditure are out-of-balance
seriously, the social security mode of high welfare, high tax revenue, high debt restricts the development
of social economy.
Ⅱ. Characteristics, advantages and disadvantages of the insurance social security
system represented by U.S.A.
The insurance social security mode regards U.S.A. and Germany as representatives. The self-service
insurance social security system of U.S.A. is formed by the system of social insurance and the system of
social welfare, the main characteristics are as follows:
First, the social security is abundant in content and the items are overall. The social security content
of U.S.A. involves the old age, widows and widowers, deformity insurance, medical insurance,
unemployment insurance, the industrial injury insurance, the disabled soldier subsidies, railway worker's
retired insurance, and coal miner's black lung insurance. The social welfare items include
"supplementary security incomes" (the subsistence allowance to old people, disabled people and blind
people in the form of cashes monthly), medical subsidies (the cash or service compensation to
individuals or families when ill), house assistance (the subsidies or directly-paid rent to people having
housing problems).
Second, the social security level is not high and it is narrow-targeted. The social security of U.S.A.
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owns distinct selectivity, which emphasizes implementation of social security to the disadvantaged
groups in need of social help, and it only meets basic life needs of the laborers. Different people in
different periods in the social security project differ relatively great in the benefits social welfare brings,
and individuals or families who apply for subsidies must accept "the livelihood check", thus avoid
welfare mess effectively. Except the form of fund assistance in social security, there are other material
assistance such as "food coupon", which can guarantee to solve the key practical problem to people in
need of help.
Third, there are many source channels of social security capital ---government's leading factor,
combined with others. What U.S.A. adopts is the mode that government, enterprise, individual and
social organization share the social security expenses. The capital comes from federal government and
local governments, there are various kinds of non-commercial organizations (such as trade union,
foundation, religious organization, community's organization, charity organization, etc.), there are
enterprises, employers and employees. This kind of mode puts stress on the combination of right and
obligation, paying and gaining, thus reduced the transfer payment fund for the social security of the
government. Because of having the feature of the welfare system, American enterprises are playing a
key role in the social security system, employers have to pay half of the social insurance tax and all the
unemployment insurance tax of employees', as well as buy the medical insurance for employees. The
government also utilizes tax preference to encourage enterprises to offer welfare to workers to promote
the pluralism that the social welfare ensures. In order to deal with accelerating aging speed, and avoid
shifting the crisis of the pension fund, U.S.A. designs a kind of professional insurance combined
mandatory deposits with voluntary deposits, as the main mode of endowment insurance.
Fourth, the management of social security runs in a twin-track system of revenue and expenditure
with fund operation. The service affairs of U.S.A.'s social security are in the charge of Social Security
Administration, the fund is taken through the Ministry of Finance who imposes the social security tax on
enterprises and individuals by the tax bureau. The operation pattern of separating revenue from
expenditure and multiple sectors' division of labor can improve working efficiency and reduce the
operating cost of social security mechanism. There are mainly three kinds of U.S.A.'s social security
funds, namely, "trust fund of social security" formed by "social security salary tax", used to pay the old
age, widows and widowers and deformity insurance; "trust fund of medical security" form by "medical
insurance salary tax", used to pay hospitalization insurance of medical insurance; "the insurance fund for
the unemployed" formed by "unemployment insurance salary tax " paid by the employers. The
insurance fund can only be invested in the federal bond in accordance with the law, with the character of
"special fund for special use". This kind of fund operation makes the social security manifest the social
function as well as the marketing function.
The insurance social security mode of U.S.A. plays an important role in stabilizing and developing
society. First of all, the selectivity of the social security not only ensures people's basic life needs, but
also succors the disadvantaged groups in need of help. It promotes the equality through reducing poverty,
thus alleviates the social contradiction, safeguards the stability of the society, creates favorable
environment for economic development, and functions as a "shock absorber". Secondly, paying standard
in social security treatment is associated with the laborer's personal income and paying fees, completed
with unique personal social security number system. It not only unifies the collection of social security
tax and the dispensing of social welfare and social relief, effectively preventing tax evasion, but also
safeguards people's basic life and the right of obtaining the social welfare and succoring conscientiously;
It not only reflects the consideration of both fairness and efficiency, but also is unlikely to influence the
vigor of the market competition. Moreover, the fund raised from the social insurance tax pays the
expenditure of the social security fund and removes heavy load of state finance considerably, especially
the annuity plan of enterprises plays a positive role.
It is obvious that the social security system of U.S.A. has really played a positive role in improving
people's living standard, safeguarding the social stability, and developing national economy etc.
However, the fund-raising mode of U.S.A. is basically paying immediately after collecting, which is
difficult to accumulate a large number of funds that can be cast on the market for a long time, and to
realize the extensive appreciation of the funds. As population aging is aggravating day by day, laboring
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population proportion is dropping constantly, the expenditure expenses of the social security are
increasing constantly, the social security fund of U.S.A. will face the crisis of the unbearable heavy load.
As to this, U.S.A. is trying various kinds of reform schemes, for example, turn the social security fund
into the combination of social insurance with investment account belonging to individual. In this way,
the personal part can be invested in the form of stock, bond or others. The operation of social insurance
fund develops to privatization too, in order to make investment up. Some big companies inject funds
into the staff’s savings account to replace traditional pension welfare, let the staff manage their own
pension savings account as investors and raise funds for their retirement in the future. As a result, people
have to work hard in order not to fall into poverty when they are old.
Ⅲ. The enlightenment of different social security modes to the building of
Chinese harmonious society
The main purpose of analyzing the characteristics, advantages and disadvantages of the different
western welfare social security systems is to make clear how our country can benefit from the
experience and draw the lesson from them in building harmonious society. The following aspects are
enlightened:
(1) Setting up a wide-covering, multi-level social security system, and guarantee the basic life
demands of people effectively, especially the specific poor crowd, is the basic demand of the
harmonious society.
The core of the harmonious society is the harmony of people and people, harmony of people and
society. The socialist harmonious society should establish a good living environment for social members
and meet their basic needs for subsistence, hence, it is unlikely to invoke the problem of direct
confrontation and conflict. If the living environment is not good, the society would not be harmonious,
everybody's interests will be damaged, not only the people below the poverty line but also the rich
stratum who seeks development will not have a sense of safety. Many current social problems by and
large have close relations with poverty, such as homeless people, group gambling, robbing, dropping out
of school, disease, etc.. Poverty has become a significant reason of social instability and disharmony. As
a result, setting up a unified, wide-covering, multi-level social security system of our country is the
basic demand of the harmonious society. It deserves our learning from the overall, sufficient,
wide-covering welfare social security mode represented by Sweden.
At present, our social security coverage is limited and each project of the social security has been far
from the degree of protecting those who should be protected. The medical security of urban residents is
still imperfect, and it is quite common for them to be unable to afford to go to hospital. Once there is an
emergency, they are very likely to be reduced to difficult conditions. It is more serious for people in the
countryside as they lack the endowment insurance and medical insurance generally. As to endowment
insurance alone, there are files in Ministry of Labor which call for rural workers in cities to participate
in the endowment insurance, but because of the household registration system, duality system of
rural-urban division, and mobility of employment, the rural workers lack the enthusiasm of taking part
in an insurance, and their rights and interests are generally damaged. There still exists discrimination
against the city residents of rural household, which causes a lot of economic and social problems. For
instance, migrant workers’ collective going-slow, appealing to higher authorities for help, cases taking
place due to asking for salary, even threatening public safety by means of extreme ways, etc. have
directly influenced social stability and economic development. It is the top priority of our country in
building harmonious society to solve all laborer's worries in such aspects as living out one's life in
retirement, disease, industrial injury, unemployment, especially peasants' social security problem, and it
concerns the stability of the majority of Chinese people. A sufficient and unified social security system
should be set up as soon as possible to assist the difficult groups, narrow the gap between rich and poor,
dissolve the social contradiction, handle carefully the interests relationships of various aspects,
guarantee the stability of social subject, strengthen cohesiveness, and let all social members share the
fruit of economic development and social progress practically. This is the cost that must be paid in
building the harmonious society.
(2) Setting up a social security system with the impelling function, which promotes the development
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of social members, and makes the society stable, in order, and full of vigor, is the embodiment of the
connotation of harmonious society.
The goal of the socialist harmonious society is to realize the common prosperity and create the chance
of full development for social members, making different social strata do according to his ability and
coordinate harmoniously, what’s more, the social structure tends to be rationalized. In the era when
people’s welfare consciousness generally strengthens and the will of social fairness obviously improves,
the public have realized that poverty is not predestined, everybody has the right to strive for wealth,
obtain good education and fulfill one's own development, thus realizing social justice. If social unjust
state is not improved, all sorts of unfair phenomena in the economic society will weaken the cohesive
force of the society, destroy the political structure which maintains the social stability. The socialist
harmonious society should develop with higher speed, as well as remain stable. It is necessary to reach a
kind of compromise and cooperation between different strata or groups, pay attention to people's
development in an all-round way, and realize the goal of high-quality life security, thus keep the
potentiality of constantly-developed productivity and the vigor of social economic development.
Consequently, the social security must be in conformity with the essential request of the harmonious
society, not simply to finish material succor function; In the meantime, it should solve the problem of
social injustice caused by lack of ability, power, motivity of different social strata. It should not only
realize the basic security of lower average level, but also realize the security of constantly-improving
life quality and social members’ enterprise. The basic way to fulfill this goal is to give play to the
reallocation function and impetus function of the social security system, ensuring harmonious
development of the society on a higher level.
The fund of the present social security comes from the distribution and reallocation of the national
income in our country. The capital sources of the projects, such as society succoring , social welfare ,
veteran benefit and placement, etc. mainly come from national financial allocations and social donations,
the projects such as living out one's life in retirement, medical treatment, unemployment, etc. are
shouldered by three sides --- country, enterprise, and individual. It reflects the justice to a certain extent,
and also helps to narrow the gap between rich and poor. However, the unconditionally overall high-level
social security is unfavorable to the improvement of the enthusiasm for production. It will hamper the
growth of productivity and economic benefits. It is difficult to keep economic development potentiality,
and will lose social justice eventually, thus waver on the economic and humane foundation of social
harmony. We should avoid the disadvantage of Swedish welfare mode of raising the sluggard, and
absorbing the experience of selective and emphasized security. For example, draw lessons from
execution way of U.S.A.'s social security mode to perfect the minimum living security system; set up
the income information system of the low-income groups; establish the standards and essential
conditions of individual and family’s " the livelihood check " concerning economic situation in the form
of social security card to different projects and different districts, and it is checked annually to record
dynamically the member structure, income level, life expenses, and reasons of poverty, etc.. According
to the minimum living standard security, classify and confirm the security condition and range, and
grant social security money or social welfare relief goods and materials. It can meet the urgent needs of
impoverished population, dispel the factors leading to social instability, make use of the limited
financial resources to the most needed, and prevent the "poor trap" of Swedish welfare mode.
What harmonious society emphasized is not the justice of equalitarianism, but the justice of chance,
not to eliminate the difference, but to control the difference to a rational degree, thus help to form the
motivity mechanism of adapting to times development. Therefore, the social security system should be
endowed with impelling function, solve the major problem of insufficient social security at present in
our country, and also prevent the social security from being excessive to influence national economic
development. The experience of U.S.A.'s insurance mode can be used for reference to reduce people's
dependence on social security and link endowment insurance with the laborer's achievement--- the
greater the contribution the laborer makes on duty, the more repayments he will receive in old age. The
supplementary projects of social security, such as business insurance, etc. should also be developed
substantially, making the laborer excite greater working enthusiasm in order to ensure corresponding
living standard and quality, thus stimulate the creativity of the whole society.
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(3) Setting up a social security system in conformity with social economic development, which is not
only the basic content of the harmonious society, but also the effective way of realizing the goal of
harmonious social value in an all-round way.
The construction of the harmonious society depends on the sustainable and stable development of
national economy. Only economy develops can the value goal of common prosperity, fairness and
justice, stability and order, equality and mutual-help of the harmonious society be realized. The primary
function of the social security system is to ensure people's basic livelihood and safeguard the justice and
order of the society, thus ensure the environment of economic development. Therefore, a primary task of
building the harmonious society is to establish and improve the social security system. Economic
development is the foundation that the social security system operates effectively, the operation
conditions of the social security system will have enormous impact on economic development. So, the
two must develop in harmony.
The western social security systems in its establishing period play a part in stabilizing the society and
promoting economic development. But with aging population and socialization development of
production and life style, they have met with a lot of problems in the course of implementing, the
essential one being the contradiction between the infinite hope of improving the degree of social
security with the finite super-addition of economic resources invested. No matter welfare mode or the
insurance mode both face the predicament that the social security fund is unable to make ends meet. It
enlightens that the scope of our social security and the scope of economic development should be
compatible. It will take up more economic resources if the social security is inappropriate. In fact, it will
increase the labor cost and influence enthusiasm for investment and production of enterprises and
laborers, suppress the sustained and steady growth of economy, which makes the social security system
difficult to maintain. This kind of negative effects run counter to the purposes to set up the social
security system and value goals in the harmonious societies. It requires social security system to remedy
the deficiency of the social member's income, as well as not to damage the creativity of social wealth;
maintain present social harmony of state, and keep the dynamic and lasting harmony of social evolution.
There are some historical debts of the social security in our country, facing the difficulty more than
social security system of developed country, for instance, it is difficult for paying immediately after
collecting way to cope with the rising social security expenditure of aging society; the income security
and the income regulating action are relatively weak; the safety question exists in fund operation; the
ability to resist risk is not good, etc.. So, the construction and development of the social security system
of our country should use external experience for reference, but basing on the national conditions of our
country is more important. The social security level should be in conformity with economy development
level of our country, and the growth rate of the social security should be in conformity with economy
development speed of our country too. The reform of U.S.A.'s social security system and the dual-track
fund operation mechanism is worth our learning from. Establishing and improving a wide-covering,
multi-level, low level and unified social security system is our top priority. Give play to the roles of
government, enterprise, society and individual in social security, develop diversified forms of social
security systems such as commercial insurance, supplementary insurance of enterprises, and personal
deposit insurance, etc., adopt the overall planning mode combined with personal account, and make
"personal account" true in the endowment insurance. Introduce the market mechanism on condition that
government's leading role is fully exerted, strengthen the management of social insurance fund, actively
promote the perfection of the capital market and its association with the social security, solve the
problem of preserving and increasing the value of social insurance fund with fund operation, and make
the social security system of our country take the road of sustainable development.
Reference
[1]Gu Shunli, Tian Dewen. An Analysis on Welfare State ---A Comparative Study against the Background of
Europe. Economic Management Press, 2002.
[2]Song Xiaowu, etc.. A Report of China's Social Security System Reform and Development. The People's
University of China Press, 2001.
[3]Jiang Shouming, Geng Liang. An Outline of Western Social Security System. Science Press, 2002.
The author can be contacted from e-mail: [email protected]
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