Social Safety Net Determinants

I use to think that social safety net is only relevant or practised effectively in states with a strong socialistic and communistic doctrine but as I give a bit more leeway to the meaning of social safety net to include activities of a philanthrophic, altruistic, religious, political and philosophical origin, the heaven seems to open before me.

Basal Dungeon Level/Poverty Line
My fundamental believe being that no matter how criminal, immoral or inhumane a person might be, there exists in each of us an intrinsic in-culpulability to help lift a fellow being from a basal dungeon to an acceptable level of survival as we each perceived it to be. The basal dungeon level is not an absolute concept but a relative one. Many economists and sociologists has attempted to define this as the poverty line along monetary and quantitative lines. This is very useful as it makes it possible to translate the concept into actionable points in determining how help should be apportioned. However, in distilling a concept into a quantitative illustration some important intrinsic qualitative elements are also removed in the process. Firstly, the basal dungeon level is a micro concept that is applicable on a personal or a monolithic social group rather than a macro concept with wider and more polarized applicability. An elderly wearing clothing consisting of a variety of patch work ( other than the fashion statement of the day ) in a relatively well off suburb like Rodeo Drive would most probably has reached beyond the basal dungeon level in that community to warrant a helping hand be it a contribution in terms of a coin drop of sort. However, in more impoverished parts of Africa, such a person is very unlikely to be offered help. Secondly, the concept is not the absolute or relative social distance between the person in need and the potential helper. It is not a absolute distance because a millionaire is unlikely to be moved to help a middle class person athough the absolute distance can be large, it is definitely not a charity case. Neither is a relative distance applicable because relativity would require us to define relative to what. Basal dungeon is basically a level that would trigger one group or person to help the other as a result of a conscience trigger. Thirdly, it is not a stable level that transcends time and space as the level changes over time in line with changes in the social political norms. However, the concept transcends time and space as it is there from the time of recorded history till now and not likely to vaporize into thin air in the foreseeable future.

Singapore
There is general believe that social safety belongs to the government alone and not body else. However, there are enough evidence both empirical and otherwise that this is not the case. I live in Singapore where the official ideology of socialist democrat is actually closer to capitalistic democrat as the leadership has make no apology in public that Singapore is a meritocratic practitioner in terms dividing the fruits of our labour. There is general perception that the social safety net is very thin in Singapore and the government has made it very clear to the populace that having seen the social safety net framework degenerate the motivation to work and the economy, Singapore shall not follow in similar light. However, over the years as the Singapore economy develops and accumulates fiscal surpluses to be in a position to afford some safety net, the government has over the years especially during the tenure of Goh Chok Tong as prime minister, dished out narrow and directed safety nets liken to a fishing by rods and line rather than broad based ones like fishing with nets. I see this as a deterministic shift in fundamental thinking as the government slowly but surely start to acquire heart ware. Some of these schemes includes the Medifund scheme to help the poor pay for the cost of essential medical care, dollar for dollar matching contribution to selected charities etc. One interesting means that the government has contributed to the social safety net in a less obvious showing which is I think is a deliberate attempt is though the innovative use of co-funded help schemes for various areas deemed to be much greater in need like innovative structuring of health care financing which might not be perfect but at least is affordable, of fairly high quality and not a drag on the economy unlike in the US where health care has become such a huge part of staff cost that it is a major factor affecting their economic competitiveness on a global basis. These Singapore cases underlines the fact that social safety net need not be narrowed to more direct transfer payments like unemployment payments or absolute freebies like free health care, education etc that more often than not lends itself to over consumption. On the note that such narrow schemes leaves a lot falling through the crack, my thinking is that like line and rod fishing, it is meant to bait and catch the more needful ones rather than a broad based safety net that would able to cast a wider net but would also end up with a lot of garbage in the process as well in the form of non-deserving recipients. Your choice.

Japan
In the case of Japan where I used to visit on a very frequent basis in my previous job where the visible governmental safety net is so thin that it is as good as none. In addition, the certain pride that the Japanese culture infuses into the work ethos makes it almost socially not acceptable for the populace to even be seen to be consumers of such safety net. In those years there during the early 1990s, there is a stark difference between Tokyo and New York as the streets are relatively void of beggars and homeless people compared to New York. It baffles me how was this possible with such a thin safety net. I slowly begin to understand that job for life philosophy results in less redundancies and retrenchments which I view is also a form of safety net that is enacted by way of social norms rather than governmental regulation. We can debate on end on the economic and business poison that such a system can breed but no safety net is without cost to the economy and society. One of the feature of the TOPIX which is the de-facto securities exchange of Japan and the largest in Asia, it has one of the lower beta compared to their counterparts in the west and one of the reason is the complex web of cross share holding between the giants of the economies call Zaibatsu and their subsidiaries as well as a very centralist macro economic planning by way of good coordination between the Ministry of International Trade and Industry ( MITI ) that even the Zaibatsu rarely go against MITI. One rare exception is Honda which was persuaded by MITI to concentrate on motorcycles and reduce their involvement in automobiles but has done almost the opposite.

Philanthrophy/GINI
Philanthrophy in terms of participation by percentage of the populace as well as percentage of the GDP, US beats Europe by a large margin. There are various studies done to explain this differential including factors like how the GINI index which measures the distribution of wealth, differentiating tax incentives for philanthrophy, old and new money as Europe tend to have more old money compared to US, immigrant society in US versus a more monolithic society in Europe. The factor that stands out is that on a ideological level, Europeans seems to be more socialistic but in practice on a personal level, US seems to put money where their mouth is rather than paying lip service. In response, the Europeans would argue that either the government is doing such a good job or they have contributed to a large part through taxes ( which are not voluntary whereas philanthrophy is ) and there so less need for private philanthrophy.

We all have a part though not always a deterministic one but a key part in shaping social safety net for our society either on an ideological or macro platform by our votes or privately on a personal and group basis. Give it a thought went you next see someone deserving of help.

Peter Lye aka lkypeter

Safe Harbor. Please note that information contained in these pages are of a personal nature and does not necessarily reflect that of any companies, organizations or individuals. In addition, some of these opinions are of a forward looking nature. Lastly the facts and opinions contained in these pages might not have been verified for correctness, so please use with caution. Happy Reading. Peter Lye