Rethinking welfare

Fang Shihan / Guest Writer

Most Singaporeans are probably familiar with the term ‘welfare’ as one of the main explanations for indolence.

Time and again, we have heard stories about alcoholic bums queuing outside welfare offices in New York, social scum living on welfare benefits because it’s easier to collect welfare than to get a job, and the countless hazards that could fall upon us should the state step onto the slippery slope down to welfarism.

Inadvertently, this would lead to a conclusion that we should not follow the ‘western’ model and should instead stick with what we have done for the past 43 years because it works.

What is welfare?

In his landmark work “The Three Worlds of Welfare Capitalism”, Danish sociologist Gøsta Esping-Anderson classified the ‘western’ world into 3 different welfare regimes, based on the level of decommodification of their social policies.

Decommodification is the level of emancipation that a worker has, from his work. For instance, a purely commodified regime is every Marxist’s dream punching bag; workers have no social rights and welfare policies are non-existent. This worker is ‘owned’ by his capitalist employer and is liable to be fired at any point of time, for any reason. Furthermore, in such a purely commodified regime, workers fight for survival through work – they would not survive without a job because the state does not step in at all. Conversly, a purely decommodifed regime where life moves beyond sheer survival is every tax collector’s nightmare. Such a regime requires high taxation in an environment which does not promote the work ethic. Thus welfare in this sense applies to structural and social policies, not only the narrow definition of financial welfare benefits.

Obviously these are two extreme ends of the spectrum. Esping Anderson divides western nations along this scale. Liberal states such as the United States give the least social assistance to allow only temporary departures from work. Most welfare policies are provided by the private sector, healthcare insurance being one such example. Conservative states base the decommodification of labour on stratification according to class, with the aim of maintaining loyalty and a hierarchical, patriarchal society. For example, Germany under Bismark had highly differentiated policies based on occupation and/or unions. Social democratic states have a universal welfare system such that no one is excluded from benefits, which are seen as a social right. This is balanced out by advocacy of full employment and the promotion of equality so every worker has an equal chance at finding a job. Scandinavian states like Sweden, with the highest tax rates in the world, fall under this category which has the most decommodification among the 3 regimes.

A very one-sided story of welfare

Clearly Singapore does not fall under any of these 3 categories. On the decommodification scale, it probably ranks below the liberal states. However as most IMF analysts would argue before 1997, this is not necessarily bad because even with minimal spending on social policies, East Asian states have identified the best sectors to invest in. High expenditures on education and infrastructure have been noted as the main reasons for the successes of Taiwan, South Korea, Japan and Singapore today. A new regime, the ‘East Asian Productivist regime’ has been coined to classify this phenomenon.

Blinding as Singapore’s brilliant success may be, we should never close our eyes to be pure propagators of the current nationalist discourse. As Singaporeans, we should feel proud of our successes. As intellectuals, we should always have a certain level of skepticism with what appears to be a very one-sided story of welfare. Among the tiger nations of Taiwan, South Korea and Singapore, only the latter has relied on policies drafted out since the start of independence, namely CPF which encompasses a ‘pension’ (ordinary account) and ‘healthcare insurance’ (Medisave). This self-sustaining system has allowed for much pomp and boasting especially when in comparison to other states including Taiwan and South Korea, that have had increasing welfare expenditure.

Unlike other welfare states which have supposedly led to moral hazard, the Singapore welfare system has preserved the work ethic. Any change to the current status quo would thus lead to a national disaster because, as we all know, we do not have natural resources and can only rely on the working population.

Welfare reform

Such an argument would be perfectly viable in the industrial age. However given that we are in the midst of transiting into a post-industrial age, this argument seems, quite frankly, worn out. Is the provision of welfare solely dependent on the presence of natural resources? To answer this question, I only need to point out that countries with tremendous amounts of natural resource like Burma are not sustaining a welfare system, and have no intention to do so. More importantly, as a knowledge-based economy, what kind of human resources are we looking at? There is so much rhetoric about the imperative of maintaining the ‘work ethic’. But in the post-industrial age, are we really looking for people to work in labour-intensive industries which do not require creativity or critical thinking? Sweden’s leading industries are heavily technology and creativity-based. This is, in no small part, due to welfare policies on education (free), healthcare (state pays 85%), and guaranteed pension provision.

The myth of welfare dependency only holds so long as no one begins to question it, the same goes for the continued, eternal efficacy of the ‘Singapore model’ that has been used since (literally) the beginning of our history. If one were to put in effort to look beyond the Straits Times, there are numerous articles calling for, not mere increased spending, but welfare reform due to Singapore’s changing demographics and its transition into modernity. Below are three highly recommended articles:

Ku, Yuen-Wen; Finer, Catherine Jones (2007), Developments in East Asian Welfare Studies, Social Policy & Administration, Vol. 41, No. 2, 115-131.

Vasoo, S.; Lee, James (2001), Singapore: Social Development, Housing and the Central Provident Fund, International Journal of Social Welfare, Vol. 10, 276-283.

Asher, Mukul G.; Nandy, Amarendu (2006), Health Financing in Singapore: A Case for Systemic Reforms, International Social Security Review, Vol. 59, 79-92.

New strategies for a new age

Among the problems raised was the challenge of de-familiarisation to the current family-based method of social security. While cultural context plays a major role in shaping effective policies, the same cannot be said for policies which try to shape culture. Try as it may, no matter how much family or Confucian propaganda is fed to the masses, change still happens. It is a known fact that today, more people choose to remain single, couples remain childless, and adult children do not live with their parents.


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