April 1, 2002
Some economists at home and abroad refer to the example of Western countries, ignore China's national conditions and the trend of the world, and rush to propose and implement a unified social security system in China (hereinafter referred to as "unified social security"). Their main reasons are three: one to help state-owned enterprises reform, to transfer and alleviate the social burden of state-owned enterprises; to ensure social stability and help alleviate the pain of social transformation;
Improve China's international status because the social security system is a sign of developed countries. My observation is the opposite: its economic motive is short-term, its strategic goal is wrong, it is financially unsustainable, and it is a short-sighted national policy of self-interesting international competitiveness in international competition. It should be reflected early and not yet late.
My reasons are: First, the unified social security economy is simply not feasible. In a highly unbalanced regional development, a developing country with a population of 1.3 billion must establish a social security system and be economically a utopian “foreign leap forward”. Unifying social security will not help the reform of state-owned enterprises, but will also drag down the entire financial system. Second, it will seriously weaken China's international competitiveness, and foreign capital will flow to countries with low social security without social security, thereby weakening rather than strengthening social stability. Third, contrary to the current world reform trend of the small government big market, the wrong path of the West and Eastern Europe is repeated in the system. I believe that China can completely follow the path of sustainable development that is better than the West based on existing practical experience.
First, the unified social security association has seriously weakened the international competitiveness of China's labor-intensive industries.
The main motive of some administrative departments to agree to establish a unified social security system stems from the misdiagnosis of the difficulty of reforming state-owned enterprises. They aim to use the method of expanding the social security system to transfer and alleviate the social burden of state-owned enterprises, rather than fundamentally improving the international competitiveness of state-owned enterprises. In the short term, they seem to be able to use the funds raised by emerging private enterprises to fill the debts and gaps of state-owned enterprises' social security. In the long run, they will increase the cost of private enterprise business models and lose the international competitiveness of current labor-intensive industries.
The fact that the former Soviet Union and Eastern Europe engage in universal health care is a fundamental difficulty in the transition of the planned economy to a market economy. Social security in Western Europe is far more "perfect" than the United States, resulting in a higher unemployment rate in Western Europe than in the United States and a weaker international competitiveness than the United States. The reason why China has become a transfer place for international capital and labor-intensive industries, and has successfully maintained a long-term high-speed economic growth is that China does not have a unified and balanced labor and social security system, with low labor costs and light social burden. The success of China's economic reforms and the rapid growth of the past two decades depend on township enterprises and private enterprises without labor insurance. A large number of basic construction relies on farmers who work in cities. Due to the high proportion of China's agricultural population, its pension and medical care are both family and personal burdens, providing a large number of labor reserve arms for all kinds of private, private and foreign-funded enterprises that are growing rapidly. Because there is no comprehensive social security in the United States, workers who rely on advanced technology can generate a sense of renewal and innovation under the system of constant challenges and risks, thus becoming an advanced productive force. Because rural and collective enterprises in China do not have social security, they encourage light and labor to move, in order to pursue higher pay and development opportunities, and not like the high-welfare western countries, workers would rather give up the possible development opportunities for employment transformation and rely on society. Guarantee a life without challenges. If a social security system is established and expanded, many labor-intensive industries that invest in China will immediately move to countries without social security. In the case that the former state-owned enterprises still could not afford local social security, further expansion of the current social security system is purely a self-defeating approach.
Second, the welfare system is the institutional root of the dislocation of the family in the Western world.
Economists who attempt to emulate Western developed countries completely ignore the painful lessons of Western social reform today. The wealthy diseases of the "welfare countries" in Western Europe, including the indolence of local workers, increasingly rely on foreign workers and illegal immigrants, the collapse of families and communities, the population growth rate falling below the crisis level of non-sustainable growth, industry migration, the big government The inefficiency and financial burden are all related to the social security system. The problem of state-owned enterprise workers enjoying universal health care in major cities such as Beijing and Shanghai is similar to the wealthy disease in the “welfare state” of North America in Western Europe!
It is generally believed that the beginning of social pension in the modern sense is due to the changes in the economic, social, political, legal, and demographic structures brought about by the industrial revolution, which has caused the family pension system to begin to collapse. This is just a superficial phenomenon. In fact, the establishment and development of the social security system are related to the needs of the war mobilization system rather than the economic competition mechanism. In 1889, German Prime Minister Bismarck established the world's first social security system. In fact, Bismarck took the path of militarism. In order to unify Germany, he defeated France and guaranteed the source of the military. Only then did he establish a social security system. The promotion of the Soviet social security system is also the need of civil war and foreign war. The Soviet Union rose rapidly. Western Europe and the United States followed suit before and after the Second World War. This trend was not reversed until the 1980s.
Although the social security system has maintained stability within the country for the past half century, it has also brought heavy economic burdens. The end of the cold war has intensified global economic competition. The technologically advanced Western countries immediately discovered that their international competitiveness was lost to the Asian Tigers and the later China. There are two main reasons: one is excessive legal and individualism, resulting in frequent legal and cumbersome lawsuits, greatly increasing the transaction costs of developed countries. The other is that the social security system is too heavy and increases labor costs. Developed countries that implement a unified social security system gradually lose their dominant position in international competition. In order to improve the competitiveness of enterprises and the country, in the 1980s, Mrs. Thatcher of the United Kingdom and Reagan of the United States all called for tax cuts. While promoting the privatization of small government and state-owned enterprises, they vigorously reduced the scope and intensity of social security. Reduce the burden on governments and businesses. High-tech companies such as IBM in the United States not only gradually abolish the lifelong employment system, but also vigorously implement the contract labor system, which is intended to reduce the burden of corporate welfare and allow contractors to purchase commercial insurance on their own to improve employee mobility and competitiveness.
It should be pointed out that the social security system does not necessarily maintain social stability. After the implementation of social security, we see that the aftermath of North America in North America is: the poor looking for social security from rural to large cities, the middle class fleeing, forming slums and criminal groups in big cities such as New York and Los Angeles, leading to the early core economic zones. Decline. For thousands of years, the human society has been the basic social security unit. The social security system transfers the burden of old-age care to the country, causing the collapse of families and communities. Most children grow up in single-parent families, leading to serious psychological and social problems among adolescents. Middle-aged people are over-taxed, women are reluctant to give birth, the birth rate has fallen too much, and the labor force is seriously inadequate. The industry has to rely on illegal immigrants, and the contradiction between the original residents and new immigrants has escalated. The shift of industry leads to unemployment pressure and stimulates the rise of neo-Nazism. Today, workers who are uncompetitive in developed countries are afraid of globalization. Due to the large regional gap, China does not have unified social security. Therefore, it is a competitive young and middle-aged labor force that flows into cities. If unified social security is implemented, a large number of poor areas will be immigrated to developed coastal areas, and large cities like Shanghai and Beijing will have slums similar to New York. In addition to the current lack of labor absorption capacity in the city, there is no border, and national security is also a problem. China’s original population distribution is tilted towards the coast. The Putian policies of all ages encouraged immigration to the interior. The implementation of unified social security will disintegrate the efforts of immigrants in the development of frontiers in the past and intensify the imbalance in regional development.
In fact, when we leave the above issues aside and discuss directly how to establish the social security system itself, we will also find that China cannot afford the social security system. No developing country like China has established a unified social security system. In a rich country like the United States, there are still tens of millions of people without medical security. At the beginning of the Clinton administration, it tried to expand the medical insurance system. As a result, it was not passed by Congress because of the high cost. China's current government budget revenue is only about 15% of GDP. In developed countries that implement social security systems, government taxes account for more than 30-50% of GDP. Developed countries like the United States are reluctant to implement a social security system like Canada. How can China afford it?
three. Establishing a unified social security system that cannot be supported is a hotbed for a new round of corruption.
If many people know that China has not been able to afford a limited state-owned enterprise social security in the past, why should we engage in greater unified social security? My observations are driven by the interests of the region or the department: the old industrial district attempts to adjust the social security fund of the coastal industrial new district to save the local social security gap; the social security department can first use the social security fund to expand the power and welfare of its own department; the financial sector can expand the market share. And profit opportunities. Whether the lack of sustainable social security system will lead to a potential financial crisis is the risk of future officials. So far, I have not seen any viable economic mechanism and operational financial solutions, and some are just blindly optimistic. On the contrary, companies have managed to evade the news of the social security fund and the government departments forcibly collecting social security funds. This not only proves that the current social security system lacks an economic foundation, but also indicates that the system that is divorced from reality is a hotbed of enlistment and acceptance of bribes, which deserves serious vigilance. Historical experience shows:
What an effective economic system relies on a benign incentive mechanism rather than a mandatory command mechanism. In the past, the high-index large canteen was so. Nowadays, the social security of the leaps and bounds will be the same.
four. Establishing a unified social security system will mislead future democratic politics
Defenders of the social security system argue that the current social security scale is small and will not cause the current heavy burdens in the West. This is a big deal. The social security system is like smoking. After being addicted, it is very difficult to quit smoking. In Western parliamentary politics, increasing labor insurance benefits and increasing tariff protection have always been the main demands of the Labor Party for votes. It is difficult to form a consensus on the reform of the people without a serious national recession. The resistance of India's reform and opening up policy is far greater than that of China, which is driven by the short-term interests of the parliamentary interest groups. In order to win votes, the Taiwan Democratic Progressive Party has opened a short check for labor insurance benefits, which has accelerated the weakening of Taiwan’s competitiveness and the shift of industry.
In order to expand the direct elections of grassroots cadres in the future, China must first build a decentralized fiscal system with sustainable growth. Let each local cadre compete to improve the performance of competitiveness, rather than relying on the abuse of government subsidies. China's long-term development in the future can outweigh the Western countries.
Fives. An effective alternative to promote social stability and economic competition
So, is there no other way to maintain social stability? The answer is yes. First, we will discuss the main part of the Chinese population, the peasants. As pointed out by Wen Tiejun, the current collective land in rural areas bears the social security function of farmers' survival. When economic development is needed, farmers will go to work in cities. When the economy is in a downturn, farmers will return to their hometowns to grow their land, and they will not become unemployed. If the privatization of land is carried out according to the Eastern European method, the peasants who lose their land after the merger of the land and who are not absorbed by the urban economy will inevitably join the social security army. The roots of the Chinese dynasty peasant uprisings in the past dynasties, the peasants after the land annexation did not have an economic outlet. China's privatization of any form of land is based on the development of China's economy, which has reduced the agricultural population to around 15-30%, similar to Japan's and Korea's urbanization. The fundamental plan for raising farmers’ income is not privatization, but urbanization, which in turn depends on the Chinese economy.
International competitiveness. To this end, I oppose the privatization of farmland in areas where per capita arable land is insufficient at this stage, and disintegrate the social security of most farmers before urbanization. In areas with severe ecological damage, the afforestation of barren hills can be learned by the German approach, that is, greening wasteland can be privately owned, but the deforestation of private forests must be approved by the environmental management department, provided that the plans for logging and afforestation must be carried out in parallel. Restricted private property rights are targeted at sustainable development rather than short-term predatory operations.
Urban residents have no land, and the minimum property necessary for survival is the basis of urban social security. The United States encouraged urban residents to own private housing after the Great Depression. Old people coming out to students and workers to rent part of their housing have become an important method of old-age care. The low-wage policy of Chinese state-owned enterprises allows workers to rely on welfare to divide their houses and have the right to use without property rights. Housing management and use efficiency are very low. For employees who have already retired and laid off, instead of using long-term support for social security, it is better to offset the debts of state-owned enterprises (including bankrupt state-owned enterprises) and to buy out the labor insurance benefits of state-owned enterprises. Let state-owned enterprise employees and private enterprise employees compete on the same starting line. China can imitate the US approach and implement low-interest, low-tax incentives for the purchase of the first home in which it lives, turning housing into an important component of urban residents' social security. After the employees acquire the housing property rights, they will invest in the maintenance of the housing in order to increase the price of the house. Unemployed or sick workers can rent out some rooms in the event of financial difficulties instead of social security.
There are shadow prices for urban land restrictions. The method of issuing investment immigrants in developed countries can also be used for reference. Residents who retire in the city or lose competitiveness can sell their household registration. An economically developed city like Shanghai, licensed by a taxi driver
The shadow price is equivalent to 100,000 yuan, and the shadow price of an urban hukou is estimated to be 200,000 to 300,000 yuan. Now the urban development of the East and the West is a kind of precipitation mechanism. The old and weak without the ability to compete can not get out of the city, resulting in the city.
The aging and weakening of the city’s population has made it impossible for young people with the ability to enter the city. Instead of doing so, it is better to encourage them to sell their hukou and move to a small town or a rural home to settle down. The price of small towns is less than one tenth of that of a big city. The difference between different places can be invested in local township enterprises, and retired residents can provide urban knowledge education and introduction of employment channels to farmers preparing to enter the city, becoming an important resource for urbanization. Old people leaving the polluted environment of big cities can also help improve health and reduce medical expenses. It’s really a matter of counting. The extension of the life expectancy of the industrial society has made the 70-year-olds still have the ability to work. It is a great social waste for the retired cadres and skilled workers in the 50s and 60s to stay in the city. It is also an unbearable burden for the only child. Officials of traditional Chinese society “returned to their hometowns” and the tradition of “decommissioning and returning to the fields” has far more use of human resources than the current institutional arrangements for rehabilitating large cities.
Of course, people in the city are not willing to go to the country because the health facilities in townships are too rudimentary. Nowadays, there are too many medical facilities in the city, and the medical facilities in small towns are insufficient. The core of the small towns is the lack of medical consumption capacity of the population. The rational layout of medical outlets can be solved through the formation of sister relationships between large cities and nearby small and medium-sized towns. The urban population change accounts for the elderly of the elderly, and the rational distribution of the medical system can be promoted by the rational convection of the urban and rural population.
For the poor and deprived population, the lowest level of social assistance provided by the state and the social care provided by the community are effective in China. This is the superiority of China's social system. In the new situation, if we can use tax cuts and other methods to encourage non-profit philanthropy, it is not difficult to maintain social assistance for living standards. The important experience that can be learned from the social security experience of developed countries is the implementation of social security systems for central or local financial payments to key public service departments, such as government officials, police, judges, and teachers in public schools. The implementation of limited social security for these sectors has the advantage of providing low salaries and low security. The public service in the United States is generally less expensive than the private sector. The reason why civil servants choose the government department is because they know their own abilities, and they lack innovation but are law-abiding. They choose government agencies with good social security, and they do not expect to use power for personal gain. They knew from the beginning that "the official is stable but can't make a fortune", and the price of stable work is lower wages. Those who violate the ethical standards and are not subject to legal sanctions will face the retirement benefits of canceling the hardships of the years, which constitute a reliable threat to the bribe takers. At present, the serious problem of official integrity in the country lies in the fact that there is no effective way to restrain officials in the gray area.
As for the endowment insurance, on the basis of family mutual assistance, it is also possible to imitate the foreign general law, and implement the incentive scheme for tax reduction or delayed payment of the pension investment savings fund that is used after retirement, and stipulate the proportion of forced savings in wages. Compared with the monopoly funds managed by the government, the market competition of self-selected investment funds has the advantages of high investment efficiency, the avoidance of corruption and abuse of power, and the deterioration of contradictions caused by the inter-regional adjustment of Sannenghua, which is suitable for local conditions. Benign competition, faster economic growth Enterprises or regions can retain talents with better welfare, and enterprises or regions with economic decline can strengthen their competitiveness by reducing the welfare burden. This is more than a one-size-fits-all "unified social security" is conducive to mobilizing the enthusiasm of the region, to choose a space for the company's independent development strategy.
Conclusion: Rooted families rely on the market to develop a civil society system that promotes competition by small governments.
All in all, the national unified social security system is only a short-lived experiment in the history of human development. Even for Eastern Europe and the West, its long-term cost is much higher than short-term benefits. At present, we do not see the big developing countries like China, and the feasibility of implementing unified social security. In terms of long-term development strategy, China should promote Chinese culture to respect family mutual assistance, attach importance to children's education, respect the fine traditions of caring for the elderly, and establish a family's savings and old-age security, supplemented by private medical insurance, and the community's social relief guarantee. A cheap, efficient, flexible and diverse social security system, rather than a unified social security system that is inefficient in China. This will help to build a clean and efficient small government. The orderly convection of the urban and rural population will help narrow the regional gap, encourage the flow of talents, reduce the land tax and labor costs in China, improve the education level and urbanization process of the whole people, and strengthen the international competitiveness of Chinese labor.
The theoretical basis of unified social security is balanced economics. For the real world where regional development is highly uneven and international competition is increasingly diversified, it is more important to study non-equilibrium evolutionary economics. Only by avoiding the detours of the high-welfare governments in Eastern Europe and the West can we get out of the new path of sustainable development that suits China's national conditions.
[Note] In the past three years, I have repeatedly criticized the plan for the unification of social security at various meetings and failed to attract the attention of relevant parties. The final text was put forward by some economists at home and abroad, and it is intended to expand the scope of discussion on the current reform ideas. This article was originally an invitation to the China Reform magazine. The "China Reform" magazine has been abridged due to layout restrictions. Published here is the full text.
Source: [China Reform]
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