Final Paper: Should We Consider Social Welfares While Developing Economy

Should We Consider Social Welfares While Developing Economy

101102038 莊朝丞 Knot

National Central University

Abstract

     To the people in Taiwan, we now face a grievous dilemma, to strengthen the foundation our economy, or to secure our very right of living, wealth, or even justice? For a long time we had been arguing about the conflict between the pursuit of economic prosperity and the disadvantages it brought to the people who are at a lower social status. Can we ignore the minority’s right of living just for the sake of our economy, can the government sign any agreement that may harm the right of the minority without concerning them first?

      For instance, China is now a prosperous and wealthy nation as we know, however the people living in the country side of China have a total opposite life in contrast with those living in the city. For the sake of the economy, Chinese government established a policy that by monopolizing the price of agricultural products in order to raise the price of other industrial material, and because of this the farmers in China live a rough, destitute life. There’s no deny that China did build a modern industrial foundation from nothing, however this financial plunder of China’s country side seriously weakened the labor force of China, twisting the price of merchandises and stocks, most important of all, it brought severe social inequality upon the people living in the country side, and further extended the Urban-rural gap in China.

     Unlike China, in Taiwan we didn’t sacrifice our entire agricultural economy to exchange the flourish of industrial business. The gap between urban and country area are way much smaller compared to China, but we still face the same question, will we, can we sacrifice some people’s interests in order to benefit the whole nation? Take a look at the issue of the infamous ECFA (Economic Cooperation Framework Agreement), ECFA agrees to Import nearly six hundred Chinese agricultural products that were used to be restricted to protect our own agricultural business, and these now unrestricted products will surely bring devastating impact on our agricultural business, leave thousands of famers lost their life support. And if we reduced or even stopped the exporting of the agricultural products, it will definitely bring mass impact on our export-based economy. 

       Searching for the true justice for the minority is the key to dissolve the unbalanced conflict between economic status and people’s rights. Of course we can’t ignore the minority because if we leave the gap between the poor and the wealthy getting bigger, we will face the same problem that China now racking their brain with. Social inequality, the mass loss of human resources, and serious Urban-rural gap, these problems rot the roots of a country’s economy, if we don’t have a sense of trying to prevent these things from happening, Taiwan’s economy will eventually reach a dead end. When the roots were all rotten, how can the plant grow higher and stronger?

Should We Consider Social Welfares While Developing Economy

     We can see from the report that, if a country faced global economic downturn, the problems of unemployment and poverty will increase violently, and the government had to spend money on the social security program such as tax reduce and health insurance in order to maintain social stability in the country. But when the level of unemployment and poverty had increased so violently that the country’s financial foundation couldn’t hold them anymore, this country’s economic system might eventually crumble. As we see from this paragraph:  “As we arrive at the end of 2010, global economic recovery and exit from the crisis remains slow and uncertain. Despite signs of recovery in global markets, in many countries unemployment is not falling. Higher levels of unemployment continue to restrain social security income from contributions while simultaneously requiring ongoing increased expenditure on benefits.”
        The expending on social security is like an endless money-burning vortex, as long as the number of the unemployed remains high, this vicious spiral will ends up becoming the great hole of the country ‘s economy. And as the report suggests, among Asia country, “Social security systems are integral to the management of the social, economic and political dimensions.” (Page 7) Our economic system are bounded with the social security systems, the over-expense of social security will eat up our money which we are going to spend on improving the country’s economic structure.

from page 7

The economic policy in Asia and Pacific area

       And what does this issue has anything that is related to the argument of balance between economy and social fairness? Well, in Taiwan we have a mature structure of social security, the farmer got the agriculture subvention, the poor got monthly financial support, and the sick got health insurance. When our society seems so perfect and calm, our government is already having troubles financing these social securities. But as recent years our government kept pursuing the economic prosperity, more and more farmers and workers or those so-called “the minority” had lost their job or having a hard time in their life. Thus, the expending of social security had increased highly over recent years(note 1), and this became a heavy burden while Taiwan is trying hard building its economy.

     Next, I would like to talk about EFCA to demonstrate my perspectives more.

     In recent years, Taiwanese government is struggling to change the agricultural nature of Taiwan into something that is more export-oriented and has more value reflecting on the market. Does our agricultural income not important enough to have an impact on the foundation of Taiwan economy? Here is a passage from the article which I found, “not only did Agriculture supply the food to support the nation but it supplied a large part of the labour force which was indispensable for the development of the economy.(Page 568)” When our government trying desperately to make Taiwan become an export-oriented country, we always forgot or intentionally ignore the foundation of our economy. How can we say that our government ”ignore” the agricultural industry in Taiwan? Look at the signing of ECFA (Economic Cooperation Framework Agreement) and the answer will reveal itself.

      My co-worker, Robert, mentioned a man who point out the problems that might come after signing ECFA, Professor Kenneth S. Lin of the department of economics at National Taiwan University, says that the signing of ECFA means the decrease of job opportunities and the increase of unemployment rate. These unemployed people are mostly farmers and traditional industry worker, these people’s social status are near the lower part of our society. People always view them with an economical judgment, conceiving them as a not-so-profitable group in our economic system, agriculture had always been thought as an industry that is doomed to be eliminated. But in the article, it mentioned that “it must be taken into account that many of these agricultural people had side-jobs in manufacturing and commerce.” Although this article is writing about Japan’s economic development, it can also be applied on Taiwan’s working class. A survey(*1) done by the Institute of Sociology, Academia Sinica, shows that compared to Professional farmers, Part-time farmers had now become the major group of Taiwan’s agriculture system. And so this points out an important concept, farmers and workers, they might have other side-jobs in their life, one cannot define their economic position only as farmer and worker, we have to take account of their side job’s economic value and contribution. 

from “The Survey of Taiwan’s social Transition”

An image of the proportion of Taiwanese farmers' career decision 

    

       In my last annotation I mentioned the raise of unemployment will cause our social security expense become too high for our country to afford, and as Professor Lin said, signing of ECFA means the decrease of job opportunities and the increase of unemployment rate. These unemployed people were mostly farmer and workers, when our country is already having troubles with these people’s social security expenses, Taiwan also has to deal with the problem of losing a large part of the labour force. These two major cracks in Taiwan economy are what we are going to face when signing ECFA, since our government didn’t even consider these problems, how can we trust them to make the next decision for Taiwan’s future economy?

      Besides, we also have to thoroughly inspect that whether our government has the qualification to practice its authority and privilege. Most important of all, we need to objectively contemplate that if our government is suitable enough to practice Capitalism.

  “Without a whole host of government rules, capitalism could not exist. Even regulations and social programs help sustain a market economy by fixing many of its serious social and economic problems.” - Douglas J. Amy, Professor of Politics at Mount Holyoke College, “Capitalism Requires Government, page: 1 of 7”

      Capitalism and Socialism, these two economic theories are both based on the condition of “good moral behaviors.” Capitalism relies on a well-functioning and impartial governing system, if the government was prone to corruption, Capitalism could not be fully practiced in that country. The authority makes rules and regulations to interfere with the so-called “free market” and it also bear the duty to accelerate the economic structure by providing job opportunities, maintaining a good market system, and bring us both economic and social justice. In short words, we need a stable and fair government to protect our rights and our wealth, providing the resources we need for building the economic foundation.

        However, can this idea be fully practice in the real world? Is our government really untouchable enough that we can rely anything on them? Will people in the world be so morally disciplined that any kinds of corruption are eliminated in front of our eyes?

        Looking through the history of human race, the answer is certainly not.
        From the article Government as the Primary Protector of our Rights and Liberties, the author, Douglas J. Amy, Professor of Politics at Mount Holyoke College, wrote “We depend heavily on the tools of democratic government to protect people’s rights…democratic governments have constitutions and institutions that enable us to effectively protect our rights and freedoms.” But in recent days, Taiwanese government appeared to have gone backward with this idea, for example, the Da-Po incident(note 1.). We can see that our own government ignores the rights and interests of the people it should protect base on some nonexistent and forceful reason, and in the end the company (InnoLux Company) which need the land most said they don’t need these land anymore(note 2.) Then what’s the economic profit in collecting these lands? There is no economic contribute to our country, so what’s the reason for the government sacrificing our right? It is clearly that there is corruption in our government, and this corruption clearly held the economic development of Taiwan, farmers lost their land so they couldn’t contribute anything for the economic, the collected land also had no economic value since the company didn’t need them. If the government didn’t fulfill their function as a protective shield, but to become a shiv that strike back on its own people, Capitalism became a broken theory and the country will fall.

       Capitalism requires the government who practice it to take control of the economic system, but it also requires the government to be pure enough to do nothing but for the interest of people. It seem that morally, our government is not “pure” enough to practice this system, the corruption obviously block our economic development. When the government turned against us, how can we contribute to the economy?

     Therefore, I will cite a concrete instance to illustrate and prove my statement about corruption more clearly.

      Recently, Taiwanese government announced that the freeway toll stations will all change into the Electronic Toll Collection System(ETC). Now called eTag system, which is an electronic system that, as its owner Far Eastern Electronic Toll Collection Co. (FETC) proclaimed, will increase passing volume of toll stations, save the time of payment, improve convenience and safety, reduce air pollution, and reach truly financial equality. And because of this, Taiwanese government decided to lay off nearly 800 toll collectors, making them wondering for their future.

     However, the eTag system now faces great deficits, as the company itself claims(note 1), FETC has already lost 3 billion NTD. Also from the static of current operation of eTag system, provided by Taiwan Area National Freeway Bureau, indicating that the rate of usage had risen nearly 20 % between the year 2012 and 2013(the chart), which is the time that Taiwanese government announced the total change of freeway toll stations. The great leap of eTag appliance is not because Taiwanese people favored it, it's because the government forced us to do it. We can even consider this act of government as a violation to our freedom of choice in the Constitution, because we have no other options to choose but eTag system.

The chart of ETC(eTag) usage rate 

     As for those toll collectors that were laid off by the government, their rights and treatment are certainly not guaranteed by Taiwanese government and FETC. On August, 2013, FETC and the government once promised that they will assist the toll collectors for future transference of their career, but there were only 30 people successfully change their jobs, and the number of the laid off collectors were 244 and more. Now, there are near 800 people waiting for job transference, although FETC still promised to assist the transference, the future of these people lies in darkness. They are mostly low-educated and aged people, it is hard for them to find another stable job in nowadays society. The job of our government is to protect and support our living, and if all these people don't find their jobs, the expense of social security that are going to spend on them will surely be a great burden for Taiwanese government.

     In addition to the aforementioned problems, here is a bigger question lies ahead. Why does our government be so persist in collaborating with FETC, the company which had been suffering great deficit from the time Taiwanese government announced the presence of ETC. And just after FETC got the open bidding of ETC, almost immediately burst out the news of SONG,NAI-WU(note 2), the ex- confidential secretary of Taiwan Area National Freeway Bureau, accepting the bribe from the tenderer, and try to leak out bidding information to the tenderer. He had been sentenced by Taiwan Supreme Court to serve 12 years in jail. With such flagrant Bribery present in front of their eyes, instead of finding another company, Taiwanese government choose to let FECT keep working on the ETC project. Until now, FECT is still operating on the ETC project, and our government is still trying to pursuade us into believing this company is the best choice for us. How can we trust the government if corruption had brazenly rooted in? How can we depend on our government to protect us if it kept ignoring our right for living and freedom?

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Discussion&Conclusion

     The balance between the role of government and the social welfares of the people is very hard to decide which one is more important. The government often takes the majority's welfares and advantages into consideration, especially those people in the highest class of this society; while the people think that the government should never sacrifice the minority, especially the marginally disadvantage groups. Instead, the government should strive for preventing its citizens from those hazards which will intimidate life and property. Most important of all, the government should accept the supervision of its people and really practice its duty and obligation into the society. However, it is a very controversial issue to debate whether developing economy is more crucial than protecting the people's rights. As far as I am concerned, which one is more significant and conforms to social justice depends on the public to decide.

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Reference

1. ISSA’s Social Security Observatory. Dynamic Social Security: Securing social stability and economic development (chapter 1 and chapter 6).

http://www.issa.int/Resursy/ISSA-Publications/Dynamic-Social-Security-Securing-social-stability-and-economic-development

2. (6 March 2007). The Developing Economies (volume 4, issue 4).

http://onlinelibrary.wiley.com/doi/10.1111/j.1746-1049.1966.tb00493.x/pdf

3. The Institute of Sociology, Academia Sinica (12 August 2007).  The Survey of Taiwan’s social Transition.

http://www.ios.sinica.edu.tw/TSCpedia/index.php/%E7%84%A1%E7%B1%B3%E6%A8%82%EF%BC%8C%E6%A8%82%E5%A6%82%E4%BD%95%3F%E8%BE%B2%E6%B0%91%E8%88%87%E8%BE%B2%E6%A5%AD%E7%9A%84%E8%95%AD%E7%91%9F

4. Government is Good. A web project of Douglas J. Amy, Professor of Politics at Mount Holyoke College

http://www.governmentisgood.com/index.php

5. Douglas J. Amy. Capitalism Requires Government
http://www.governmentisgood.com/articles.php?aid=13&p=2

6. Douglas J. Amy. Government as the Primary Protector of our Rights and Liberties
http://www.governmentisgood.com/articles.php?aid=19

7. Da-Pu Incident
http://kalamazoo.pixnet.net/blog/post/25455015-%E5%A4%A7%E5%9F%94%E4%BA%8B%E4%BB%B6%E6%87%B6%E4%BA%BA%E5%8C%85

8. InnoLux claims the need of Jhu-Nan science base was no longer pressing
http://www.libertytimes.com.tw/2010/new/jul/13/today-life11.htm

9. FECT's claim of deficit

http://www.fetc.net.tw/portal/article/show?articleId=8ad199b03a280eae013a401bc2de0002

10. Taiwan supreme court sentenced SONG, NAI-WU to serve 12 years in jail because of bribery 

http://www.epochtimes.com/b5/10/12/23/n3121771.htm

11. Taiwan Area National Freeway Bureau. Toll&Service Div. (16 December 2009). The Progress of ETC system

 http://www.freeway.gov.tw/English/Publish.aspx?cnid=1622&p=1743

12. Taiwan Area National Freeway Bureau. Toll&Service Div. (4 November 2013) Special Report on Electronic Toll Collection --「Public Participation in Build and Operate Project for Electronic Toll Collection System on Freeways」

http://www.freeway.gov.tw/English/Publish.aspx?cnid=1112&p=503