You have that everywhere, but yeah I think without a safetynet more people fight harder. So as you do not have the extreme upsides(but also not the extreme downsides) I guess we will never have the facebooks or googles here. It takes some kind of battle. Or being rich from birth and being able to hire people like that. Personally I do not enjoy that very much.
Sadly I think it also promotes (overt) envy and crab mentality. Many people use their safety to pull others down rather than try to excel. It pains me to say this, and I wish it wasn’t so, but it seems to me that people only accept meritocracy when there is some kind of external threat…
A safety net may lead some people to experiment and play with things, others to slouching off. This even applies outside the public sphere. A stereotype of a bored millionaire's son with no energy to do anything substantial exists for a reason.