1. Bismarck’s social insurance legislation in Imperial Germany A comparison with UK Liberal welfare reforms

2. Structure of Lecture Part A: Late 19 th century Germany –The founding of an industrial empire –Social insurance legislation (1880s) Part B: Britain and social insurance –Demands for social reform (1880-1914) –Outcomes: social insurance in context Part C: Comparisons and conclusions –The different objectives (policy logics) –Regime contradictions

3. Part A: Germany in the late 19 th century (recap) (1) Empire, governance and industrialisation Kaiser absolutism and Junker dominance –Weakness of Reichstag (low tax capacity) –Weakness of liberal laissez-faire capitalism Rapid, successful industrialisation –State-sponsored: protectionist –Railways & armaments (German unification) –Post 1848 revolution: socialist problem (SPD) –Trade unions. RC: Hirsch Duncker (liberal): ‘free’ (SPD) – the latter being the most successful

7. Germany in the late 19 th century (recap) (2) Coping with poverty Poor Law (in rural Prussia, quasi-feudal) Prussian legislation –1849 Prussian law empowers municipalities to compel workers to join mutual aid societies –1854 Prussian miners compelled to join benevolent funds Rapid industrialisation and urban growth –Collapse of financial base of poor law –Pressure from localities for reform

8. German Hilfenkassen Derived from guild-based, journeymen’s provident funds 1845 Prussia introduces compulsion –All workers in trade must join –State supervision and model rules –Duty of relief falls first on corporation, second on poor law 1849 legislation for factory workers (textile, iron and steel) –Communes empowered to set up compulsory provident funds –Supplemented by local provident funds

9. German Hilfenkassen II 1850s – provident funds expand 1860s – SPD and liberal trade unions create mutual benefit funds [1866 – North German confederation founded: introduction of Reichstag] –1876 Trade union funds must match payments of provident funds –Sickness and death only (no strike pay)

10. Bismarck’s legislation To win workers’ loyalty to the Reich 1883 Health Insurance (joint contributions) 1884 Accident Insurance (employers’ contributions) 1889 Old age and Invalidity Insurance (tri- partite contributions) 1879-1890: Anti-Socialist Laws in force (repression of ‘free’ TUs and SPD)

12. Common features Contributions and benefits all earnings-related Cover confined to employed industrial workforce (low protection for migrants, the very poor or women: excludes rural workers) –E.g. Ehrfurt: 1895 – 10% population covered by social insurance Aim: to give skilled, well-paid and organised (socialist) German workers a vested interest in the Reich

13. SPD and sickness funds Whole range of established (& new) sick funds register under legislation. Sickness fund administration –Council elected in proportion to contributions –Financed two-thirds by workers: one-third by employers (elected officials: 2 out of 3 = workers’ representatives) –During repression, SPD use this to consolidate organisation at local level

14. Britain and social reform 1880-1914: origins of Liberal welfare reform Recurrent economic depression: recurrent crises in poor law finance (inner cities) Poverty exposed (Booth and Rowntree) –Threat to physical efficiency (Eugenics) –Threat to economic / Imperial supremacy 1906 and after: threat of Labour Party to Liberal parliamentary majority

15. British Liberal Welfare Reforms Outcome: reforming the labour market 1906 Trade Disputes Act (TUs legal protection) 1908 Old Age Pensions Act (tax-funded) 1908 Wages Boards Act (‘sweated’ trades) 1908 Labour exchanges (decasualisation) 1911 National Insurance (contributory) –Part 1 health insurance (universal) – via registered friendly societies & trade unions –Part 2 unemployment insurance (5 trades) – single central fund

17. Conclusions I: similarities Both cases see social insurance as part of solution to crisis of poor law. Insurance principle: identify and isolate regular workers= male heads of household Supporting economic modernisation (protection against new ‘risks’) Consolidating Empire

18. Conclusions II: dissimilarities Different objectives (policy logics) Germany: working class allegiance to Reich –SPD suppressed: welfare legislation passed –Contributory schemes offer social rights –Schemes aimed at well-off workers, not poor UK: meeting economic threat of pauperism –Welfare legislation & growth of TU protection –Contributory schemes = extension of ‘friendly’ society protection –More tax payer subsidy (esp. pensions which include cover for women)

19. Conclusions III: More dissimilarity Counter-factual outcomes + remits of state power Germany: –authoritarian regime fosters social democracy = roots of industrial co-determination –Limitations on nation state: Reich respect for municipal /state powers = diversity UK: –liberal democracy fosters autocratic (centralised & bureaucratic) social insurance (actuarial principle) –Corrosion of local autonomy