Special thanks to my girlfriend Naphaphorn for providing this piece. You can follow her history tweets on Twitter.
Otto von Bismarck is perhaps one of the best known names in German political history, notable for his strong influence upon European politics during the two decades in which he served as Chancellor of the German Empire. His name tends to paint a picture of a man in grey overcoat, white moustache and pickelhaube – a figure of great genius, shrewdness and confidence who is so closely associated with the Unification of Germany. Considered a master of realpolitik, Bismarck created one of Europe’s most powerful states by means of balance of power diplomacy, maintaining peace between the great European powers once he had achieved the goal of unification. He also took part in establishing the German colonial empire from 1871 on until his removal from power by Emperor Wilhelm II in 1890, with whom he fell out of favour.
As Chancellor, he was effectively the most powerful figure in the German Empire. Bismarck was head of government, in charge of state affairs on a daily basis. He had considerable influence on Kaiser Wilhelm I. Thus, he was also responsible for numerous changes and progressive reforms inside the Second Reich, despite being a conservative himself. Bismarck was involved in the drafting of the Constitution of the German Empire, in which universal male suffrage was introduced. He also brought about the Kulturkampf – the cultural struggle against the Pope and Rome’s influence. A key element of the Kulturkampf was introduction of the May Laws. The May Laws had a strong effect upon German society, essentially handing over the education to the state and eliminating the influence of Catholicism, placing parochial schools under state control and expelling the Jesuits.
However, he soon ended the feud with the Catholics and sided with them to compete with a new threat – socialism. Although Karl Marx was making his living in exile in London, his ideas began to spread around the continent. Already in the process of industrialisation, Marx believed that Germany was rife for socialist revolution. Accordingly, the Social Democratic Party of Germany (SDP) and other socialist movements were becoming a major concern for Bismarck and other conservatives alike, leading to the Anti-Socialist Laws in 1878. From 1878 to 1890, the laws essentially banned any assembly or meeting that aimed at spreading socialist principles, but the SDP continued to gain support in elections.
From 1883, Bismarck introduced a series of social programmes, which were meant to appease and distract the working-class from the socialist ideas that were beginning to flourish in Germany. Rather ironically, the welfare programs would soon be referred to as ‘State Socialism’ (Staatssozialismus) by his opponents, but the description was later accepted by the Chancellor himself. Nevertheless, Bismarck never intended to replace the capitalist economy of the Second Reich with the socialist system. The reforms were pursued in an effort to reduce the threat of revolution engulfing the German Empire – the state which Bismarck had worked so tirelessly to create.
The Prussian welfare state was developed by the German academic Sozialpolitiker (Social Policy Supporter) group, intellectually associated with the historical school of economics. Bismarck’s welfare programme consisted of three major pieces of legislation passed during a six year period between 1883 and 1889. These bills respectively allowed for the creation of national healthcare, the provision of accident insurance, and the introduction of old age pensions.
The first bill was introduced by Bismarck was the Health Insurance Bill of 1883, which provided healthcare insurance for the German workers by the health service established on a local basis, with the cost divided between employers and the employed. The employers contributed one-third, the workers the rest. The minimum payments for medical treatment and sick pay for up to 13 weeks were legally fixed. Bismarck viewed the bill as the least politically troublesome. He therefore used the bill as a means of assessing the political climate while he prepared to introduce further reforms.
The second bill was the Accident Insurance Bill of 1884. It paid for medical treatment and a pension of up to two-thirds of earned wages if the worker was fully disabled. The program kicked in to replace the health insurance program as of the 14th week. Later, it was expanded in 1886 to include agricultural workers. The Old Age and Disability Insurance Bill of 1889 would soon follow, financed by a tax paid by the workers. It was intended to provide pensions for workers who reached the age of 70 (by 1890, German life expectancy at birth was 42 years). The state supervised this program directly. Unlike accident insurance and health insurance, this program covered industrial and agrarian workers, artisans and servants from the start.
Two other acts that followed later were the Workers Protection Act of 1891 and Children’s Protection Act of 1903. These pieces of legislation were passed after Bismarck’s forced resignation in 1890. The former would regulate the safety of workers during working hours, as well as limiting the hours for female workers to 11 hours and workers younger than 16 years old to 10 hours. The Act also banned work on Sundays and nighttime. The Children’s Protect Act further tightened regulations on child labour to prevent exploitation of children.
“[…] the actual complaint of the worker is the insecurity of his existence; he is unsure if he will always have work, he is unsure if he will always be healthy and he can predict that he will reach old age and be unable to work. If he falls into poverty, and be that only through prolonged illness, he will find himself totally helpless being on his own, and society currently does not accept any responsibility towards him beyond the usual provisions for the poor, even if he has been working all the time ever so diligently and faithfully. The ordinary provisions for the poor, however, leaves a lot to be desired […].” — Otto von Bismarck, 20.03.1884
Bismarck’s social reforms were on the whole a great success. Over the subsequent decades Germany’s economy prospered and its population experienced constant increases in life expectancy. Naturally, the increase in German economic capacity also increased the Second Reich’s military potential – which was a source of concern throughout the continent. The success of Bismarck’s reform programme caused some European powers to look on with jealousy. In the United Kingdom, the reforms introduced by successive Liberal governments during 1906-14 and most closely associated with David Lloyd George as Chancellor of the Exchequer were inspired by Bismarck’s social welfare programme. These ideas would later lead to the creation of welfare states in post-Second World War Europe. Although Bismarck was a political conservative, he was ahead of his time in introducing social reforms that were later adopted by liberal and socialist governments across Europe.