State Socialism (Germany)

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State Socialism (German: Staatssozialismus) was a term introduced to describe Otto von Bismarck's social welfare policies. The term was actually coined by Bismarck's liberal opposition, but later accepted by Bismarck.[1] They refer to a set of social programs implemented in Germany that were initiated by Bismarck in 1883 as remedial measures to appease the working class and detract support for socialism and the Social Democratic Party of Germany following earlier attempts to achieve the same objective through Bismarck's anti-socialist laws.[2][3]

Intellectual predecessors and heirs[edit]

The Prussian welfare state was developed by the German academic Sozialpolitiker ("Social Policy Supporter") group, intellectually associated with the historical school of economics.

At the time, they influenced social liberalism in the United Kingdom and progressivism in the United States[citation needed] as well as the current (post-World War II) German economy, the social market economy, which is a continuation of similar policies.


According to William Harbutt Dawson, despite being labeled "socialist" by his opponents, Bismarck's social legislation sought to preserve the existing economic order and state in Germany. This was in stark contrast to socialists, who sought to subvert the power of the existing state and eventually replace the capitalist order with a socialist economy.[4]

German social legislation [edit]

[...] 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 March 1884[5]

The 1880s were a period when Germany started on its long road towards the welfare state as it is today. The Social Democratic, National Liberal and Centre political parties were all involved in the beginnings of social legislation, but it was Bismarck who established the first practical aspects of this program. The program of the Social Democrats included all of the programs that Bismarck eventually implemented, but also included programs designed to preempt the programs championed by Karl Marx and Friedrich Engels. Bismarck's idea was to implement the minimum aspects of these programs that were acceptable to the German government without any of the overtly socialistic aspects.

Bismarck opened debate on the subject on 17 November 1881 in the Imperial Message to the Reichstag, using the term "practical Christianity" to describe his program.[6] In 1881, Bismarck had also referred to this program as Staatssozialismus when he made the following accurate prediction to a colleague:

It is possible that all our politics will come to nothing when I am dead but state socialism will drub[force] itself in [Der Staatssozialismus paukt sich durch].[7]

Bismarck's program centered squarely on insurance programs designed to increase productivity and focus the political attentions of German workers on supporting the Junker's government. The program included health insurance, accident insurance (workman's compensation), disability insurance and an old-age retirement pension, none of which then in existence to any great degree. After Bismarck left office in 1890, further social legislation regulated working time and conditions and sought to protect more vulnerable workers (women and children) and establish a system to allow redress for employer abuse.

Based on Bismarck's message, the Reichstag filed three bills designed to deal with the concept of accident insurance and one for health Insurance. Retirement pensions and disability insurance were placed on the back burner for the time being.[8] Other bills were passed after Bismarck left office.

Health Insurance Bill of 1883[edit]

The first bill that had success was the Health Insurance bill, which was passed in 1883. The program was considered the least important from Bismarck's point of view and the least politically troublesome. The program was established to provide health insurance for the largest segment of the German workers. The health service was established on a local basis, with the cost divided between employers and the employed. The employers contributed one-third, the workers the rest. The contributions were made to "sickness funds", which employees could draw from when they needed medical care. The minimum payments for medical treatment and sick pay for up to 13 weeks were legally fixed. The individual local health bureaus were administered by a committee elected by the members of each bureau and this move had the unintended effect of establishing a majority representation for the workers on account of their large financial contribution. This worked to the advantage of the Social Democrats, who through heavy worker membership achieved their first small foothold in public administration.[8]

Accident Insurance Bill of 1884[edit]

Bismarck's government had to submit three draft bills before it could get one passed by the Reichstag in 1884. Bismarck had originally proposed that the federal government should pay a portion of the accident insurance contribution to show the willingness of the German government to lessen the hardship experienced by the German workers as a means of weaning them away from the various left-wing parties, most importantly the Social Democrats. The National Liberals took this program to be an expression of state socialism, which they were strongly against. The Centre Party was afraid of the expansion of federal power at the expense of states' rights. As a result, the only way the program could be passed at all was for the entire expense to be underwritten by the employers. To facilitate this, Bismarck arranged for the administration of this program to be placed in the hands of "the organization of employers in occupational corporations". This organization established central and bureaucratic insurance offices on the federal and in some cases the state level to perform the actual administration. The program kicked in to replace the health insurance program as of the 14th week. It paid for medical treatment and a pension of up to two-thirds of earned wages if the worker was fully disabled. This program was expanded in 1886 to include agricultural workers.[8]

Old Age and Disability Insurance Bill of 1889[edit]

The old age pension program, financed by a tax on workers, was designed to provide a pension annuity for workers who reached the age of 70. At the time, the life expectancy for the average Prussian was 45, although this reflects the high infant mortality of the era and retired workers could expect to live until 70 years. Unlike accident insurance and health insurance, this program covered industrial, agrarian, artisans and servants from the start. Unlike the other two programs, the principle that the federal government should also contribute a portion of the underwriting cost, with the other two portions prorated accordingly, was accepted without question. The disability insurance program was intended to be used by those permanently disabled. This time, the state supervised the programs directly.[8]

Workers Protection Act of 1891[edit]

This law set up stricter regulations to ensure greater workplace safety, banned work on Sundays, introduced a maximum working day of eleven hours for women and ten hours for workers under 16 years of age and prohibited night work by them, banned those under the age of 13 from working in industry and encouraged the establishment of worker's committees in factories to address disputes. As a result, industrial tribunals were set up to settle disputes between employees and employers.[9]

Children's Protection Act of 1903[edit]

The law further tightened regulations on child labor to prevent exploitation of children.[9]

See also[edit]


  1. ^ Bismarck, Edgar Feuchtwanger, (2002) p. 221
  2. ^ "Bismarck’s Reichstag Speech on the Law for Workers’ Compensation", March 15, 1884:
  3. ^ Comparing Economic Systems in the Twenty-First Century, 2003, by Gregory and Stuart. ISBN 0-618-26181-8. (p. 207). "Chancellor Otto von Bismarck introduced social welfare legislation in Germany between 1883 and 1888, despite violent political opposition, as a direct attempt to stave off Marx's (prediction of a) socialist revolution".
  4. ^ Bismarck and State Socialism; an exposition of the social and economic legislation of Germany since 1870 Publisher: London : S. Sonnenschein & co.(1891), Author: Dawson, William Harbutt. page 2 paragraph 2
  5. ^ Reichstagsprotokolle, Bd. 082, 05.Legislaturperiode 04.Session 1884, 9. Sitzung am Donnerstag, 20.03.1884 (Sitzungsbeginn: page 133), speech of Otto von Bismarck: page 161 ff., page 165, Bavarian State Library, Münchener Digitalisierungszentrum (MDZ),
  6. ^ Moritz Busch, Bismarck: Some secret pages from his history, Macmillan, New York (1898) Vol. II, p. 282
  7. ^ Werner Richter, Bismarck, G.P. Putnam's Sons, New York (1965) p. 275
  8. ^ a b c d Holborn, Hajo: A History of Modern Germany – 1840–1945: Princeton University Press; 1969; pp. 291–93.
  9. ^ a b Berger, Stefan: Social Democracy and the Working Class: In Nineteenth- and Twentieth-Century Germany, p. 73

External links[edit]