The Origin of the Welfare State in England and Germany, 1850-1914: Social Policies Compared

Published by EH.NET (August 2008)

E.P. Hennock, The Origin of the Welfare State in England and Germany, 1850-1914: Social Policies Compared. Cambridge: Cambridge University Press, 2007. xvii + 381 pp. $36 (paperback), ISBN: 978-0-521-59770-8.

Reviewed for EH.NET by Bernard Harris, Division of Sociology and Social Policy, University of Southampton.

Peter Hennock is Emeritus Professor of Modern History at the University of Liverpool. Over the course of a long and distinguished career he has published numerous articles together with seminal accounts of the history of English local government in the nineteenth century [1] and the influence of German social reform on the introduction of social insurance in Great Britain before 1914.[2] It is difficult to think of any single author who is better qualified to undertake the task he has set himself in the current volume.

Although this study is entitled The Origin of the Welfare State in England and Germany, this title is in some respects misleading. The book has comparatively little to say about the relationship between gender and the welfare state or about the role of charity and philanthropy in the evolution of welfare provision. It also has very little to say about a range of issues which are commonly associated with the welfare state, at least in Britain, such as the development of hospital services, the expansion of public education, the introduction of public housing or the provision of social care, and it is very largely confined to the period before 1914. However, what the book does provide is a meticulous and richly-detailed account of the development of such services as sickness insurance, invalidity benefits and old-age pensions in Germany, and pensions, health insurance and unemployment insurance in the United Kingdom and, as the author suggests, these issues are certainly central to the development of the modern welfare state, even if they are not exactly coterminous with it.

The book also reflects a particular approach to the conduct of comparative history. As Hennock explains in the introductory chapter, one of his main aims is to compare the historiographies of welfare provision in the two countries in order to see how far the different points of emphasis in one country raise new questions about the development of welfare policy in the other country. Having done this, the book?s second key aim is to investigate the different paths taken by the two countries between 1850 and 1914 and to explain, in the light of this, why social insurance has ended up playing a much smaller role in the long-term development of welfare policy in Britain than it has in Germany. If I have understood Hennock?s arguments correctly, this question can be answered in two main ways: first, by reference to the importance of the voluntary tradition in British social welfare; and, second, by reference to the association of the origins of the British system of national insurance with the poor law.

The main part of the book consists of four sections containing seventeen numbered chapters and a ?Conclusion and Epilogue.? In Part I, Hennock begins by comparing the development of poor relief in the two countries. He argues that it is impossible to understand the development of social insurance in Germany without first considering the system of poor relief, and that the neglect of this topic has constituted a major gap in German welfare historiography. He then proceeds to compare the extent of poor law provision in the two countries and concludes that, despite the aims of both the poor law reformers of 1834 and the ?crusaders? against outdoor relief in the 1870s, Britain still spent more money on poor relief, and provided more generous assistance to a wider spectrum of the population, than its German counterpart. He also compares the machinery of poor law administration in the two countries and argues that, despite prevailing national stereotypes, it was the British, and not the German system, which gave less discretion to local authorities and relied more heavily on professional administrators.

After establishing the importance of the poor law as a key starting point for the understanding of later developments, Hennock moves on to explore the history of factory legislation and the relationship between the state and industrial injury. In England and Wales, there was a much stronger tradition of government legislation to impose minimum standards on working conditions in factories and workplaces and this helped to protect individuals against the risk of accidents at work. In Germany, there was more resistance to this kind of factory legislation and this led to the emergence of a much stronger accident insurance scheme as a way of coercing employers into creating safer working environments. Hennock also makes it clear that the prime mover in the development of this scheme was a senior official in the Prussian Ministry of Trade and Industry, Theodor Lohmann, and that both the Sickness Insurance Law of 1883 and the Accident Insurance Law of 1884, as well as the Invalidity and Old Age Pension Insurance Law of 1889, owed much more to the work of men like Lohmann and Robert Bosse, the Head of the Ministry?s Economic Division, than to any of Bismarck?s initiatives.

The third, and by far the longest, section of the book is concerned with the evolution of a range of measures designed to offer protection against the hazards of sickness, invalidity and old age. Hennock begins by comparing the development of friendly societies in the United Kingdom with that of Hilfskassen (and subsequently Krankenkassen) in Prussia and Germany, before going on to describe the origins of the Sickness Insurance Law of 1883. He then proceeds to examine the next stage in the evolution of the German system of social insurance, namely the Invalidity and Old Age Insurance Law of 1889. He identifies a number of key differences between the German schemes and those introduced by the British government between 1908 and 1911. In Germany, the primary purpose of the Invalidity and Old Age insurance scheme was to provide compensation for loss of earnings as a result of invalidity and the provision of a separate old-age pension scheme was, in the words of one historian, ?no more than a decorative addition? (quoted on p. 191). By contrast, in Britain it was the relief of old age itself which took priority and national health insurance was only introduced three years later. There were also key differences in the ways in which the different schemes were financed, and these had a dramatic bearing on the value of the benefits which could be provided. In Britain, the old-age pension scheme was funded out of general taxation and the receipt of benefits was subject to a means test. The national health insurance scheme had more in common with its German predecessor but it was funded by flat-rate contributions rather than graduated contributions, and this meant that the opportunities for growth were much more limited.

Although Germany preceded Britain in the introduction of sickness insurance and old-age pensions, there was no comparable effort to introduce a national system of unemployment insurance before 1914. In Britain, the foundations of a national scheme were laid by the introduction of short-term unemployment insurance benefits for a limited number of workers in 1911 and both the extent and the coverage of the scheme were expanded greatly after the end of the First World War. However, although this might appear more generous, the long-term viability of the unemployment insurance scheme continued to be hampered by its dependence on flat-rate contributions, which were inevitably limited by the capacity of the lowest-paid workers to pay, and this continued to be the case when both unemployment insurance and health insurance were replaced by a consolidated scheme of national insurance in 1946. Hennock argues that this decision played a crucial role in limiting the scope of national insurance in postwar Britain, and that even though different governments attempted to address the problem by introducing graduated pensions in 1959 and an earnings-related supplement to short-term national insurance benefits in 1966, the die had long since been cast.

Notes:

1. E.P. Hennock, Fit and Proper Persons: Ideal and Reality in Nineteenth-century Urban Government, London: Edward Arnold, 1973.

2. E.P. Hennock, British Social Reform and German Precedents: The Case of Social Insurance, 1880-1914, Oxford: Clarendon Press, 1987.

Bernard Harris is Professor of the History of Social Policy in the Division of Sociology and Social Policy, School of Social Sciences, University of Southampton, UK. He has published extensively in the areas of anthropometric history, the history of health and living standards, and the history of social policy. He is the author of The Origins of the British Welfare State: Social Welfare in England and Wales, 1800-1945 (Basingstoke: Palgrave Macmillan, 2004) and coeditor of Charity and Mutual Aid in Europe and North America since 1800 (New York: Routledge, 2007). Email address: bjh2@soton.ac.uk.