Warfare and Welfare: Military Conflict and Welfare State Development in Western Countries 0198779593, 9780198779599

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W A RF A RE A N D W E L F A R E

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Warfare and Welfare Military Conflict and Welfare State Development in Western Countries

Edited by

HERBERT OBINGER, KLAUS PETERSEN, AND PETER STARKE

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Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Oxford University Press 2018 The moral rights of the authors have been asserted First Edition published in 2018 Impression: 1 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2018939483 ISBN 978–0–19–877959–9 Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work.

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Preface One hundred years before writing this preface, World War I was in full spate. The so-called Great War was one of the first examples of a military conflict that was waged as an industrialized mass war. Around the world, the human consequences of the war were horrendous, and it gave rise to deep and longlasting political transformations. Just over twenty years after it ended, war returned on a much greater and even deadlier scale. The most destructive war in the history of mankind clearly represented a low point for civilization. While the first half of the twentieth century was characterized by total war, the second half witnessed, at least in the Western world, a massive expansion of the modern welfare state. A growing share of the population was covered by ever more generous systems of social protection that, without doubt, dramatically reduced poverty and economic inequality in the post-war decades. With this came a growth in social spending, taxation, and regulation that changed the nature of the modern state and the functioning of market economies. Whether, and in what ways, warfare and the rise of the welfare state are related is the subject of this volume. Examining the warfare–welfare nexus, however, does not mean that we subscribe to a verbatim interpretation of Heraclitus’ notion that ‘war is the father of all and king of all’. Monocausal accounts of complex phenomena like the welfare state are always suspicious. And yet we are, at the same time, convinced that the study of war—in addition to, and in interaction with, the well-known driving forces of social policy—is essential for understanding several aspects of welfare state development. Writing a collaborative volume is challenging but rewarding. Cooperation with a dozen colleagues from all over the world was a stimulating experience, and we thank all of the contributors for their efforts. We also appreciate their patience, as this book took longer to finalize than expected. International collaboration was facilitated by two institutions: We are very grateful to the Fritz Thyssen Foundation for generously financing a workshop in Bremen in late 2014. A second workshop took place in Odense a year later, and we thank the Department of Political Science at the University of Southern Denmark (SDU) for making this event possible. In addition, we received financial support from the project Nice Welfare (SDU 2020) for copy editing. Benedikte Xenia Rokkedahl, Larissa Kroll, and Sophy Kohler did a great job in this respect. We are grateful to Jordan Rosenblum, Philipp Demiroglou, and Sten Barsøe for helping with literature research and data management. Special thanks must go to Frank Castles for his friendship, comments, and critical advice. Finally, we wish to thank Olivia Wells and Dominic Byatt from Oxford University Press for their support and patience over the past years. Bremen and Odense, June 2017

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Contents List of Figures List of Tables List of Contributors

1. Introduction: Studying the Warfare–Welfare Nexus Herbert Obinger, Klaus Petersen, and Peter Starke

ix xi xiii 1

2. The Impact of War on Welfare State Development in Germany Peter Starke

36

3. War Preparation, Warfare, and the Welfare State in Austria Herbert Obinger

67

4. Italy: Wars, Political Extremism, and the Constraints to Welfare Reform Maurizio Ferrera

99

5. The Two World Wars and Social Policy in France Timothy B. Smith

127

6. Welfare Policy and War in Japan Gregory J. Kasza

149

7. Foreign Policy on the Home Front: War and the Development of the American Welfare State Robert P. Saldin 8. War and the Development of the British Welfare State David Edgerton 9. Reinforcements for the Wage-Earners’ Welfare State? The Effects of the Two World Wars on Australia’s Model of Welfare Christopher Lloyd and Tim Battin 10. Wars, Nation, and the Welfare State in Finland Pauli Kettunen

176 200

230 260

11. From Military State to Welfare State: The Warfare–Welfare Nexus in Denmark, 1848–1950s Klaus Petersen and Nils Arne Sørensen

290

12. Diverging Paths: The Impact of the Two World Wars on Welfare State Development in Belgium and the Netherlands Dirk Luyten

320

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Contents

13. War and Social Policy Development in Switzerland, 1870–1990 Matthieu Leimgruber

364

14. Bullets and Benefits in the Israeli Welfare State Michael Shalev and John Gal

393

15. War and Welfare States Before and After 1945: Conclusions and Perspectives Herbert Obinger, Klaus Petersen, Carina Schmitt, and Peter Starke Index

426

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List of Figures 1.1. Military conscription in selected countries, 1860–1960

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3.1. Unserviceable men due to bodily defects per 1,000 mustered conscripts, 1870–82

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3.2. Military spending and public revenue (without debt) in Austria-Hungary, 1913–18

76

3.3. Crop yields in million Meterzentner, 1913 versus 1917

78

3.4. War-related social spending and total social spending in Austria, 1951–80

93

11.1. Military personnel in Denmark, 1841–2007

296

11.2. Defence expenditure in Denmark as a percentage of GNP

303

11.3. Municipality and state shares of social spending in Denmark, 1891–1947

314

13.1. Tax expenditure and corporate ‘welfare institutions’ in Switzerland, 1913–55

371

13.2. Social expenditure of the Swiss Confederation, 1938–53

379

13.3. Social insurance expenditure, 1930–60, as a percentage of GDP

379

13.4. The 1947 referendum against old-age and survivors’ insurance (AHV)

382

13.5. From soldiers’ benefits to maternity insurance, 2004

387

14.1. Timeline of Israel’s wars showing the official number of military casualties

398

14.2. Main war-related cash benefits as a proportion of total transfer payments

403

14.3. Comparative generosity of civilian and military benefits relative to average wage

408

15.1. Index of war intensity

433

15.2. Social spending on war victims, 1949–80

434

15.3. Programme adoption and major reforms in four welfare state branches

438

15.4. Relevance of life insurance in 1960 and war intensity

442

15.5. Average top rate of income tax from 1910 until 1970

444

15.6. Development of top tax rate around World War I

444

15.7. Development of top tax rate around World War II

445

15.8. Top 1% pre-tax income share in per cent in selected countries, 1900–2013

446

15.9. Top 1% pre-tax income share in per cent in selected countries, 1913–2015 15.10. Military expenditure as a percentage of GDP, 1988 and 2015

447 453

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List of Tables 1.1. Possible causal links between war and social policies

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1.2. War incidence and war intensity

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2.1. Shares of civilian employment, 1939–44, in per cent

56

3.1. Strikes in Austria during World War I

78

4.1. Main institutional changes in the Italian welfare state, 1950–70

121

8.1. Central and local government expenditure on social services, 1920–38

208

8.2. Structure of interwar social services: expenditure and contributions

210

8.3. Overview of warfare–welfare mechanisms in Britain

225

9.1. Main Australian social security benefits, 1901–12

236

13.1. Army, society, and social security in Switzerland, 1874–2014

368

13.2. Overview of social policy development in Switzerland, 1918–60

376

14.1. Rates of strong support for liberal and republican principles of deservingness, by social sector

413

14.2. Support for granting material and symbolic benefits to military and non-military beneficiaries

414

14.3. Readiness to grant preferential treatment to different beneficiaries

414

15.1. Impact of World War II on social spending, 1951–80

435

15.2. Impact of World War I on social spending in 1933

436

15.3. Impact of war on the replacement rate of four welfare programmes

440

15.4. Impact of war on the coverage of four social security programmes

440

15.5. Life insurance premium volume as a percentage of GDP, 1960 and 1979

442

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List of Contributors Tim Battin, senior lecturer, University of New England, Australia David Edgerton, professor, King’s College London, United Kingdom Maurizio Ferrera, professor, University of Milan, Italy John Gal, professor, Hebrew University of Jerusalem, Israel Gregory J. Kasza, professor, Indiana University, USA Pauli Kettunen, professor, University of Helsinki, Finland Matthieu Leimgruber, professor, University of Zurich, Switzerland Christopher Lloyd, professor emeritus, University of New England, Australia Dirk Luyten, researcher, Belgian State Archives / Centre for Historical Research and Documentation on War and Contemporary Society, Brussels, Belgium Herbert Obinger, professor, University of Bremen, Germany Klaus Petersen, professor, University of Southern Denmark, Denmark Robert P. Saldin, associate professor, University of Montana, USA Carina Schmitt, professor, University of Bremen, Germany Michael Shalev, professor emeritus, Hebrew University of Jerusalem, Israel Timothy B. Smith, professor, Queen’s University, Canada Nils Arne Sørensen, professor, University of Southern Denmark, Denmark Peter Starke, professor, University of Southern Denmark, Denmark

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1 Introduction Studying the Warfare–Welfare Nexus Herbert Obinger, Klaus Petersen, and Peter Starke

WARFA RE AND WELFARE: ARE THEY RELATED? IF SO, HOW? ‘War made the state and the state made war’ goes Charles Tilly’s famous phrase (1975, 42). In advancing this view, Tilly and others, including Norbert Elias, Otto Hintze, and Max Weber, were mainly concerned with explaining the rise of the modern nation state up until the nineteenth century. What came afterwards, namely the spectacular expansion of domestic state intervention and a massive increase in public spending—in short, the rise of the modern welfare state—was outside the scope of their argument. Since the formation and expansion of the modern welfare state took place in the age of mass warfare, one could, following Richard Titmuss (1958), also pose the question of whether warfare and welfare are causally related. To put it differently: Did war also make welfare states? This book is concerned with exactly that nexus between warfare and welfare. From a comparative and interdisciplinary perspective, it addresses the question of whether and how war between nations has influenced the development of advanced welfare states. Distinguishing between three different phases (war preparation, wartime mobilization, and the post-war period) and focusing largely on the two world wars, the volume provides the first systematic comparative analysis of the impact of war on welfare state development. The chapters examine both short-term responses to and long-term effects of war in fourteen belligerent, occupied, or neutral countries in the age of mass warfare stretching over the period from c.1860 to 1960. Positing a causal relationship between mass warfare and the welfare state might be counterintuitive at first glance. After all, war and the welfare state are ‘ostensibly antithetical concepts’ (Gal 2007, 99). This was clearly illustrated

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during World War II when the term ‘welfare state’ was popularized in Britain as the progressive alternative to the fascist ‘Warfare State’ (Temple 1941; Petersen and Petersen 2013). Human well-being, equality, and compensation for the vicissitudes of life are essential objectives of the modern welfare state, which is therefore portrayed as ‘one of modern history’s most spectacular reformist achievements’ (Esping-Andersen 1999, 1). War, by contrast, is associated with destruction and fathomless human suffering. The two world wars alone took an inconceivable seventy million lives. Normatively, it seems almost repulsive to link the concepts of war and welfare. This is perhaps why few military historians or scholars of the welfare state have crossed the boundary between the conceptual and normative worlds of warfare and welfare. The boundary between military and domestic concerns is less pronounced in other areas, however. Several authors have emphasized the empirical importance of war for various phenomena with clear positive connotations, including voting rights, advances in science and technology, domestic security, and decolonization (Porter 1994; Kier and Krebs 2010; Aidt and Jensen 2014; Thomas, Moore, and Butler 2015; Ferejohn and Rosenbluth 2016). It turns out that some of the unintended consequences of war have been beneficial, at least in the long run (for a more radical version of this argument, see Turchin et al. 2013; Morris 2014). To make things clear: Making this argument does not, of course, mean saying that the effects of war on, say, science, have been uniformly beneficial. Nor are we, in any way, implying that these benefits outweigh the enormous human costs of war. But wars—and especially industrialized mass warfare—had major impacts on society and politics, and we need to take these into account when seeking to explain the development of modern social policy. In doing so, we need to specify the causal effects underlying the relationship between the two twentieth-century phenomena of mass warfare and the rise of the welfare state. That is the reasoning behind this book: We think it is time to open the black box of the warfare–welfare nexus.

WARFARE – WELFARE NARRATIVES IN THE NATI ONAL L I TE RATURE To be sure, this is not the first time that the ‘paradox of war’ (Porter 1994) is evoked with regard to the welfare state. Following a pioneering essay by Titmuss (1958), British historians and social scientists, in particular, have pointed to the substantial impact of war on social policy and many of them even see military conflict and the experience of war as a driving force behind welfare state transformation and welfare state construction. Michael Howard, for instance, suggests that war and welfare ‘have paradoxically gone hand in

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hand’ (1993 [1984], 156). According to Deborah Dwork (1987), the experience of the Boer Wars prompted various welfare reforms favouring young children in Britain, as the nation’s poor military performance in this conflict was attributed to a national degeneration in the British motherland caused by industrialization and urbanization. School meals and other welfare measures tailored to children were meant to ensure that ‘the new generation of children, tomorrow’s Imperial Army, was properly nourished’ (Fraser 1973, 137). World War II is, in particular, considered by British scholars as a crucial precondition for the take-off of the modern welfare state. Both Titmuss (1958; 1976 [1950]) and Arthur Marwick (1988) have argued for the close connection between the shared experience of war and the emergence of the British welfare state in the years after 1945. In this view, the war enhanced solidarity and led to a tectonic shift in welfare provision in the post-war period as the odium of traditional poor relief was replaced by a more rights-based and universal access to social security. John Dryzek and Robert Goodin (1986) have offered strong evidence that in Britain the pervasive uncertainty during World War II nurtured a demand for redistribution and risk-pooling. The renowned American welfare state scholar Harold L. Wilensky (1975, 71), referring to British scholarly work, claimed that ‘labor never had it so good’ during the war and that World War II was ‘oddly egalitarian’. British historian Asa Briggs has even argued that ‘[t]he experience of war seems to have been as relevant as the appeal of socialism in determining the practicability and popularity of introducing comprehensive welfare proposals’ (Briggs 1961, 223). However, such arguments are not restricted to the British case. In the United States, both World War I (Schaeffer 1991; Eisner 2000) and World War II (Sparrow 2011) paved the way for big government in the realms of spending and taxation (Scheve and Stasavage 2016), changed the character of state–business relations and altered, via habituation effects, the preferences among the population vis-à-vis state intervention. The so-called GI Bill of 1944, which (among other things) opened up new educational opportunities for war veterans on an unprecedented scale, contributed not just to better educational outcomes (Bound and Turner 2002; Stanley 2003), but also to higher levels of political and civic engagement (Mettler 2005). Erikson and Stoker (2011) show that the Vietnam draft lottery even changed political preferences among young men. Those more likely to be drafted into a brutal and unpopular war tended to become more anti-war, more liberal, and more Democratic in their voting. Effects persisted over years, sometimes decades, and may thus have even influenced long-term social policy development. For Japan, Gregory J. Kasza (2002) has shown that power ambitions and military requirements in an age of mass warfare pushed the expansion of the Japanese welfare state, notably the provision of health insurance, during the Pacific War. Susan Pedersen (1993) has demonstrated the importance of war for family policy and gender relations in World War I in Britain and France.

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Finland was clearly a Nordic exception where the experience of both world wars left a strong imprint on nation state-building, including welfare state formation (Kettunen 2001; 2006). However, even in the neighbouring countries of Norway, Sweden, and Denmark, the literature suggests a significant impact of mass war with respect to state capacity, family policy, and labour market regulation (see, for example, Klausen 2001, chs 4 and 5; Ahlund 2012; O. Pedersen 2014). For Germany, Preller (1978 [1949]) has argued that World War I was a pacemaker of the Weimar welfare state. In fact, labour shortages in industry during World War I led to the Auxiliary Services Act, which for the first time acknowledged trade unions as legitimate partners in industrial relations and was therefore crucial for the subsequent developments of social policy and industrial relations in the Weimar Republic (Feldman 1992 [1966]; Preller 1978 [1949]). Mai (1987) even argues that the Weimar welfare state—with the exception of the eight-hour day—was basically designed during wartime and military demobilization. The case of Germany, however, also reminds us that welfare benefits can be severely curtailed in wartime. The völkisch welfare state created during Nazi rule included substantial welfare cutbacks and rested on a pronounced racist and authoritarian thrust, while family and health policy were imbued with eugenic principles. Moreover, Götz Aly (2006) claims that the Nazis used social policy and redistribution in favour of the Volksgemeinschaft as tools for enhancing mass compliance. The bitter lessons of Nazi rule and war—or what Schmidt (1989) described as ‘learning from catastrophes’—in turn significantly informed state intervention in economic and social affairs in West Germany in an effort to bolster democracy. Also in several other countries we find examples of war experiences curtailing social and political rights. War efforts legitimatized radical changes and interventions that not only included new policies but also changes in redistribution and political priorities. War-related spending often took priority over social spending. Wartime labour markets generally became heavily regulated to the extent of a ban on strikes and various workfare measures vis-à-vis the unemployed. In addition, labour protection legislation (e.g. the regulation of working hours) was often rescinded. In several countries, social or political groups (such as communists) were excluded from society, supposedly in the interests of national security. Authority tended to become centralized and civil and political rights, including freedom of the press and freedom of assembly, were curtailed, even in democracies.

DID WA R REALLY MATTER THAT MUCH? However, the assumption that war has shaped social policy does not remain undisputed. Sociologist Gøran Therborn writes that, especially outside of Britain, ‘the expansion of the welfare state was a product neither of the war

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nor of the post-war settlement’ (Therborn 1995, 92). Instead, he attributes welfare state expansion to the economic boom years of the 1960s. We wish to challenge this view, as the post-war economic boom is itself clearly related to repercussions of warfare (see ‘The Post-War Period’ below). More recent work by British historians has suggested revisions to the strong war–welfare state narrative (Harris 1992).¹ Overall, the argument is that the impact of war has been exaggerated with respect to both its direct and indirect influences on welfare state development. Following Harris (1992), these so-called revisionist interpretations of the impact of World War II on British society have several reservations: First, there is heavy scepticism concerning the view that war had a strong impact on British social structure (Welshman 1999), and with respect to the impact of war on gender relations and the position of women in the labour market, the argument is that the influence of war was much less uniform and important than is often assumed (Summerfield 1997—see also the discussion in ‘War Mobilization’ below). Second, it has been pointed out that the narrative of a political consensus during wartime is misleading or overstated—not least when looking at political discourses and strategies for social reform. Even during wartime, there was far from any consensus between the Conservatives and Labour concerning major plans for future social reforms (Jeffreys 1987). Third, British historians have underlined that the transition from war to the welfare state was more complex and less linear than assumed by earlier scholarly work—and that many policy fields display more continuity (from the 1930s to the 1950s) than war-related change (Jeffreys 1987). It is of course debatable to what degree the British experience can be generalized (see also Harris 1992, 35), but the more recent British historiography reminds us of the importance of not assuming any linear or simple relationship between war and social policy development, but rather of the need to focus systematically on the actual mechanisms or links, to situate them in their historical context, and to acknowledge the interplay between war-related effects and other factors influencing social policy.

WAR A ND WELFARE I N THE COMPARATIVE L ITERATURE This incomplete review of existing national studies demonstrates that there are numerous but relatively unconnected and contradictory findings regarding ¹ Harris (1992, 30) correctly points out that, in his original writings on the impact on war on social policy, Titmuss (1958) actually emphasized both the importance of competing social and political interest groups as well as the fact that war did not mean the end of existing social or economic inequalities.

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war’s short-term and long-term impacts on social policy. By contrast, comparative work on the topic is rare and comparative welfare state research especially so. With the exception of a handful of small-N inquiries (Adams 1977; Kaufman 1983; Marwick 1988; S. Pedersen 1993; Klausen 2001) and the studies by Wilensky (1975, ch. 4), Dryzek and Goodin (1986), and Castles (1998; 2010), we are not aware of any comparative work dealing with this topic. Moreover, few studies look at the welfare state as a whole. Comparative research rather tends to deal with distinct aspects of the warfare–welfare nexus; for example, the politics of progressive taxation (Scheve and Stasavage 2010; 2012; 2016). The necessity of allocating the burdens of mass warfare in a fair way prompted the introduction of new taxes and led to a massive increase in tax progressivity. Seeing as the war-related high levels of tax rates and public expenditure did not return to their pre-war level, new opportunities for civilian state intervention emerged in the aftermath of war (Peacock and Wiseman 1961). Not only did war lead to a higher tax take, but it also led to greater redistribution. In his comparative economic history of inequality, Thomas Piketty (2014) famously showed how various measures of income and wealth inequality dropped markedly after both world wars. Another topic that has been addressed by comparative researchers is the relationship between social spending and military spending—the well-known ‘guns and butter’ trade-off. The basic and most tested argument is that high levels of military expenditure crowd out social spending and, in consequence, impede welfare state development. However, the empirical evidence is inconclusive at best (see ‘War Mobilization’ below). Finally, there are comparative studies in historiography that examine the social protection of war victims and the reintegration of war veterans into society (Gerber 2012; Pironti 2015). Some of these inquiries also discuss the long-term impact of these programmes on welfare state development (Geyer 1983). Ironically, in the comparative welfare state literature, the two world wars are frequently mentioned, but usually only as temporal markers, not as causal events. Flora and Alber (1981), for example, distinguish between four phases of welfare state development in Western Europe: an ‘introductory phase’ of social insurance innovation ranging from c.1880 until the outbreak of World War I, an interwar ‘phase of extension’ and the phases of ‘completion’ and ‘consolidation and reorganization’ in the aftermath of World War II (1981, 184). Whereas war is seen here as a watershed demarcating different phases of welfare state development, the authors do not discuss why and how the two world wars may have played a substantive role in changing the course of social legislation. This periodization of welfare state development has become so well established in national narratives and comparative studies that it is almost taken for granted. And even when authors come close to portraying war as a causal event, they remain typically silent on the nature (in other words: the mechanisms) of that cause–effect

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relationship.² One example is Abbott and DeViney’s quantitative study of social policy diffusion. After having analysed social policy innovation ‘events’ across eighteen countries, they find it curious . . . that three of the five events have substantial peaks during the First World War (health insurance, pensions, workmen’s compensation) and that family allowances are clearly tied to the Second World War. It is also noticeable that unemployment insurance has its major adoption peak right after the First World War, although in fact unemployment in Europe was generally lower during 1918–20 than after 1920. (Abbott and DeViney 1992, 268–9)

Unfortunately, they do not follow up on the reasons for this curious pattern. Similarly, Gøsta Esping-Andersen suggests that one cannot predict from prewar data the size of welfare states after World War II, which he describes as ‘a watershed for pension development’ (1990, 100, 115). Yet how exactly the war changed pension trajectories remains unclear from his account. Thus, in the comparative welfare state literature, war is generally a black box.

OPENING THE BLACK BOX: TOWARDS A SYSTEMATIC COMPARATIVE STUDY OF THE WARFARE– WELFARE NEXUS This volume builds upon previous work on war and welfare (as discussed above), but it also goes beyond such work in at least three ways. First, by asking the same set of questions about each case, by using the same fundamental analytical concepts, and by referring to the same menu of theoretical mechanisms, we go beyond the relatively isolated case study evidence reflecting national experiences. In this respect, the framework of the book resembles the design of a ‘structured, focused comparison’ with the goal of ‘systematic comparison and cumulation of the findings of the cases’ (George and Bennett 2005, 67). Second, previous comparative work has often focused exclusively on certain aspects of the warfare–welfare complex (e.g. taxation, veterans’ benefits, and industrial relations). By looking at the core welfare state in its entirety, we are able to paint a more comprehensive picture, which can contribute to the key problematic of the comparative welfare state literature: how to explain the development of modern welfare states. What we understand by the welfare state comprises the big transfer and service schemes—old age pensions, public health provision, unemployment benefits, and family benefits—in addition to housing and labour regulation. Special war-related programmes such as ² Exceptions are Dryzek and Goodin (1986) and Kasza (1996).

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veterans’ benefits and relief for war victims will also be included. Third, an emphasis is placed on the causal mechanisms that link war and the welfare state, with a view to identifying causal pathways that ‘travel’ well across cases. However, our aim is not to build a universal theory of the impact of war on social policy, but rather a more modest one of identifying a common theoretical framework, empirically reconstructing a limited number of mechanisms and defining some of the scope conditions for these mechanisms. The selection of cases for this book follows a logic of examining comparable, yet diverse cases. We examine war-waging and non-belligerent countries to gauge the effects of war on welfare state development in comparative perspective. ‘War’ is defined here mainly as war between nation states. The repercussions of civil war on social policy are likely to be very different and there is even less systematic research on this question (but see Skocpol 1992, as well as Chapter 10 in this volume on Finland, and Chapter 15, the Conclusion). The primary focus is on the two world wars, not only because of their importance for the course of global history, but also because they are the prime examples of industrialized mass warfare, or what is often called ‘total’ war (Chickering et al. 2012). We examine fourteen economically developed countries in the age of mass warfare and welfare state expansion, that is, a period stretching from about the 1860s to the 1960s. In alphabetical order these are: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Israel,³ Italy, Japan, the Netherlands, Switzerland, the UK, and the USA. Each chapter will discuss the impact of the two world wars as well as nationally important wars (such as early nationalist wars and civil wars). These countries differ significantly in terms of their experiences of war. Some were aggressors, other were attacked or occupied, while still others were not involved in military combat at all. Some were democratic throughout the period studied, whereas others experienced more volatile political institutional settings. Some were strong military powers, while others were small states in fear of military attack. In addition, our study includes winners and losers, countries suffering from dramatic destruction on the home territory, and nations that fought mainly overseas. This substantial variation in war experience and war incidence helps us avoid a sampling on the dependent variable (cf. Wimmer 2014). We also include Israel in our study. Even though the country was only founded after World War II, it is a particularly interesting case insofar as state-building and welfare state formation took place in the context of permanent military threat and a series of smaller wars. In terms of effects, we argue that war unfolded its impact on social policy via two channels. The first refers to war impacts on the demand-side of the political system. The cruelties and destructiveness of war created a huge

³ The case of Israel will, of course, cover a different time period than the other cases.

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demand for social protection that inevitably required government action. These war-induced social needs are unequivocally and directly related to war, as they would not have occurred in the absence of military conflict. Examples include the provision of income support and welfare services to the various categories of war victims, such as disabled and traumatized veterans, the dependants of fallen servicemen, civilians injured by acts of war, victims of persecution, the bombed-out homeless, and war refugees. In addition, millions of soldiers had to be reintegrated into society through employment, education, and housing programmes in the wake of military demobilization. The second channel includes several war impacts on the supply-side of the political system. Mass warfare changed politics and institutional settings in a way that facilitated welfare state development in the post-war period. There is considerable empirical evidence that mass warfare gave rise to enhanced state capacities (de Swaan 1988), furnished governments with new fiscal powers and policy jurisdictions, propelled democratization (Porter 1994), led to a centralization of government (Elias 1982 [1939]; Obinger, Leibfried, and Castles 2005), recalibrated power resources in industrial relations and government, and affected economic performance (Castles 1991) and trade openness in the aftermath of war (Scharpf 2000). These merely indirect effects of war refer to the war-related changes of those factors that feature prominently in the standard theories of the welfare state. By examining these indirect effects of war on social policy, we follow the advice of sociologist Andreas Wimmer, who argues in a recent wide-ranging review article on war studies across disciplines that much more needs to be done to disentangle the various causal processes and positive and negative feedbacks (or endogeneity). The research on war, welfare, and citizenship could more systematically take into account other factors that have been discussed in the historically oriented welfare literature . . . as well as in the democratization literature. . . . Does war indeed make a difference when the picture broadens to include these other factors? (Wimmer 2014, 189)

In any case, the effects of war should not be seen as an alternative to explanations based on the established causal factors of the welfare state literature such as class, socio-economic structure, political actors, ideology and ideas, economic development, institutions, and so on. Rather, what we often find is that there is a combination of war-related and welfare-related causes that produces welfare state change. In political science parlance, social policy outcomes can be explained as the result of an interaction rather than being of independent causation (Mayhew 2008). War, for example, often changes the power resources of established actors in the social policy arena. War can also be a force accelerating or slowing down ongoing processes of change. Sometimes, however, wartime politics follows quite a different logic

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when compared with normal policy making in peacetime. This means that those theories in comparative public policy developed to explain the latter have little explanatory purchase in accounting for wartime events and causal consequences. In belligerent democracies, for example, partisan differences often dwindle in situations of emergency and military threat (e.g. through the formation of oversized war cabinets or a general ‘rally round the flag’), institutional veto points are less effective because of comprehensive emergency powers of government, anti-welfare interest groups such as medical professions may lose influence or can be more easily overruled by powerful governments, and the economy is typically subject to massive public control. The military often becomes a powerful and sometimes even a dominant actor, and the experience of war (or the threat of war) might simply change the power balance between vested interest groups in society (Olson 1982). As argued elsewhere, however (see, for example, Obinger and Petersen 2017), studying wartime mobilization alone is not enough. War should be seen ‘as a process and not solely as an event’ (Thompson 1993, 140; Dudziak 2012) and therefore disaggregated. Since wars are planned and anticipated, we also have to include war preparation efforts in our analysis and study the short-term and long-term effects of war for social policy making in the postwar era (cf. Titmuss 1958). By distinguishing between three phases (war preparation, wartime mobilization, and the post-war legacy) and between supply-side and demand-side effects in the short run and the long term, we can relate welfare state changes more easily to specific causal mechanisms and, as a consequence, offer a comprehensive and more systematic account of the impact of mass warfare on the development of Western welfare states.

POSSIBLE CAUSAL MECHANISMS L INKING MILITARY CONFLICT AND THE WELFARE S TATE In what follows, we address for each of the three phases a number of possible causal links between war and social policy. Table 1.1 summarizes feedback effects of war on the welfare state that can be posited or are discussed in the pertinent literature. It is important to emphasize that we are not arguing in favour of a one-size-fits-all theory of the effects of military conflict on welfare state development, as of course much depends on national contexts. Our aim is rather to suggest a series of presumed, and partly already welldocumented, causal links between warfare and welfare as an analytical framework for the country chapters. These inquiries examine whether, and under what contextual conditions, these mechanisms played out in different national settings.

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Table 1.1. Possible causal links between war and social policies Phase

Mechanism and channel of influence (supply- vs. demand-side)

War preparation

Mass conscription, industrialization, technological change, and demographic transition trigger • concerns about public health (demand-side) • a logic of equal sacrifice (demand-side) • worries about the size of the population fit for military service (demand-side) • concerns about the skills of soldiers (demand-side)

Mobilization period

Industrialized mass warfare leads to • a guns and butter trade-off (supply-side) • the need to increase mass loyalty and stability on the home front (demand-side) • new and higher taxes related to war financing (supply-side) • a massive increase in state intervention and state capacities related to economic planning and the overall war effort (supply-side) • new patterns of policy diffusion (supply-side) • shifts in power resources (supply-side) • tremendous social needs caused by mass carnage and destruction (demand-side) • changed individual preferences and collective behaviour due to wartime uncertainty and the horrors of war (demand-side)

Possible short- and long-term impacts on social policy

• Labour protection legislation, public health measures (short- and long-run) • taxation of non-servicemen, concession of political and social rights in exchange for war service (long-run) • youth and maternalist welfare, family policy (short- and long-run) • educational reforms (long-run)

• policy stalemate/welfare cutbacks during war (short-run) • expansion of benefits, welfare state promises (long-run) • displacement effect in fiscal policy facilitates welfare state expansion (long-run) • governments gain experience in socio-economic planning; wartime transformations in state capacity facilitate post-war state intervention (long-run) • coercive social policy transfer, policy learning (short- and long-run) • recalibration of power resources shapes political coalition-building in the post-war period (long-run) • new welfare programmes for war victims and soldiers (short- and, especially, long-run) • risk aversion and higher preferences for redistribution and risk-pooling; elite cooperation (short- and long-run) (continued )

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Table 1.1. Continued Phase

Mechanism and channel of influence (supply- vs. demand-side)

Post-war period

After armistice • social needs related to demobilization (demand-side) • territorial changes related to war outcome (demand-side) • polity reconfigurations (e.g. democratization), economic stabilization/reconstruction (supply-side) • new political and economic international order such as the establishment of international organizations (supply-side)

Possible short- and long-term impacts on social policy

• reintegration programmes for veterans (short-run) • social protection of war refugees; territorial changes may increase ethnic homogeneity and thus strengthen solidarity (short- and long-run) • democratization and economic growth related to reconstruction facilitate welfare state expansion (long-run) • international cooperation, IOs as hubs of policy diffusion, international codification of social rights (long-run)

War Preparation When studying the relationship between military conflict and the welfare state, we first have to shed light on the antecedent conditions of war and war preparation efforts. Wars are anticipated and planned, and welfare reform might be one element of war preparation activities. To understand the possible links between war preparation and social policy, one has to recall two fundamental transformations in the military context that occurred in the second half of the nineteenth century. On the one hand, most European countries introduced universal conscription (Figure 1.1) in response to previous military defeats and rising military competition in the age of imperialism (Foerster 1994; Epkenhans and Groß 2003; Asal, Conrad, and Toronto 2015). By contrast, conscription was less common in the English-speaking world before the twentieth century (Levi 1996). Britain, for example, a country with a favourable geographic location, which, furthermore, was protected by a powerful navy, introduced conscription only in 1916. On the other hand, the late nineteenth century witnessed a revolution in military technology (Chickering et al. 2012). The invention of the machine gun and technological improvements in artillery and naval forces dramatically increased the firepower of weaponry. The mechanization and the destructiveness

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Australia Austria Belgium Denmark Finland France Germany Israel Italy Japan Switzerland The Netherlands United Kingdom USA 1860

1880

1900

1920

1940

1960

Figure 1.1. Military conscription in selected countries, 1860–1960 Note: The definition of conscription follows Toronto (2007): ‘The method of recruitment is considered to be “conscription” if the principal means of induction into the military is the use of force, be it through legal means (e.g., conscription) or extra-legal means (e.g., impressments), or where individuals cannot realistically say “no” to military service.’ Sources: authors’ compilation, based on Toronto (2007) and Asal et al. (2015), corrected with information from chapter authors.

of warfare were, later on, further accelerated by the use of aircraft, tanks, and newly developed weapons of mass destruction (such as toxic gas). For the military, these developments meant that any future conflict would be waged as an industrialized mass war with continental Europe as the main theatre. While it was clear that this future ‘machine war’ (Weber 1985 [1922], 566, 686) would end up causing unprecedented destruction, its duration, as well as the appropriate strategy for waging it, was contested among the different militaries. Even though the American Civil War and the Russo–Japanese War had already exemplified the changed nature and brutality of this new kind of warfare, immediate experience of these realities was more or less lacking in Europe until World War I. Given these imponderables, and against the backdrop of rising tensions between the Great Powers in Europe in the age of imperialism, militaries and governments increased their war preparation efforts (Kronenbitter 2003; Boemke et al. 2006; Hamilton and Herwig 2010). Apart from mere military activities (armament, manoeuvres, etc.), it is at least arguable that the war preparation activities and the power ambitions of states also included domestic reforms in social policy. But how are universal conscription, changes in military technology, and social and educational policies causally related? At least four causal mechanisms might play a role: First, the introduction of mass conscription coincided with rapidly progressing industrialization and urbanization. Economic structural change led to a decline of the agricultural sector, which traditionally had been the army’s most important reservoir for recruiting healthy and morally reliable soldiers. The deterioration of working and living conditions caused by industrialization and

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urbanization was mirrored in the high numbers of young men who were deemed unfit for military service. Physical examination of those conscripted provided policymakers for the first time with mass data on the health status and educational competencies of young men (Hartmann 2011). By 1880, more than 50 per cent of the young men mustered in Germany and Switzerland did not pass their physical (Cohn 1879). In Austria-Hungary, the share was even higher than 70 per cent. High numbers of young men unqualified for service were also reported for Britain during the Boer Wars (cf. Titmuss 1958; Dwork 1987; Zweiniger-Bargielowska 2010). These figures were certainly alarming and raised concerns among policymakers and the military about the combat preparedness and force level of the armed forces. In light of the poor physical status of British soldiers during World War I (Winter 1985, 199–200), Prime Minister Lloyd George said, in a speech delivered in 1917, that ‘[y]ou cannot maintain an A-1 empire with a C-3 population’ (quoted in Gilbert 1970, 15). Similar concerns were raised in several countries and may well have figured as part of the motivation for measures to improve public health. Examples include labour protection legislation (e.g. regulation of working hours), better nutrition, and improved hygiene to roll back rampant diseases. It is plausible to assume that these measures were particularly aimed at children, juveniles, and young females (i.e. prospective mothers), in an effort to secure the nation’s future defence power. Second, the introduction of mass conscription raised issues regarding the equality of sacrifice, that is, the fair distribution of the costs and burdens of military service among the population (Wilensky 1975, 71). For Wilensky and many other scholars, the logic of equal or shared sacrifice implied a thrust for equality in the long run (Andrzejewski 1954; Mann 1988; Tilly 1990; Kestnbaum 2002). According to Otto Hintze (1975 [1906], 207), universal conscription led to an ‘awakening of political consciousness in the population, the image of the state becoming an affair not merely of the rulers but of the ruled and being conceived of as a community’. Why was this the case? Conscription significantly changed the relationship between the state and its citizens. It expelled foreign mercenaries from the armed forces and made military service an obligation for male citizens. However, mass conscription and war service imposed high costs and risks on young men. The fact that the state mandated a burdensome and potentially deadly duty on male citizens, which for men from the lower classes was often unmatched by political and social rights, nurtured claims for political equality (Andrzejewski 1954, 69; Kestnbaum 2002, 130–3). This pressure increased with the ‘military participation ratio’ (Andrzejewski 1954), that is, the number of men under arms. It is therefore plausible to assume that the males from the lower strata of society drafted for military service (but also the men and women replacing soldiers in the domestic economy) demanded political as well as social rights on a quid pro quo basis, that is, as compensation for their sacrifices and merits rendered

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for, and mandated by, the state. Already in 1868, Hermann Ritter von Orges, a former member of the Prussian army and later civil servant in Imperial Austria, had noted: ‘If one aims at democratizing the state, one has to militarize the nation. . . . Universal suffrage and mass conscription reinforce each other’ (Ritter von Orges 1868: 297, 314). Even though Otto Hintze (1975 [1906], 211) pointed out (before World War I) that universal suffrage was ‘not . . . an automatic consequence’ of conscription and war,⁴ it is fair to assume that mass conscription and war service raised expectations of equal rights among the lower strata of society. In fact, one political slogan in Swedish suffrage debates was ‘one man, one vote, one gun’ (Bendix 1977, 114). Critics of mass conscription had warned of this scenario from the very outset. Metternich, for example, insisted at the Congress of Vienna on the abolition of conscription, which he regarded as a threat to the ancien régime (Andrezejeski 1954, 69), while German historian Leopold von Ranke warned against giving military training to the masses, ‘for he who serves the state with his life has also a claim on it for his support’ (quoted in Rimlinger 1971, 101). It was thus generally only in the wake of military setbacks (Posen 1993), under conditions of strong military rivalry (Asal et al. 2015), or in situations where the future of the state or the independence of its people were at stake (Kestnbaum 2002) that governments adopted universal conscription. We find this equalizing effect of conscription and war service in other areas, too. Scheve and Stasavage (2010; 2012; 2016) have convincingly demonstrated that the logic of fair burden-sharing prompted the introduction of progressive taxes at high rates levied on the very rich, that is, typically old men who did not risk their lives for the nation. But, for the same reason, in several countries, young males deemed unfit for military service were heavily taxed and the revenues of this tax often used to finance the income support of disabled veterans (Cohn 1879; Thierl 1892). In the long run, these changes on the revenue side might have been an important fiscal prerequisite of welfare statebuilding, both with respect to state capacity and norms (on taxes, see also ‘War Mobilization’ below). Third, conscription and industrialization were accompanied by demographic transition. Between 1870 and 1940, the birth rate in the Western world declined by about 50 per cent (Teitelbaum and Winter 1985, 14). This decline set in early in France and in other highly industrialized nations and later spilled over into the rest of Europe (Kahn 1930; Myrdal and Myrdal 1935). Related fears and discourses of depopulation (Teiltelbaum and Winter 1985;

⁴ This is borne out by quantitative research. Preparation for war does not appear to have a statistically significant effect on suffrage extensions (Przeworski 2009), whereas there is evidence of a post-war effect on democracy, especially in terms of female suffrage (Hicks 2013). For a recent wide-ranging study of the link between war and political rights, see Ferejohn and Rosenbluth (2016).

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Tomlinson 1985; Hartmann 2011), power ambitions of nations in foreign affairs (Forcucci 2010) and a military doctrine emphasizing ‘superiority in numbers’ (von Clausewitz 2012 [1832], 203) are possible triggers of pronatalist policies because military leaders typically assumed a simple linear relationship between the size of the population and military power.⁵ Governments and the militaries became engaged in what has been called ‘the increasingly obsessive numbers game of comparative demography’ (Best, quoted in Krebs and Levy 2001, 68). France, where declining birth rates coincided with defeat in the Franco-Prussian War, was particularly susceptible to these ideas. Once population policy is on the agenda, however, young females and mothers inevitably become targets of public welfare interventions. Apart from improving the social protection of mothers, military interests might also have stimulated pronatalist family policies with cash benefits and tax deductions providing material incentives for family formation (see, for instance, Bock and Thane 1991). In addition, population decline caused by acts of war might have reinforced a pronatalist thrust, and it is likely that pronatalist population policies, maternalist social policy regulations, and the promotion of masculine values through mass conscription (Frevert 2004) had a lasting effect on gender relations. Finally, as already mentioned in the context of public health concerns, not only the quantity of the population but also its quality mattered in the age of mass warfare. The rapid progress in military technology raised skill requirements in the armed forces. Moreover, while population size is one important factor for waging a mass war, history is full of examples of clever Davids defeating Goliaths. Handling and maintaining an increasingly sophisticated weaponry and progress in communication technology (e.g. telegraph) required basic skills in reading, writing, and calculus (Duffy 1985). Rolling back illiteracy was also a prerequisite for effective military propaganda and mass indoctrination (Posen 1993). In addition, multinational armed forces, such as the Austro-Hungarian army, were facing a severe language problem (Stone 1966). While armies maintained their own educational institutions and also operated programmes to fight illiteracy, it is less clear to what extent public education was shaped by military interests. Comparative studies in sociology and political science concerning the historical development of primary education (see, for example, Soysal and Strang 1989; Ansell and Lindvall 2013) have to date neglected this question. Economists, by contrast, have shown that military defeats and military competition led to higher levels of education spending (Aghion et al. 2012). While not a central theme of this volume, this possible relationship between warfare and public education is a promising avenue of inquiry.

⁵ This assumption is shared by ‘realists’ in international relations (see Krebs and Levy 2001).

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War Mobilization War mobilization, especially mobilization for industrialized mass war, changes the parameters of whole countries. Entering the phase of large-scale mobilization and military combat simply raises the stakes for both nation states and their citizens. To begin with, the impact of war on social policy in wartime is likely to be negative because of the large extent of resources absorbed by the military. This mechanism has become known as the guns and butter trade-off in the public expenditure literature. Military spending is expected to crowd out civil expenditure, most notably social spending. Some of that spending already happens in anticipation of war, but wartime military spending dramatically outgrows expenditure on pre-war armaments (Harrison 1998). The empirical case for a strong guns and butter trade-off in peacetime, however, is ambiguous at best. There is no evidence that military and social spending is strongly negatively related across countries and across time (Russett 1982; Mahler 1990; Gifford 2006; Cusack 2007). However, things might well be different in the mobilization phase with national security and survival taking priority over all other goals, including social expenditure. As a result, one should expect a short-term tradeoff favouring guns over butter in the darkest hours of war. However, a closer look at the mobilization period also reveals that war may have a more beneficial impact on social policy development. Several causal mechanisms might be of relevance. Most of them, however, take effect only in the long run. First, governments of all types are in need of mass loyalty in emergency situations. Issues of legitimacy, efforts to stabilize the home front, and military requirements are closely related in wartime. Governments need to motivate millions of soldiers and give citizens an understanding of the aims of the war and reasons it is being fought, while the military has a strong interest in political stability on the home front and the maintenance of effective supply chains. Even such apologists of total war as German General Erich Ludendorff (1937, 34–9) saw ‘mental unity’ as a prerequisite of, and ‘malcontents on the home front’ as a threat to, military success. In an effort to increase mass compliance, governments may well be tempted to enact welfare reforms or to promise an expansion of social protection in the aftermath of war. Nazi politician Robert Ley unveiled a plan for an expanded post-war German welfare state as early as 1940. And in 1941, the Allies emphasized their horizon of expectations for a better post-war world in the Atlantic Charter, and, in Britain, the promise of a ‘New Jerusalem’ played a prominent role in the wartime public debate (Addison 1994). Public interest in the Beveridge Report (1942) for an overhaul of the British social security system was enormous. Digested versions of the Report were even dropped over German cities as part of a strategy for destabilizing the German home front (Baldwin 1994).

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Legitimacy issues in belligerent countries are arguably of lesser importance in the early war phase, when the cruelties of war are often masked by patriotic fervour, ‘self-mobilization’ (Purseigle 2012, 259) and war propaganda, but they may become predominant in long-lasting wars, with continuously rising death tolls, destruction, and exhaustion (Adams 1977, 424). Under the latter circumstances, neither repression nor propaganda alone is likely to be sufficient for securing mass compliance. Governments may therefore be forced to offer social policy concessions to enhance fighting spirit and to promote political stability on the home front, as material hardship threatens social turmoil. From a purely military perspective, social unrest and both physical and mental exhaustion undercut a nation’s power to defend itself. Suppression of strikes and riots is a feasible option at times of extreme emergency but is, at the same time, risky for regime stability and detrimental to mass loyalty. However, the need to foster an appearance of benevolence through output legitimacy is, as mentioned above, severely constrained by the dramatic increase in military expenditure implicit in modern mass warfare. In case of war, national survival will always be prioritized vis-à-vis other policy initiatives. While this is particularly true for the introduction of new welfare programmes requiring substantial amounts of public money (e.g. cash benefits), the trade-off between military and social spending in wartime is less relevant for rather inexpensive regulatory social policies such as labour protection. In any case, the most effective strategy for generating mass loyalty is arguably to make promises of welfare reform after the war is ended. This involves no costs in the short run but may be highly effective in enhancing legitimacy in the post-war period. Second, financing the soaring military expenditure requires new public revenues. It has been extensively documented by numerous studies that new taxes have been introduced in wartime (Tilly 1975, 1990; Elias 1982 [1939]; Porter 1994; Kiser and Linton 2001; Aidt and Jensen 2009; Dincecco and Prado 2012; Piketty 2014) and that tax rates, as well as tax progressivity (Scheve and Stasavage 2010; 2012; 2016), have also been raised significantly. Bank et al. write that ‘the history of America’s tax system can be written largely as a history of America’s wars’ (Bank, Stark, and Thorndike 2008, xii)—and this close nexus between warfare and taxation holds for many other countries (cf. Centeno 2003), even those not actively involved in war. Given the sheer size of the military budget in the age of mass warfare, new and/or higher taxes are frequently insufficient, forcing governments to rely on public borrowing through the issuing of war loans. In war-torn countries, however, massively rising debt typically creates macro-economic imbalances in the long run, with hyperinflation as the most drastic example. By wiping out private savings and generating abundant uncertainty, hyperinflation creates new welfare state constituencies among the middle classes. Overall, the mode and legacy of financing warfare seems to be of great relevance for post-war public policies.

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Third, total war heavily affects and disturbs the economy and labour markets in various ways. Established trade and financial relations are interrupted or simply collapse due to military hostilities; the military extracts a massive share of economic resources, male workers are drafted for war service on a large scale, while war-induced destruction of infrastructure and production sites leads to output decline. Labour markets suffer from manpower shortages and are therefore subject to massive regulation. In fact, these patterns can be observed in both world wars. The resulting shortages of goods, services, and labour typically led to unprecedented levels of government intervention in economic affairs and the rise of ‘economic planning’ (Klausen 2001). As a result, the market economy was replaced by what contemporary observers described as ‘war socialism’. Economic planning and state intervention included rationing of all kinds of goods and services, price regulations, currency controls, nationalizations of companies and heavy regulation of labour markets. Large-scale government intrusion in economic affairs went hand in hand with markedly changed relations between government, business organizations, and trade unions; enhanced the administrative, fiscal, and legislative powers of the state; and led to an enormous centralization of government and bureaucratic professionalization (de Swaan 1988; Porter 1994). This well-documented massive increase in state capacities and the war-related changes in state–economy relations likely created favourable institutional conditions for post-war welfare state development. Fourth, wars can lead to changing patterns of policy diffusion. War-related policy diffusion can happen through various channels. One of these is coercive policy transfer in the course of the occupation or annexation of new territories. Legal rules, including social policy institutions, from the invading country are regularly imposed on the occupied territory. Even though it is common that such rules are adjusted to local circumstances, the resulting impact of that change can still be substantial. There are also other more indirect avenues of diffusion. Going to other countries to fight teaches about differences in institutions, customs, and standards of living. Soviet soldiers invading Eastern German territories in World War II experienced a ‘rude shock’ when they saw the far higher living standards enjoyed by ethnic Germans in the East and ‘[w]ith good reason . . . wondered why Germans had ever attacked’ (Naimark 1995, 469). Similarly, it is plausible that returning occupation forces in some cases bring back knowledge about the social protection levels found in other countries. Policy learning also occurs at the elite level. Acknowledging the power of international comparison, Nazi Germany in the 1930s and 1940s—with limited success—tried to strengthen the legitimacy of the Nazi social model by initiating an alternative framework (Patel 2015). Moreover, in World War II, a number of European governments were exiled to London. It was common to draw up post-war recovery plans that were more or less inspired by those of other countries (Goddeeris 2007), and such plans, in many

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instances, influenced post-war planning and policy making in their respective national contexts. Fifth, war affects the distribution of power resources in politics, society, and industrial relations in manifold ways. For example, war may strengthen the power resources of hitherto marginalized groups, as total war requires the mobilization of all segments of society. To maximize military power in World War II, several of the Allied forces called-up men belonging to racial minorities and/or recruited soldiers from colonial territories for the armed forces. It is once more conceivable that the ‘logic of equal sacrifice’ translated war service of these groups into a higher societal esteem after war. It is questionable, however, whether this effect persisted over the long pull. In a similar vein, labour scarcity in wartime led in many cases to an influx of women in the labour force, substituting conscripted male workers in manufacturing and many other areas of the economy (Marwick 1988). Recent research, however, has questioned the extent to which this changed women’s long-term position on the labour market in the post-war period, as wartime gender arrangements were often explicitly marked as temporary (see contributions in Wall and Winter 2005). Labour shortages in wartime also might have strengthened trade unions’ bargaining power vis-à-vis business organization and the government. The reason is simply that the quiescence of the unions was imperative for the functioning of the munitions industry and the war machinery in general. Repression was feasible in some contexts, but this option was also risky as it could provoke strikes. During World War I, for example, German Chancellor Bethmann Hollweg rejected demands by the military that a harsh line should be taken against labour by arguing that ‘we cannot win the war against the working class’ (quoted in Mai 1987, 98). In democratic countries, war or military threat helped to forge broad coalition governments emphasizing consensus and cooperation over ideological conflicts (at least for the time being). A common external threat and common experiences of danger and emergency arguably make socio-economic and political differences look less significant than in peacetime and give rise to a ‘rally round the flag’ mentality (Oneal and Bryan 1995). As cooperation is to some extent a habit, the experience of a successful cross-class war cabinet or lesson-drawing from a common experience of threat and danger could well have informed politics and institution-building in the post-war period.⁶ However, war can also substantially weaken the power resources of collective actors. For example, governments can use war-related emergency powers to contain the influence of vested interest groups. Even more important,

⁶ The ‘rally round the flag’ effect may well not be an automatic consequence of conflict involvement, but rather depends on the type of military crisis and the way in which war participation is framed (Baker and Oneal 2001).

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however, is that war itself is often a source of social and political division. War might strengthen the power resources of labour in the long run, as argued above, but there is also compelling evidence that war, most notably World War I, contributed to a dramatic split in the left. The extreme social conditions of the latter wartime years, in conjunction with the exemplar of the Russian Revolution, contributed to widespread radicalization and, in consequence, to a split in the political left in several countries.⁷ A case in point is the rift of the German Social Democratic Party in 1917 over the support of the imperial government’s war policies. This divide on the left was not only long-lasting, as it was after World War II preserved and reinforced by the Cold War, but also had a major impact on political coalition-building in countries such as Italy, where the radical left remained excluded from government for much of the post-war period (thereby cementing the dominant status of the Democrazia Cristiana). Sixth, the cruelties and horrors of war generate social needs on a massive scale. During World War I, social need was, for the first time, detached from lower-class status on a major scale. Millions of war casualties, civilians and soldiers alike, needed shelter, income support, food, and medical treatment. Once more, however, it is plausible to assume that the exorbitant resources absorbed by the war machinery likely foreclosed a comprehensive resolution of these vast social needs in wartime so that a political response to warinduced social problem pressure was postponed until the guns were silent. Finally, the horrors of war and war-induced uncertainty left a strong imprint on individual preferences and collective behaviour as demonstrated by various cross-disciplinary inquiries. At the individual level, psychic trauma caused by the horrors of war is likely to translate into a higher risk and loss aversion on the part of individuals. Given the profound and pervasive uncertainty in emergency situations such as total war, even among people who otherwise conceive of themselves as good risks, there is likely to be a rising demand for collective insurance, that is, the pooling of risk (Dryzek and Goodin, 1986). The most important institution of collective insurance is the welfare state, and the demand for public social protection is further nurtured by the lack of market alternatives at a time when financial markets are malfunctioning or simply collapse in war-torn economies. War also might affect the political orientation and behaviour of individual and collective actors within a nation state. Common experience of violence and deprivation might not only promote solidarity among people, as already argued by Titmuss (1976 [1950], 1958; see also Bauer et al. 2016), but also foster cooperation between formerly antagonistic interest groups and political parties. ⁷ This was, of course, not the only cause for a split. The ideological struggle between the reformist and revolutionary ideologies and the Russian Revolution in 1917 was likely more decisive in this respect (see Sassoon 1996, 27–60).

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The Post-War Period Wars cast long shadows on peacetime (Kier and Krebs 2010). This is particularly true of total war and its impact on post-war social policies (see also the discussion in Chapter 15 in this volume, the Conclusion). In the immediate post-war phase, there is often a strong fear of social unrest as well as economic and political instability. This was especially the case in 1945, based on the lessons learned from World War I. Such moments of insecurity created a short window of opportunity for progressive ideas (and promises) often expressed in the post-war plans of centre-left parties and trade unions. This was even the case in the USA, where the immediate post-war period 1945–7 has been described as a progressive moment, where visions of social policy reform flourished, inspired by Britain and Scandinavia (Bell 2010). In the longer run, the legacies of wartime shaped the development of social policies. We can imagine at least five causal feedback effects of war on the welfare state, some of which are discussed in the existing literature. First, both war and its aftershocks created new welfare constituencies across social classes. Immediately after the end of war, military demobilization created the challenge of reintegrating millions of soldiers into society and labour markets. Unemployment, caused by an already shaky and sometimes even disastrous economic environment, was further aggravated by the massive lay-offs in the munitions industry. In addition, millions of disabled veterans, families of killed soldiers, and civilian war casualties needed income support and medical treatment (Gerber 2012), while refugees and homeless families needed shelter in countries where the housing stock was depleted by acts of war. Moreover, shortages in war-torn economies required government intervention in fields such as foodstuffs and heating. It is well known that social disorder created political instability and revolutionary threats, especially in defeated countries. Legitimacy problems, in turn, may serve as a further impetus for welfare reforms. The necessity of averting violent regime change, and of securing mass compliance in a shaky political and economic environment, might have prompted social reforms at almost any price. While several of these war-induced social needs disappeared in the wake of economic recovery, others did not, and income support for war victims remained a major item in the welfare budget for decades. Second, the welfare state benefited from the legacy of some of the wartime transformations discussed in the previous section. War not only created new needs but often also new means for the state to cater to those needs. This applies to the massive expansion of the tax state, the increased executive and legislative powers of the state, and the experiences of policymakers in economic and social planning gathered in wartime (Klausen 2001). These changes and experiences facilitated the mastering of the war-related social needs in the post-war period. They were usually not scaled back but stayed in place when

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the fighting had stopped (Peacock and Wiseman 1961; Higgs 1989). This ‘ratchet effect’ was already observed by Norbert Elias in the 1930s and has usually been explained with habituation to increased state intervention during wartime. Once the fighting had stopped and the immediate war-related needs had been catered for, administrative and financial resources could then be diverted to new social programmes, not directly related to war. Third, the immediate post-war period is often marked by territorial changes, particularly in defeated countries. Social rights are bound to nation states, and border revisions (not to mention the emergence of new nation states) often lead to fundamental changes in welfare legislation or complicated transitions for the regions in question. Alsace (Kott 1992) or North Slesvig (Schultz 2002) are illustrative examples in this respect. Wars and territorial changes also reshape the social structure in a violent fashion. The breakdown of multinational empires after World War I (accompanied by border revisions and population exchange on a large scale) and racial mania during World War II ended up in an unusually high degree of ethnic homogeneity in European nation states (Therborn 1995). This devastating impact of war on the social structure might be related to the welfare state in a particularly perverse manner as societal homogeneity has sometimes been posited as a precondition for solidarity and redistribution to flourish (Alesina, Glaeser, and Sacerdote 2001; see also Brady and Finnigan 2014). Fourth, wars affect economic performance in many ways that are of relevance for the welfare state. However, it is important to distinguish between immediate effects and long-term impacts. In the short run, economic decline in war-torn countries created additional needs for social protection. Post-war hyperinflation and economic depression created a situation of uncertainty and made private fortunes worthless. It is likely that such a deep crisis affects the public–private mix in social policy and income distribution. As historical inequality data show, war clearly destroys private capital and leads to a more egalitarian income distribution, through the destruction of physical assets, stagnating stock prices, and the collapse of foreign portfolios (Piketty 2014, 147–50). In the long run, however, war-induced destruction and economic reconstruction were triggers for the exceptionally high economic growth of some countries in the post-war period (Castles 1991). According to neoclassical theory of economic growth, a massive decline in the physical capital stock on a country’s home territory creates a high potential for economic catch-up over the transitory phase to the steady state (Solow 1956). The economic boom unleashed by reconstruction reduced unemployment and even led to labour shortages in countries suffering from massive human losses incurred during wartime. In a functionalist fashion, rising GDP also facilitated the financing of welfare state expansion. Moreover, military conflict typically changes trade relations during war and affects levels of trade openness thereafter. In fact, both world wars resulted in higher economic closure in the post-war period.

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After World War II, capital controls restricted the exit options for mobile factors. Governments could seize this opportunity to enact redistributive policies and to levy a heavy tax burden on firms and capital (Scharpf 2000). Overall, the long-term economic repercussions of war could be beneficial for welfare state development. Finally, wars frequently lead to fundamental institutional reconfigurations at the national and international level. Both world wars meant the breakthrough of democracy, which may be interpreted as a long-term outcome of the ‘logic of equal sacrifice’ discussed above (Porter 1994; Kasza 1996; Przeworski 2009; Hicks 2013). Given the death toll of millions of soldiers, mainly recruited from the lower strata of society, and the large-scale mobilization of the female labour force in wartime, it was no longer possible for governments to deny political participation. In a nutshell, ‘[m]ass military service and mass carnage had created a democratic imperative’ (Porter 1994, 172–3). In fact, in many countries, both world wars heralded the extension of male suffrage and/or the introduction of women’s suffrage (Przeworski 2009).⁸ Moreover, World War I was a catalyst of proportional representation (Emmenegger and Petersen 2017). Democratization and electoral reform led to a substantial reallocation of power resources in the post-war period and generated new patterns of coalition-building with important implications for government spending and redistribution (Iversen and Soskice 2006; Manow 2009). At an international level, both world wars clearly prompted the foundation of global bodies such as the International Labour Organization (ILO), the League of Nations (World War I), and the United Nations (World War II). The ILO, for example, is widely seen as an international organization that has pushed social policy all over the world (Kott and Droux 2013; Schmitt et al. 2015). After World War II, social rights were anchored in the Universal Declaration of Human Rights. In Europe, World War II served as an impetus for European integration, with a view to foreclose the possibility of a future armed conflict through closer economic collaboration.⁹ This was also a lesson of World War I, which demonstrated that the asymmetric outcome of war, that is the division of belligerent nations into groupings of winners and losers, may also fuel new tensions between states and create space for new actors seeking revenge for the supposed indignities inflicted on the defeated countries. War also reconfigured military alliances with important effects for welfare state development. During the Cold War, systemic competition between East and West contributed to the expansion of welfare states in the post-war era

⁸ In fact, Przeworski shows that the relationship between war and post-war suffrage extension is much more evident than between conscription and democracy (2009). See also Aidt and Jensen (2014). ⁹ However, it is contested whether European integration was also beneficial for the welfare state (Scharpf 2002).

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(Obinger and Schmitt 2011). This competition was particularly fierce in newly divided countries such as Germany (Hockerts 2009; Obinger and Lee 2013). This list of tentative and well-established causal effects and mechanisms between military conflict and social reform will serve as the framework for the fourteen national cases analysed in this volume. Taking national cases as our point of departure allows not only for testing the relevance of specific linkages but also for addressing the importance of the national and historical context (discussed in the following section). Furthermore, it makes it possible to address the questions of the accumulated effects of wars. In fact, the relatively short period between 1914 and 1945 covered two world wars as well as the Great Depression of the 1930s. Accumulated effects may include both lessonlearning (e.g. the rise of the regulation state) and legacies in the form of institution-building.

THE I MPORTANCE O F CONTEXT Needless to say, the relevance of all the mechanisms discussed in the previous section varies significantly across different political, economic, and military contexts. Much, for example, depends on the existing welfare institutions, the political regime type, the nature of military organization (e.g. mass conscription), whether or not a country was an aggressor, whether or not it was occupied by a foreign power, and whether or not military conflict took place on the home territory. Table 1.2 provides some figures that reveal significant cross-national variation in respect of our key independent variable, that is, war. It is clear from this table that we have a large between-case variation in terms of both the costs of war and the scope of war involvement. The difference in casualties incurred by Germany and Japan, on the one hand, and countries such as Switzerland and Denmark, on the other, is enormous. Some countries, such as the United States, although heavily involved in the world wars, never had to fight interstate wars on their own soil. Yet other countries remained fully neutral and were spared from any direct war impacts altogether. This variation in war intensity and war incidence is an important part of the explanation of the impact of war on the welfare state. Moreover, the social policy effects of warfare may be shaped by the preexisting welfare state architecture and by previous participation in war (e.g. via learning effects). At the time of the two world wars, even in the group of industrialized countries, we find variation with respect to the introduction of basic social policy legislation. Some countries had mature and comprehensive social security systems already in place, whereas others were latecomers. Finally, the outcome of war should clearly matter. Germany fought and lost two world wars, Britain and the USA won twice, whereas Switzerland

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Table 1.2. War incidence and war intensity Months at War

Battle Deaths (% of population)

(1860–1960) Country Australia Austria Belgium Denmark Finland France Germany Italy Japan Netherlands Switzerland United Kingdom USA

Total

Interstate

% of Total

WWI

WWII

103 214 100 4 54 606 208 274 285 157 0 621 241

103 55 82 4 54 219 138 121 194 30 0 161 106

100 26 82 100 100 36 66 44 68 19 0 26 44

1.37 2.34 0.18 0 0.47 3.36 2.82 1.78 0.001 0 0 2.02 0.13

0.48 3.43 0.12 0 1.76 0.51 5.01 0.51 2.38 0.09 0 0.87 0.31

Note: 1910 population used for World War I, 1940 population used for World War II; 1917–18 Finnish Civil War for Finland included in World War I battle deaths. Sources: Months at war and battle deaths are from the Correlates of War (COW) dataset (Sarkees and Wayman 2010); total population from Clio Infra dataset (International Institute for Social History 2017); Australian WWI battle deaths from Australian War Memorial (2017); Austria-Hungary WWI population from Austria-Hungary 1910 Census, quoted in Romsics (2002, 1); and Austrian WWII battle deaths from Frumkin (1951).

remained neutral during both conflicts. In between these clear-cut cases, we find the remaining countries in this volume. Problems of legitimacy, for example, are arguably much more pressing and prevalent in defeated countries where the military breakdown was often accompanied by regime overthrow. Such conditional hypotheses have been almost totally ignored by the existing literature. At the same time, and in line with Wimmer’s warning cited earlier, we need to be aware of the other causal factors that had an impact on welfare state development irrespective of the war effort. Yet, there is hardly any causal factor emphasized in the welfare state literature that is not affected by mass warfare in the sense that it potentially interacts with war. This holds true for economic prosperity, political regime type, state capacity, power resources of labour parties and trade unions, institutional veto points, social policy paradigms, social structure, and more.

OUTLIN E OF CONTENTS Each of the following thirteen country chapters (Belgium and the Netherlands are treated in one longer chapter) proceed chronologically. They start with a

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brief description of the welfare state status quo ante and report basic facts related to politics, the economy, and the military. Starting from early wars of nation-building (if relevant), they then move on to World War I, World War II, and the post-1945 period.¹⁰ The chapters investigate the possible mechanisms linking war and welfare state development discussed in this introduction. The country chapters are arranged according to war intensity. We start with the nations that suffered from acts of war on their home territory and move on to belligerent countries, which fought mainly in war theatres abroad. This is followed by the experience of occupied and neutral countries and, finally, the Israeli case, which is, as already mentioned, unique in several respects. The concluding chapter will offer a brief summary of the case study evidence and a quantitative analysis of the effects of war on welfare state development. Entering this discussion allows us to link the evidence presented in this book more closely to theories of comparative welfare state research. We will also discuss the effect on social outcomes, especially on inequality, the impact of the Cold War on welfare state development, and the state of the warfare–welfare nexus today. Finally, the Conclusion will end with an outline for future research.

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Pedersen, Susan. 1993. Family, Dependence, and the Origins of the Welfare State: Britain and France, 1914–1945. Cambridge: Cambridge University Press. Petersen, Jørn Henrik and Klaus Petersen. 2013. ‘Confusion and Divergence: Origins and Meanings of the Term “Welfare State” in Germany and Britain, 1840–1940’. Journal of European Social Policy 23: 1–15. Piketty, Thomas. 2014. Capital in the 21st Century. Cambridge, MA: Harvard University Press. Pironti, Pierluigi. 2015. Kriegsopfer und Staat. Sozialpolitik für Invaliden, Witwen und Waisen des Ersten Weltkriegs in Deutschland und Italien (1914–1924). Vienna & Cologne: Böhlau. Porter, Bruce D. 1994. War and the Rise of the State: The Military Foundations of Modern Politics. New York, NY: Free Press. Posen, Barry R. 1993. ‘Nationalism, the Mass Army, and Military Power’. International Security 18: 80–124. Preller, Ludwig. 1978 [1949]. Sozialpolitik in der Weimarer Republik. Düsseldorf: Droste. Przeworski, Adam. 2009. ‘Conquered or Granted? A History of Suffrage Extensions’. British Journal of Political Science 39: 291–321. Purseigle, Pierre. 2012. ‘Home Fronts: The Mobilization of Resources for Total War’. In The Cambridge History of War: Vol. 4, War and the Modern World, edited by R. Chickering, D. Showalter, and H. van de Ven, 257–84. Cambridge: Cambridge University Press. Rimlinger, Gaston V. 1971. Welfare Policy and Industrialization in Europe, America, and Russia. New York: Wiley. Romsics, Ignac. 2002. The Dismantling of Historic Hungary: The Peace Treaty of Trianon, 1920. New York, NY: Columbia University Press. Russett, Bruce. 1982. ‘Defense Expenditures and National Well-Being’. American Political Science Review 76: 767–77. Sarkees, Meredith Reid and Frank Wayman. 2010. Resort to War: 1816–2007. Washington, DC: CQ Press. Sassoon, Donald. 1996. One Hundred Years of Socialism: The West European Left in the Twentieth Century. New York, NY: The New Press. Schaeffer, Ronald. 1991. America in the Great War: The Rise of the War Welfare State. New York & Oxford: Oxford University Press. Scharpf, Fritz W. 2000. ‘The Viability of Advanced Welfare States in the International Economy: Vulnerabilities and Options’. Journal of European Public Policy 7: 190–228. Scharpf, Fritz W. 2002. ‘The European Social Model: Coping with the Challenges of Diversity’. Journal of Common Market Studies 40: 645–70. Scheve, Kenneth and David Stasavage. 2010. ‘The Conscription of Wealth: Mass Warfare and the Demand for Progressive Taxation’. International Organization 64: 529–61. Scheve, Kenneth and David Stasavage. 2012. ‘Democracy, War, and Wealth: Lessons from Two Centuries of Inheritance Taxation’. American Political Science Review 106: 81–102.

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Scheve, Kenneth and David Stasavage. 2016. Taxing the Rich: A History of Fiscal Fairness in the United States and Europe. Princeton, NJ: Princeton University Press. Schmidt, Manfred G. 1989. ‘Learning From Catastrophes: West Germany’s Public Policy’. In The Comparative History of Public Policy, edited by Francis G. Castles, 56–99. Cambridge: Polity Press. Schmitt, Carina, Hanna Lierse, Herbert Obinger, and Laura Seelkopf. 2015. ‘The Global Emergence of Social Protection: Explaining Social Security Legislation 1820–2013’. Politics & Society 43: 503–24. Schultz, Anette Ø. 2002. ‘Sociale sikringer i Sønderjylland—administrayiv brakmark eller nationalpolitisk slagmark?’ In Harmonisering eller særordning. Sønderjylland som administrativ forsøgsmark efter genforeningen i 1920, edited by Peter Fransen et al., vol. 1, 383–549. Aabenraa: Historisk Samfund for Sønderjylland. Skocpol, Theda. 1992. Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States. Cambridge, MA: Harvard University Press. Solow, Robert M. 1956. ‘A Contribution to the Theory of Economic Growth’. Quarterly Journal of Economics 70: 65–94. Soysal, Yasemin N. and David Strang. 1989. ‘Construction of the First Mass Education Systems in Nineteenth-Century Europe’. Sociology and Education 62: 277–88. Sparrow, James T. 2011. Warfare State: World War II Americans and the Age of Big Government. Oxford: Oxford University Press. Stanley, Marcus. 2003. ‘College Education and the Midcentury GI Bills’. The Quarterly Journal of Economics 118: 671–708. Stone, Norman. 1966. ‘Army and Society in the Habsburg Monarchy, 1900–1914’. Past & Present 33: 95–111. Summerfield, Penny. 1997. ‘Gender and War in the Twentieth Century’. The International History Review 19: 1–15. Teitelbaum, Michael S. and Jay M. Winter. 1985. The Fear of Population Decline. London: Academic Press. Temple, William. 1941. Citizen and Churchman. London: Eyre & Spottiswoode. Therborn, Gøran. 1995. European Modernity and Beyond: The Trajectory of European Societies, 1945–2000. London: Sage Publications. Thierl, Heinrich Gustav. 1892. ‘Die Abgabe der Wehrdienstfreien mit besonderer Berücksichtigung auf Österreich-Ungarn’. Zeitschrift für Volkswirtschaft, Socialpolitik und Verwaltung. Band 1, 569–612. Thomas, Martin, Bob Moore, and L. J. Butler, eds. 2015. Crises of Empire: Decolonization and Europe’s Imperial States. London: Bloomsbury Publishing. Thompson, William R. 1993. ‘The Consequences of War’. International Interactions 19: 125–47. Tilly, Charles. 1975. The Formation of National States in Western Europe. Princeton, NJ: Princeton University Press. Tilly, Charles. 1990. Coercion, Capital, and European States, AD 990–1990. Oxford: Blackwell. Titmuss, Richard M. 1958. Essays on the Welfare State, second edition. London: Unwin University Books. Titmuss, Richard M. 1976 [1950]. Problems of Social Policy. London: Kraus reprint.

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Tomlinson, Richard. 1985. ‘The “Disappearance” of France, 1860–1940: French Politics and the Birth Rate’. The Historical Journal 28: 405–15. Toronto, Nathan. 2007. Military Recruitment Dataset. Fort Leavenworth, KS: Foreign Military Studies Office. Turchin, Peter, Thomas E. Currie, Edward A. L. Turner, and Sergey Gavrilets. 2013. ‘War, Space, and the Evolution of Old World Complex Societies’. Proceedings of the National Academy of Sciences of the United States of America 110: 16384–9. Wall, Richard and Jay M. Winter. 2005. The Upheaval of War: Family, Work and Welfare in Europe, 1914–1918. Cambridge: Cambridge University Press. Weber, Max. 1985 [1922]. Wirtschaft und Gesellschaft. Tübingen: Mohr. Welshman, John. 1999. ‘Evacuation, Hygiene, and Social Policy: The Our Towns Report of 1943’. The Historical Journal 42: 781–807. Wilensky, Harold, L. 1975. The Welfare State and Equality: Structural and Ideological Roots of Public Expenditure. Berkeley, CA: University of California Press. Wimmer, Andreas. 2014. ‘War’. Annual Review of Sociology 40: 173–97. Winter, Jay. 1985. ‘Army and Society: The Demographic Context’. In A Nation in Arms: A Social Study of the British Army in First World War, edited by Ian F. W. Beckett and Keith Simpson, 193–209. Manchester: Manchester University Press. Zweiniger-Bargielowska, Ina. 2010. Managing the Body: Beauty, Health, and Fitness in Britain 1880–1939. Oxford: Oxford University Press.

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2 The Impact of War on Welfare State Development in Germany Peter Starke

INTRODUCTION Despite the indisputable importance of warfare for German history, war has never played a major role in the historiography of the German welfare state. Certainly, there are a number of important historical studies of specific periods or of specific social policy effects of war, but few authors have addressed the warfare–welfare nexus in German social policy more generally (the main exception being Reidegeld 1989; 2006a; 2006b). This is perhaps because the big foundational moments of the history of the German welfare state—for instance, Bismarck’s social insurance laws in the 1890s and Adenauer’s 1957 pension reform—had no real connection to war. While it is possible to find many instances when war indeed became, in the words of German social democrat Ludwig Preller, a ‘pacemaker’ (‘Schrittmacher’) of welfare state expansion (Preller 1978 [1949], 85), this tends to apply to areas such as family policy, social assistance, and disability policy. In other words, it appears that war could make more of an impact in areas that were not yet highly developed at the time. But an impact it did have. The main causal mechanisms of the warfare–welfare link in Germany are, as will be shown in detail, associated with direct responses to material hardship, compensation for mass conscription, and later demobilization, and caring for the victims of war through social policy. Social policy was always a defensive instrument of autocratic regimes trying to appease the home front and, after the fighting had stopped, democratic governments used social policy to try and heal the wounds of war, both literally and metaphorically. Mobilizing labour for the war effort was a constant problem, but it hardly led to new social benefits. Instead, strong regulation and forced labour, especially of foreign workers, were used to manage labour scarcity. The labour mobilization effort, however, empowered different actors each time around: In World War I,

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trade unions gained a level of recognition that indirectly shaped social policy in the Weimar Republic. In World War II, labour mobilization was imposed but empowered only loyal agencies of state and party. In order to understand the context, it is important to briefly sketch the welfare state status quo antebellum, the extent of mobilization and destruction during World War I and II, and the political institutions and main political actors involved. First of all, Germany is rightfully counted as one of the pioneers of the modern welfare state, with Chancellor Otto von Bismarck as the main explorer of the unknown territory of national social insurance from the 1880s onwards. In quick succession, Germany introduced sickness (1883), accident (1884), and old age and invalids’ insurance (1889) for industrial workers. War played no role in these reforms, other than the fact that the very nation state introducing these laws was brought into existence through the wars of unification between 1864 and 1871. Social reform was one element in Bismarck’s twopronged strategy to contain the socialist threat posed by the emergence of Ferdinand Lassalle’s General German Workers’ Association—the other being the repression of socialist or social democratic organizations and ideas (Heffter 1963). While Bismarck’s attempt to contain social democracy failed miserably, workers clearly benefited from social insurance and German policies had a powerful influence on the international debate on social policy in Europe and even in the United States (Rodgers 1998). For the rest of the world, the country soon represented an ambivalent mix of, on the one hand, economic dynamism and progressive social policies—certainly by the standards of the day—and conservative politics and nationalistic militarism on the other. As time went by, Germany lost its place in the vanguard of welfare reformers, although coverage was extended to white-collar workers in 1911.¹ On the eve of World War I, a few other countries had either followed the German social insurance model or had embarked on an alternative assistance-type path targeting not workers but (poor) citizens, thereby following the lead of Denmark (1891) and New Zealand (1898) (Overbye 1997). Germany was not a clear frontrunner anymore. Moreover, the German mode of modernization had failed to combine social protection with greater political freedom and the government’s attitude towards the growing trade union and social democratic movement was ambiguous at best. While the repressive Sozialistengesetz had not been renewed in 1890, the labour movement remained excluded from decision-making positions. In his book on wartime labour relations, Gerald D. Feldman describes the situation in preWorld War I Wilhelmine Germany thus: On the eve of the war the political and social issues had become completely intermeshed, but the efforts to solve them had reached a point of stagnation.

¹ Some white-collar workers had been covered by the original social insurance laws, but only those with an annual income of up to 2,000 marks.

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Prosperity and widespread complacency seemed to promise protection against any major internal upheavals, but Germany was poorly prepared to suffer the sustained crisis which the war would bring. (Feldman 1992 [1966], 26–7)

Between the world wars, Germany regained its status as a pioneer, a development that is partly related to wartime domestic politics, as will be shown. The Weimar Republic was one of the most advanced welfare states of the time. Social rights had a prominent place in the new constitution of 1919 and, relative to GDP, Germany became the nation with the highest social spending in the world (Tanzi 2011). Neither austerity in the early 1930s nor the Nazi seizure of power significantly altered that picture. The Nazis preserved most of the social security rules, but tightened the eligibility regulations to exclude those citizens they regarded as non-German. In their anti-liberal reorganization of state and society, they also abolished many of labour’s key achievements of World War I. The explicit goal of replacing both free trade unions and employer organizations with a unitary labour organization (with some social policy attached) was ‘to create a true social and productive community’, as the head of the German Labour Front (German: Deutsche Arbeitsfront, DAF) Robert Ley put it. This was, briefly, the institutional status quo at the eve of World War II. Post-World War II social policy was partly formulated, or at least heavily influenced, by the victorious Allied nations. Yet the war, as will be shown, continued to shape policy development even after the founding of the two political systems of the Federal Republic of Germany (FRG) and the German Democratic Republic (GDR) in 1949. In purely military terms, Germany was the aggressor nation in all of the wars it fought during the time period under review. Before 1945—interrupted only by the break of the Versailles Treaty and the Weimar Republic—the military occupied a prominent position vis-à-vis the civilian leadership, and militarism was deeply ingrained in civil society. The wars Germany fought in the twentieth century were extremely destructive, including for its own military and civilian populations. Just over two million soldiers died during World War I,² and during World War II, Germany suffered about 6.9 million casualties: 3.3 million soldiers and 3.6 million civilians. Due to an intensified Allied bombing campaign and finally the invasion of German territory, the losses in material infrastructure and capital were enormous. The latter aspect stands in contrast to World War I, where the direct post-war costs consisted mainly of physical and mental incapacity among veterans, territorial concessions, and reparation payments imposed in the Versailles Treaty.

² Estimating civilian losses is difficult. Since the war took place largely outside of German borders, there are no numbers for German civilian deaths due directly to combat. However, food shortages claimed many lives and hunger-related mortality due to the Allied naval blockade is estimated at around 750,000 (Davis and Engerman 2006).

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The main focus of the narrative that follows will be the two world wars and their aftermaths. Some early policy effects, however, can be traced back to the mid-nineteenth century.

THE W ARS OF GERMAN UNIFICATION The Second Schleswig War of 1864, the Austro-Prussian War of 1866, and the Franco-Prussian War of 1870, pre-date the period of ‘modern’ social policy in Germany, usually associated with Bismarckian social reforms. Nonetheless, these wars contributed in some specific ways to long-term social policy development. One is the use and regulation of volunteers and voluntary organizations such as the Red Cross during wartime. From 1866 the German Red Cross was integrated into Prussian military planning, which led to significant professionalization of military and volunteer nursing (Riesenberger 1994). The wars of 1864 and 1866 had exposed the quantitative and qualitative limitations of traditional church-based nursing. Volunteers—especially bourgeois women—were now already recruited during peacetime through new women’s associations. The Franco-Prussian War of 1870/1 confirmed the success of professionalization, as the number of wounded or sick that could be saved was considerably higher among Prussian-German soldiers than among the French (Riesenberger 1994, 60). It is hard to gauge the impact on civilian healthcare, but indirect effects are quite likely. The Franco-Prussian War, already an ‘industrialised people’s war’ (‘industrialisierter Volkskrieg’) (Förster 2002, 17; see also Seyferth 2007, 567–73) then led to the first systematic benefits for retired military servicemen, invalids, and survivors (Frerich and Frey 1993, 161–5). Bismarckian workers’ insurance, by contrast, is commonly not seen as a result of war (Reidegeld 2006a, 349).

‘ SOCIAL IMPERIALISM’ AND W AR PREPARATION PRE-1914 Perhaps surprisingly, imperialism in pre-1914 Germany did not have a discernible influence on actual social policy legislation. While there was a ‘social imperialist’ discourse among members of the military, in administrative circles and the liberal intelligentsia (Reidegeld 2006a, 269–80), the imperial elite had yet to discover the ‘high instrumental “value” of specific “underdeveloped” fields of state social policy for a modern industrial mass war’ (Reidegeld 2006a, 269, own translation). The immediate pre-war years were

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instead a period of policy stagnation as conservative forces tried to ignore (or at least isolate as best they could) the labour movement. This was more difficult than ever, with the Social Democratic Party (SPD) going from strength to strength, winning 34.8 per cent of the vote in 1912, the last Reichstag election before the war. At this point, the power resources of the labour movement became entangled with imperialistic war preparation in a remarkable way. The German Army League (Deutscher Wehrverein) had lobbied in favour of an expansion of the army already for some time when, in June 1913, the Reichstag passed the largest expansion of the German army ever, with support from the SPD. The key to their support lies on the financing side, as the so-called defence contribution (Wehrbeitrag) of one billion marks came from a progressive capital levy and income tax, with quite explicit redistributive aims (Gerloff 1914). The 1913 decision already indicated the kind of role the SPD would play during the first phase of World War I.

W O R L D WA R I , 19 1 4 – 1 91 8

The ‘Burgfrieden’: The Primacy of Warfare The World War I period is commonly divided into two phases: First, the initial mobilization from August 1914 onward and, second, a phase of intensified mobilization of soldiers and workers from 1916 until the end of the war in 1918. The impact of the beginning of World War I on German social policy development must be seen in the context of the Burgfrieden, that is, the explicit truce between the imperial government and the labour movement and more generally the ‘rally round the flag’ of political parties and interest groups (Groh 1973; Miller 1974). The Burgfrieden was sealed when the social democrats voted in favour of a range of war measures in the Reichstag on 4 August 1914.³ Consent for massive war credits and a law granting the government wartime emergency powers were obtained, and the trade unions promised to refrain from industrial action and to support the government in fighting unemployment (Miller 1974, 48–51; Preller 1978 [1949]). The exact motives of social democrats and trade union leaders were manifold, but nationalism, and the genuine conviction that Germany was defending itself from reactionary and imperialist Russia, played an important role (Feldman 1992 [1966], 28).

³ In internal voting, at least fourteen members voted against the war credit bill, but eventually the leadership was able to enforce party discipline (Miller 1974).

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The extent of public enthusiasm and support for war remains controversial (Verhey 2000), but it is fair to say that, while working-class Germans, for example, were less enthusiastic, there was strong public support for the war, at least initially. For social democrats, the real threat of repression of the opposition under martial law also played a role and may have swayed even less nationalistic social democrats to support the war measures (see Kocka 1978, 36). The extent of mobilization was unprecedented, with 2.3 million men under arms in August 1914, 6 million one year later, and 8 million by the end of the war.⁴ By 1918, as many as 50 per cent of male Germans between the ages of 16 and 50 may have been serving in active war service (Sachße and Tennstedt 1988, 46–7).⁵ The organizational, political, and economic challenges were enormous. It turned out, however, that Germany was extremely ill-prepared for the switch to a war economy in 1914, with the public and most decision-makers—except for a few insiders in the military leadership—holding on to the erroneous belief that the war would be brief and relatively limited (Herwig 2002). During the early months, the mobilization of labour was completely overshadowed by the military mobilization (Feldman 1992 [1966], 64–5) with initial conscription exclusively for the purposes of military manpower.

Material Hardship and the Modernization of Social Assistance and Social Services The material consequences of war could be felt early on. Conscripts received low pay and thus often left their wives and children without adequate income, as only a few occupations continued to receive their civilian salaries (Sachße and Tennstedt 1988, 49). Nominal wages on the home front increased markedly between March 1914 and September 1918, but given high inflation, the average real wage of a worker dropped by 23 per cent in war industries and 44 per cent in non-war-related sectors. The decrease in pay for female workers was 12 per cent and 39 per cent, respectively (Sachße and Tennstedt 1988, 47). Middle-class Germans and the self-employed also bore great economic losses

⁴ Volunteering for military service did play a role in August 1914, especially for uppermiddle-class men, yet ‘the vast majority of the over 13 million German soldiers who served between 1914 and 1918 were simply subject to the draft’ (Hirschfeld and Krumeich 2013, 62, own translation). ⁵ Based on a report by the War Ministry, Whalen cites a mobilization rate of 85 per cent of those eligible for military service serving at any point between 1914 and 1918 (Whalen 1984, 39).

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(Kocka 1978). Food supply was markedly inferior to that in the Allied nations. Food rationing was introduced in 1914 but did not prevent widespread hunger and malnutrition. One important development was that poverty was, for the first time, experienced by the middle classes, with clear repercussions for the politics of the welfare state (Sachße and Tennstedt 1988). Unemployment shot up in 1914 but declined soon thereafter. For the remainder of the war, labour shortages were the main problem. The war had a significant impact on the German welfare state in the area of social services and family benefits, with trends towards centralization, professionalization, and increasing state intervention occurring during its course. In addition, wartime social assistance (Kriegsfürsorge) paved the way for a modern, rights-based policy for the poor, regulated at the national level. To alleviate the hardship of families of conscripts, the government expanded the rules of the 1888 law on wartime family assistance in August 1914 and again in September 1915 (Sachße and Tennstedt 1988, 50; Kundrus 1995; Sachße 2003, 136). The 1888 act had been built upon precursors that can be traced back to Prussian legislation from 1850 (Daniel 1989, 170–1). The wives and children of soldiers received minimum flat-rate separation allowances as well as various in-kind benefits. During the war, spending on such family support for soldiers rose massively, due to a continuous expansion of eligibility. In Prussia, for example, 16.3 million marks were devoted to separation allowances for servicemen’s families during the month of August 1914. The amount rose to over 100 million marks monthly from December 1916 until the end of the war. Around one third of German families had benefited from such payments by the end of 1917 (Daniel 1989, 173). In 1914/15, a new ‘wartime maternity benefit’ was introduced (Wochenhilfe während der Kriegszeit), which granted cash benefits for a period of up to twelve weeks after the birth of a child to the wives of conscripts—first only for members of social insurance funds and later for all soldiers’ wives. To be sure, these family assistance and maternity benefits were means-tested and the level of benefits was extremely low. Yet they were also social rights rather than discretionary benefits. As part of the Kriegsfürsorge, a proto-unemployment assistance was even introduced, which was remarkable given the staunch resistance of the government, as well as trade unions, to any form of statutory unemployment benefits prior to the war (Brok 2012, 344–5, 349).⁶ The rights-based nature of these benefits was frequently stressed by the government and is also evident in the fact that the administration was, in most cases, separate from the stigmatizing poor-law administration (Sachße 2003, 137). For the first time, social

⁶ Since labour was scarce, the importance of the scheme remained very limited during the war (Sachße and Tennstedt 1988, 94).

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assistance benefits were received by a considerable part of the urban population. That said, implementation remained decentralized and there was some leeway in provision: while some local authorities lacked the fiscal means to fulfil their duties, others were even able to top up minimum benefit rates. Local communes supplemented wartime social assistance with a host of additional welfare benefits and services (Kriegswohlfahrtspflege). In contrast to wartime social assistance, these were fully voluntary and therefore fairly heterogeneous across the country. As the government had issued a regulation that was widely interpreted as a moratorium on rent payments, rents often remained unpaid. In response to lobbying by landlords, many cities then introduced rent subsidies (Sachße and Tennstedt 1988, 53). The provision of food, clothing, and fuel was an important part of wartime social policies. State intervention reached unprecedented intensity in at least two respects: First, given increasing hardship and insufficient food supply on the market, local communities started to act as producers, and not just distributors, of goods. For example, some local authorities started to produce their own sausages (Sachße and Tennstedt 1988, 54) or ran municipal farms. Second, large parts of the German middle class became dependent on state provision, including on special state-provided credits to keep small enterprises afloat. The rising importance of the Third Sector fuelled the development and professionalization of the welfare sector more generally (Stolleis 2003, 115). The women’s associations affiliated with the Red Cross that can be traced back to the nineteenth century joined various other women’s associations, ranging from nationalist through to social democratic to Jewish organizations in 1914, in order to found the National Women’s Service (Nationaler Frauendienst). It organized welfare services on the home front in close collaboration with state agencies (Sachße and Tennstedt 1988, 57–60; Hirschfeld and Krumeich 2013, 130–1). The women’s movement, in a manner similar to that of the labour movement, hoped to gain general acceptance through the war and therefore employed a perhaps surprisingly nationalistic rhetoric. Gertrud Bäumer, a leading figure of the movement, wrote that ‘war the destroyer has at the same time turned out to be the mightiest socializing power giving us guidance for the future’ (quoted in Daniel 1989, 82, own translation). However, the women’s movement refrained, by and large, from asking for direct concessions (e.g. voting rights) in exchange for this voluntary service, as they wished to maintain the ‘truce between the sexes’ (‘Burgfrieden zwischen den Geschlechtern’) in service of the nation (quoted in Daniel 1989, 83). Social insurance was subject to numerous technical changes during World War I (Frerich and Frey 1993, 168–9; Reidegeld 2006a, 321–3) in order, for example, to compensate for wartime gaps in the contribution record of soldiers. A more lasting change was the lowering of the statutory pension age for blue-collar workers from 70 to 65 in December 1916 (Stolleis 2003, 111). Given that white-collar workers already retired at the age of 65,

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this measure reflected the general egalitarianism of wartime. The effect was massive: it led to a doubling of pensioner numbers and a steep rise in contribution rates.

The ‘Human Economics of War’: Using Social Policy to Mobilize the War Economy As mentioned earlier, the initial expectation was that the war would lead to rising levels of unemployment, due to the collapse of international trade. This was indeed what happened at first. Reliable data is hard to come by, but a commonly used indicator for this is the level of unemployment among social democratic trade union members, which rose from 2.9 per cent of all members in July to 22.4 per cent in August 1914 (Kocka 1978, 20). After this initial shock, unemployment declined again, partly due to the increase in arms production, and reached 3.3 per cent as early as March 1915. Labour shortages became the new problem caused by mobilization. Important changes concerned female employment, which shifted from ‘peace industries’ to ‘war industries’, so that in some arms factories there were more female than male workers by the end of the war (Kocka 1978, 13). Photographs of shop floors full of women producing arms and munitions are part of the popular imagery of World War I. Yet in contrast to popular belief, the war was not a period of lasting integration of women into the modern workforce. In her comprehensive study of wartime female employment, Ute Daniel has shown the notion of World War I as a moment of female liberation in the sphere of work to be largely a myth. Although absolute female employment numbers rose by 17 per cent between 1914 and 1918, this was not an exceptional increase, given annual changes of over 20 per cent in a typical pre-war year (Daniel 1989, 43). And while female employment rates increased from 30.5 per cent to 35.6 per cent between 1907 and 1925, the increase in male employment rates was even more pronounced: 61.4 per cent to 68.0 per cent (Daniel 1989, 259). More dramatic changes can be seen in a disaggregated perspective, such as the increasing rate of female workers in manufacturing, at the expense of sectors such as textiles and domestic services. Some women were employed more directly in wartime arenas, either as one of the 92,000 nurses on the front or one of about 20,000 Etappenhelferinnen, that is, women employed in the war bureaucracy, in kitchens, and in similar positions in military support areas. As in other countries, however, deeper power relations in the labour market were mostly unaffected by these shifts. Employers usually kept women in non-skilled occupations, as men feared the prospect of post-war competition from qualified women. Female workers were sometimes made to sign declarations stating that they would quit their jobs once the fighting stopped. Moreover, women in general also had

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to contribute more in the household arena, as they had to improvise in providing their families with food at a time of tight rationing. Many families supplemented what they could buy or get from the state with small-scale subsistence farming. The wartime mobilization of labour was not seen as a priority at first, given the rise in unemployment. Deregulation of employment protection in August 1914 (Kocka 1978, 20) was followed by reregulation from 1915 onwards, including certain working-time regulations (e.g. the prohibition of night shifts for certain occupations in order to save electricity) (for an overview, see Frerich and Frey 1993, 166). Unemployment also prompted the expansion and centralization of labour exchanges in 1915/16, which nonetheless was only partially successful (Frerich and Frey 1993, 167; Reidegeld 2006a, 304). All of these measures followed the functional imperatives of the war economy rather than popular demands. Given increasing shortages, from April 1915 the task of initiating manpower planning fell to a special unit within the Prussian War Ministry, known as the Exports and Exemptions Office (Abteilung für Zurückstellungswesen, AZS) (Feldman 1992 [1966], 66). This was a delicate task, as tensions between the military and German industry, with regard to who should go to the front and who was going to work in industry (and where), were running high. The number of persons exempted from conscription rose slightly, from one million in late 1915 to 1.2 million about a year later, but the AZS resisted calls from employers for more and worked to increase the number of female workers, youth and—especially— prisoners of war instead. While, as explained earlier, the role of female labour in wartime manufacturing has been widely—though not always accurately—described, there has been much less discussion about prisoners of war, whose forced contribution to the German war effort was enormous. Of the 1,984,202 military prisoners and interned civilians in September 1917, almost all (1,703,498) were working (Daniel 1989, 57–8). Guest workers from abroad were also employed on a massive scale. For a while, the AZS became the centre of military social policymaking. The fact that it was run by bourgeois social reformers explains the positive attitude towards trade unions (Feldman 1992 [1966], 74). War labour committees of trade unions and employers were set up in the industrial centres as a response to the problem of workers leaving their employers in droves to benefit from the labour scarcity in some sectors as well as to the issue of excessive wage demands. The army also included clauses about minimum wages in their contracts with industry, and sent out inspectors to enforce these rules. When the AZS supported a trade union proposal for a special holiday, an employer representative stated that ‘certain responsible agencies conduct too much social policy and not enough production policy’ (quoted in Feldman 1992 [1966], 94). German ‘war socialism’ (Reidegeld 2006a, 293) was not introduced for intrinsic reasons but was a means of waging ‘total war’, guided by the ‘human economics of war’ (‘Menschenökonomik im Kriege’), as it was

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described by its advocates at the time (cited in Reidegeld 2006a, 312). Leading trade unionists nonetheless applauded the actions of the War Ministry. The corporatist policy of labour mobilization initiated by the military was a double-edged sword. Unprecedented inclusion of labour was combined with ever tighter restrictions on individual freedom during the second mobilization phase from 1916 onwards. The Battles of Verdun and the Somme were unsuccessful and extremely costly attempts at ending the stalemate on the Western Front, with around 800,000 German casualties resulting from the two battles combined. The Third Supreme Army Command (3. Oberste Heeresleitung, OHL), led by Generals Paul Hindenburg and Erich Ludendorff, established a de facto military dictatorship and unprecedented mobilization of workers and military servicemen. The Auxiliary Services Law of 1916 (Gesetz über den vaterländischen Hilfsdienst) was the social policy element of the ‘Hindenburg-Programm’ for total war mobilization. Free mobility of labour was abolished and all male Germans between 17 and 60 years of age were obliged to work. The military leadership wanted to include women, but the civilian government resisted this (Daniel 1989, 75–9). Instead, the newly founded War Department (Kriegsamt), in close collaboration with leading figures of the women’s movement, tried to promote female work through better regulation and childcare provision (Sachße and Tennstedt 1988, 61–2; Daniel 1989, 81–8).⁷ While the effects of the Auxiliary Services Act on wartime labour mobilization of both men and women were rather modest, it did have important, unintended long-term effects on welfare state development in Germany. In particular, the corporatist steering committees, which were to manage manpower and drafting decisions at the level of military districts, represented a historic change in the relationship between the state and trade unions. In order to achieve its goals of mobilization, the Supreme Army Command had to accept the concession of trade union involvement (Feldman 1992 [1966], 173–7). The way in which not only trade unions but also parliamentary parties were involved in the making of this policy was novel for the German Empire (Sachße and Tennstedt 1988, 64). Vice Chancellor Karl Helfferich claimed that ‘one could almost say that Social Democrats, Poles, Alsatians and trade unionists made that law’ (quoted in Reidegeld 2006a, 326). According to a social democratic pamphlet, the Act demonstrated ‘the influence of labour representatives to an extent unlike any law passed by the Reichstag previously’ (quoted in Miller 1974, 274, own translation). The trade unions also achieved the abolition of a number of important repressive laws between 1916 and 1918.

⁷ The maternity benefits for soldiers’ wives were extended to the wives of those working under the auxiliary service provisions.

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State Breakdown, Defeat, and the Failure of Social Policy The material situation of the German population declined dramatically after the first year of the war, causing the first food riots in Berlin in October 1915. During the famous ‘Turnip Winter’ of 1916/17 hundreds of thousands died of hunger, particularly in urban areas. The days of the Burgfrieden seemed far away as the country witnessed a wave of industrial action in 1917 and 1918 (Feldman 1992 [1966], 301–404) and with the breakup and division of the Social Democratic Party into moderate and radical parties, the radical party naming itself the Independent Social Democratic Party of Germany (USPD). This pre-revolutionary situation must be borne in mind when considering the ambiguous social policy measures introduced in the second half of the war. The fear of revolution was generally high among the military, already before World War I. The experience of the Paris Commune during the FrancoPrussian War and the Russian Revolution during the Russo-Japanese War of 1905 were vivid examples of the real risk that war could trigger massive domestic unrest. The Bolshevik Revolution of 1917 was only the latest example underlining the immediacy of this fear, and for good reason as it turned out. In 1918 a last attempt at political reform ‘from above’ came too late to prevent revolution and German military defeat. The armistice took effect on 11 November at 11 a.m. Germany had lost the war and the Treaty of Versailles aimed to make sure that it would never be able to wage war again.

THE AFTERMATH OF WORLD WAR I

Welfare State Building on the Empire’s Ruins During the transition phase from war to peace and from autocracy to democracy in Germany, two agencies were founded that shaped social policy in the immediate aftermath of World War I: the Department of Labour (Reichsarbeitsamt, from 1919: Reichsarbeitsministerium) and the Office for Economic Demobilization (Reichsamt für wirtschaftliche Demobilmachung). Again, trade unions and employers were heavily involved in setting up these agencies and the Department of Labour was even run by the prominent trade unionist Gustav Bauer, while the demobilization agency was headed by the military (Reidegeld 2006b, 15). This demonstrates the will to continue in the consensual mode of the mobilization period. The so-called Stinnes–Legien Agreement in 1918, the founding act of German industrial relations, was the consequence of what Gerald Feldman described as a ‘Burgfrieden’ mentality of employers and workers in the immediate aftermath of the war (Feldman 1977 [1974]).

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The expansion of the welfare state became an important source of legitimacy of the new Weimar Republic. Not only were extensive social rights— for mothers, the sick and the elderly—included in the constitution, but a number of new programmes were introduced, some with an explicit link to the war and demobilization. The restrictions on labour law introduced at the beginning of the war, as well as the Auxiliary Service Law, were repealed by the interim government shortly after the revolution, on 12 November 1918 (Reidegeld 2006b, 19).⁸ Moreover, in November 1918, unemployment assistance (Erwerbslosenfürsorge) was passed as a temporary demobilization measure and, thereafter, renewed on an annual basis (Preller 1978 [1949], 363). This provision was closely modelled on the wartime assistance system in that the federation and the states subsidized municipal assistance at 50 per cent and 33 per cent, respectively. Benefits were means-tested and, at least initially, subject to local discretion. Although the scheme granted assistance only when unemployment was war-related, this condition was often loosely interpreted. As the reinsertion of the unemployed became more important, the government cut back benefits from 1920 onwards (Sachße and Tennstedt 1988, 96). Nevertheless, wartime unemployment assistance and wartime corporatist practices paved the way for unemployment insurance, introduced in 1927. An important prerequisite of welfare state expansion were the fiscal reforms of Minister of Finance Erzberger in 1919/20—the most important tax reform of the twentieth century—which removed the fiscal straitjacket from the federal government and introduced new taxes such as an emergency capital levy (Reichsnotopfer, 1919). A new basis for funding the manifold new tasks of the Weimar Republic had been created.

Weimar as a Veterans’ Welfare State One group that received special attention was disabled veterans. An estimated 4.3 million men were wounded during the war (Whalen 1984, 40), of which 1.5 million ex-servicemen returned from the trenches permanently disabled (Cohen 2001, 4). In addition, in 1923, the Department of Labour estimated that there were 533,000 war widows and 1.92 million orphans (Whalen 1984, 95). As in other countries, veteran benefits in Germany before the war—based on laws from 1906 and 1907—were rudimentary and suited only to short wars with few casualties (Diehl 1985). Moreover, military rank determined entitlements even in the case of widows’ pensions: while the widow of a common ⁸ The only elements left in place were the corporatist arbitration committees, which were converted into important institutions in the new industrial relations system.

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soldier was entitled to a pension of 100 Reichsmarks (RM) per year, a field grade officer’s widow received as much as 1,500 RM. During the war, a number of ‘stop-gap measures’ (Whalen 1984, 102) were introduced to enhance benefits for veterans and their families, such as extra payments to soldiers’ wives. In 1915, a new National Committee for War Victim’s Care (Reichsausschuss der Kriegsbeschädigtenfürsorge), an advisory body of federal and state civil servants, started to promote ideas of retraining and rehabilitation initiated through a complex web of measures at different state levels (Sachße and Tennstedt 1988, 55). It was only after the war, however, that the legal system was completely overhauled, ‘demilitarized’ and made more generous. While private charity towards disabled veterans at the local level was still thriving in the first years of the war, these charitable efforts were deliberately crowded out through state regulation in an attempt to concentrate resources on the war effort in the second half of the conflict (Sachße and Tennstedt 1988, 56; Cohen 2001). Instead of private charity, direct state provision as well as corporatist welfare provision by six large welfare associations was preferred.⁹ The administration of war pensions was shifted to the newly founded Labour Ministry, because the Versailles Treaty stipulated a drastic reduction in military personnel, meaning that ‘[i]n many cases, soldiers simply exchanged uniforms for suits and ties’ and joined the Labour Ministry (Whalen 1984, 132). The most important legislative changes in relation to disabled veterans were the Decree on the Social Assistance for War Survivors of 1919, the 1920 Law on the Provision of Assistance for the War-Disabled and Survivors, and the National Pension Law of the same year. The 1920 Assistance Law, in particular, was to become one of the central pieces of welfare legislation in the Weimar Republic. It was clear that the challenge was enormous, but exact figures on the numbers of veterans and estimates of the spending involved were lacking. The Pension Law was firmly built upon the principles of rehabilitation and employability—and more firmly so than similar laws in France and the UK— principles that came from the existing work accident insurance scheme (Geyer 1983; Whalen 1984, ch. 6; Sachße and Tennstedt 1988, 90). Rehabilitation was to be achieved through retraining and regulatory policies, such as strong dismissal protection and hiring quotas for severely disabled veterans—a provision that proved to be influential with respect to general disability policy.¹⁰ Cash benefits also existed, including supplements for wives and children.

⁹ Welfare corporatism was consolidated in the 1922 National Youth Welfare Law and the National Welfare Decree of 1924. ¹⁰ The statutory hiring quotas of severely disabled workers were: 2 per cent of all employees in firms with more than twenty employees and 3 per cent in public agencies (Sachße and Tennstedt 1988, 91).

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However, the element of categorical veterans’ pensions was explicitly downplayed and conceived of as a last resort for the severely disabled who were unable to work. Lightly disabled veterans usually received no transfers at all (on the detailed provisions, see also Frerich and Frey 1993, 229–30),¹¹ military rank no longer played a role in entitlement, and rehabilitation was largely successful (Whalen 1984). Defying the images conveyed by artists such as Grosz and Dix, the begging, one-legged veteran abandoned by state and society was an exception rather than the rule, as the large majority of disabled veterans were successfully reintegrated into employment, and usually not in isolated workshops, as was the case in other countries. More than half seem to have been able to secure their pre-war status in terms of occupation. Nevertheless, by the late 1920s, the Weimar state was spending almost 20 per cent of its budget on war pensions and 300 welfare offices were administrating claims (Cohen 2001, 5, 155). The number of disabled veterans benefiting from the 1920 law peaked at over 350,000 in 1931. Caring for war victims was one of the most salient political issues of the young Republic. The interest groups of war victims could certainly not be ignored by the government (Whalen 1984, ch. 8). There were seven national organizations, with a total membership of almost 1.4 million by 1921 (Donner 1960; Geyer 1983, 231; Cohen 2001, 88). They participated, for example, by sitting on advisory boards or through public protest marches (Frie 1994). However, while British veterans became generally supportive of the political establishment, German veteran groups felt neglected by the state, despite receiving better treatment by any material standards than their British counterparts. Over the course of the years, the veterans’ movement radicalized and became fertile ground for Nazi and communist agitators: ‘In Germany, disabled veterans received the best that a defeated and nearly bankrupt state had to offer. Alienated from the society they had served, veterans helped to topple the Republic that had favoured them’ (Cohen 2001, 192; see also Whalen 1984). Veterans of World War I, organized in groups like the Stahlhelm, became crucial in the downfall of the Weimar Republic. Radical groups, which often had an affiliated paramilitary wing, typically cared little about the nitty-gritty details of social benefits, but preferred to fight one another and the government relentlessly (Diehl 1977; Geyer 1983; Mulligan 2013). The detachment between social policies and the identity of World War veterans was thus mirrored at the level of interest organizations.

¹¹ ‘Lightly disabled’ was defined as disability of 40 per cent or less. This was a rather strict measure, given that, for example, a missing foot amounted to 30 per cent disability (Cohen 2001, 154).

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WAR P REPARATION IN THE 1930s

Armament and Social Policy: Guns and a Little Butter After taking power in 1933, the Nazis soon pushed towards massive rearmament and the comprehensive militarization of both domestic and foreign policy. In March 1935, Germany announced the development of an air force, against the stipulations of the Versailles Treaty, and reintroduced universal conscription. The duration of military service was initially twelve months, and twenty-four months from 1936. Moreover, preceding military service there was compulsory labour service (Reichsarbeitsdienst) of six months. The military, nominally capped at 100,000 men, was set to rise to half a million. Whether or not there was a strong trade-off between guns and butter in the years leading up to World War II, the focus of spending was increasingly on guns, not butter. In the words of the economic historian Abelshauser, the policy was one of ‘as much butter as necessary, as many guns as possible’ (Abelshauser 1999, 512, own translation; see also Tooze 2008). Armaments spending rose steeply after 1933 (see the overview in Humann 2011, 722) and much of what was officially civilian stimulus spending had military aspects to it (see Wolffsohn 1977; Ambrosius 1990, 89–98; Hildebrand 2009, 210). From 1934/5, military spending began to dominate the budget and contributed to a huge fiscal deficit. By 1939, annual public spending for civilian purposes totalled 16.3 billion RM, against 20.5 billion RM for military spending (while revenue was only between 17 and 18 billion RM) (Aly 2005, 53).¹² Armaments were financed through debt, although, increasingly, Jewish assets were also plundered as part of the so-called Aryanization of the economy and a 20 (later 25) per cent capital tax placed on Jewish assets (Aly 2005). The amount thus confiscated was not insignificant: Jewish assets made up at least 9 per cent of the Reich’s revenues in the last pre-war budget.

Mobilizing Labour: Lessons Learned? Social policy served Germany’s expansionism and played a crucial role in the mobilization of labour for war. Learning from the experience of World War I, this already took place during the preparation phase in the creation of ‘a war economy during peacetime’ (Erbe, cited in Recker 1985, 291). The

¹² In order to conceal armaments spending from other countries, it was to a significant extent channelled through promissory notes to a fictitious private company, the so-called MefoWechsel, issued from 1934 until 1938. When these notes became due, from 1939 onwards, they put a strain on the German capital market.

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mobilization of economic resources was organized in a truly ‘polycratic’ manner by various party and state agencies with partly overlapping responsibilities, led by loyal but ambitious members of the Nazi leadership circle, competing with one another and trying to anticipate the will of the Führer (on the polycratic welfare state, see Recker 1985, 297–99; Sachße and Tennstedt 1992, 19–34). In 1935, for example, the post of General Plenipotentiary for the War Economy—a task given to the Minister of the Economy, Schacht—was created, with responsibilities that reached into the realm of the Wehrmacht and the Minister of War (von Blomberg). Then in 1936, Hermann Göring was put in charge of the Office of the Four-Year Plan, overseeing a scheme that aimed at maximum autarky of the German economy with a view to war. This move obviously further increased competition in the already crowded field of the war economy, involving, inter alia, the Ministry of Labour, the German Labour Front (Deutsche Arbeitsfront, DAF) the Gauleiter (regional Nazi party leaders), and the Organisation Todt—a military and civil engineering agency named after its leader, Fritz Todt (Sachße and Tennstedt 1992, 203). This staggering multiplication of roles and organizations continued during the war (see the following section, ‘World War II’). It is important to note that, in stark contrast to the role of the military in World War I, the Wehrmacht proper played only a relatively minor role in the mobilization of labour (Sachße and Tennstedt 1992, 208). The Four-Year Plan included a reorganization of unemployment insurance and labour exchanges. Both policy areas were put under immediate administration of the Reich and massively expanded. State intervention for wage moderation became the norm, and the Ministry of Labour successfully marginalized the more worker-friendly DAF in this respect. From 1942, even the term ‘labour market’ was avoided in official documents and replaced with ‘work deployment’ (Arbeitseinsatz) (Sachße and Tennstedt 1992, 226). Earnings-related unemployment benefits were replaced by means-tested minimum benefits, which, on the one hand, included beneficiaries without a contributory record but, at the same time, excluded Jews and other groups as well as the ‘work shy’ or ‘asocial’ unemployed who became subject to monitoring and repression by police forces (Sachße and Tennstedt 1992, 227). The reorganization of the labour administration gave the Nazi regime the means to steer labour supply according to military needs: for example, by channelling artisanal workers towards heavy industries. Military conscription was, once again, accompanied by a civil conscription order (wirtschaftlicher Gestellungsbefehl) from the Office of the Four-Year Plan of Hermann Göring—similar to the Auxiliary Service Law of 1916. In theory, it also included women, old people, and students. In 1938, civil conscription was used for the construction of the Westwall, a defence project along the Western border and further heavy industry projects. The Westwall alone involved 360,000 workers and the DAF under Robert Ley helped to

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organize these public works schemes. Although civilian conscription was extended in subsequent years (Frerich and Frey 1993, 262), the regime was extremely cautious about stirring up popular opposition to labour mobilization (Seldte 1939, cited in Sachße and Tennstedt 1992, 213). Legally, free movement of labour was severely restricted in early 1939 and completely abolished with the beginning of the war in September 1939. In addition, from September 1939 onwards, labour protection measures were significantly cut back or abolished in several steps, and wages were frozen out of fear of hyperinflation (Reidegeld 2006b, 477–83). Germany was certainly better prepared for wartime labour mobilization than at the beginning of World War I, but eventually foreign labour became, again, much more important than civil conscription.

W O R L D WA R I I

Cash for Services Rendered: The Wartime Expansion of Family Benefits Germany had long had a special ‘military family policy’ in the form of separation allowances. The 1888 law on the dependants of conscripted soldiers had been amended during World War I to improve the material living standards of the families of those serving at the front and, from 1916, for all those conscripted in the war effort (Sachße and Tennstedt 1992, 257). However, even though large parts of the German population benefited during wartime, benefit levels were low and eligibility was subject to a means test. When the Wehrmacht was established in 1935, these rules were fundamentally altered and—most importantly—extended to other types of service, such as the Reichsarbeitsdienst and all military and paramilitary organizations beyond the Wehrmacht. The reform was clearly linked to the occupation of the Rhineland in 1936 (Kundrus 1995, 235). In a series of decrees and laws in 1935 and 1936, the principle of assistance (Fürsorge) was replaced by a principle of corresponding duties: The individual’s ‘honourable service to the German people’ (‘Ehrendienst am deutschen Volke’) was met with the ‘honourable duty’ of the state to provide for the families of servicemen (Sachße and Tennstedt 1992, 257). Service benefits had elements of a social right in that they were not income- or asset-tested. Moreover, a host of additional benefits (e.g. rent support) became available. As the war continued and the different service schemes for the war effort multiplied (Kundrus 1995), more and more families became eligible and the cost of the corresponding family allowances became massive. By September 1941, secretary of state Fritz Reinhardt estimated spending under the Familienunterhaltsgesetz

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at 5 billion RM, amounting to one eighth of annual state revenues (Eichholtz 2003 [1969], vol. 1, 84). The fiscal burden and consequences for labour incentives worried officials, but it was seen as a necessary evil in order to preserve mass loyalties.

Social Security: Favours, Rivalries, and Propaganda Further early social policy changes during the war included technical changes in social insurance law to take into account time spent in military and other war-related service for the calculation of pension contributions (Frerich and Frey 1993, 301–2; Reidegeld 2006b, 496–511). However, directly contradicting Aly’s thesis that Nazi Germany constituted a ‘dictatorship of favours’ (Aly 2005), the existing welfare state was not significantly expanded during World War II (Recker 1985). The same applies to health policy, which was subordinated to the war effort in the sense that the scarce resources available for healthcare were directed towards the Wehrmacht at the expense of civilians and, most cruelly, the chronically or mentally ill and the frail elderly (Süß 2003). (This does not even include the conscious killing of tens of thousands of people in the infamous ‘T4’ programme.) There were very few exceptions to this restrictive social policy. One concerned the social protection of miners, deemed particularly important during wartime, and the other concerned old age pensions. In 1941, pensioners saw some of the Depression-era cutbacks of the early 1930s restored (Reidegeld 2006b, 505). In 1941, pension benefits were on average increased by 15 per cent. Lower-rate pensioners benefited in particular, because the increase was in fixed amounts, not percentages. Moreover, pensioners were to be included in public health insurance, which meant that they no longer had to turn to social assistance if they did not have private insurance. Further pension increases, however, were vetoed by the Ministry of Finance in 1942 and 1944.¹³ This expansion of pensions was perhaps less a response to the war than a consequence of the intense rivalry between the Ministry of Labour and the German Labour Front (DAF), the latter being a Nazi party organization. In order to mobilize the population for the war and ease the burden of individual sacrifices, the DAF had announced a massive post-war expansion and reform of social policy, the so-called Ley plan (Sozialwerk des deutschen Volkes) in 1940 (Recker 1985, 82–154). The plan aimed at ‘the final realisation of the German ¹³ The (unsuccessful) 1944 initiative was probably influenced by the Beveridge Report via policy diffusion. Minister of Labour, Franz Seldte, argued in favour of a benefit level matching that in Western democracies, citing the ‘psychological repercussions for the working German Volksgenosse’ and the negative ‘effect abroad’ if pensions in Germany did not keep up (cited in Patel 2015, 32).

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Volksgemeinschaft’ ‘on a scientific basis’ (Arbeitswissenschaftliches Institut der Deutschen Arbeitsfront 1992 [1944]) and painted the broad contours of an entirely new welfare state, based on egalitarian educational provision, taxfinanced universal benefits (thus replacing social insurance), and a housing programme of 300,000 new units to be built after the war. Extensive regulation would also be initiated to ensure that wages were set ‘independent of the market’. Historian Hans Günter Hockerts called Ley ‘in a certain sense…the German William Beveridge’ (quoted in Elsner 1992, 83, own translation). It has even been claimed that the Ley plan had an influence on the 1957 pension reform in the German Federal Republic (Aly 2005). Careful historical analysis shows, however, that while the Ley plan mirrored similar ideas discussed across European countries, a direct link between Nazi plans for a post-war welfare state and German pension development under Adenauer cannot be established (Recker 1985; Elsner 1992).¹⁴ In other words, the Ley plan was propaganda rather than policy;¹⁵ it was never implemented. Outside of the DAF, it was not taken very seriously, not even by leading national socialists. Minister of Finance, Graf Schwerin von Krosigk, for example, argued against promises that ‘nobody knows will eventually be kept’ and doubted that the population would believe in them (quoted in Aly 2005, 72–3).

The Mobilization of Labour in the ‘Total War’ The end of the blitzkrieg phase in the winter of 1941/2 highlighted the need for, among other things, more intensive mobilization of civilian resources. Labour mobilization was supposed to accompany a total reorganization of production, epitomized by the extraordinary powers given to Albert Speer, Minister of Armaments and War Production, from February 1942 onwards. Yet the mobilization of labour was problematic for at least two reasons: First, there was a clear primacy of military mobilization. The number of men conscripted for the Wehrmacht, as a share of the potential labour force (including soldiers), grew from 3.5 per cent in 1939, to 23.1 per cent in 1942, to 31.4 per cent by the end of September 1944 (Sachße and Tennstedt 1992, 215). In other words, the pool of workers was diminished by up to a third. Second, the party leadership was, for reasons of domestic policy, still hesitant to push for stronger mobilization of the German population. Hitler deemed the ‘dragging to and fro of workers’ ‘impossible’ and wished to avoid

¹⁴ To be fair, Hockerts himself has a nuanced view on the links between DAF social policy advisors and post-war reforms in the FRG (see Hockerts 2011, Introduction). ¹⁵ Among other things, Robert Ley claimed that a typical German worker would ‘look better’ than an English Lord ‘today’ (quoted in Reidegeld 2006b, 509).

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the separation of families (quoted in Sachße and Tennstedt 1992, 214). Speer and other officials disagreed about the use of civilian labour, especially female labour, for war production efforts. While the military was pushing for female labour conscription, the measure was resisted by the Nazi leadership. Fritz Todt argued that female service conscription could not be considered ‘due to political reasons’ (quoted in Eichholtz 2003 [1996], 85). Indeed, several welfare measures actually weakened incentives for women to take up work. Not only were separation allowances massively expanded, but measures such as the Maternity Leave Law (Mutterschutzgesetz) of May 1942 explicitly limited the employment of mothers, in order not to endanger the ‘service of motherhood’ for the nation (Reidegeld 2006b, 469–70). A string of similar benefits—but also tougher sanctions on illegal abortions and the like—fell into the same category. Institutional fragmentation in the area of labour mobilization further impeded a solution. The Supreme Command of the Armed Forces (OKW) requested a single authority in this field. In 1942, after some infighting between the various agencies (Eichholtz 2003 [1996], 74–7), Fritz Sauckel became General Plenipotentiary for Labour Deployment (Generalbevollmächtigter für den Arbeitseinsatz), directly accountable to the Führer. This led to the marginalization of the Ministry of Labour, which lost control over significant resources to Sauckel, as well as the DAF, and marked the beginning of the second phase of labour mobilization, which focused on the use of foreign labour (i.e. mostly forced labour). Foreign labour became extremely important throughout the war. The total number of people subject to forced labour is unclear, but estimates range between 7 million and 11 million. They include not only prisoners of war but also workers who were forcibly recruited abroad and brought to Germany or who were forced to work in the occupied territories. Table 2.1 reveals that, while the number of working women remained stagnant, the share of foreign workers (and their absolute number) grew enormously after 1939. Several decrees introduced towards the end of the war, which increased the scope of Table 2.1. Shares of civilian employment, 1939–44, in per cent Year

Male

Female

Foreign

1939 1940 1941 1942 1943 1944

62.2 56.7 52.6 47.6 42.4 39.3

37.0 40.0 39.1 40.6 40.4 41.0

0.8 3.3 8.3 11.8 17.2 19.7

Source: Sachße and Tennstedt (1992: 217) based on data from Zumpe (1980).

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civilian conscription in terms of age, gender, and working conditions, did not significantly change that picture (Reidegeld 2006b, 490–6).

Simulated Civil Society: Social Services During the War The role of social services can hardly be overstated with regard to securing the home front. In this respect, World War II—like World War I—was instrumental in developing the local welfare state, both in terms of organizations and the services provided. Yet, while World War I was a boost for genuine civil society, World War II was built upon a simulated, illiberal form of civil society. The Third Sector organizations that had become consolidated during the Weimar Republic were partly wiped out. Only the German Red Cross, the Catholic Caritas, and the Protestant Inner Mission survived as largely loyal organizations within the Nazi welfare state. Genuine Nazi welfare organizations, however, especially the powerful National Socialist People’s Welfare Organization (Nationalsozialistische Volkswohlfahrt, NSV) and the National Socialist Women’s League (Nationalsozialistische Frauenschaft, NSF), expanded massively and took on important roles in the field of social services, food provision, and so on. The NSV competed with state agencies in virtually all social policy fields (Vorländer 1986) and, among other things, distributed ration cards, organized soup kitchens, and arranged child care for female workers. The NSV was the ‘social policy rearguard of the German troops’ (Sachße and Tennstedt 1992, 246), actively supplanting existing welfare state institutions in the occupied territories and erecting a racist system of benefits and controls. The NSV became perhaps the most important organization with direct contact to the German population in the final years of the war (organizing evacuations, for example), and its power and status in the party hierarchy were greatly enhanced. It was closely aligned with the large philanthropic ‘relief ’ campaigns, such as the Winter Relief (Winterhilfswerk, WHW) (Vorländer 1986). The financial resources of the WHW rose massively during the war, from 553 million RM in 1938/9 to 1.64 billion RM in the winter of 1942/3 (Sachße and Tennstedt 1992, 253). All these officially non-state organizations have to be taken into account in order to fully gauge the extent of the war’s social policy impact.

Financing World War II The financing of World War II was only partly accomplished through the issuing of debt. Given the experience of hyperinflation in the 1920s, the government could not issue war bonds to the same extent as during World

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War I. Alternative means were found. First, the state secretly borrowed from banks. This policy of ‘silent war financing’ worked until about 1943, when the trust of small savers decreased. Second, some tax increases were included in the War Economy Decree of 4 September 1939. A war surtax (Kriegszuschlag) of 50 per cent was added to the income tax, but only for incomes above 2,400 RM—a relatively high threshold, which left the vast majority of income earners unaffected (Aly 2005, 66–71). Some indirect taxes were raised but only moderately so (and only on non-necessary items). Particular sectors (e.g. agriculture) were shielded from new tax measures. Third, the plundering of occupied economies was increasingly used. All of this demonstrates that the Nazi leadership was extremely cautious not to overburden ‘ordinary Germans’ in the financing of the war.

THE AFTERMATH OF WORLD W AR II

Immediate Needs The period after the war has been characterized as the ‘foundation crisis’ of the post-war (West) German welfare state (Hockerts 1986). One of the main causes of this multifaceted crisis was, of course, the Nazi regime and World War II itself.¹⁶ The most immediate impact of the war on social policy development was due to the massive human and material damage in Germany (Hockerts 1986 provides a good overview). An estimated 5 million housing units and 1.63 million houses were destroyed (Fröhlich 2013, 12), creating homelessness and overcrowding, to which the refugee crisis contributed further. Various groups of refugees had to be taken care of, including 7.9 million German refugees from the lost territories in the East and 1.5 million people who fled the Soviet-controlled zone (what was to become the GDR) for the Western parts of the country. At least 7 million displaced persons—that is, foreign slave labourers, prisoners of war, inmates of concentration camps, and other refugees—were still in the Western Allied sectors when the fighting stopped, and more than one million could not be repatriated. Moreover, Germans prisoners of war were returning up to ten years after the war. The task of reintegrating all these different groups into society was enormous. Social policy change first took place under the auspices of the Allied Control Council and also partly under the United Nations Relief and Rehabilitation Administration (UNRRA) (Cohen 2008). It is important to note that the ¹⁶ The others being, according to Hockerts, gaps in the existing welfare state and political conflict between the government and the social-democratic opposition and its allies, the trade unions.

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Allied authorities intended to introduce an entirely new system of social security based substantially on the Beveridge Report. However, the Allied proposal of a unitary social insurance, made in 1946, was never implemented in West Germany (Krause and Hoffmann 2001). Even though the big Bismarckian social insurance schemes had collapsed in administrative and financial terms, and had ceased to pay out benefits, and even though new blueprints such as the Allied proposal were on the table, there was a surprising return to long-established principles of social security. Nevertheless, a new emphasis on more inclusive and more distributive social security is also evident during that period (Krause and Hoffmann 2001, 370–3). The immediate post-war years were, on the whole, marked by pragmatic solutions, not visions for the future. The Emergency Relief Act (Soforthilfegesetz) of 1948 (Wengst 2001, 85) introduced a range of social assistance measures for various purposes (such as training and self-employment). As it was funded through capital levies, it already reflected the redistributive thrust of the much larger Lastenausgleich (see the following section). The Soviet occupation zone saw much more disruptive social policy. Here, a unitary social insurance similar to what had been proposed by the Allied Control Council (but developed independently by the authorities in the Eastern zone) was implemented in 1947. Differences in organization and entitlement between, for example, civil servants, white-collar workers, and blue-collar workers, were levelled out, unlike in West Germany (Krause and Hoffmann 2001), and private social insurance schemes were abolished.

The Emerging Welfare State for War Victims The impact of directly war-related needs on German social spending was massive and lasting. West German social spending in 1950 was about 30 per cent higher due to directly war-related expenses compared to the hypothetical situation without war (17.8 per cent instead of 13.5 per cent of GDP) and still 15 per cent higher by 1960 (18.1 per cent instead of 15.7 per cent of GDP) (Zöllner 1963, 43).¹⁷ After 1949, there were three types of interventions in the FRG that targeted the immediate consequences of the war (on the following, see Hockerts 1986). First, the Bundesversorgungsgesetz of 1950 was a comprehensive attempt to compensate and rehabilitate various kinds of war-related physical damage or death during military service. Benefits included pensions, but emphasis was put on health services, rehabilitation, housing, and training. Second, so-called Wiedergutmachung, or restitution and compensation for ¹⁷ Note that this does not even include the various indirect effects on all areas of social spending.

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victims of Nazi persecution—but not, for example, of foreign slave labourers— was established. This was a highly complex system of measures, enacted between 1953 and 1965, but with a clear focus on social policy measures (Hockerts 2001; Goschler 2005). De facto, it was primarily German victims who benefited. Victims of persecution were compensated for missing social insurance contributions; they could receive healthcare and special protections for integration into the labour market. However, eligibility tests were complex and many received their benefits very late or died before eligibility had been established. Nonetheless, up to the present time, more than 50 billion euros have been disbursed under the Wiedergutmachung programme. The third big measure was the Burden Sharing Act (Lastenausgleichsgesetz, LAG) of 1952. It was a massive reform triggered by the flight and expulsion of Germans from the former German territories in the East, who had often lost all their property. However, it was based on the larger idea of redistribution from those sections of the German population that still had assets to those that did not. It explicitly referred to social justice principles and was funded through a comprehensive 50 per cent levy on assets. While the amount sounds enormous at first, it is important to note that payment could be stretched over a period of thirty years, which led to a common tax rate of only 1.67 per cent, which could be paid out of capital income rather than assets themselves. Nevertheless, up to 1982, 115 billion Deutsche Marks (DM) were distributed by the LAG fund. Benefits included various cash compensation transfers for loss of assets (houses, companies, savings), reintegration loans, pensions (e.g. for people who had lived on rental income), privileged access to housing, subsidized home building loans, and the like. Whereas compensating and rehabilitating disabled veterans was clearly one of the key tasks of the Weimar Republic after 1918, any official veterans’ policy was prohibited by the Allied authorities in East and West alike. Anything that could lead to a politicization of the issue was suppressed, including veterans’ organizations, which had played such a crucial role in the interwar period. Returning soldiers therefore had to be catered for through various other programmes, such as general disability benefits and social assistance. In an attempt to fight German militarism, soldiers had to make do with what civilians would receive. In the Soviet occupied territory, and later in the GDR, no special effort was made to cater for the victims of war, partly due to Soviet resistance. The little that was provided was often insufficient and short-term (Schwartz and Goschler 2004). It also created new inequalities, for example, when only refugees, but not local war victims, received special compensation. An important exception applied to ‘persons who were politically accorded special honour, such as “those persecuted under National Socialism” ’ (Schmidt 2013, 46), who received honorary pensions or pension bonuses.

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CO NCLUSION War had an important impact on welfare state development in Germany. Yet perhaps in contrast to countries like Britain, change occurred not in the classical welfare state schemes, that is, the big social insurance schemes in the case of Germany, but mostly via special wartime or post-war benefit regimes. Whenever war did have a significant impact on the core welfare state programmes, it was through indirect and long-term, rather than direct and short-term, dynamics. The most important war-related social policy changes described in this chapter include the professionalization of nursing, the invention of military pensions in the German wars of the second half of the nineteenth century, and redistributive taxes to finance massive armament projects on the eve of World War I. The mobilization for total war during World War I brought stronger state intervention in the labour market—even forced labour—but also the grudging acknowledgement of trade unions as legitimate social partners. A system of wartime social assistance and a broad array of specific social services emerged, which, for the first time, catered for ordinary German families in a largely non-stigmatizing way. Both labour mobilization and social assistance and services thereby paved the way for the expansion of the welfare state after the war in the Weimar Republic, particularly the introduction of unemployment insurance. Seen in the long run—and against the background of pre-war policy—this was a massive break, and it fits nicely with the picture of a government trying to secure mass loyalty on the home front. However, perhaps due to a lack of more substantive policy concessions, mass loyalty eventually broke down in 1917/18 (Reidegeld 1989). The massive task of compensating and reintegrating the 1.5 million disabled veterans awaited the Weimar Republic. In contrast to popular belief, it did so relatively well, even though this came at a huge budgetary cost and failed to pacify radical political movements. In its entirety, social policy during the Nazi period is difficult to analytically distinguish from those parts that are causally connected to the war effort. This not only has to do with the amount of mobilization and destruction that came with World War II, but also with the degree of militarization of Nazi Germany already prior to 1939. The Nazi welfare state excluded a large number of Germans domestically and was subordinated to aggressive expansionist foreign policy aims. The Nazis learned from the failed labour mobilization during World War I that labour market institutions had to be in place early on. Family benefits (separation allowances for soldiers’ families) were also updated before the fighting began and massively expanded after 1939. The direct fallout from war for the German population was tackled through a variety of often local social services, provided largely by Nazi organizations.

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Despite some expansions, Nazi Germany was clearly not a ‘dictatorship of favours’ (‘Gefälligkeitsdiktatur’), as Götz Aly has claimed. There is little systematic evidence of his thesis that ‘continuous social policy bribes formed the basis of the domestic social cohesion in Hitler’s people’s state’ (Aly 2005, 89, own translation). Not that Nazi leaders were unconcerned about mass loyalty during war, but this did not inspire a great expansion of the welfare state. Post-war social policy in West Germany centred on three main compensation and restitution initiatives: for victims of fighting, for victims of persecution, and for those who had lost assets (mostly due to flight and expulsion from the East). In contrast to these special programmes, social security in West Germany was much less shaped by World War II, but much more by the ‘normal politics’ of party competition, new socio-economic needs, and rising middle-class demands that characterize social policy in ‘les trente glorieuses’ across the Organisation for Economic Co-operation and Development (OECD) world. However, the (West) German welfare state was again among the leading spenders of the OECD, also because it compensated for the consequences of World War II. Continuity with pre-war and Nazi social security institutions is remarkable, given the enormous amount of destruction. In the Soviet occupation zone, and later in the GDR, war indirectly brought much more discontinuity with previous practices. But again, the story quickly became not one of war but one of socialism and the Cold War. To sum up, war did have an impact on the welfare state in Germany, but this impact was far from straightforward. The clearest links can be found with regard to the direct fallouts of war—destruction and hunger, for example— and the social services established to deal with them. The fate of soldiers’ families during, and disabled veterans after, war was also a main concern of new social policy measures. Mobilization of labour for ‘total war’ was not limitless, although labour market policy was put at its service. These measures, including civilian conscription, always followed military aims and were not favourable for workers. That is why there were clear political limits to the use of civil conscription, for example. When it comes to other areas, however, the links are much more questionable. The labour movement was strengthened during World War I but crushed under the Nazi reign. With regard to actors, there is also a big difference between the two wars. While the military was the driver of some of the social policy measures enacted, and (hesitantly) allowed for an integration of organized labour during World War I, the Wehrmacht took a back seat in the quest for labour mobilization in World War II. The causal mechanisms linking war and the welfare state in Germany were, therefore, mostly those concerning the destruction and needs created by fighting and demobilization. Solidarity mechanisms, for example, seem to have played an ambiguous role. World War I, in particular, became the great divider in the political fights over memory, honour, and compensation that destabilized the Weimar Republic. After 1945, we find more egalitarian

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ideas in both East and West Germany, which had an uneven impact on policy. Yet neither did welfare state effects stem from the revenue side during the war. The funding of World War I and World War II was only to some extent tax-based: debt and stripping occupied countries of their assets played a much more important role. The big expansion of the German tax potential—the Erzberger reforms—came only after the war, as did the redistributive Lastenausgleich. In addition to the massive and long-lasting financial impact of war on spending, there is some evidence—albeit more speculative—that war eased the qualitative expansion of the welfare state in the long run. This concerns, for example, social service provision and special social assistance during World War I and family benefits during World War II. In all these fields, wartime policy intervened more deeply, took new forms, and reached new societal groups, and thus may have increased the acceptance of the welfare state at the micro level in the long run. War therefore helped build the institutions needed for further welfare state expansion later on.

REFERENCES Abelshauser, Werner. 1999. ‘Kriegswirtschaft und Wirtschaftswunder. Deutschlands wirtschaftliche Mobilisierung für den Zweiten Weltkrieg und die Folgen für die Nachkriegszeit’. Vierteljahrshefte für Zeitgeschichte 47: 503–38. Aly, Götz. 2005. Hitlers Volksstaat. Raub, Rassenkrieg und Nationaler Sozialismus. Frankfurt a.M.: S. Fischer Verlag. Ambrosius, Gerold. 1990. Staat und Wirtschaft im 20. Jahrhundert. Munich: Oldenbourg. Arbeitswissenschaftliches Institut der Deutschen Arbeitsfront. 1992 [1944]. ‘Sozialwerk des deutschen Volkes’. In Sozialstrategien der Deutschen Arbeitsfront. Teil B, edited by Hamburger Stifung für Sozialgeschichte des 20. Jahrhunderts, 2110–23. Berlin: De Gruyter. Brok, Anja. 2012. ‘Only in Times of Crisis? Unemployment Policy in Germany and the Netherlands, 1914–1918’. Australian Journal of Politics & History 58: 340–52. Cohen, Deborah. 2001. The War Come Home: Disabled Veterans in Britain and Germany, 1914–1939. Berkeley & Los Angeles, CA: University of California Press. Cohen, G. Daniel. 2008. ‘Between Relief and Politics: Refugee Humanitarianism in Occupied Germany 1945–1946’. Journal of Contemporary History 43: 437–49. Daniel, Ute. 1989. Arbeiterfrauen in der Kriegsgesellschaft. Beruf, Familie und Politik Im Ersten Weltkrieg. Göttingen: Vandenhoeck & Ruprecht. Davis, Lance E. and Stanley L. Engerman. 2006. Naval Blockades in Peace and War: An Economic History since 1750. Cambridge: Cambridge University Press. Diehl, James M. 1977. Paramilitary Politics in Weimar Germany. Bloomington & London: Indiana University Press. Diehl, James M. 1985. ‘Change and Continuity in the Treatment of German Kriegsopfer’. Central European History 18: 170–87.

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Kocka, Jürgen. 1978. Klassengesellschaft im Krieg. Göttingen: Vandehoeck & Ruprecht. Krause, Peter and Dierk Hoffmann. 2001. ‘Gemeinsame Fragen der Organisation und des Rechts der sozialen Leistungen’. In Geschichte der Sozialpolitik in Deutschland seit 1945. Band 2/1, 1945–1949, Die Zeit der Besatzungszonen, edited by Udo Wengst, 341–90. Baden-Baden: Nomos. Kundrus, Birthe. 1995. Kriegerfrauen. Familienpolitik und Geschlechterverhältnisse im Ersten und Zweiten Weltkrieg. Hamburg: Christians. Miller, Susanne. 1974. Burgfrieden und Klassenkampf. Die deutsche Sozialdemokratie im Ersten Weltkrieg. Düsseldorf: Droste Verlag. Mulligan, William. 2013. ‘German Veterans’ Associations and the Culture of Peace: The Case of the Reichsbanner’. In The Great War and Veterans’ Internationalism, edited by Julia Eichenberg and John Paul Newman, 139–61. Basingstoke: Palgrave Macmillan. Overbye, E. 1997. ‘Mainstream Pattern, Deviant Cases: The New Zealand and Danish Pension Systems in an International Context’. Journal of European Social Policy 7: 101–17. Patel, Kiran Klaus. 2015. ‘Welfare in the Warfare State: Nazi Social Policy on the International Stage’. German Historical Institute London Bulletin 37: 3–38. Preller, Ludwig. 1978 [1949]. Sozialpolitik in der Weimarer Republik. Düsseldorf: Droste. Recker, Marie-Luise. 1985. Nationalsozialistische Sozialpolitik im Zweiten Weltkrieg. Munich: Oldenbourg. Reidegeld, Eckart. 1989. ‘Krieg und staatliche Sozialpolitik’. Leviathan 17: 479–526. Reidegeld, Eckart. 2006a. Staatliche Sozialpolitik in Deutschland. Band 1, Von den Ursprüngen bis zum Untergang des Kaiserreiches 1918. Wiesbaden: VS Verlag für Sozialwissenschaften. Reidegeld, Eckart. 2006b. Staatliche Sozialpolitik in Deutschland. Band 2, Sozialpolitik in Demokratie und Diktatur 1919–1945. Wiesbaden: VS Verlag für Sozialwissenschaften. Riesenberger, Dieter. 1994. ‘Zur Professionalisierung und Militarisierung der Schwestern vom Roten Kreuz vor dem Ersten Weltkrieg’. Militärgeschichtliche Mitteilungen 53: 49–72. Rodgers, Daniel T. 1998. Atlantic Crossings: Social Politics in a Progressive Age. Cambridge, MA: Harvard University Press. Sachße, Christoph. 2003. Mütterlichkeit als Beruf. Sozialarbeit, Sozialreform und Frauenbewegung 1871–1929. Weinheim: Beltz. Sachße, Christoph and Florian Tennstedt. 1988. Geschichte der Armenfürsorge in Deutschland. Band 2, Fürsorge und Wohlfahrtspflege 1871–1929. Stuttgart, Berlin, and Cologne: Kohlhammer. Sachße, Christoph and Florian Tennstedt. 1992. Geschichte der Armenfürsorge in Deutschland. Band 3, Der Wohlfahrtsstaat im Nationalsozialismus. Stuttgart, Berlin, & Cologne: Kohlhammer. Schmidt, Manfred G. 2013. ‘Social Policy in the German Democratic Republic’. In The Rise and Fall of a Socialist Welfare State: The German Democratic Republic (1949–1990) and German Unification (1989–1994), edited by Manfred G. Schmidt and Gerhard A. Ritter, 23–166. Berlin & Heidelberg: Springer. Schwartz, Michael and Constantin Goschler. 2004. ‘Ausgleich von Kriegs- und Diktaturfolgen, soziales Entschädigungsrecht’. In Geschichte der Sozialpolitik in

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3 War Preparation, Warfare, and the Welfare State in Austria Herbert Obinger

I N T R O D U C TI O N War has had a tremendous impact on state and nation building in Austria. After the wars on the Italian peninsula and the Austro-Prussian War in 1866, Imperial Austria was forced to restructure its political system. Austria’s military defeat by Prussia led to the Compromise with Hungary and paved the way for the December Constitution of 1867. From then on, the Habsburg multi-nation state was a dual monarchy consisting of Cisleithanian (Austrian) and Transleithanian (Hungarian) parts. Both halves of the empire were governed by Emperor Franz Joseph I, formed a common customs and currency area, and were united by joint foreign affairs and defence policies. All other policy sectors—including social policy—were separately regulated. In terms of the social structure, the two halves of the empire were themselves multi-nation states. Growing nationality conflicts increasingly overshadowed domestic politics and eventually contributed to the breakdown of the empire after the Great War. Another consequence of Austria’s defeat by Prussia was the introduction in 1868 of universal conscription of three years’ duration, followed by seven years of service in the reserve. The Austro-Hungarian Compromise also led to a reorganization of the army, which consisted of three elements: the Common Army, the Hungarian Honvéd and the Austrian Landwehr. The Imperial and Royal War Ministry was responsible for the Common Army, whereas each half of the empire had a separate defence ministry. Apart from its impact on state building, this chapter argues that war also shaped the formation and patterns of the welfare state.¹ In addition to the

¹ In what follows, I will only focus on the Cisleithanian part of the empire, which comprised the territories that later became the Republic of Austria.

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direct effects of war on social policy (e.g. compensation of war-induced social needs, the introduction of new programmes, and the crowding-out of markets from welfare provision), the outcome of mass warfare affected politics and polity in ways that allowed the welfare state to flourish in the post-war period, notably after World War II. Key factors in this respect are democratization and the related increase in the power resources of labour, changed state– business relations, a centralization of the legislative and executive powers of government and, after World War II, the emergence of consensus democracy and neo-corporatism. Focusing on the period of military conflict and its postwar repercussions is not enough, however. The first section of this chapter demonstrates that power ambitions and military interests are also relevant for a better understanding of the formative period of the welfare state. The impact of both world wars is discussed in separate sections, and also a politically conflictual interwar period that connected them. The final section offers a conclusion, and explicates the long-term repercussions of war on social policy.

WAR P REPARATION AND E ARLY WELFARE STA TE FO RM A T IO N The December Constitution of 1867 guaranteed basic liberal civil rights by means of constitutional law. The resulting freedoms of association and assembly were a significant prerequisite for the organization of political parties and trade unions.² However, the curial and census voting system denied large economically underprivileged groups of the population the right to vote. It was only in 1907 that universal male suffrage was introduced. In economic terms, the December Constitution underpinned a process of rapid industrialization that was accompanied by urbanization, population growth, and social pauperization. However, the crash of the Viennese stock exchange in 1873 brought the economic boom of the Founding Epoch to an end. This crash eventually also meant the end of the Liberal dominance in politics in 1879 and was a turning point in terms of social policy (Baernreither 1892, 14). Social protection was rudimentary at best under the Liberal governments and many of the then existing social regulations dated back to the neo-absolutist era (1851–67). Examples are the Miners’ Act (Bruderladengesetz) of 1854, which provided oldage and survivor’s benefits for miners, the welfare regulations enshrined in the Trade Code (Gewerbeordnung), and the Reichsheimatgesetz (1863), which delegated poverty assistance to the municipalities based on the place of birth principle. ² The right of association was introduced in 1870 by the Liberals. The Social Democratic Party was founded in 1889 and the Christian Social Party in 1890.

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The Liberals, however, launched a major school reform in 1869, which extended compulsory school attendance to eight years (Reichsvolksschulgesetz).³ After the economic crisis of 1873, the Liberals became more sensitive to the ‘social question’, which was brought up not only by a growing labour movement but also by some clergy and other Christian social reformers. In 1879, Count Eduard von Taaffe took over as the head of government in the Austrian part of the empire. This change in power marked a turning point in several respects. While the previous German-dominated liberal governments were strongly committed to centralism and the free play of market forces, the Taaffe government relied on a coalition (the so-called Iron Ring) between clerical German-speaking conservatives, Czech and Polish federalists, and Southern Slavs that was inclined to state intervention in economic and social affairs. The ideology of the Iron Ring was ‘backward-looking conservatism with a distinct touch of Catholicism’ (Grandner 1994, 3). Taaffe, a former minister of defence and boyhood friend of the Emperor, enacted an electoral reform in 1882 that reduced the census from 10 to 5 gulden and aimed at rebalancing the nationality issue. At the same time, however, the Taaffe government took a harsh course vis-à-vis the press and the growing radicalism of the labour movement. In a manner similar to Imperial Germany, anti-socialist legislation was enacted and a state of emergency was repeatedly imposed in Vienna and the nearby industrial areas (Brügel 1919, 141; Tálos 1981).⁴ Against this backdrop, and inspired by German social insurance and Swiss labour protection legislation, the Conservative government launched a series of social policy reforms in the 1880s. Building on the preparatory work of the Liberals, the Trade Code was revised in three steps (Ebert 1975). Factory inspectors were introduced in 1883, while a further revision enacted in 1885 significantly enhanced labour protection provisions for workers in trade business and factories. Innovations included the introduction of a general 11-hour working day in factories, the prohibition of child labour (for children under 12 years across the board and 14 years in factories), a ban on the employment of women who had recently given birth (within four weeks), working-time restrictions for juveniles (day and night work), Sundays and public holidays as rest days, and the prohibition of night work for women in factories. Labour protection for miners, notably children, juveniles, and females, was regulated in a separate law in 1884. Social insurance legislation for industrial workers followed suit. With the introduction of mandatory accident insurance (1887), compulsory health insurance (1888),⁵ and the Bruderladengesetz

³ For the military origins of this bill, see Obinger and Kovacevic (2016). ⁴ An anti-socialist law was announced by the Emperor in his speech from the throne delivered on 26 September 1885. ⁵ Note that sickness insurance and the anti-socialist legislation were submitted to parliament on the same day (Brügel 1919, 141–3).

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(1889), which prescribed health and dependants’ benefits for miners, Austria relied heavily on the Bismarckian social insurance model. However, agricultural and forestry workers, a group large in numbers, remained without social protection (Bruckmüller et al. 1978), as did farmers and the selfemployed. Accident insurance was fully funded and predominantly financed by employers’ contributions, while the contribution ratio between workers and employers in health insurance was initially two thirds to one third on a pay-as-you-earn basis. State subsidies were not provided before World War I (Hofmeister 1981, 547). All these social reforms were enacted by a Conservative elite, who were strongly influenced by Catholic social teaching. The motives inspiring the reforms were multi-layered: socio-ethical considerations, anti-liberalism, anticapitalism, and legitimization issues were just as prominent as attempts to take the wind out of the sails of the emerging workers’ movement and to protect small businesses and craftsmen from big business and unfettered market forces. Comparative welfare state research has described this pattern of early welfare state consolidation as social policy from the ‘top down’ (Alber 1982), in other words an attempt by Conservative elites to bolster the legitimacy of the (authoritarian) state and to attach disenfranchised workers to the state. In contrast to Bismarck’s social reforms, however, Austrian social policy was backward looking rather than future focused and aimed at preserving the old, pre-industrial economic and social order (Rosenberg 1976; Tálos 1981; Grandner 1994; Drobesch 2010). By its very nature, the policy stance of the Conservative government was anti-capitalist and anti-liberal, given that social pauperization was attributed to unfettered markets, mobile capital, and big industry. This view perfectly conformed to the diagnosis of Catholic social reformers (e.g. Liechtenstein 1877). The question now is whether—and, if so, to what extent—early welfare state formation was influenced by the military. These questions raise some difficulties, as political activities were forbidden for officers in active service. However, relying on a content analysis of two prominent military journals of the monarchy, the Militär-Zeitung and Danzer’s Armee-Zeitung, over the period 1870 to 1914, it is possible to map the social policy-related preferences of the military in the run-up to the Great War.⁶ In general, the military’s growing interest in social issues emerged from two major changes in the military context in the second half of the nineteenth century: the spread of universal conscription and the massive change in military technology. Against this backdrop, the quantity and quality of what the military in a derogatory manner denoted as ‘human material’ attracted

⁶ See Obinger and Kovacevic (2016) for a more comprehensive analysis.

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800

700

600

500

400 1870

1875 Cisleithania

1880

1885

Transleithania

Austria-Hungary

Figure 3.1. Unserviceable men due to bodily defects per 1,000 mustered conscripts, 1870–82 Source: Data taken from Tálos (1981, 24–5).

growing attention. The crucial point was that the introduction of mass conscription temporally coincided with rapid industrialization, urbanization, and demographic changes. Since the disastrous social repercussions of these socioeconomic transformations had a likely impact on the force level and combat power of the armed forces, public health, education, and population issues increasingly became relevant for the military. By comparative standards, the share of unserviceable men was particularly high in the Habsburg Empire, notably in the more industrialized Austrian part of the empire (Figure 3.1). If those young men who did not qualify for service because of low body height (often a result of malnutrition) are included, then 85 per cent of the young men medically examined did not qualify for military service in 1882 (Tálos 1981, 24–5).⁷ For the military these figures were ‘extremely depressing’, as the Militär-Zeitung (13.8.1889) put it, and concerns about ‘social degeneration’ were common. This disastrous social situation was attributed to industrialization and big business, which were seen as a threat to small trade and the peasantry (see

⁷ Note that unserviceable men had been subject to a military tax since 1880 (Thierl 1892). The revenues were used for the support of disabled veterans.

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Militär-Zeitung 11.12.1891)—the military’s main reservoirs for recruiting healthy and morally reliable soldiers: The army has a strong interest in maintaining a strong peasantry since the ‘human material’ that the rural area is delivering to us as conscripts is not at all comparable to the conscripts from industrial areas. Factory workers arguably are smarter, more skilful at the beginning, and easier to handle, but the farmer’s son is of a different stamp. First of all he is proud of being a soldier. He is healthy and powerful, he is in touch with nature, has sense of orientation, but first and foremost he is a morally good soldier, patriotic, devoted, and thankful for what he has learned . . . . Most importantly, however: The countryside provides us with ablebodied men after all, the industry, by contrast, to a much lesser percentage . . . . (Danzer’s Armee-Zeitung 28.11.1907; see also Militär-Zeitung 21.7.1891 for a similar statement. Own translation)

Averting a proletarianization of the agricultural and small business sectors, however, required active state intervention and there is some evidence that interventions favouring these sectors were backed by the military: [There is] from a military perspective an outstanding interest that also the economic situation of the peasantry is satisfactory, or rather has to be made satisfactory, in order to prevent that rising destitution summons, those pestilent comforters which are suited to ruin the people to the quick. (Militär-Zeitung 21.07.1891)

By contrast, pronatalist population policy was not a major issue in the military press. A possible reason is the delayed demographic transition in the economically backward Austro-Hungarian Empire. Therefore, suggestions for the improvement of the social protection of women and children with a view to enhancing military power and the quality of the people’s army came up late and only sporadically. For example, a captain of the reserve, writing in 1912, noted that welfare for soldiers ‘has to be extended to child welfare, by counteracting the still pretty high infant mortality. And it must not spare females since only strong women can give birth to strong children’ (Danzer’s Armee-Zeitung 11.4.1912). The army’s attitude vis-à-vis the working-class was much more ambiguous. On the one hand, the military was very concerned about socialist ideas and agitators infiltrating the armed forces. Containing a radical labour movement with its anti-militaristic, internationalist, and revolutionary orientation therefore became a key objective of the army command. On the other hand, there are several statements in the military press that attribute the growing political radicalization of labour to the precarious living conditions of industrial workers. Hence, the military press acknowledged the need for moderate social reforms to ameliorate social conditions and pacify the working class: Every fair-minded man will have no objections to the efforts of workers to improve their living conditions, but will rather have complete understanding

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for these endeavours. The worker has a right to a decent existence, a right that his performance on the job is adequately remunerated and that he is not exposed to hunger and misery in case of disability and incapacity to work. (Militär-Zeitung 15.03.1897. Own translation)

The military press even praised the social legislation enacted by the Taaffe government in the 1880s, although it was mainly interested in better social protection of military personnel: These [social policy] efforts are evident from the measures recently enacted by the state authorities to improve the fate of workers, a field in which especially our monarchy has been epoch-making or at least leading, but where the greatest and finest achievements have still to be realised. (Militär-Zeitung 11.12.1891. Own translation)

But while tentative social reforms were accepted, there was an ‘irreconcilable divide’ with the social policy ambitions of the Social Democrats, which were branded ‘totally unjustified’ and ‘forever unfulfillable’ (Miliär-Zeitung 15.3.1897). Overall, there was a striking overlap between the motives underlying the social reforms enacted by the Taaffe government and military interests. Commonalities existed in terms of pronounced anti-industrial and anti-socialist sentiments; related attempts to preserve the old socio-economic order, for example, measures aimed at protecting the small trade and agricultural sectors; and a ‘stick and carrot’ strategy towards an increasingly radicalized labour movement. There is also some evidence that military interests and concerns influenced social legislation. The close nexus between the social degeneration of the population, mass conscription and defence power was a motive for the government’s initiation of labour protection legislation in the 1880s (Ebert 1975, 131–2; Tálos 1981, 46–7), a topic that also repeatedly appeared in the respective parliamentary debates.⁸ The same can be said for the social insurance reforms enacted in this decade. At their founding party convention in 1888/9, the Social Democrats summarized the motives underlying social legislation in the Taaffe era as follows: What today is mainly called ‘social reform’, the introduction of state-organised workers’ insurance against sickness and work injury, mainly originates from the fear of a rising proletarian movement, from the hope to convince workers about the benevolence of the owning classes, and finally from the insight that the increasing impoverishment of the people eventually will impair the defence power. (Quoted in Karl-Renner-Institut 1977, 8. Own translation)

Taaffe stepped down from office in 1893 after major electoral reform and a compromise with the Czechs failed. What followed was an era of political instability characterized by short-lived cabinets. The German-dominated ⁸ See Sten. Prot. Abgeordnetenhaus, 373. Sitzung, IX. Session, 17.5.1884, pp. 12915, 12934, 12936.

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military elite (Deák 1991) strictly opposed any major political concessions to the Slavic nationalities. Increased nationalist tensions and the resulting politics of obstruction in parliament overshadowed domestic politics and frustrated policy reform. Apart from the 1906 Old-Age Pension Act for white-collar workers, no new social policy scheme was adopted before the outbreak of the Great War.⁹ Plans for a major overhaul of the welfare state did exist, but they either failed or were sidelined (Layer 1905; Brügel 1919). Arguably the most ambitious plan was the Programme for Reform and Extension of Workers’ Insurance initiated by the Körber government in 1904. It not only envisaged improvements in accident and health insurance (e.g. the extension of coverage to all employees), but also included the introduction of old-age and disability pensions for workers. The related bill, passed in November 1908 by the Beck government, even went beyond the initial plan, not least because the first democratic election in 1907 led to a markedly changed political composition of the Reichsrat. Pushed by the Christian Social Party, old-age insurance was to be extended to agricultural workers and, in a move quite innovative for the time, to some categories of the self-employed with low income. Moreover, state subsidies were to be provided for social insurance for the first time (cf. Layer 1905; Gaertner 1909). However, this draft bill was contested and became a victim of protracted parliamentary deliberations. When an agreement was eventually reached in the parliamentary committee in July 1914, this comprehensive reform was brutally stopped by the outbreak of war.

W O R L D WA R I The reasons leading to the Great War and Austria’s role in this respect are well known. A preventive military strike against Serbia was postulated by the army command for years, and when the declaration of war was eventually promulgated it sparked patriotic fervour across the board. After its session in spring 1914, parliament did not reconvene until 1917. Instead, Prime Minister Karl von Stürgkh’s cabinet governed by means of emergency decrees and the Supreme Army Command, under the auspices of Conrad von Hötzendorf, became the dominant actor in domestic politics. Until 1917, Austria had de facto been a military dictatorship. The groundwork for this development was established long before the Great War by the Kriegsleistungsgesetz, adopted during the Balkan ⁹ Other important innovations included the introduction of a Labour Statistics Office (Arbeitsstatistisches Amt) and a tripartite Advisory Council for Labour Issues (Arbeitsbeirat). Moreover, the coverage of social insurance was extended. An example is the extension of work injury insurance to transport and railways workers (1894), construction workers (1912), and miners (1914/17).

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crisis in late 1912, and by a secret manual from the same year that envisaged the creation of a War Surveillance Office.¹⁰ These regulations had come into force with the outbreak of war. In addition, civil rights guaranteed by the constitution were suspended based on a law enacted in 1869, while the jurisdiction of military courts was extended (Redlich 1925, 82–95, 116–26). Based on its emergency powers, the government significantly enhanced its intervention in social and economic affairs. An Imperial Decree empowered the government to enact ‘all necessary measures to promote economic life, notably with respect to agriculture, industry, commerce, trade, and nutrition of the population’.¹¹ In consequence, 510 decrees were imposed by the Stürgkh government to govern the war economy (Rauchensteiner 2013, 741–2). Through newly established central offices (Redlich 1925, 175–81), the government regulated production, distribution, and consumption of goods and services, and intervened in the daily life of citizens to an unprecedented extent. Joseph Redlich, a professor of law and last Minister of Finance of Cisleithania, classified the emerging system of state intervention as ‘state socialism of war’ and ‘hyper-etatism’ (Redlich 1925, 198, 229). Yet, state intervention largely occurred on an ad hoc basis, since Austria was anything but well prepared when the war broke out. Price regulations, rationing of food and commodities, the regulation of foreign trade, and so on, led to a dramatic expansion of government and the enhancement of the executive powers of the state (Rauchensteiner 2013, 204f.). War financing had a similar effect. Military spending skyrocketed and exceeded public revenues already in the first year of the war (Figure 3.2). As a result, 60 per cent of war costs were financed from war loans, the rest coming from taxes and current receipts (Rauchensteiner 2013, 596). A war profit tax was introduced in 1916, while indirect taxes and fees were repeatedly raised. In addition, eight war loans were issued in Cisleithania and the government printed money to finance the war and public expenses. In consequence, the money supply increased from 3.5 billion krone (July 1914) to 33.5 billion krone in October 1918 (März 1981, 213) with public debt amounting to 83.1 billion krone by the end of the Great War (Rauchensteiner 2013, 601). Apart from a few measures that were introduced to adjust welfare legislation to the exigencies of war (e.g. social insurance and placement service), social rights were mainly restricted in the early war period. Several decrees enacted after the outbreak of war extended working time, constrained labour mobility and deregulated labour protection (Stolper 1915, 101f.; Adler 1927).

¹⁰ ‘Orientierungsbehelf über Ausnahmeverfügungen für den Kriegsfall für die im Reichsrat vetretenen Königreiche und Länder’. It was drafted by the General Staff, the War Ministry, and the Council of Ministers. ¹¹ RGBl 274/1914. This decree was replaced by the Wartime Economy Authority Law (Kriegswirtschaftliches Ermächtigungsgesetz) in 1917 (RGBl 307/1917).

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Billion krone

20

15

10

5

0 1913

1914

1915

Revenue

1916

1917

Military expenditure

Figure 3.2. Military spending and public revenue (without debt) in Austria-Hungary, 1913–18 Note: In billion krone. 1914 = financial year 1914/15; 1915 = financial year 1915/16; 1916 = financial year 1916/17; 1917 = July 1917 to October 1918. Source: Rumpler and Schmied-Kowarzik (2014, 335, 339).

For example, as early as July 1914 work on Sundays and public holidays was made permissible for the duration of the war,¹² while the Kriegsleistungsgesetz obliged able-bodied male civilians between 17 and 50 to undertake services supportive of the war effort on the home front. Even men working for transportation companies were subject to military penal law. Although the bulk of labour protection legislation formally remained in place, the takeover of companies by military authorities, the threat of being sent to the front lines, and the government’s power to assume control of important companies (the so-called staatlich geschützte Unternehmen¹³), de facto invalidated labour standards and the right of association (Adler 1927, 69–77). Even though the trade unions suffered significantly from the outbreak of war,¹⁴ they practised a truce policy by forgoing strike activities and cooperating with government in the early war period (Grandner 1992, 77, 107–11).

¹² RGBl 183 and 184/1914. ¹³ 1,202 of these companies existed in Austria in 1917 (Rumpler and Schmied-Kowarzik 2014, 296). ¹⁴ Unions lost 42 per cent of their members by the end of 1914 (Grandner 1992, 99). Moreover, the Kriegsleistungsgesetz curtailed their influence at the company level.

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However, the expectation of a short and successful punitive expedition in the Balkans turned out to be illusory. Early military defeats by Russia and growing economic difficulties soon led to disillusionment and supply problems on the home front.¹⁵ By 1915, the first major foodstuff shortages had already occurred. In terms of the labour market, the sudden increase in unemployment after the outbreak of war was soon replaced by a labour shortage, as more and more men were drafted for military service. The militarization of labour brought about by the Kriegsleistungsgesetz could only solve this shortage to a limited extent. In consequence, working time was extended in 1915, the maximum age for enforced labour was raised to 55 one year later, and women and prisoners of war increasingly occupied the place of servicemen in the workforce. Workers’ discontent increased as the war continued. In an effort to motivate workers (Adler 1927, 95f.), the government adopted a variety of reforms, particularly in the area of labour law. Some categories of white-collar workers were protected from dismissal caused by military service¹⁶ and a reform of the Civil Law Code was enacted in the same year guaranteeing continued remuneration if an employee was unable to work for up to one week. The second half of 1916 was a turning point in several respects. The authoritarian Prime Minister von Stürgkh was assassinated, and in November Emperor Franz Joseph died after sixty-eight years in office. His successor, 29-year-old Charles I of Austria embarked on a new course. He sounded out, albeit in a naïve way, opportunities for peace, tried to relieve the country of German dominance in military affairs, and rolled back the influence of the military in domestic politics. Karl himself took over the command of the armed forces, fired the Chief of the General Staff, Conrad von Hötzendorf, and appointed a new government under the auspices of Count Heinrich Clam-Martinic in December 1916. Most importantly, however, the Reichsrat reconvened in May 1917. As the war progressed with increasing intensity and new front lines were opened after Italy, Romania, and, finally, the United States had declared war on the Axis Powers, the situation on the home front became increasingly serious. Economic scarcity was rife, and living and working standards deteriorated continuously. War-induced economic isolation and total mobilization for war led to massive shortages of foodstuffs, commodities, and raw materials and, along with an excessive monetary policy, fuelled inflation. The index of consumer prices (including housing rents) increased from 1.0 in July 1914 to 3.36 in July 1916 and, finally, to 13.2 in November 1918, indicative of massive inflation during the final war years (März 1981, 214) that strongly impacted the middle

¹⁵ By late 1914, about one million men were already missing, wounded, killed, or captured as prisoners of war. ¹⁶ RGBl 58/1916.

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1913

1917

0

20

40 million Meterzentner

80

60

Wheat

Potatoes

Rye

Beet

Figure 3.3. Crop yields in million Meterzentner, 1913 versus 1917 Note: Austrian Crownlands outside the war-torn territories (Galicia, Tyrol, Coastland, Bukovina). Source: Rumpler and Schmied-Kowarzik (2014, 225). One Meterzentner is equivalent to 100 kilograms.

Table 3.1. Strikes in Austria during World War I Year 1914 (since August) 1915 1916 1917 1918*

Number of strikes

Companies affected by strikes

Number of employees on strike

Working days lost

18 39 41 131 244

21 51 60 375 1,284

3,699 7,951 14,841 161,234 462,106

6,067 17,638 21,871 469,014 1,384,966

* Only in the territories of today’s Republic of Austria, plus Moravia, Bohemia, and Silesia. Source: Rumpler and Schmied-Kowarzik 2014, 310, 313.

class (Redlich 1925, 168, 237). Moreover, from 1916 onwards, food shortages effectively meant starvation for many sections of the population (Figure 3.3). Rising death tolls, disastrous living conditions, and deteriorating working environments led to exhaustion and, in consequence, growing social and political unrest on the home front.¹⁷ Strike activity, hunger-induced revolts, and protests for the eight-hour working day and for peace significantly increased in the final two years of the war (Table 3.1). ¹⁷ By the end of 1915, 310,000 soldiers and officers had already been killed (Rumpler and Schmied-Kowarzik 2014, 162).

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The trade unions, which in the early war period had endorsed a truce policy, now came up with a social policy memorandum calling for enhanced social protection. The situation on the home front also raised increasing concerns within army command, which expressed an anxiety that food shortages and rising food prices would lower the morale of the people and the troops’ willingness to fight. To avert strikes in the mining and arms industries, the military supported wage increases. During a labour conflict in Silesia, for example, army command urged the government ‘to use all available means to prompt employers to pay higher wages in order to avert a strike’ (Führ 1968, 125). Against this backdrop, the government was forced to offer some social concessions. Clam-Martinic set out an agenda for social reform in late December 1916 that, interestingly, found its strongest cabinet support in the Minister of War (Rauchensteiner 2013, 744). Political and social stabilization on the home front, the maintenance of military supply chains and, in consequence, the sustainment of the combat power of the army were the key motives underlying social compensation in the late war period. Foreign Minister Ottokar Czernin wrote to Hungarian Prime Minister István Tisza in early 1917: ‘Social policy is the valve that we have to open in order to channel away excrescent damp— otherwise the box explodes’ (quoted in Grandner 1992, 309; own translation). In addition, social policy featured prominently in Emperor Karl’s speech from the throne in the opening session of the Reichsrat in late May 1917. Preserving the ‘strength of the people’ (Volkskraft) by means of ‘purposeful population policy’ was the keynote of the speech, but, more specifically, Karl announced measures intended to reduce infant mortality, to address hygiene problems and widespread diseases, to enhance labour protection for women and juveniles, and to improve youth welfare and housing. Finally, measures for the social protection of injured veterans and their surviving dependants were envisaged (1 der Beilagen zu den sten. Prot. AH, XXII. Session, 1917, 3–4). As the implementation of these measures required new administrative capacities, a Ministry of Social Welfare was established in December 1917. Among the social policy measures that were actually passed in the last two years of the war were decrees in 1917 and 1918 that improved the position of tenants by introducing new rental caps and better protection from unwarranted eviction. Moreover, special offices (Mietämter) were established to settle conflicts related to rent increases. With this legislation, the government not only responded to rising rent caused by inflation, and a housing shortage due to the influx of refugees and low construction activity in this sector, but also planned for the period after demobilization (Brügel 1919, 241–2). Grievance commissions (Beschwerdekommissionen) were established in March 1917.¹⁸ By improving the social situation of workers in war-related

¹⁸ RGBl 122/1917.

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industries, the government aimed to sustain the war effort. The task of these commissions was to ensure reasonable wages and working conditions for workers in companies serving military purposes. These workers’ wages were not to fall short of those of private companies and were to reflect the workers’ skills and family situations. At the same time, however, labour mobility remained very restricted. The commissions consisted of a chairman (typically a high-ranking officer), a judge, a civil servant, and one representative each of the employees and employers. Decisions were made on the basis of majority rule and were binding. Based on this decree, unions were for the first time recognized as legitimate representatives of workers’ interests (Tálos 1981, 121; Grandner 1992, 379). Sickness insurance was enhanced in several respects.¹⁹ The sick pay of new mothers was extended from four to six weeks; a new nursing mother’s allowance (Stillprämie)—offering 50 per cent of sick pay for twelve weeks—was introduced; funeral allowances as well as sick pay were increased; and the maximum duration for sick pay was extended from twenty to twenty-six weeks. The decree also allowed sickness funds to enhance statutory benefits on a voluntary basis (e.g. sick pay up to one year, introduction of family insurance). Several improvements were also made in 1917 to cover for work injuries.²⁰ Insurance now included accidents while commuting to work; the replacement rate in case of permanent disability was increased from 60 to 66 per cent; people in need of assistance were entitled to 150 per cent of the accident annuity; benefits were adjusted in line with inflation; and the funding of accident insurance was completely shifted to company owners (in other words, the 10 per cent contribution share of workers was abolished). A revision of the Trade Code extended the employment ban for new mothers from four to six weeks.²¹ Labour protection was also enhanced for the baking trade. Based on a decree passed in early 1917,²² night work in bakeries was forbidden between nine p.m. and five a.m. (with the exception of bakeries under military control). However, this measure was less motivated by social protection than it was an attempt to cope with supply problems. The government also set up a subsidized food programme for poor households and provided unemployment assistance to workers who were laid off due to shortages of raw materials (e.g. coal) in the munitions industry. The latter measures paved the way for the introduction of unemployment compensation at the end of the war (Grandner 1992, 243, 255f.). Finally, income support to the family members of servicemen, and welfare benefits for war victims and refugees were also improved. Overall, however, these measures were little more than a drop in the ocean. Both deterioration of the social and economic situation and the collapse of the multinational empire continued unabated. In 1918, in a final act of despair, ¹⁹ RGBl Nr. 6, 1917. ²² RGBl Nr. 54, 1917.

²⁰ RGBl Nr. 363, 1917.

²¹ RGBl Nr. 7, 1917.

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the government drafted a bill that stipulated a general obligation to work for both men and women. This last attempt at total mobilization of the civilian population basically implied the extension of conscription to the labour market as a whole in an effort to mobilize the labour force ‘for the economic preservation of the homeland’.²³ However, this draft encountered fierce opposition from the unions and was not enacted. A last military offensive in Italy failed in June, and in October the war machinery imploded. A manifesto proclaimed by Emperor Karl in October, which attempted to restructure the monarchy into a federal state, was not enough to prevent the collapse of the Habsburg multination state along nationality-bound fault lines.

T H E IN T E R W A R P E R I O D

Republican Austria (1918–1933/4) The founding of the Republic took place in revolutionary style with the elimination of the imperial prerogative and the implementation of participatory rule. Proportional representation and female suffrage were introduced. The post-war national unity government consisted of Social Democrats, Christian Socials, and Pan-Germans. The first democratic election held in February 1919 led to a coalition government of Social Democrats and Christian Socials that lasted until July 1920. What was left of the multinational Habsburg Empire, with its 55 million inhabitants, was a rump state known as the Republic of German-Austria, which comprised the German-speaking territories of Cisleithania. A national identity and economic resources were lacking, and social and economic problems were abundant. Since the new state was separated from the industrial areas in Bohemia and the farming areas in Hungary, it was widely believed that the young Republic was not economically viable. Despite this, the Treaty of SaintGermain of September 1919 ruled out the possibility of a political union with the Weimar Republic. Moreover, the country lost further territories (reducing the population to 6.5 million) and had to change the state title from GermanAustria to Austria. Finally, war reparations were imposed, conscription was abolished, and the size of the (professional) army was limited to 30,000 men. With the passing of the Federal Constitutional Law on 1 October 1920, Austria became a democratic federal state. The fact that most legislative and fiscal powers were concentrated at the federal tier was clearly the result of a severe war-related political and economic crisis in the aftermath of war. ²³ 1050 der Beilagen zu den stenogr. Protokollen des Abgeordnetenhauses, XXII Session 1918, 2.

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The period between late 1918 and mid-1920 witnessed a quantum leap in social policy. Four reasons account for rapid legislative action. First, the repercussions of war generated huge social needs. The population was physically and morally exhausted and rampant diseases such as Spanish influenza caused thousands of deaths. In addition, widows, orphans, disabled veterans, the unemployed, and refugees from lost territories needed assistance ranging from food and housing to income support. Second, the appalling economic and social situation in the immediate post-war years, military demobilization, and massive lay-offs in the munitions industry increased the danger of a revolution. Post-war inflation, mainly caused by state borrowing to finance public expenses (including social policy), became hyperinflation in 1921/2. While private debtors and the state could easily amortize their loans, those parts of the middle class who had applied for war loans or held debt securities were expropriated (Weber 1995a, 33–4). The unemployment rate was close to 20 per cent in 1919. A communist party was founded in November 1918, while Soviet Republics emerged in neighbouring Hungary and Bavaria in early 1919. On 12 November 1918, the day on which the Republic was proclaimed, communists pulled down the flag (a red–white– red tri-band) in front of the parliament buildings and removed the white band. Against this backdrop, social policy became a crucial vehicle to bolster legitimacy and political stability in the newly established Republic. Third, the government was able to respond quickly to social needs as it could build upon the preparatory work of post-war planning that had commenced in the last two war years (Riedl 1917; Grandner 1992, 315ff.). Moreover, social policy legislators were able to rely on the extraordinary war powers enshrined in the Wartime Economy Authority Law (RGBl 307/ 1917). Numerous decrees were drafted by civil servants and enacted within hours without any major deliberation process. Fourth, the political transformation of 1918 brought the era of ‘social policy from the top down’ to an end. For the first time, Social Democrats were represented in government and their coalition partner, the Christian Socials, shared their pro-welfare orientation. However, there was a sharp ideological divide in terms of concrete policies. The conflict between Austro-Marxism on the one hand and corporatist-conservative ideas on the other overshadowed the entire Republican era and eventually led, reinforced by the repercussions of the Great Depression, to the breakdown of democracy in 1933, followed by a short civil war and the formation of a quasi-fascist regime in 1934. Among the welfare measures enacted in the immediate post-war period were the following: • introduction of the eight-hour working day (1918) • several decrees providing income support to the unemployed (1918 and 1919) and the introduction of unemployment insurance (1920)

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• decrees and laws that improved labour protection (i) in general (e.g. banning of Sunday and holiday work), (ii) for particular professions (e.g. banning of night work for butchers and bakers, dismissal protection for white-collar workers, social protection of homeworkers and home helps), and (iii) for particularly vulnerable groups (children, women, and juveniles) • the introduction of paid workers’ holidays (1919) • the establishment of works councils (1919) • the statutory regulation of collective agreements, amended by the introduction of Arbitration and Conciliation Offices (1919) • the creation of the Chambers of Labour as a statutory interest organization (and counterpart to the Chambers of Commerce) of blue- and white-collar workers (1920). Several of these regulations were closely related to military demobilization. By 30 October 1918, the Provisional National Assembly had already decided to set up an employment office with a view to reintegrating soldiers into the labour market, and introduced a limited unemployment compensation scheme by decree on 4 November. This publicly financed programme was initially designed as a fixed-term and means-tested emergency benefit for indigent veterans and the unemployed workers of the arms industry, and was literally created overnight as the first trains carrying returning veterans arrived (Pribram 1920, 631). After this decree was extended several times and broadened to other professions, it was eventually converted into a general unemployment insurance scheme in 1920. Unemployment insurance, the related emergency benefit (Notstandsaushilfe) for the long-term unemployed (1922), and income support provided to disabled veterans and their dependants (1919) marked the first occasion on which the state stepped in to finance social policy on a large scale (Tálos 1981, 161). While the eight-hour working day was a longstanding goal of the labour movement, to cut working hours, the working-time reduction in 1918 was also motivated by an effort to create additional jobs (Pribram 1920, 623). Among the measures aimed at the compensation of the roughly 450,000 war victims (about 110,000 disabled veterans and 350,000 dependants; 7 per cent of the population),²⁴ two acts are important.²⁵ A bill passed in 1919 provided disability pensions, medical treatment, sick pay, prostheses, and vocational ²⁴ Veterans soon set up their own interest organizations. The biggest was the Zentralverband der deutschösterreichischen Kriegsbeschädigten, which maintained close relations with the Social Democrats and had 160,000 members in 1921 (Pawloswky and Wendelin 2015). ²⁵ The benefits provided by previous regulations such as the Militärversorgungsgesetz (1875) and the Gesetz über die Militär-Versorgung von Witwen und Waisen (1887) turned out to be totally inappropriate during the Great War (Pawlowsky and Wendelin 2015, 57–61).

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training to disabled veterans, to persons who were subject to the Kriegsleistungsgesetz, and to people who were injured by acts of war through no fault of their own.²⁶ In the case of death, next of kin were entitled to survivors’ pensions and a death benefit. The programme was rights-based, entirely state financed and tied to citizenship. It therefore marked the beginning of a new era in welfare state history, as benefits for disabled veterans were granted as a social right in exchange for mandatory war service imposed by mass conscription (Pawlowsky and Wendelin 2015, 61). The Invalids’ Employment Act of 1920 prescribed a mandatory employment quota for disabled veterans.²⁷ One disabled veteran had to be hired per twenty regular employees and a further veteran for the next twenty-five employees. Alternatively, employers had to pay a compensation fee (Ausgleichstaxe) into a fund, administered by the Ministry of Social Affairs, which was used to support disabled victims of war. However, mandated employment was not restricted to disabled war veterans. A decree adopted in 1919 (signed by Finance Minister Joseph Schumpeter) forced companies with more than fifteen employees to increase their staff by 20 per cent.²⁸ This initially provisional regulation remained in force until 1928 but was less successful than the Invalids’ Employment Act (Stiefel 1979, 130–2). Moreover, employers had to re-employ white-collar workers after war service and any dismissal of white-collar workers was forbidden for a transition period. While evoking harsh criticism from employers, all these measures aimed at enhancing political and social stability. For the very same reason, the government subsidized food prices during the immediate post-war period. Compared to labour law and labour market policy, reforms in the field of social insurance legislation were restricted to just a few measures. Most importantly, the government created a health insurance scheme for civil servants in 1920. By contrast, an attempt to introduce an old-age, disability, and survivors’ insurance for workers failed. Following the exit of the Social Democrats from government in 1920, the expansion of state social policy continued, albeit at a much slower pace. Political as well as economic factors are important in this respect. Politically, the short-lived governments were made up of the Christian Social Party, Pan-Germans, and agrarian interests, who adopted social policy measures for the benefit of their constituencies. This is manifest in the 1921 decisions to include agricultural workers in health insurance and to create a separate social insurance scheme for notaries (1926).²⁹

²⁶ Invalidenentschädigungsgesetz, StGBl 245/1919. The bill was substantially revised in 1922. ²⁷ StGBl 459/1920. ²⁸ StGBl 268/1919. ²⁹ The bill was revoked by the Constitutional Court, but finally enacted in 1928. The so-called Agricultural Workers’ Insurance Act (BGBl 235/1928) regulated health, accident, and invalidity insurance. The latter was not enforced, however.

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Economically, pressure from problems remained high. Hyperinflation in the early 1920s led to a reform of the funding system for accident and pension insurance for white-collar workers. Since any correlation between contributions and benefits had totally ceased, a less inflation-sensitive pay-as-you-earn system was introduced (Hofmeister 1981, 640). Hyperinflation was eventually halted by means of a currency reform. This was based on a loan provided by the League of Nations, which, however, was tied to a variety of political and economic conditions (e.g. commitment to a balanced budget). The implications were harsh austerity measures and tax increases, notably of consumption taxes. Ten of thousands of civil servants were fired and welfare benefits reduced (Kernbauer 1995, 557–8; Weber 1995b, 533). The lesson drawn from the hyperinflation experience was a commitment to price stability and balanced budgets that was also shared by the Social Democrats. For a short time there was hope for economic recovery—GDP increased by more than 3 per cent annually between 1924 and 1929, and it was during this period that the last major Republican-era expansion of the welfare state took place. The White-Collar Workers’ Insurance Act (1926) codified the pension, sickness, and accident insurance of white-collar workers in a single law. Of particular importance was the extension of social protection to family members. Similar bills for blue-collar workers and agricultural workers were passed in 1927 and 1928, respectively. However, the proposed enactment of old-age pensions for blue-collar and agricultural workers was linked to the improvement of macro-economic conditions and never came to fruition in the Republican era. Political tensions between the right-wing government parties and the Social Democrats increased in the late 1920s. Both camps maintained paramilitary forces and the Federal Army repeatedly had to intervene. Faced with a rightwing federal government, and with a view to creating ‘a new proletarian human being’, the Social Democrats used federalism to establish path-breaking policy innovations in terms of public housing, health, education, and youth welfare policies in their Viennese stronghold (Gruber 1991). The conflict eventually escalated in the wake of the global economic crisis. In 1931, the Creditanstalt, the then biggest bank in Central Europe and chief shareholder of many industrial companies, collapsed. The government bailout had dramatic implications for the state budget and the government once more responded with austerity measures. Public investment was reduced by 50 per cent, thereby further reinforcing the economic crisis. Between 1929 and 1933, GDP declined by more than 20 per cent, industrial production by 40 per cent, and exports by 65 per cent, while the (official) unemployment rate skyrocketed to 25 per cent (Kernbauer 1995, 564–6). In reality, however, the unemployment rate was close to 35 per cent (Weber 1995a, 25). Nevertheless, the right-wing government did not deviate from its commitment to sound public finances, exchange rate stability, and non-interventionism, and ultimately it did not shy away from a coup to realize these goals and to subvert the political left.

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Austro-Fascism (1933/4–1938) The final blow to democracy came in the years 1933 and 1934. In 1933, Chancellor Engelbert Dollfuss dissolved parliament and established an authoritarian regime by making use of the Wartime Economy Authority Law of 1917. The Communist Party, the Nazi Party, and the paramilitary organization of the Social Democrats (the Republikanische Schutzbund) were banned. In February 1934, the now illegally operating Schutzbund resisted a search for weapons, sparking a brief civil war that resulted in some 350 casualties before the conflict was suppressed by the police, the Federal Army, and right-wing paramilitary forces. Dollfuss seized the opportunity to ban the Social Democrats and the affiliated trade unions and established a quasi-fascist regime in May 1934 (Tálos 2013). The Christian Social Party and their paramilitary forces were merged into the Patriotic Front as the only remaining political party. Two months later, however, Federal Chancellor Dollfuss was assassinated during a Nazi coup that again was suppressed by the police. The succeeding government under the auspices of Kurt Schuschnigg continued the authoritarian thrust. Despite mass unemployment (the actual rate of unemployment between 1933 and 1937 stood at 34.6 per cent on average; see Weber 1995a, 25) the Austro-fascist regime stuck to austerity, deflationary policies, and welfare state retrenchment. Apart from eliminating works councils in 1934, the regime enacted a major overhaul of social insurance, consolidating the different social insurance branches into a single law.³⁰ This reform also included a series of benefit cutbacks, with only a few enhancements, such as an extension of accident insurance (Tálos 2013, 372–5). In addition, the bill constrained the involvement of workers in the administration of social insurance. In particular, unemployment benefits were slashed. Whereas 86 per cent of the unemployed received income support in 1929, only 50 per cent drew benefits in 1936 (Stiefel 1979, 29). The harsh austerity policies of the Austro-fascist regime and the resulting social disaster nurtured pro-Nazi sentiments in Austria, which were further fuelled by the labour market success of the demand-side-oriented rearmament taking place in Nazi Germany. The combination of a growing illegal Nazi movement at home and political³¹ and economic pressure³² by Nazi Germany eventually led to the annexation of Austria (Haas 2000). A referendum on Austria’s independence scheduled for 13 March 1938 was pre-empted by the German ³⁰ BGBl 107/1935. ³¹ For example, Hitler demanded the replacement of Alfred Jansa, Chief of the Federal Army’s General Staff, who expected a German attack on Austria in 1939. Jansa therefore developed a plan for a defensive war against Germany and pressed for rearmament. In fact, military spending was increased and universal conscription reintroduced in 1936. At the meeting in Berchtesgaden, however, Schuschnigg accepted Hitler’s claim and Jansa was replaced. ³² For example, the Thousand Mark Ban imposed in 1933. German citizens had to pay 1,000 RM for entry into Austria. The idea was to harm the Austrian tourism industry.

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Wehrmacht, which crossed the border on 12 March without encountering any resistance—rather, in fact, it was greeted by enthusiastic masses.

NAZI RULE AND W ORLD WAR I I On 13 March, the ‘Federal Constitutional Law on the Reunification of Austria with the German Reich’ was enacted. German legislation was gradually imposed and Austrian institutions were either dissolved or integrated into the German Reich (e.g. the Federal Army, jurisprudence, fiscal authorities, railways, the postal and telegraph services, and the national bank). The Reichsmark (RM) was introduced as currency and tolls for products of Austrian origin were abolished. In an effort to bolster the legitimacy of the new regime, not least expressed in the propagandistic slogan ‘bread and work’, the imposition of social policy regulations started immediately after the Anschluss. Moreover, free meals were offered to poor people and thousands of children could spend holidays in the Old Reich (Tálos 2000, 377; Botz 2017, 263–4). The Decree for the Economic Recovery of Austria enacted as early as March 1938 is particularly interesting, as it demonstrates a strong nexus between military planning and social policy as a vehicle for enhancing legitimacy.³³ Based on this decree, the Reich provided money and loans to establish public works programmes in Austria that included the construction of highways and the repair of streets, the promotion of hydroelectric plants, mining and oil production, agricultural production, and housing. As of late March, needy unemployed people, whose unemployment benefit entitlement had expired on 1 January 1930, were again eligible for an unemployment emergency benefit and included in health insurance schemes.³⁴ The next step was the introduction of old-age pensions for workers and other social policy regulations, such as holiday pay.³⁵ Moreover, article IV of the decree prescribed that the existing wages and labour conditions could not be changed to the disadvantage of workers. Next, child allowances and wedlock loans (up to 1,000 RM) were extended to Austria and enforced on 1 April.³⁶ Pronatalism was the key motivation, as 25 per cent of the wedlock loan lapsed for each child born out of marriage.³⁷ A one-off child allowance of up to 1,000 RM was provided to needy families with four or more children, whereas regular child allowances

³³ GBlÖ 31/1938. ³⁴ GBlÖ 206/1938. ³⁵ GBlÖ 58/1938. ³⁶ GBlÖ 67/1938. ³⁷ As a symbolic pronatalist measure, the ‘Cross of Honour of the German Mother’ was introduced in 1938. It was awarded to mothers who gave birth to at least four ‘hereditarily healthy’ children.

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(10 RM per month per child) were provided to families with three or more children. This measure was followed by a price freeze on convenience goods.³⁸ In April 1938, the Youth Protection Act came into force.³⁹ Its intention is clearly spelled out in the preamble: ‘Educating all juveniles to be mentally and physically healthy fellow Germans (Volksgenossen) is a völkisch imperative and national-socialist obligation. It is the will of the Reich’s government to bestow protection and assistance on German youth in order to raise its capability.’ Despite several exceptions, the bill brought some improvements to the status quo. Child labour was banned for children under 14 years, working time for juveniles (aged 14 to 18) was restricted to eight hours, and night work as well as Sunday and holiday work was forbidden. In addition, juveniles were entitled to paid holidays of between twelve and fifteen working days. In the case of participation in the vacation activities of the Hitler Youth, the leave entitlement extended to eighteen days. Once more, this bill underscores the close relationship between social protection, war preparation, and ideological indoctrination (cf. Kramer 2017). The next step was the imposition of the German Labour Law (Gesetz zur Ordnung der nationalen Arbeit), which was enforced in July.⁴⁰ It installed the ‘leader principle’ in firms, while works councils were replaced by so-called men of confidence (who had to be members of the German Labour Front).⁴¹ Conflicts related to working time, dismissals, or wages were bindingly adjudicated by so-called custodians of labour (Treuhänder der Arbeit), who were civil servants and bound by the instructions of the Reich government. This restructuring of labour law provided the state with strong leverage for steering companies and work relations, and later on facilitated the adjustment of the economy to the conditions of war. The extant labour regulations and institutions, such as the Arbitration and Conciliation Offices, labour representation in firms, and collective agreements, were abolished.⁴² What then followed were measures that regulated the social protection of the families of conscripts⁴³ and of former members of the Wehrmacht and their relatives.⁴⁴ The first bill provided tax-financed income support, rent allowances, and health care for pregnant women and new mothers, to the needy families of conscripts during active service. The latter act regulated benefits for the dependants of deceased soldiers and disabled servicemen. In October 1938, the Reich’s welfare regulations were enforced in Austria, which involved major organizational restructuring.⁴⁵ Based on the Decree on ³⁸ GBlÖ 53/1938. ³⁹ RGBl I, S. 437; GBlÖ 129/1938. ⁴⁰ RGBl I, S. 45; GBlÖ 290/1938. ⁴¹ The Austro-fascist regime had already replaced the work councils with Werksgemeinschaften (BGBl 153/1934). ⁴² GBlÖ 366/1938. ⁴³ GBlÖ 387/1938. ⁴⁴ RGBl I, S. 1077; GBlÖ 411/1938; see also GBlÖ 374/1939. ⁴⁵ GBlÖ 397/1938; GBlÖ 599/1938.

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the Introduction of Social Insurance in Austria,⁴⁶ the Reich Insurance Code (Reichsversicherungsordnung), the White Collar Workers’ Insurance (Angestelltengesetz), Miners’ Insurance (Reichsknappschaftsgesetz), and the Job Service and Unemployment Insurance Act were enforced on 1 January 1939. However, these new regulations were only valid for insured events that occurred after the commencement of the law. An improvement on the status quo was the introduction of survivors’ pensions for workers, while the pensions for miners were raised through German legislation. It is also worth noting that several ‘Austrian’ regulations that went beyond the Reich’s social standards remained in force (Hofmeister 1981). Finally, German workingtime regulations were enforced from 1 March 1939 onwards.⁴⁷ Regular working time was restricted to eight hours according to §3 (with exemptions⁴⁸) and special regulations were enacted for women (e.g. the banning of night work and work in mines and salt workings for pregnant women). Overall, the imposition of German social legislation was more or less complete by early 1939. The changes that took place in labour law were far more comprehensive than those in social insurance, even though the involvement of workers in the administration of social insurance was abolished and replaced by the ‘leader principle’ (Tálos 2000). In sum, the Nazis dexterously seized on social problems created by the Austro-fascist legacy (mass unemployment) and responded to gaps in the Austrian welfare state (e.g. old-age pensions for blue-collar and agricultural workers, and family cash benefits). Selective social expansion for particular groups was combined with employment policies for the purpose of war preparation. The rapid transfer of the Reich’s social policies was equated by Nazi propaganda with social progress and was used to bolster the legitimacy of the new regime (an association that was certainly reinforced by the virtual disappearance of unemployment by 1939). Hence, the early period of Nazi rule in Austria is to some extent in line with Götz Aly’s notion that ‘continuous bribery in social affairs formed the basis for internal cohesion in Hitler’s Volksstaat’ (Aly 2005, 89). The crucial point, however, is that this ‘sociopolitical dictatorship of complaisance’ only aimed at improving the material well-being of what the Nazis considered the Volksgemeinschaft and served as a vehicle of war preparation. All other population groups suffered from dramatic welfare cutbacks, expropriation, and persecution. The Nazi terror set in immediately after the annexation. Up until 1940, about 70 per cent of Austrian Jews had been able to flee, although only after their property had been ruthlessly seized and exit taxes levied. The vast majority of the remaining 60,000 Jews were later killed in concentration camps. The expropriation of Jewish property and, with the ⁴⁶ GBlÖ 703/1938. ⁴⁷ RGBl I S. 155. ⁴⁸ In some cases extra work was remunerated with a supplement of 25 per cent.

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onset of war, the massive armed robbery in the occupied territories provided resources for redistribution for the benefit of the Volksgemeinschaft (Aly 2005). Moreover, the new völkisch welfare state included a variety of racist regulations related to welfare benefits as well as eligibility conditions, and was a vehicle for the Nazis’ eugenic policy aims that permeated healthcare and family policy (Malina and Neugebauer 2000; von Miquel 2014). For example, wedlock loans were provided neither to political opponents nor to couples suffering from genetic diseases, since the Nazis considered these marriages ‘as not in the interest of the Volksgemeinschaft’.⁴⁹ In terms of welfare benefits, Jews were relegated to the support of Jewish welfare organizations to which public welfare was merely subsidiary.⁵⁰ Additional public benefits beyond basic assistance were only granted to Jews if they aided emigration. Jews were also excluded from the Kleinrentnergesetz in 1939,⁵¹ which provided assistance to persons with low pensions (see Tàlos 2000, 395–6, for other racist regulations that were extended to Sinti and Romani groups in 1942). The further development of the völkisch welfare state during wartime was strongly influenced by the fortunes of war. Until 1942, new programmes, including some improvements in terms of benefit generosity, eligibility, and coverage, were enacted. Immediately after the Nazis unleashed the war, a series of measures were passed that adjusted social regulations to the conditions and repercussions of war.⁵² These measures brought about improvements⁵³ but also retrenchment, as labour protection and working-time regulations were revoked after the outbreak of war and later only partly restored. In addition, labour mobility was constrained in strategically important sectors, such as the metal and chemical industries and mining. The Working Mothers’ Protection Act, passed in May 1942, enhanced the protection of pregnant women for pronatalist reasons. The bill, the preamble of which stated that giving birth to healthy children was the German woman’s greatest contribution to the Volksgemeinschaft, included several improvements both in terms of maternity benefits and protective regulations (e.g. an employment ban for six weeks before and after giving birth, and the prohibition of dismissal), extended coverage (e.g. the inclusion of women employed in the agricultural sector and female homeworkers), and child care facilities. All these regulations applied only to German citizens, with the exception of Jews.⁵⁴ Other improvements enacted in 1941 and 1942 included pension increases⁵⁵ (enhanced widows’ benefits and higher child supplements for pensioners,⁵⁶ health insurance for retirees⁵⁷) or the extension

⁴⁹ §1 lit. c–d. Durchführungsverordnung über die Gewährung von Ehestandsdarlehen vom 20. Juni 1933 (RGBl I, 377). ⁵⁰ GBlÖ 641/1938. ⁵¹ See §7 GBlÖ 181/1939. ⁵² RGBl I S. 1623; RGBl I, 911. ⁵³ RGBl I, 34. ⁵⁴ §1 RGBl I, 324. ⁵⁵ RGBl I, 443. ⁵⁶ RGBl I, 407. ⁵⁷ RGBl I, 689.

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of accident insurance to new groups (e.g. peasants).⁵⁸ Special pension supplements were granted to the former Austrian territories to accommodate higher costs of living.⁵⁹ The mobilization for total war in 1943 was a turning point, as social and labour market policy were fully subordinated to the requirements of the war economy and the military. The growing labour shortage was resolved by the brutal exploitation of forced labourers. Moreover, women increasingly replaced men in industry, indicating the ambiguity between maternalist ideology and war-related necessities. The share of women working in the ‘Austrian’ industrial sector amounted to one third in 1945, while the share of forced labourers was 28 per cent in 1944 (Weber 2000, 339). What was ultimately left after total war and racial mania were 300,000 people killed and 120,000 disabled, a massive destruction of infrastructure, and economic chaos.

POST-WAR CONSEQUENCES In April 1945, the provisional government, consisting of the Social Democratic Party (SPÖ), the Austrian People’s Party (ÖVP, the former Christian Socials), and the Communist Party, issued a decree nullifying the Anschluss and re-establishing a democratic republic. Nevertheless, Austria was controlled by the Allied Forces until 1955. In contrast to the First Republic, the dominant pattern in the post-war period was one of cooperation, leading to a grand coalition between the ÖVP and SPÖ until 1966. Until the mid-1980s, the two major parties together represented, on average, around 90 per cent of the electorate. Cooperation also became the dominant pattern in industrial relations, with the emergence of a neo-corporatist system of ‘social partnership’ in the late 1950s. Apart from economic necessities, consensus democracy and corporatism were reinforced by the common experience of political persecution and lesson-learning. Post-war cooperation between the two former antagonistic blocs was mythically attributed to the ‘spirit of the camp street’.⁶⁰ At the same time, however, both political camps blocked out or played down the active role of many Austrians in the Nazi war machinery and the Holocaust. The reference to the Moscow Declaration of the Allied Powers (1943), declaring Austria the ‘first free country to fall a victim to Hitlerite aggression’, was the grand delusion of the Second Republic until the mid-1980s.

⁵⁸ RGBl I, 107. ⁵⁹ §6 RGBl I, 407. ⁶⁰ Several leading post-war politicians had been inmates of the Dachau concentration camp. These included, for example, the later Federal Chancellors Leopold Figl and Alfons Gorbach (ÖVP), and Franz Olah (SPÖ), who later became president of the Trade Union Federation.

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Early social and economic policy measures were crucially influenced by the legacy of World War II. The post-war national unity government socialized about seventy companies in 1946 and 1947. What emerged was one of the biggest public enterprise sectors in the Western world, which was later utilized for social and labour market policies (e.g. labour hoarding in times of recession). In terms of social policy, German social legislation provisionally remained in force until 1955, though without the racist and authoritarian regulations. Based on the Social Insurance Transition Act (1947), corporatist self-administration within social insurance institutions was re-established and the organization of social insurance restructured. Moreover, the government gradually re-enacted pre-war social legislation and provided advance money to social insurance institutions. Hence, despite the ruptures of war, there was no path departure in terms of the structural make-up of the welfare state. The left tinkered with the idea of implementing universal insurance but these discussions were cursory and quickly sidelined. Instead of institutional innovation, the government pragmatically relied on past experience to cope with the numerous pressing problems of the immediate post-war period. However, war was also a trigger for new programmes. Income support and employment opportunities for victims of war and fascism were introduced in the immediate post-war years, as evidenced by the Invalids’ Employment Act (1946), the NS-Victims Welfare Act (1947), and the 1949 War Victims’ Compensation Act (1949). The NS-Victims Welfare Act supported members of the resistance⁶¹ and victims of Nazi persecution and their dependants. However, coverage and benefits were only gradually extended (Pfeil 2004), not least because of Austria’s belated revisiting of its Nazi past. It was only in the wake of the Waldheim Affair and the related debates surrounding Austria’s role in World War II that particular groups of victims of Nazi terror who had been excluded under the previous legislation (e.g. disabled and homosexual persons, forced labourers, Sinti and Romani) received (symbolic) compensation.⁶² The 1949 War Victims’ Compensation Act provided assistance to disabled veterans and their dependants based on citizenship. The bill provided similar benefits, as did the corresponding legislation of 1919.⁶³ In 1950, the recipients consisted of around 170,000 wounded soldiers and

⁶¹ See Neugebauer (2015) for a comprehensive analysis of the Austrian resistance against the Nazi regime. ⁶² In 1995, the National Fund of the Republic of Austria for the Victims of National Socialism was established. A Reconciliation Fund (established in 2000) provided voluntary compensation to forced labourers from Eastern Europe. Finally, the General Settlement Fund for Victims of National Socialism, based on an agreement with the US government, was set up in 2001. ⁶³ This included disability benefits, vocational training, medical treatment, and prostheses for veterans, while dependants were entitled to survivors’ pensions and death benefits. The bill also provided a nursing supplement that was staggered based on the scope of care needed. Note that similar regulations are enshrined in the (civilian) Long-Term Care Act of 1993.

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25

20

%

15

10

0

1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

5

Total social spending

War-related social spending

Figure 3.4. War-related social spending and total social spending in Austria, 1951–80 Note: War-related social spending = war-related social spending as a percentage of total social expenditure. Total social spending = total social spending as a percentage of GDP. Source: ILO: The Cost of Social Security (various issues).

280,000 survivors of deceased servicemen, or the dependants of prisoners of war or missing soldiers. In sum, more than half a million people or about 8 per cent of the total population received cash benefits in 1950. Income support for war victims absorbed about 9 per cent of total social spending (Figure 3.4) or 1.2 per cent of GNP in the early 1950s (Butschek 1964). Spending on this item petered out slowly. In 1979, the number of beneficiaries still amounted to 201,000 (or 2.6 per cent of the population) of whom 10,500 were war victims of World War I (Bundesministerium für soziale Verwaltung and Zentralorganisation der Kriegsopferverbände Österreichs 1979, 17, 47). In 2015, about 20,000 people still received a pension from the war-related compensation schemes. The 1946 Invalids’ Employment Act included several regulations that had already been introduced by the Invalids’ Employment Act of 1920 (e.g. employment quotas, a compensation charge (Ausgleichstaxe) and special dismissal protection for disabled people). It was gradually extended to disabled civilians in the 1950s and 1960s and eventually renamed the Disability Employment Act in 1988. Overall, benefits for disabled war veterans considerably informed post-war civilian disability and long-term care policies. Family policy was another new area of state intervention prompted by war. In 1948, the government introduced food allowances for families with

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dependant children, which one year later were converted into child benefits for dependant employees. The relevant parliamentary debate clearly shows that family benefits were also motivated by a pronatalist population policy. Communist as well as Christian Democratic MPs argued that both world wars had led to an unfavourable demographic structure and a very low birth rate. Hence family cash benefits were not only seen as compensation for the higher living costs of families but also as a vehicle for improving the ‘power of the people’ and ‘public health’.⁶⁴ Given the magnitude of war-related social needs and a mature welfare state, Austria entered the post-war period as one of the world’s biggest social security spenders. According to International Labour Organization data, Austria was second only to Germany with respect to its social expenditure/GNP ratio in 1950. The reinstatement of full sovereignty in 1955 signalled the triumph of the welfare state on all fronts. A milestone in this respect was the General Social Insurance Act (Allgemeines Sozialversicherungsgesetz), enacted in 1955, which combined health and accident insurance and old-age pensions for blue- and white-collar workers into a single system. Under the conditions of the economic post-war boom this bill served as a blueprint for the inclusion of farmers and the self-employed into social insurance, paving the way towards a universal but occupationally fragmented and earnings-related social security system.

CONCLUSIO N War preparation and particularly the two world wars have left a strong and lasting imprint on the Austrian welfare state. Overall, five long-term effects of mass warfare on welfare state development stand out. While the first three refer to direct consequences of warfare, the impact of the others unfolded in an indirect manner. First, war and war preparation are important factors for understanding the timing of programme adoption. This holds in particular for unemployment insurance, labour protection, family benefits, housing policy (notably in Red Vienna) and, of course, for the welfare benefits provided to the victims of war. Moreover, the introduction of old-age pensions for blue-collar workers and family cash benefits in 1938 are examples of coercive policy transfers that were not revoked thereafter. Second, the economic and social repercussions of war decidedly shaped welfare state patterns. While war did not bring about a departure from the ⁶⁴ Stenographisches Protokoll, 9. Sitzung NR, VI. GP, 16 December 1949, 172, 174–5.

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nineteenth-century’s Bismarckian inheritance, it strongly affected the public– private mix and financing mode of the welfare state. Military expenses and welfare state-building after the Great War were financed from borrowing and printing money. The resulting hyperinflation not only led to the impoverishment of the middle-class and made private forms of welfare provision worthless, but was also a trigger for changing the financing mode of social insurance from capital funding towards a pay-as-you-go system. As a result, markets were more or less crowded out from welfare provision in Austria up to the 1990s. War-related destruction had a similarly strong impact on the public–private mix. Whereas World War I did not lead to severe destruction of infrastructure in the territories that later became the Republic of Austria, World War II, notably as a consequence of air strikes, caused considerable destruction. Once more it was only the government that, not least thanks to foreign aid, could raise the huge amounts of capital necessary for economic reconstruction. Moreover, large parts of heavy industry, transport, banks, and utilities were nationalized in the late 1940s. All this produced a mixed economy that was only dismantled from the late 1980s onwards. Third, mass warfare provoked a boost in social spending. From having been a ‘red rag to a bull’ in the Habsburg Empire, state subsidies to social insurance were introduced in the aftermath of the Great War when the government was confronted with colossal social needs. Welfare provision to victims, who represented almost 8 per cent of the population after both wars, had a strong impact on the social spending/GDP ratio that only gradually petered out with the demographic demise of the war generations. Fourth, social provision for the victims of war was a forerunner of modern social policies. Although created under heavy time pressure and adverse economic conditions, these programmes included various modern elements and objectives, such as an emphasis on employability and labour market reintegration, employment quotas, vocational training, and fines for firms failing to employ disabled war veterans, that many years later informed (civilian) disability policies, active labour market policy, long-term care and, to some extent, even the idea of social investment. In addition, state intervention in this field was based on a new rationale, as these measures aimed to compensate damages related to a civic duty mandated by the state. Finally, war drastically altered the supply side of the political system in a way that allowed the welfare state to flourish in the post-war period. While the Great War led to democratization and proportional representation, and changed the distribution of power resources in politics and industrial relations, World War II paved the way to fully fledged corporatism and consensus democracy. Moreover, both wars led to a centralization of government, enhanced the fiscal and administrative capacities of the state (e.g. with the creation of a ministry of social affairs in 1917), and provided the state with new jurisdictions in social and fiscal policy. The post-war duopoly of

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two pro-welfare state parties, consensus democracy (a lesson of intra- and international war), the emergence of the most centralized neo-corporatist system of interest mediation in the Western world, a lack of institutional veto points (not least because federalism was weakened by war), and rapid economic growth spurred by economic reconstruction, constituted an environment highly conducive to welfare state expansion in the three decades following the worst man-made catastrophe in human history.

REFERENCES Adler, Emanuel. 1927. ‘Das Arbeitsrecht im Kriege’. In Die Regelung der Arbeitsverhältnisse im Kriege, edited by Ferdinand Hanusch and Emanuel Adler, 19–170. Vienna: Hölder–Pichler–Tempsky. Alber, Jens. 1982. Vom Armenhaus zum Wohlfahrtsstaat. Frankfurt & New York: Campus. Aly, Götz. 2005. Hitlers Volksstaat. Raub, Rassenkrieg und nationaler Sozialismus. Frankfurt a.M.: Fischer. Baernreither, Joseph Maria. 1892. ‘Socialreform in Österreich’. Zeitschrift für Volkswirtschaft, Socialpolitik und Verwaltung 1: 11–42. Botz, Gerhard. 2017. ‘Nationalsozialismus in Wien. Machtübernahme, Herrschaftssicherung, Radikalisierung 1938/39’. Historical Social Research, Supplement (2017), 28 (2nd edn): 241–315. Bundesministerium für soziale Verwaltung and Zentralorganisation der Kriegsopferverbände Österreichs. 1979. 60 Jahre Kriegsopferversorgung in Österreich. Vienna. Bruckmüller, Ernst, Roman Sandgruber, and Hannes Stekl. 1978. Soziale Sicherheit im Nachziehverfahren. Die Einbeziehung der Bauern, Landarbeiter, Gewerbetreibenden und Hausgehilfen in das System der österreichischen Sozialversicherung. Salzburg: Neugebauer. Brügel, Ludwig. 1919. Soziale Gesetzgebung in Österreich von 1848 bis 1918. Eine geschichtliche Darstellung. Vienna & Leipzig: Deuticke. Butschek, Felix. 1964. ‘Die Kriegsopferversorgung’. WIFO Monatberichte 4: 150–5. Danzer’s Armee-Zeitung, 1870–1914, http://anno.onb.ac.at/cgi-content/anno?aid=daz. Deák, Istvan. 1991. Der K.(u.)K. Offizier. 1848–1918. Vienna & Cologne: Böhlau. Drobesch, Werner. 2010. ‘Ideologische Konzepte zur Lösung der “sozialen Frage” ’. In Die Habsburgermonarchie 1848–1918, vol. 9/1, edited by Helmut Rumpler and Peter Urbanitsch, 1419–63. Vienna: ÖAW. Ebert, Kurt. 1975. Die Anfänge der modernen Sozialpolitik in Österreich. Die Taaffesche Sozialgesetzgebung für die Arbeiter im Rahmen der Gewerbeordnungsreform (1879–1885). Vienna: Verlag der österreichischen Akademie der Wissenschaften. Führ, Christoph. 1968. Das k.u.k Armeeoberkommando und die Innenpolitik in Österreich 1914–1917. Vienna & Cologne: Böhlau. Gaertner, Friedrich. 1909. ‘Der Ausbau der Sozialversicherung in Österreich’. Archiv für Sozialwissenschaft und Sozialpolitik 29: 417–43 and 759–833.

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Grandner, Margarete. 1992. Kooperative Gewerkschaftspolitik in der Kriegswirtschaft. Die freien Gewerkschaften Österreichs im ersten Weltkrieg. Vienna & Cologne: Böhlau. Grandner, Margarete. 1994. ‘Conservative Social Politics in Austria, 1880–1890’. Working Paper 94–2 in Austrian Studies. Minneapolis, MN: University of Minnesota. Gruber, Helmut. 1991. Red Vienna: Experiment in Working-Class Culture 1919–1934. Oxford: Oxford University Press. Haas, Hanns. 2000. ‘Der “Anschluss” ’. In NS-Herrschaft in Österreich, edited by Emmerich Tálos, Ernst Hanisch, Wolfgang Neugebauer, and Reinhard Sieder, 26–54. Vienna: öbv & hpt. Hofmeister, Herbert. 1981. ‘Ein Jahrhundert Sozialversicherung in Österreich’. Schriftenreihe für Internationales und Vergleichendes Sozialrecht, Band 6b. Berlin: Duncker & Humblot. Karl-Renner-Institut. 1977. Sozialistische Politik. Die österreichische Sozialdemokratie im Spiegel ihrer Programme. Vienna: Karl Renner Institut. Kernbauer, Hans. 1995. ‘Österreichische Währungs-, Bank- und Budgetpolitik in der Zwischenkriegszeit’. In Handbuch des politischen Systems Österreich. Erste Republik 1918–1933, edited by Emmerich Tálos, Herbert Dachs, Ernst Hanisch, and Anton Staudinger, 552–69. Vienna: Manz. Kramer, Nicole. 2017. ‘Welfare, Mobilization and the Nazi Society’. In Poverty and Welfare in Modern German History, edited by Lutz Raphael, 137–71. New York: Berghahn. Layer, Max. 1905. Geschichte der österreichischen Arbeiterversicherung seit dem Jahre 1889 mit besonderer Berücksichtigung des neuen Gesetzesentwurfs, Internationaler Arbeiterversicherungs-Kongress. Vienna: Engel. Liechtenstein, Alois Prinz. 1877. Die sociale Frage. Rede gehalten am 3. Mai 1877 in der Schlußversammlung des Allg. österr. Katholikentages für die Gesammt-Monarchie. Vienna: Maher. Malina, Peter and Wolfgang Neugebauer. 2000. ‘NS-Gesundheitswesen und –medizin’. In NS-Herrschaft in Österreich, edited by Emmerich Tálos, Ernst Hanisch, Wolfgang Neugebauer, and Reinhard Sieder, 686–720. Vienna: öbv & hpt. März, Eduard. 1981. Österreichs Bankpolitik in der Zeit der großen Wende 1913–1923. Vienna: Böhlau. Militär-Zeitung. 1870–1914. http://anno.onb.ac.at/cgi-content/anno?aid=mil. Neugebauer, Wolfgang. 2015. Der österreichische Widerstand 1938–1945. Vienna: Steinbauer. Obinger, Herbert and Sonja Kovacevic. 2016. ‘Soziale Kriegsrüstung. Militär, militärische Interessen und die Anfänge des Wohlfahrtsstaates in der k.u.k. Monarchie’. Politische Vierteljahresschrift 57: 116–46. Pawlowsky, Verena and Harald Wendelin. 2015. Die Wunden des Staates. Kriegsopfer und Sozialstaat in Österreich 1914–1938. Vienna & Cologne: Böhlau. Pfeil, Walter J. 2004. Die Entschädigung von Opfern des Nationalsozialismus im österreichischen Sozialrecht. Munich: Oldenbourg. Pribram, Karl. 1920. ‘Die Sozialpolitik im neuen Oesterreich’. Archiv für Sozialwissenschaft und Sozialpolitik 48: 615–80.

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Rauchensteiner, Manfried. 2013. Der Erste Weltkrieg und das Ende der Habsburgermonarchie 1914–1918. Vienna & Cologne: Böhlau. Redlich, Joseph. 1925. Österreichische Regierung und Verwaltung im Weltkriege. Vienna: Hölder–Pichler–Temsky. Riedl, Richard. 1917. Denkschrift über die Aufgaben der Übergangswirtschaft. Vienna: k.k. Hof- und Staatsdruckerei. Rosenberg, Hans. 1976. Große Depression und Bismarckzeit. Munich: Ullstein. Rumpler, Helmut and Anatol Schmied-Kowarzik. 2014. Die Habsburgermonarchie und der Erste Weltkrieg. 2. Teilband. Weltkriegsstatistik Österreich-Ungarn 1914–1918. Vienna: ÖAW. Stiefel, Dieter. 1979. Arbeitslosigkeit. Soziale, politische und wirtschaftliche Auswirkungen— am Beispiel Österreichs 1918–1938. Berlin: Duncker & Humblot. Stolper, Gustav. 1915. ‘Die kriegswirtschaftlichen Vorgänge und Maßnahmen in Österreich’. Zeitschrift für Volkswirtschaft, Sozialpolitik und Verwaltung 24: 1–113. Tálos, Emmerich. 1981. Staatliche Sozialpolitik in Österreich. Rekonstruktion und Analyse. Vienna: Verlag für Gesellschaftskritik. Tálos, Emmerich. 2000. ‘Sozialpolitik in der “Ostmark”’. In NS-Herrschaft in Österreich, edited by Emmerich Tálos, Ernst Hanisch, Wolfgang Neugebauer, and Reinhard Sieder, 376–408. Vienna: öbv & hpt. Tálos, Emmerich. 2013. Das austrofaschistische Herrschaftssystem. Österreich 1933–1938. Vienna: LIT. Thierl, Heinrich Gustav. 1892. ‘Die Abgabe der Wehrdienstfreien mit besonderer Berücksichtigung auf Österreich-Ungarn’. Zeitschrift für Volkswirtschaft, Socialpolitik und Verwaltung 1: 569–612. von Miquel, Marc. 2014. ‘Der “völkische” Wohlfahrtsstaat in der NS-Zeit’. In Grundlagen und Herausforderungen des Sozialstaats. Denkschrift 60 Jahre Bundessozialgericht, vol. 1, edited by Peter Masuch, Wolfgang Spellbrink, Ulrich Becker, and Stephan Leibfried, 119–38. Berlin: Erich Schmidt Verlag. Weber, Fritz. 1995a. ‘Die wirtschaftliche Entwicklung’. In Handbuch des politischen Systems Österreich. Erste Republik 1918–1933, edited by Emmerich Tálos, Herbert Dachs, Ernst Hanisch, and Anton Staudinger, 23–39. Vienna: Manz. Weber, Fritz. 1995b. ‘Staatliche Wirtschaftspolitik in der Zwischenkriegszeit’. In Handbuch des politischen Systems Österreich. Erste Republik 1918–1933, edited by Emmerich Tálos, Herbert Dachs, Ernst Hanisch, and Anton Staudinger, 531–51. Vienna: Manz. Weber, Fritz. 2000. ‘Zwischen abhängiger Modernisierung und Zerstörung. Österreichs Wirtschaft 1938–1945’. In: NS-Herrschaft in Österreich, edited by Emmerich Tálos, Ernst Hanisch, Wolfgang Neugebauer, and Reinhard Sieder, 884–901. Vienna: öbv & hpt.

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4 Italy Wars, Political Extremism, and the Constraints to Welfare Reform Maurizio Ferrera

I N T R O D U C TI O N The Italian welfare state was officially born in 1898, when compulsory insurance was introduced to cover work injuries. The formative period lasted until the late 1940s, when the coverage of all the standard risks was completed in a Bismarckian framework of employment-related schemes and differentiated regulations for each occupational group. Two critical junctures are noticeable in this development, both of which coincide with the aftermath of the world wars. Old age, disability, and unemployment insurance were introduced in 1919. Survivors’ and sickness insurance were in their turn added between 1946 and 1947. Family allowances had been introduced in the interwar period but were thoroughly reorganized between 1947 and 1955. Between the two wars, the mobilization strategies of the Fascist regime also left their mark on social policy. The wars played a key role in focusing attention on the social question, in encouraging reflection on the appropriate state response to it, in prompting the elaboration of reform plans, and in creating favourable cultural, institutional, and political preconditions for subsequent policy innovations. What is distinctive about Italy from a comparative perspective is the breadth of the reform plans, which, at the end of both wars, outlined very generous, comprehensive and—most significantly—quasi-universalistic designs for social insurance. Equally distinctive was the failure of both plans to materialize in practice, due to the rapid polarization of party politics, especially within the left. In the aftermath of World War I, the main trigger for this polarization was the Russian Revolution; after World War II, it was the onset of the Cold War. This chapter reconstructs developments from unification until the late 1940s. Section two offers a brief synopsis of post-unification developments

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and the colonial wars, while section three summarizes Italy’s experience of those developments, and the main implications of the wars on the country’s social policy. Sections four and five describe the ambitious proposals made for social insurance reform and the reasons for their failure. Section six focuses on the Fascist period and its warfare mobilization strategies. Section seven discusses World War II and the reform proposals aimed at ‘universalizing’ Italy’s welfare state. The conclusion ties all of these threads together.

EARLY ORIGINS: F ROM I NDEPENDENCE TO THE L IBYAN WAR The Kingdom of Italy was officially established in 1861 after two wars of independence. A third war against Austria took place in 1866, which expanded the eastern border to Veneto, with the exclusion of Trento and Trieste. The social conditions of the pre-Unitarian states were relatively homogeneous in the North and centre. The Lombard–Venetian Kingdom was relatively more advanced than Piedmont in terms of public policies, especially in the health and poor-relief sectors. Almost everywhere, however, the key role in social assistance was that of the Catholic Church and its charitable institutions. In 1859, Piedmont had introduced a mild system of regulation of such institutions, reserving for the state a power of loose and distant supervision. In 1862, this system was extended to the new Kingdom. In 1865, a broad provision unified the administrative systems of the pre-unitary states according, again, to Piedmontese standards, including the obligation for local governments to offer poor relief. Veterans’ benefits for the disabled soldiers of the independence wars had been considered already in the early 1860s, but they were only introduced in 1876 after the conquest of Rome and the coming-to-power of the left (see ‘PostWar Politics . . . ’ below). The main social issue dominating the first decade after unification was the extreme backwardness of the South and the desperate material conditions of the agricultural masses. The ‘Southern Question’ created numerous popular revolts against the new regime, a phenomenon known as brigantaggio. The ‘bandits’ were covertly supported by the loyalist aristocracy linked to the Bourbons. Between 1861 and 1865, the government used the army to enforce public order in the southern regions, with thousands of executions and arrests. Another serious aspect of the Southern Question derived from the introduction of compulsory military service in 1861. In Sicily, such duty had never previously been experienced and about one half of the eligible population took to the bush. The army had to organize mopping-up operations for a number of years in order to enlist draft dodgers. For the new governments, conscription

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was not only an instrument for military recruitment but also a means of cementing the unity of the Kingdom. Military service was to be undertaken away from home in order to expose (southern) young people to new experiences, to dress differently, and to learn to speak, read, and write Italian. Initially the term of military service was set at five years (reduced to three in 1876, two in 1910, and one in 1920). A lengthy period of service transformed illiterate and destitute young people into disciplined soldiers with at least a modicum of education, conscious of belonging to one nation and one Italian state (Ilari 1989; 1990). The army was the only mass organization that existed after unification and played an even greater nation-building role than compulsory schooling (which consisted of three years of elementary education from 1877) (Whittam 1979; Gooch 1994). In 1875, a law generalized the personal obligation of every Italian male to serve in the army in case of war, and applied to all those below the age of 40. In 1879, the army acquired the official title of ‘Royal Army’, ultimately responding to the king alone. The military elite kept aloof from parliamentary politics, serving the interests of the Crown. In alliance with the Foreign Ministry, the military elite actively promoted the Kingdom’s colonial strategy, the first explicit move of which was the occupation of Massaua and the establishment of the first Italian colony, Eritrea, in 1890. Internally, during the 1890s, the army intervened on several occasions to re-establish public order in the wake of strikes or workers’ demonstrations (Gooch 1994). However, the reputation and power of the military suffered a considerable blow in the wake of the unsuccessful Abyssinian war (1894–6) and the battle of Adua, in which the Italian army was defeated by the Ethiopians. The need to finance public (and especially military) spending forced the various post-unitary governments to improve tax collection and to rationalize taxation more generally: a coherent national tax code was introduced in 1877 (taxation was based on proportional and not progressive rates). The gradual strengthening of the tax state between 1861 and the end of the century laid the basis for the subsequent introduction of social assistance and insurance programmes. State activism focused initially on the health sector (Cosmacini 2005). The hygienic and health conditions of the South were almost tragic after unification—a fact that became clear with the launch of mass conscription. In 1862, average life expectancy was 29 years. In Campania and Basilicata it was just 23, while in Piedmont and Liguria it reached 35. Infective and respiratory diseases, as well as malaria, were endemic in areas south of Rome. Less than 5 per cent of young Sicilian miners passed the physical test for conscription in the first two decades, and the figure was only slightly higher in the malaria-ridden areas of the Agro Pontino (Lazio) and the Maremma (Tuscany). In the northern plains, pellagra was widespread among farmers and agricultural labourers. The new state adopted a health code in 1865, establishing the first rules of public hygiene and the practice of

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medicine, partly modelled on the standards already existing in Lombardy. In 1868, the first public hospitals were established. In 1887, a Health Directorate was set up within the Ministry of the Interior and the national network of medici condotti (local physicians paid by the state) was strengthened and rationalized. By 1900, average life expectancy had risen to 45 (41 in the South) (Atella et al. 2011). In the last two decades of the nineteenth century, the ‘social question’ gradually moved to the forefront of political attention. Workers started to mobilize with the emergence of unions (especially in the more advanced North) and the official birth of the Italian Socialist Party in 1892. In the wake of Pope Leo XIII’s encyclical Rerum novarum, the Church’s orientation became more progressive. Both socialist and Catholic unions intensified their social activism (mainly through friendly societies and mutual funds, especially for healthcare) and started to press for active state intervention. In 1886, a first law was introduced to regulate child labour. In 1890, the plethora of private, mainly charitable Catholic institutions were transformed into Public Institutions for Assistance and Beneficence under state control. Partly echoing the German example, during the 1890s the Liberal government introduced some measures for the improvement of working conditions, and in 1898, a compulsory insurance scheme to cover work injuries, as well as a state-subsidized voluntary scheme for old-age and disability insurance, was introduced. This reform was adopted with conservative–paternalist intentions (Ferrera 1992) in the difficult phase of political turmoil that followed the Adua defeat. The left rose against the imperial and colonial ambitions of the government. Demonstrations and strikes provoked a strong reaction from political authorities. In Milan, the army proclaimed a state of siege in May 1898 and repressed the riots with guns. The government suppressed a number of workers’ associations as well as the first women’s leagues. In the new century, a phase of social reformism took off under Giovanni Giolitti. The new Liberal leader was guiding the country towards democratization and new social measures became part of the government agenda in the wake of growing pressures from trade unions (Acquarone 1988). Giolitti was convinced that an increase in the social and political influence of the proletariat was inevitable and that this emerging social class had to be fully included within the Italian state through social reforms and greater ‘neutrality’ of the government in industrial conflicts. Thus, despite protests from employers, a stricter regulation of woman and child labour, a coverage expansion of work injuries insurance, and compulsory maternity insurance for female blue-collar workers were legislated (1911). Primary education was brought under the direct responsibility and control of the state rather than the municipalities. Women’s leagues were reorganized in both the socialist and Catholic camps, and in 1908, the First National Congress of Italian Women was held in Rome.

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In 1911, Giolitti declared war against the Ottoman Empire, with a view to conquering Libya. Essentially driven by power–political interests in the international competition for colonies, the Libyan war was presented domestically as also serving the interests of the working class, providing Italy with a ‘fourth shore’ (in addition to the Tyrrenian, Adriatic, and Ionian shores) where emigrants could find new economic opportunities. The war inflamed the political scene, juxtaposing socialists on one side and nationalists on the other. The Ottomans surrendered in 1912 and Libya became an Italian colony (the fourth shore was to reveal itself as an expensive burden rather than a source of opportunities and profits). Despite victory, the Libyan war weakened Giolitti, who tried to regain consensus by passing important progressive reforms, such as the introduction of male quasi-universal suffrage (1912) and a state monopoly over insurance, the profits of which were to subsidize voluntary social-protection schemes. In 1912, war pensions for veterans were introduced as a distinctive benefit within the class of state pensions. The period between 1913 (first elections with universal suffrage) and the Great War witnessed a growing ferment of discussions and proposals about the extension of social insurance to other social risks and social groups. The most vocal demands came from the Catholic unions, while many socialist union leaders were jealous of the autonomy of workers’ associations and mutual societies.

WORLD WAR I AND ITS DOMESTIC I MPACT At the start of the Great War, Italy was part of the Triple Alliance, together with Germany and Austria-Hungary. Formally, the alliance did not require Italy to go to war, so the country remained neutral and tried to negotiate territorial concessions from Vienna. Talks were, however, unsuccessful. France, Britain, and Russia were in turn exerting pressure and offering blandishments for Italy to shift camp. On 26 April 1915, the Italian government signed the Pact of London with the Entente. On 4 May 1915, the Triple Alliance was denounced, and on 24 May, Italy went to war against Austria-Hungary. The Italian state was not prepared for the financial and organizational efforts required by the war. The Salandra government had to organize the mass conscription of over five million men. Most were uneducated peasants and did not understand the purpose of the war. Forced conscription challenged the state’s legitimacy, especially in the southern regions where sections of the population had never fully accepted unification and the tougher and more effective rule exerted by the new state. The Carabinieri corps had to exercise considerable control over the conscription process. A second major

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challenge was to organize an industrial mobilization economy aimed at boosting productive capacity. The state became the key customer of the developing industrial apparatus. Quick depreciation schedules, advance payments, and favourable interest rates allowed the government to induce large corporations such as Fiat and ILVA to produce goods in a timely manner. Moreover, war production councils were set up where industry, government officials, and regional authorities could meet to hammer out procurement plans. A dedicated Ministry of Arms and Munitions was created to oversee the production effort and coordinate all activities at the local and national levels. Though relatively large in number, the army was technically unprepared and the northern and eastern borders were the most difficult to defend of any in the European theatre. There were repeated attacks against Austria, which made little progress and caused heavy losses. In 1917, Italy suffered a major defeat at Caporetto and had to withdraw from the Isonzo to the Piave River. In 1918, however, as civil unrest increased in Austria-Hungary, the Italian army attacked again. The Austrian army broke at Vittorio Veneto, and the Italians drove deep into Austrian territory. Fighting ended on 3 November 1918. The major territorial gains were Trento, Trieste, and the Istrian peninsula. During the war the Italian economy experienced massive stress (Galassi and Harrison 2005). Essential supplies for both the military and the civilian population were hard to provide and deliver. The Ufficio Mobilitazione Industriale (UMI, Industrial Mobilization Bureau) was granted vast powers in dealing with war production. The bureau had the right to classify private establishments and even whole firms as ‘auxiliary’ to the war effort, which meant that the UMI thereby assumed significant management responsibilities for an indefinite period. The industrial plants of the north-west were made to operate at full gear, under military discipline and control, provoking waves of discontent among workers forced to work for sixteen hours a day (the right to strike had been suppressed). Female employment in militarized industrial plants rose from 4 per cent to 25 per cent between 1915 and 1918, and the prohibition of night work for women was suspended. During the same period, virtually all women (including those from the middle and upper classes) either entered the labour force or were engaged in voluntary and nursing work. Prices and consumption were supposedly under public control, but there was much scope for fraud and abuse by war profiteers. Given that the vast majority of male farmers and labourers had been drafted, agricultural production fell despite the enhanced contribution of women. To lift the morale of soldiers, there were promises of generous subsidies for land purchase once the war was over and a fund was created for this purpose in 1918. Those exempted from military service were subjected to a special tax and a life insurance contract was issued for each soldier. War financing pushed up public expenditure for defence from 4.4 per cent of GDP in 1913 to 24.9 per cent in 1918, with a peak of 34.6 per cent in 1917. Extraordinary revenue had to be collected: 0.5 per cent of all taxes in 1915 and then up to

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3.9 per cent, 10.8 per cent, and 15.5 per cent by 1918 (with a peak of 23.9 per cent in 1920 for reconstruction and foreign loan repayments) (Flora et al. 1987). Five subsequent war loans were launched, accompanied by intense patriotic propaganda. From the first to the fifth loan, there was an escalation in the production of symbols of national unity and solidarity in an attempt to mobilize fear and aggressiveness towards the enemy, as well as pride. A privileged target of this financial propaganda was the female population. The official poster of the fifth loan was accompanied by a public appeal signed by well-known patriotic women (Ada Negri, Grazia Deledda, Costanza Garibaldi, and others) and explicitly urged mothers to ‘save your loved ones’ and to ‘save your belongings’ (Cimorelli and Villari 2015). The human losses (more than 600,000), the material destruction, the substantial decline in foreign trade, the rise in prices (which more than tripled between 1914 and 1919), and the rise of unemployment contributed to the rapid impoverishment of large segments of the population when the war ended, especially among the various categories of survivors (half a million crippled veterans, plus widows, orphans, etc.) (Procacci 2013). The deterioration of hygiene and public health (not to mention an influenza epidemic of unprecedented intensity) in turn caused a general increase in morbidity, with an alarming resurgence of tuberculosis (Cherubini 1977). In the face of these problems, pre-war welfare arrangements turned out to be totally inadequate: voluntary mutualism and the various charities had neither the financial resources nor the organizational structures to provide for their traditional clientele and were certainly not capable of taking on additional burdens. As Cherubini observed: [M]utualism suffered a severe beating as a consequence of the war. The statutes of the health mutual funds generally provided that the member of a fund called to arms ceased to pay contributions and upon return was reinstated as a member, keeping all his rights and without prior medical examination. But the condition of the veterans was often bad. The result was a considerable burden [on the funds] and especially an imbalance in the relationship between contributions and benefits. (1977, 226)

The government reacted by strengthening its role in ‘subsidiary’ terms, that is, intervening to fill the gaps in existing non-public institutions. A first instrument was the provision of financial relief to mutual societies, which paid disability benefits to returning soldiers. A second instrument was the introduction of a new system for subsidizing directly (through the local authorities) the families of soldiers, especially those of disabled and deceased combatants. The aim was to replace the income of the breadwinner by paying a sum of money paid out to the wife and the children. Such sums were, however, very low: in a city like Milan, the daily rate for a wife was roughly equal to the cost of a kilo of bread (Procacci 2013). In March 1917, a dedicated Ministry for Military Assistance and War Pensions was created, together with a National Institute for

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the Protection and Assistance of War Invalids and a National Institute for Combatants. The latter two were entrusted with the task of paying subsidies and reinserting veterans into the labour market (including through the assignment of uncultivated lands) (Procacci 2013). The strengthening of welfare ‘stateness’ during the war is also visible in respect of the labour market. In 1918, the government established a national system of labour exchanges, with public offices at the local level designed to intermediate between the supply and demand of workers, in collaboration with the existing trade unions and employer associations (Conti and Silei 2005). The war did spur a wide range of social policy initiatives but mostly in a dispersed and fragmented way, as a response to emergency. This approach was criticized by progressive intellectuals and reformist politicians, who initiated an articulated discussion on possible ‘comprehensive’ reforms. The debate on social security legislation flared up in 1918, with a plethora of conferences, events, study committees, and parliamentary discussions. Two ambitious projects elaborated in this period are worth describing in some detail, as they represented a sort of Italian Beveridge Plan before its time. The first project, prepared by the Rava Commission (see ‘The Institutional and Distributional Consequences . . . ’ below), provided for the establishment of a so-called global mandatory insurance for work-related risks and extended to the whole population below a certain income. More precisely, the ‘recommendations’ made by the Commission were: • that compulsory insurance covers employees (with no income limits) and self-employed (farmers, artisans, etc.) whose income does not exceed a certain limit; • that the risks covered by the insurance are temporary disability, permanent disability, death caused either by work-related or common illnesses and by work-related injuries . . . and by involuntary unemployment; • that mandatory benefits include a minimum income to compensate the family for the loss caused by occupational risks and therefore: 1. health and eventually orthopaedic care for the insured or persons in their family; 2. a special care during pregnancy and breastfeeding; 3. pecuniary compensation equal to half the wage . . . for temporary disability up to a certain length of time and involuntary unemployment, decreasing with time . . . and possibly modulated in relation to the family composition; 4. in case of death, to grant a funeral and a temporary income to children up to the age at which they can earn a living through work, as well as an annuity to widows who do not have any other benefits. • that a compulsory contribution is determined according to the basic salary, partly paid by the worker (entirely, in case of the self-employed)

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and partly by the employer, with . . . the additional contribution covered by charities, municipalities, the State. (Commissione Reale per il Dopoguerra [Royal Commission for the Post-War] 1920, 463–4; italics added) There is little need to stress the very innovative character of these recommendations (in particular those highlighted in italics) which anticipated the principles of universal social security and were at the forefront of the European agenda of the time with regard to the catalogue of covered risks, the share of the insured population, and the target level of generosity.¹ The proposed mandatory insurance for work-related risks did not expressly include the oldage pension, which was the subject of discussion and a separate initiative by the government itself. However, the process—which later led to decree no. 603 of 29 April 1919, establishing mandatory pension insurance—included the idea of extending the coverage beyond the private sector, including to self-employed workers, as a prelude to a ‘basic universal benefit’ to every citizen without exception or distinction (Cherubini 1977, 253). This was a scheme not so distant from, and perhaps even more ambitious than, the one introduced by Sweden in 1913. The second project was drafted by the special Commission for the Study of Medical Insurance, established already in 1917, before the Rava Commission. It contemplated the establishment of a kind of public health system extending to all workers (including many categories of the self-employed) below a certain income threshold, the unemployed, and the ‘poor’ (i.e. virtually all citizens truly in need of protection), and aimed to provide, among other things, hospital care in facilities directly managed by the state (with the requisition, if necessary, of private and religious institutions) (Cherubini 1970; 1977). What factors led to the development of these two ambitious and explicitly universalistic projects? Given the scarcity of historiographical literature, it is not easy to provide a comprehensive answer. By a first approximation, however, it may be suggested that three elements played a key role: (1) The vast opportunities for reform that opened up in the institutional system during the war and the development, in this context, of new principles of social policy. (2) The gradual rapprochement between the working classes and middle classes—at least in terms of distributive interests—as a result of the social and economic upheavals of the war. (3) The embryonic formation (at the end of the war) of a progressive coalition of Liberals, Reformist Socialists, and Catholics, aimed at implementing a comprehensive strategy of social pacification and political legitimation through social rights and cross-class redistribution.

¹ See especially the references to a ‘minimum income’ and the consideration of ‘family burdens’ for calculating benefits, and the reference to ‘half of the wage’ as a standard amount.

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THE I NSTITUTIONAL AND DISTRIBUTIONAL C ONSEQ UENCES OF THE WAR AND THE ‘CO NVERSION’ TO WELFARE UNIVERSALISM The social and economic consequences of the war prompted government and parliament to reopen many social policy dossiers that had been elaborated in the pre-war period. A specific institutional impetus for the debate on the social question was the establishment of the post-war Royal Commission, the work of which was carried out in parliament between 1917 and 1918. Divided into two main subcommittees (the one for legal, social, and administrative matters and the other for economic matters), in turn divided into several sections, the task of this Commissionissima (a ‘super-commission’, as it was nicknamed) was to plan the post-war transition and the most urgent reforms to be launched with the restoration of peace. A whole section was dedicated to the problems of ‘social insurance and social policy’ and was chaired by the Hon. Luigi Rava (and therefore also informally known as the Rava Commission).² The discussion around these problems was largely influenced by the experience of the war, which definitely contributed to the affirmation of three new principles: (1) the compulsory nature of social insurance, (2) its global/comprehensive reach in terms of risks, and (3) quasi-universalism. The first principle had been partly actualized before the war, but the irreversible crises of voluntary mutualism and subsidized public welfare erased the last vestiges of ideological and organizational resistance to the compulsory principle. Two specific institutional stimuli contributed to its final victory. The first was the existence of mandatory medical insurance in the so-called redeemed provinces of Trento and Trieste: the government had been committed since 1916 to preserving the Austrian system in case of annexation, thus binding itself to hastening its plans for the introduction of compulsory medical insurance throughout the country. The second stimulus was the mandatory membership (approved in 1917) of the State Pension Fund³ for workers of auxiliary industrial plants confiscated by the government for the production of war material (about 800,000 people) (Istitutio Nazionale per la Previdenza Sociale (INPS) 1970). This measure established a significant institutional precedent, making it very difficult to defend the idea that pension insurance should remain voluntary for other categories of workers. The State Pension Fund itself, guided by an active administrative board, turned into a combative advocacy group for overcoming voluntariness (Gustapane 1989).

² The commission on medical insurance was not part of the Commissionissima and had been appointed earlier. ³ Such a fund had been established in 1898 on a voluntary basis.

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The overall conversion to compulsory insurance in the areas of pensions, health, and unemployment was accompanied by an ever-increasing need for coordination and, if possible, organizational integration between the various regulations (those already existing and those still to be introduced) and the various structures of benefit provision. The wish for comprehensive solutions (the second principle) for the issue of social risks is to be found in almost all documents of that time: governmental, parliamentary, and associational. This was in part a reaction to the state of pre-war disorder and fragmentation (coexistence of public and private schemes within workinjuries insurance, sectoral and local inequalities of mutualism, etc.). The adoption of a comprehensive approach, however, was also made possible by the increased capacities gained by the Italian state during the war, in terms of: policy steering (especially but not exclusively in the economic sphere), administrative coordination, greater power vis-à-vis organized interests (through a deliberate strategy of sticks and carrots), tax collection, and the size of public revenues. The establishment of the Commissionissima was in itself a sign of capacity, at least in terms of a novel form of ambitious policy planning based on wide consultation and (partly) on technical knowledge. The principle of quasi-universalism proceeded more slowly than the other two, establishing itself at first in a ‘minimal’ and later in a ‘maximum’ form. At first, the idea that compulsory insurance should extend to all employees, including agricultural workers, started to take root, in no small part due to the war sacrifices borne by the latter on the battlefront. The first important institutional materialization of this idea was the extension of workinjuries protection to farm labourers already in 1917. At a later stage, the idea of including other occupational categories made its way in the context of the increasing mood of national solidarity brought about by the war. A protagonist of the pensions debate at the time, V. Magaldi, summed up this delicate transition as follows: While initially the prevailing thought was that comprehensive protection should benefit only the working classes—i.e. the ones that experience had proved less suited to respond with their own strength against the threats to health, labour force and life—as time passed, more mature observations and experiences led to a broader concept: that of protecting all individual and family incomes. (Quoted in Cherubini 1977, 238)

The institutional incentives, the new reformist principles and, more generally, the climate of ‘national solidarity’ experienced perhaps for the first time in Italy during the war, encouraged the development of a quasi-universalistic scenario within policymaking arenas and intellectual debates. Such a scenario, however, also appeared consistent with the changing constellation of socioeconomic interests.

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The wartime experience produced huge shocks within the national production system and widespread insecurity within the major occupational categories, not just those previously exposed to the turmoil of capitalistic modernization (i.e. salaried workers), but also those traditionally more stable, such as independent farmers, artisans, merchants, and shopkeepers. The war loans, rent freezes (and therefore a freeze on the incomes of home owners), inflation, and the collapse of distribution channels inflicted severe blows to the economic stability of these categories, eroding the remaining potential for autonomous risk protection. With reference to the arguments of Baldwin (1990), it could be said that the war accelerated the homogenization of the risk profiles of the various occupational categories, creating the conditions for a possible universalistic coalition extended not only ‘horizontally’ from industrial workers to agricultural labourers but also ‘vertically’ to the middle classes. In the end this coalition was not actualized, and in fact, the small middle class ended up allying with big business, thereby opening the door to Fascism (Sylos Labini 1974). But a ‘Scandinavian-style’ scenario of a cross-class coalition did open up briefly amid the turmoil of the immediate post-war era. We find indeed a clear testimony in the debates held inside the Rava Commission. As mentioned, the latter’s proposals suggested not only the inclusion of the self-employed within the insurance scheme against the risks of work but also a package of additional provisions for the self-employed, ‘as it is an essential interest of the State to strengthen the middle classes, which represent the connective tissue of the social and economic life of the nation and recognising that the war has deeply disturbed [their] economic life’ (Commissione Reale per il Dopoguerra 1920, 468; own translation). The package included credit facilities, loan subsidies for agriculture and small business, and various provisions to support the free professions, smallholdings, and craft activities. In other words, the self-employed (in particular those with lower incomes) were to be included (with contributions but also with state subsidies) within the new compulsory insurance and would furthermore receive a number of tax and credit advantages. With a graceful and elegant language, the Rava Commission envisaged some sort of inter-class alliance as the basis of its recommendations, which was to be cemented by social policies. In the summary of its discussions the committee explicitly stated that ‘the provisions that the State is required to implement for the working classes should have some counterweight in similar provisions in favour of middle classes’ (Commissione Reale per il Dopoguerra 1920, 457). It can thus be suggested that the universalist project of 1917–20 was at least initially powered by a logic of distributional aggregation focused on the involvement (very beneficial for them) of the petty bourgeoisie, the very same logic that has accompanied the introduction of social protection schemes with ‘national’, citizenship-based coverage throughout the Western nations.

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POST-WAR POLITICS AND THE (FIRST) F A I L U R E OF UN I V ER S A L I S M The third key factor contributing to the emergence (but also, as we shall see, the failure) of welfare universalism was political. The war had a momentous impact on Italy’s fragile political system by producing at least two significant developments. The first was the political mobilization and organization of Catholics, who founded the Popular Party in January 1918 and were particularly focused on mobilizing the moderate vote, especially in the countryside. The second development was the (further) radicalization of, and within, the left. The Russian Revolution reinforced the ‘maximalist’ wing of the Socialist Party. In the summer of 1917, a Soviet delegation visited Turin, a stronghold of the workers’ movement. The event snowballed into a violent demonstration against the war, in support of Lenin and the revolution. The army repressed the demonstration, but ‘the shadow of revolution had descended on Italy’ (SetonWatson 1967, 619). Maximalist radicalization continued in the subsequent years and 1919–20—known as the Biennio Rosso (the Red Biennium)—was characterized by mass strikes, workers’ demonstrations, as well as self-management experiments through land and factory occupations. Workers’ councils were formed in Turin and Milan and many factory occupations took place under the leadership of anarcho-syndicalists. The agitations also extended to the agricultural areas of the Po Valley and were accompanied by peasant strikes, rural unrest, and guerrilla conflicts between left-wing and right-wing militias. In March 1919, the Fascist movement was officially formed. Against this alarming backdrop of centrifugal forces, the moderate, democratic, and ‘pro-system’ parties had no other choice but to join forces. Liberals, Catholics, and the reformist wing of the Socialist Party sought an alliance not only in the parliamentary arena but also in the executive arena. The aim was to establish a political bloc around the centre (leaning towards the centre-left) of the ideological spectrum, which would be able to halt the maximalist shift to the extremes of the left and the right and be able to steer the serious economic and social problems of the country in a democratic reformist direction. The implementation of comprehensive social reforms of just the kind recommended by the two parliamentary commissions was one of the most decisive ingredients of this design: the reforms promised to respond not only to the social (more specifically, social insurance) crisis but also to aggregate mass political support around the fragile tripartite democratic centre. The prospect of a major round of electoral reform in 1919 provided additional incentives for the development of proposals for social policy in the universalistic direction. In July 1919, it was decided to switch from singlemember constituencies with two-round majority voting to a list system of proportional representation. Suffrage was also extended to all males provided

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that they were of age, even if illiterate, and to all those who, even if underage, had served in the military: a clear example of the ‘political equalization’ effects of the war. The elections of November 1919 became the first ‘full’ (male) suffrage direct elections and a key role was to be played by demobilized voters (Vivarelli 1991). The extension of the suffrage to women was openly discussed, and a draft bill was adopted by the Chamber of Deputies on 6 September 1919. Parliament was, however, dissolved prior to the senate’s approval. Earlier, in July 1919, an important step had been taken in terms of extending the civic rights of women: the ‘marital authorization’ for the exercise of a wide range of economic rights (deeds of gift, real estate buying and selling, establishing a legal company, and so on) was abolished. The main protagonist of this ‘consociational’ project was Francesco Saverio Nitti, a Liberal who had always paid attention to the relationship with the left and to social issues (Barbagallo 1984). Nitti found available interlocutors, especially in Bissolati in the reformist wing of the Socialist Party and in the Sturzo–De Gasperi group within the Catholic camp, interested in a rapid governmental legitimation of the new party.⁴ The Nitti government was voted into office in June 1919 and included two members of the Popular Party. It was also indirectly supported by a number of socialist reformist MPs. After the formation of the new cabinet, it was suggested in political circles that ‘if the Popular Party could be described as the lawful wife of Nitti, the Socialist Party was his lover’ (Seton-Watson 1967, 614). It was this Catholic–Liberal–Social-reformist coalition, led by Nitti, that gave political impetus to the universalist projects described above. The Rava Commission’s proposals were made public in the first months of 1919 and those of the Study Commission on Medical Insurance came out the following September. The actual legislative accomplishments of 1919 did not achieve complete universalism. Statutory pension insurance and unemployment insurance were introduced in 1919, but covered only employed workers. In February 1920, however, the Nitti government asked parliament to establish a new special commission ‘in order to introduce all possible improvements and coordination between their various forms of insurance, crowning that building of a comprehensive insurance, which was for many years the tenacious aspiration of workers and is now an actual achievement’ (quoted in Cherubini 1977, 242). The same Nitti government then introduced its own draft bill on a compulsory sickness scheme, which included most of the recommendations of the Study Commission. One of Nitti’s final achievements was the establishment of the Ministry of Labour and Social Welfare, assigned to the socialist Arturo

⁴ In 1919, Pope Benedict XV lifted the so-called Non expedit, i.e. the prohibition of Catholic voters from participating in elections, in revenge for having suppressed the Papal State.

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Labriola, whose task was, among other things, to supervise the implementation of the comprehensive social insurance system. The Nitti cabinet unfortunately fell on 9 June 1920 after a bitter quarrel over the price of bread, ‘amid the joy of the right wing and the song Bandiera Rossa from the socialists’ benches’ (Seton-Watson 1967, 639). The idea of a tripartite consociational settlement for post-war democratic pacification and social reform was definitively shattered, leaving room for the spiral of ideological polarization and centrifugal competition that culminated in Fascist rule. Many factors contributed to this failure: from the objective gravity of the post-war economic situation and public finances to the acuteness of social unrest, as well as the hesitation of the Popular Party and (especially) the Socialists in supporting Nitti, and his own inability to mediate between diverging political interests (Monteleone 1982; Vivarelli 1991). A not insignificant role was also played by the introduction of the proportional list ballot. Benefiting the two parties that could count on a solid mass organization (the Socialists and the Popular Party), the formula resulted in a centrifugal landslide of votes (the Liberals went down from 55.9 to 35.5 per cent) and Nitti was cornered, giving rise to the ‘parliamentary paralysis’ in which, in just a few months, the fate of his democratic-reformist project was consumed and, with it, the creation of a universalistic and advanced welfare system. The major factor behind the failure was, however, the unstoppable spiral of political polarization, the roots of which must be found, on the one hand, in the domestic consequences of the war for the workers’ movement and, on the other, in the Russian Revolution and its radicalizing effects on the left. This spiral culminated in the split with the left during the 1921 Congress of the Socialist Party, after which Bordiga and Gramsci founded the Partito Comunista d’Italia. Its official mission was to overthrow the bourgeois state and to establish a dictatorship of the proletariat through councils of workers and peasants, modelled on the example of the Russian Bolsheviks. After the fall of the Nitti government, the maximalist rhetoric (especially on the part of the new Communist Party) came to demand the full selfmanagement of social security funds by workers’ representatives as a first step towards ‘Sovietization’. Despite the goodwill of Nitti’s successor, the old Giolitti, by the end of 1921 the design of a comprehensive and universalist insurance system was now destined to remain a dead letter. The quantitative impact of the post-war legislation should not, however, be downplayed: in the early 1930s, coverage for occupational injuries had gone up to 53 per cent of the labour force (from 9 per cent in 1905), and up to 39 per cent for pensions (from 1 per cent under the voluntary scheme that existed in 1905) and up to 28 per cent for unemployment benefits. Albeit less ambitious than intended, post-war social reforms did have a significant long-term effect.

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FASCISM AND THE RISE OF THE WARFARE S TATE Initially, the advent of Fascism abruptly halted the development of the Italian welfare state. The new regime paid its debt to the great industrial and agrarian bourgeoisie that had supported it by freezing all the projects under discussion. The introduction of mandatory medical insurance was postponed indefinitely and only general declarations in support of ‘free agreements between the parties’ were formulated. Levels of health protection were reduced in the redeemed provinces of Trento and Trieste, where family members were excluded from benefits and the inclusion of new members in the former Austrian welfare schemes was no longer permitted. Pension coverage was abolished for tenant farmers and the entire agricultural sector was excluded from unemployment insurance coverage. Public labour exchanges were suppressed. Fascism reserved special treatment for the middle classes but not through insurance. The new regime chose to restore the economic stability of these categories (and thus their ability for self-protection) through selective measures, such as the withdrawal of government subsidies to cooperatives (which was damaging to small traders) and the freezing of licences for the provision of retail trade and credit facilities for artisans (Sylos Labini 1974). From the second half of the 1920s, the Fascist regime resumed welfare development as part of its broader corporate–authoritarian modernization project. The 1930s witnessed the increase of welfare programmes and expenditure. Inspired as it was by the principles of corporatism, and in order to win consent, the expansion of social protection followed the tradition of occupational fragmentation and class divisions. The welfare state became an arena of clientelistic exchanges through the provision of selective benefits to the social groups whose consensus had to be secured or preserved (Salvati 1992). It must be noted, however, that a rudimentary safety net for the poor was also gradually established, especially through the creation of social assistance centres (Enti Comunali di Assistenza, ECAs) in each municipality. This was an important step in the etatization (‘stateness’) of social assistance, which reduced the margins of manoeuvre for non-state, mainly religious associations. The ECAs were put under the direct supervision of the central government and received regular funding from it. The creation of a plethora of public institutes and funds made many jobs available for the rank and file of the Fascist Party. The benefits and services provided by these enti did contribute, however, to enhancing popular consensus. The regime used the reserves of the various insurance funds at its own discretion, especially to prepare for war. In 1935, the main social insurance schemes were unified within two central funds: INFPS (old age, disability, unemployment, and family allowances) and INFAIL (work injuries).⁵ ⁵ The Istituto Nazionale Fascista della Previdenza Sociale (Fascist National Institute of Social Security) and Istituto Nazionale Fascista per l’assicurazione contro gli infortuni sul lavoro

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Fascist social policy privileged interventions for boosting natality and supporting the family and childhood. In 1925, a National Institute for Maternity and Childhood (Opera Nazionale Maternità e Infanzia, ONMI) was established, with the mission of providing material and ‘moral’ support to mothers and promoting the education (and fascist ‘socialization’) of children and youth, through an array of programmes and rituals (Minesso 2007; Mattera 2012). Free assistance for illegitimate and abandoned infants was legislated in 1927, and a dedicated institute for orphans was created in 1929. The Fascist policy on mother-and-child care was part of a larger strategy aimed at restoring the glories of imperial Rome and restoring the central role that, according to Mussolini, Italy merited in the international arena. Militarism and racism—key traits of fascist ideology in its maximalist variants—as well as the aggressive imperialist policy of the regime, were intertwined with the ‘anthropological’ project of regenerating the Italian population by creating a ‘new Fascist man’, suited to the domination of other ‘races’ (Falasca Zamponi 2003). In a famous speech given in 1927, Mussolini made an explicit connection between the international power/strength (potenza) of nations (in political but also in economic and moral terms) and their population size: ‘what do 40 million Italian count vis-à-vis 90 million Germans and 200 million Slavs? . . . 40 million French, plus 90 in their colonies, or 40 million English, plus 450 in their colonies?’ (Falasca Zamponi 2003, 134). Mussolini wanted the Italian population to reach 60 million by the middle of the century. His demographic policy included a number of concrete measures, such as a tax on unmarried men above 25 (1927); an enhancement of maternity insurance, with compulsory confinement (1929 and 1934); a prohibition on firing mothers (1930); a nuptiality bonus for public employees, and a loan scheme for young couples (1937). More general measures were also adopted to support large families, especially in the wake of the 1929 economic crisis. During the 1930s most transfer benefits were calibrated to take family size into account, and between 1934 and 1937 a National Fund for Family Allowances was set up, paying supplements to wages for industrial workers with family dependants. It must be noted, however, that in order to tackle unemployment the regime promoted a selective expulsion of women from the labour market by imposing limits on female employment, first within public administration (1933 and 1934) and then also within the private sector. In 1938, a limit of 10 per cent was set in all public and private sectors (Gaeta and Viscomi 2007). Already in 1927, women’s wages had been set at 50 per cent of those of men. Between 1931 and 1939, the Italian population grew from 41 million to 44 million. This outcome was, however, less the result of explicit pronatalist (Fascist National Institute for Insurance against Accidents at Work), respectively. These two funds still exist today and with almost the same acronyms, except for the ‘F’, which stood for ‘Fascist’, which has been removed.

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and family policies than of a less emphasized set of interventions against infant mortality implemented by ONMI (Gaeta and Viscomi 2007; Minesso 2007). An important role was also played by the expansion of the public hospital network (free care for the indigents, at least de jure, had already been introduced in 1923) and by insurance coverage against sickness: a public scheme against tuberculosis was introduced in 1928, and tax incentives were attached to national contracts that included sickness insurance coverage (Ferrera et al. 2013). The latter were unified during World War II (in 1943) under the umbrella of a central National Institute for Health Insurance, which remained the fulcrum of public health insurance until 1978, when the Italian National Health Service was created. While the abovementioned ECAs were abolished when social assistance became a formal competence of regions (created in 1970), the other two national institutes established under Fascism (INPS and INAIL) are still today the key administrative pillars of the Italian social protection system. Already in its early years the Fascist regime started to put together a ‘colossal machine’ for war preparation (Mignemi 1993; Gooch 2007). In 1925, a law established the cornerstones of a gradual ‘militarization’ of the country and laid down standards aimed at ensuring the coordination of all state apparatuses in case of war, as well as their coordination with industry; ensuring an equitable distribution of means of subsistence in case of famine; and, more generally, organizing civil society so that ‘every citizen knows what his place is’.⁶ As one of the various bodies to be established in the case of war, the law envisaged a dedicated body for propaganda and material assistance to citizens affected by war operations. Subsequent measures established a network of ‘civil resistance committees’ in every province and a large municipality for the organization of emergency relief and social assistance, and in 1935, a High Commission for domestic propaganda and civil assistance was created. Between 1930 and 1940, detailed programmes were outlined for the ‘civil and psychological mobilization’ of the whole population. In 1937, a document on the ‘Armed Economy’ was published (Labanca 2002). The chiefs of staff of the various armed forces discussed the actions necessary to prepare for war, bringing together the political, industrial, scientific, and military spheres. This document testifies that the military were up to date with the newest theories on how to prepare for a total war based on advanced technologies. They had also clearly learnt their lessons from the past, including from the Ethiopian conflict which had created the Italian Empire, proclaimed in 1936 (Rochat 2005). This conflict had in fact revealed an inadequate availability of

⁶ Camera dei Deputati (1925), Archivio Storico, vol. 1120, ‘Organizzazione della Nazione per la Guerra’, available at: http://archivio.camera.it/patrimonio/archivio_della_camera_regia_ 1848_1943/are01o/documento/CD0000001039.

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strategic raw materials, backwardness in communication and logistics, and an insufficient supply of advanced weaponry. Nevertheless, when war finally came in 1940, the strategy of war preparation proved largely unsuccessful. Historians agree that there was a marked mismatch between Mussolini’s over-ambitious objectives, the nature of the conflict, and the character of national mobilization. The regime had made too many incompatible promises both internally (to the military, to various groups of industrialists, to party cadres, and so on) and externally (to the German allies). The war could not have been won (Labanca 2002).

W O R L D WA R I I A N D I T S D OM E S TI C I M P AC T Italy entered World War II as an ally of Nazi Germany in June 1940, driven by Mussolini’s territorial and imperial ambitions. Despite some initial success in the Western Balkans and North Africa, the Italian army soon found itself in a quagmire and had to be supported repeatedly by Germany. After the surrender of the Axis powers in North Africa in the spring of 1943, it became clear that the war would be lost. Rome was bombed in May, and Sicily was invaded in June. A putsch within the top Fascist hierarchy toppled Mussolini from power in July. The Germans rescued the dictator and installed him as the head of the Republic of Salò in Northern Italy. The King and the new government led by Pietro Badoglio negotiated an armistice with the Allies that entered into force on 8 September 1943. A Kingdom of the South was formed between 1943 and 1944, with headquarters in Brindisi and then in Salerno. It took two additional years of fighting for the full liberation of the country, proclaimed in April 1945. An important role in the liberation of Northern Italy was played by the Resistenza: a composite movement of paramilitary formations (the so-called partigiani) recruited among anti-Fascist former soldiers and civil servants, draft dodgers, and volunteers from the ordinary population. The size of such formations is estimated to have been around a total of 100,000 people (250,000 including occasional or intermittent collaborators), who supported Allied operations and engaged themselves in autonomous guerrilla initiatives. The Resistenza had mixed and partly ambiguous political objectives. It saw itself at the same time as being engaged in a liberation war (against the Nazis) and in a civil war (against the Fascists). For many partigiani, however, the Resistenza was also a class war against those strata of the bourgeoisie that had supported Fascism, and against business and landowners in general. The largest brigades of partigiani (around 50 per cent of total numbers) were under Communist control and were animated by revolutionary objectives. Towards the end of the war, in some liberated territories the Communist-dominated liberation

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committees established popular tribunals and confiscated private property with a view to ‘Sovietization’. The Communist Party (PCI) national leadership disavowed such initiatives. Togliatti, the PCI secretary, had returned to Italy from Moscow in 1943, with a mandate from Stalin to support the Kingdom of the South and cooperate with all anti-Fascist parties to re-establish territorial sovereignty. The ‘radical’ and revolutionary soul of the Resistenza did not, however, subside after the end of the war and remained widespread among the militant base of both the PCI and the Socialist Party (PSI), despite the consociational strategy followed by Togliatti between 1945 and 1947. The monarchy had been seriously delegitimized by its connivance with Mussolini since 1922. In June 1946, a referendum (in which women could vote for the first time) established the Italian Republic, and a new constitution was adopted in 1947 by all anti-Fascist parties. This entered into force on 1 January 1948. Several articles dealt with social protection, committing the Republic to providing free medical care and social assistance for the needy, as well as social protection to all workers. The war had caused massive material destruction. More than 10 per cent of civilian dwellings had been destroyed, together with 60 per cent of all roads and 40 per cent of all railway stations, hospitals, and schools. Agricultural production had fallen to its 1938 level, and industrial production had gone down by 25 per cent compared to 1939. During the first phase of the war, the Fascist government, on several occasions, increased the level of cash benefits, especially for unemployment. The duration of the ordinary benefit was also increased from 120 to 180 days (a limit that was maintained until the 1990s). More importantly, in 1941 a central fund called Cassa Nazionale per l’Integrazione dei Guadagni degli Operai (the National Fund for the Supplementation of Blue-Collar Earnings) was established through collective bargaining. Its aim was to supplement the earnings of blue-collar workers in case of work-time reductions due to the war and its impact on industrial production. The scheme was strengthened for northern enterprises during the Salò Republic and was retained, improved, and extended to the new Italian Republic in 1947, subsequently becoming a key pillar of the Italian welfare state but also an institutional disincentive to create a modern, universal unemployment insurance system (Ferrera et al. 2013). During the war, social insurance institutions were of course shattered. The surge of inflation caused massive damage to their financial structure: reserves were almost annihilated, due partly to the fact that Fascism had used them extensively to finance the war. The cost of benefits, services, and administration increased, while revenues declined. War damage seriously prejudiced the real estate value of all insurance institutions. For private insurance, the blow was dramatic: this sector took a long time to regain financial viability in the post-war period and ceased to be seen as a possible alternative to public provision. The organizational structure of the latter staggered beneath the

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hard experience of the administrative separation between the two territorial entities in 1944 and 1945. Indeed, at one time there was even doubt as to the possibility of administrative reunification in the face of demands for regional autonomy and of organizational fragmentation. That this was not the outcome was mainly thanks to new social policy ideas that the war had itself generated (Consiglio Nazionale dell’Economia e del Lavoro 1963, 315). In the face of such a broad crisis, the post-war government enacted a series of social emergency measures between 1945 and 1947, essentially aimed at raising existing benefits (pensions, unemployment indemnities, and family allowances) and introducing ad hoc subsidies (Ferrera et al. 2013). In 1945, survivors’ pensions were generalized for all INPS schemes and, between 1945 and 1947, sickness insurance was made compulsory and the various semipublic corporatist funds created by Fascism were brought under state control. The share of social protection in GDP grew from 4 per cent in 1944 to 4.8 per cent in 1946; in 1950, it had reached 5.6 per cent. In the same years, defence spending as a percentage of GDP declined from 10 per cent to 4.5 per cent and then to 3.5 per cent in 1950 (Flora et al. 1987). It is, of course, difficult to sort out the exact determinants of social spending growth (e.g. the socioeconomic consequence of the war in terms of risks and needs versus the effects of institutional changes). Aggregate and summary data do suggest that the ‘guns and butter’ trade-off was indeed operative in post-war Italy, and that the end of the conflict coincided with the onset of a long phase of welfare state expansion. Alongside extraordinary measures, broad strategic thinking considered how to reorganize social protection. Thanks to a campaign launched by the British government, parts of the Beveridge Plan were translated into Italian and circulated in both expert and public circles. The plan raised interest within all anti-Fascist parties. However, after an internal discussion, the Communists disavowed their initial support and harshly criticized Beveridge’s approach as an attempt to salvage bourgeois capitalism. Already in 1944, the Badoglio government had appointed a first Royal Commission for the Reform of Social Insurance. This never became fully operational, but it did stimulate the various parties to define their positions. With a number of important caveats, the Christian Democrats (DC) and the secular liberal-reformist parties leaned towards a comprehensive and inclusive approach, while the Socialists and the Communists espoused a markedly ‘workerist’ philosophy aimed at achieving ‘liberation from want’ for the proletariat. Other commissions were set up after the liberation, but the most important one was appointed in 1947, under the chair of the Reformist Socialist, Ludovico D’Aragona (who had already participated in the Rava Commission between 1917 and 1919). The task of this Commission for the Reform of Social Insurance was to carry out a review of the existing schemes, with a view to reforming them based on principles of institutional uniformity/standardization and of full coverage for the working classes (Commissione per la Riforma della Previdenza Sociale (CRPS) 1948).

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Echoing the Beveridge Plan, at the start of its work the issue of the ‘coverage model’ was immediately addressed, that is, the definition of risk communities upon whom the new welfare system would rest: ‘[W]ho should benefit from social insurance? All Italians, workers in general, all workers below a certain income limit or only the employees?’ D’Aragona asked in his opening speech. He continued by saying, ‘A new orientation is growing, arguing that social insurance should be universal, meaning that it should be extended to the entire population . . . We need to determine whether the time is ripe for such a radical solution’ (CRPS 1948, 127). In the end, the Commission expressed itself against this radical solution. The idea of creating a universal system in the full sense—extended to the entire population, including ‘those who consider themselves in a position to take care of themselves’—was not taken on board by the Commission. A reading of the documents shows that the negative choice was based mainly on three considerations: (a) the excessive costs of allinclusiveness; (b) the desire to respect the traditional mutualistic and occupational tradition of Italy’s welfare system; and (c) the belief that it was improper to also provide for the needs of those citizens ‘who do not get their income from their work’ (with the exception of family dependants). It should be noted that when they dismissed universalism à la Beveridge, the views of the Commission conformed with the prevailing orientations among the major political and social forces: the vast majority of political parties and trade unions were in fact not in favour of the principle of full universalism and the voices that rose up in its defence were very few (Cabibbo 1944; Mazzini 1980). After half a century of Bismarckian welfare, resting on the link between social insurance and employment status, this aversion to the principle of citizenshipbased security was not surprising. In the constitutional debate that was taking place at that time, the fundamental basis of the new Republic was ‘labour’. The exclusion from insurance of a few hundred thousand ‘wealthy capitalists’ or ‘prostitutes, beggars, and prisoners’ did not seem like a serious violation of the ideal of solidarity that such discussions had embraced. While not giving in to full citizenship-based universalism, the proposals of the Commission nevertheless remained universalistic with respect to the status quo. In fact, the Commission recommended: (a) the extension of social protection to all workers and their families, and (b) the establishment of a single scheme to ensure basic uniform treatment for all. The idea was, in other words, to overcome the categorical fragmentation inherited by the Liberal and Fascist regimes and move towards the establishment of a single large-risk community comprising all households connected to the labour market (through at least one of their members). The Commission’s recommendations were highly innovative, not only with respect to the disorganized and faulty status quo, but also comparatively: in the late 1940s, no European welfare state (‘Bismarckian’ or ‘Beveridgian’) provided benefits linked to income as generous as those proposed by the

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Table 4.1. Main institutional changes in the Italian welfare state, 1950–70 1950: job security and earnings-related benefits granted to working mothers 1952: pension reform: improvement of pension formula and establishment of minimum pensions 1955: reform of family allowances 1957: extension of pension insurance to farmers 1962: extension of pension insurance to artisans 1962: establishment of a commission for the reform of social insurance: proposal for universal pension and health insurance 1966: extension of pension insurance to shopkeepers 1968: hospital reform (universalization of coverage) 1968: improvement of unemployment insurance 1969: pension reform: introduction of earnings-related formula and of social pensions 1978: healthcare reform: establishment of the National Health Service

Commission (e.g. a 50–60 per cent replacement rate for a standard pension). However, despite their strong innovative character, the impact of these recommendations was somewhat modest, more modest than the impact of the parallel French and Dutch plans of social insurance reform. Due to the delicate political situation, nothing was done during 1948. After having briefly resurfaced (in a very watered-down form) as a draft bill introduced by the Fanfani government in 1949, the D’Aragona project fell substantially by the wayside, and from the 1950s onwards the Italian welfare state embarked upon a path of fragmented occupational expansion (Table 4.1).

THE S ECOND (POLITICA L) F AILURE OF UNIVERSA LISM What was the cause of this (second) failure of universalism after the demise of the Rava Plan in the early 1920s? A number of conjunctural factors played a role, but as in 1919, the main reason was political, that is, ideological polarization and centrifugal competition. Let us start with the former factors. There was, to begin with, a lack of overall design and coherence in D’Aragona’s project. Haste prevented the articulation of many aspects of the proposals and a detailed analysis of their implications, especially financial (Coppini et al. 1948). A second element was the fact that the project was, so to speak, suspended in the air: it was not in fact supported by some recognizable social coalition actually interested in promoting it, contrary to what had happened in 1919. In fact, on closer inspection, the goals of this project were hardly compatible with the constellation of distributive interests in post-war Italy. The proposal to establish a single insurance

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scheme that was extended to all workers, without distinction, threatened to go against the interests (if not the actual privileges) of many of the categories already covered by existing schemes, creating bitter horizontal redistributive antagonisms. In addition, there was a vertical antagonism between categories of income, which according to the Commission’s proposals would essentially become ‘net contributors’ (the free professions, managers and cadres, property owners, etc.) and categories of income that would otherwise become ‘net receivers’ (the lower-middle and working classes). The proposed inclusion of the self-employed raised particular concerns (Delogu 1967). On the one hand, the Italian General Confederation of Labour expressed concern that these groups might benefit unduly from such insurance, perhaps to the detriment of employees, especially owing to their high rates of tax evasion. On the other hand, the self-employed themselves were concerned about the size of the contributions that they would be expected to pay in the case of compulsory coverage. The decisive reason of the failure had to do, however, with the political implications of the plan. The establishment of the D’Aragona Commission was one of the last initiatives of the coalition between Catholics and Socialist– Communists (the ‘National Unity’ governments), which dominated Italian politics for a brief moment between 1945 and 1947. Within the left, however, it was the PCI that prevailed: a ‘revolutionary’ party with close links to the Soviet Union. With the beginning of the Cold War, ideological polarization rapidly increased. In 1947, a number of Socialists abandoned the leftist front and created a social democratic splinter party. For a brief moment, it seemed that the balance of power within the left might turn in favour of reformist socialism; a solid alliance between them and the confessional block could have possibly ‘forced’ a quasi-universalistic solution, encouraging the various occupational categories to reach a redistributive compromise. The seeds of such a scenario were, to some extent, sown in the very birth of the D’Aragona Commission: a veteran of reformist socialism, its president was among the protagonists of the social democratic secession of January 1947. The decision to appoint the Commission had been taken by Amintore Fanfani, the Labour Minister, a member of the Christian Democratic left-wing who was very attentive to social issues and ready to support reforms. However, during 1948, the overall balance of power within the left was re-captured by the PCI, which pursued a strategy of social radicalization, ideological polarization and centrifugal competition. Weeks after the appointment of the Commission, the National Unity coalition broke up and the fourth government led by Alcide De Gasperi (the DC’s leader) was formed, the first Christian Democratic single-party cabinet. The constitution entered into force on 1 January 1948 and elections were called for April. In January, the Communists and the Socialists formed a ‘Popular Front’. The campaign was mainly fought on ‘regime’ and ‘political camp’ rather than ‘policy’ issues. The DC and its smaller

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allies argued that a victory for the Front would have pushed Italy into the arms of the Soviet bloc, and caused the suppression of liberal democracy and market freedom. Such alarming (and not wholly unjustified) prospects frightened moderate and confessional voters, and the DC won a landslide victory: 48.5 per cent against 31 per cent for the Popular Front (the reorganized neo-Fascist Italian Social Movement (MSI), received just two per cent of the vote). After the 1948 elections, Italy’s party system became a victim of ‘polarized pluralism’ (Sartori 1976), based on high ideological polarization, centrifugal competition, and bilateral (far left and far right) and irresponsible oppositions. The establishment of universal social insurance ceased to be a politically feasible option for both centrist and left parties, as it was fiercely opposed by the anti-system formations of both the left (the PCI, which split from the Socialists in the early 1950s) and the right (the MSI, which later incorporated the monarchists). It was the beginning of the ‘particularistic– clientelistic’ welfare state (Ferrera 1984; 1992; Paci 1984), based on marked categorical fragmentation and a system of patronage-based distributions, mainly centred on the Democrazia Cristiana party (DC).

CO NCLUSION The two world wars had an enormous impact on the formation of the Italian welfare state. At the ideational/intellectual level, they prompted remarkable advancements in collective thinking about solidarity and social protection (its goals, its design, and its distributional logic). In 1898, Italy had embarked upon a Bismarckian path of occupational coverage and work-related benefits. However, in both 1917 (that is, during World War I) and 1947 (shortly after World War II), universalistic ideals and principles made their appearance in public and parliamentary debates and were taken into serious consideration. Even if the ambitious and innovative proposals of the Rava and D’Aragona Commissions did not immediately materialize, such ideals and principles remained part and parcel of Italy’s social policy culture. They resurfaced again during the 1960s and were eventually translated into practice in 1978 with the establishment of the first citizen-based National Health Service of Continental Europe (Table 4.1). At the institutional level, both wars accelerated the etatization of social protection, overcoming voluntary mutualism, displacing the Catholic Church, and making insurance schemes not only compulsory but also bringing them under close state control. Coverage was extended and the roles and needs of women were openly recognized. The extension of pension and unemployment insurance to agriculture in 1919 was in part motivated by the wish to acknowledge and compensate female workers who had so effectively replaced men

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during the war. In 1945, survivors’ insurance was introduced to protect women and children who had lost the family breadwinner to war. The introduction of job security and earning-related benefits for working mothers were among the first social insurance extensions of the 1950s (Table 4.1). Institutional expansion was reflected in spending growth, but in the case of World War I, this effect was rather short-lived due to the advent of Fascism. The reforms introduced in the aftermath of World War II instead prompted a real take-off of social expenditure, which lasted throughout the 1970s. Finally, in political terms, the wars highlighted the explicit connection between social policies, electoral consensus and, more generally, regime legitimation. It is true that this connection had already been tested in 1898, but at the time, the suffrage was still limited and the political logic of the first social insurance provisions was Bismarckian, not only in its design but also in its aim to be a top-down, semi-authoritarian domestication of the mobilizing workers’ movement (Ferrera 1992). After the introduction of universal male suffrage in 1912, and its further extension to veterans in 1919, social policies became a prime ingredient of party competition and started to be seen as the key instrument for a peaceful integration of the working masses into the democratic political system. On this important front, Italy stands out in comparative perspective for the obstacles posed to this trajectory not only by Fascism but also (and perhaps primarily) by the activation of the so-called ‘fifth cleavage’, that is, the division between a maximalist, revolutionary, and pro-Soviet left and a reformist, social democratic, and Atlantic left. As has been shown, this factor played a decisive role in causing the failure of both universalistic attempts at reform (which Catholics largely supported) and in triggering ideological and electoral polarization, and thus in ‘locking’ the Italian welfare state within a trajectory of welfare particularism, still partly visible in the present day.

REFERENCES Acquarone, Alberto. 1988. L’Italia giolittiana (1896–1915). Bologna: Il Mulino. Atella Vincenzo, Sivia Francisci, and Giovanni Vecchi. 2011. ‘La salute degli italiani, 1861–2011’. Politiche Sanitarie 12: 165–89. Baldwin, Peter. 1990. The Politics of Social Solidarity: Class Bases of the European Welfare States 1875–1975. Cambridge: Cambridge University Press. Barbagallo, Francesco. 1984. Francesco Saverio Nitti. Turin: Utet. Cabibbo, Emanuele. 1944. ‘I partiti politici e la previdenza sociale in Italia’. Rivista degli infortuni e delle malattie professionali 1: 13–27. Camera dei Deputati. 1925. ‘Organizzazione della Nazione per la Guerra’, Archivio Storico, vol. 1120, available at: http://archivio.camera.it/patrimonio/archivio_della_ camera_regia_1848_1943/are01o/documento/CD0000001039.

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Cherubini, Arnaldo. 1970. ‘Una pagina molto nota e poco conosciuta. Lo schema del disegno di legge sull’assicurazione obbligatoria di malattia del dicembre 1919’. La Rivista italiana di previdenza sociale 3: 793–842. Cherubini, Arnaldo. 1977. Storia della previdenza sociale in Italia 1860–1960. Rome: Editori Riuniti. Cimorelli, Dario and Anna Villari. 2015. ‘Persuadere! Guerra, comunicazione e consenso attraverso i manifesti dei Presiti Nazionali’. In La Grande Guerra. Società, propaganda, consenso, edited by D. Cimorelli and A. Villari. Milan: Silvana editoriale. Commissione Reale per il Dopoguerra. 1920. Studi e proposte della prima sottocommissione. Rome: Tipografia Artigianelli. Commissione per la Riforma della Previdenza Sociale (CRPS). 1948. Relazione sui lavori della Commissione. Rome: Ministero del Lavoro e della Previdenza Sociale. Consiglio Nazionale dell’Economia e del Lavoro. 1963. Relazione preliminare sulla riforma della previdenza sociale. Rome. Conti, Fulvi and Gianni Silei. 2005. Breve storia dello Stato sociale. Rome: Carocci. Coppini, Mario Alberto, Filippo Emanuelli, and G. Petrilli. 1948. ‘Il costo della riforma della previdenza sociale’. Rivista degli infortuni e delle malattie professionali 2: 367–445. Cosmacini, Giorgio. 2005. Storia della medicina e della sanità in Italia. Rome-Bari: Laterza. Delogu, Severino. 1967. Sanità pubblica, sicurezza sociale e programmememazione economica. Turin: Einaudi. Falasca Zamponi, Simonetta. 2003. Lo spettacolo del fascismo. Rome: Rubettino. Ferrera, Mauricio. 1984. Il welfare state in Italia. Sviluppo e crisi in prospettiva comparata. Bologna: Il Mulino. Ferrera, Mauricio. 1992. Modelli di Solidarietà. Bologna: Il Mulino. Ferrera, Mauricio, Valeria Fargion, and Matteo Jessoula. 2013. Alle origini del welfare all’italiana. Padova: Marsilio. Flora, Peter, Franz Kraus, and Winfried Pfenning. 1987. State, Economy and Society in Western Europe, vol. 2. Frankfurt a.M.: Campus. Gaeta, Lorento and Antonio Viscomi. 2007. ‘L’Italia e lo Stato sociale’. In Storia dello Stato sociale, edited by Gerhard Ritter, 238–76. Rome-Bari: Laterza. Galassi, Francesco Luigi, and Mark Harrison. 2005. ‘Italy at War, 1915–1918’. In The Economics of World War I, edited by Stephen Broadberry and Mark Harrison, 276–309. Cambridge: Cambridge University Press. Gooch, John. 1994. Esercito, Stato e società in Italia 1870–1915. Milan: Franco Angeli. Gooch, John. 2007. Mussolini and His Generals: The Armed Forces and Fascist Foreign Policy, 1922–1940. Cambridge & New York: Cambridge University Press. Gustapane, Enrico. 1989. ‘Le origini del sistema previdenziale. La Cassa nazionale di previdenza per l’invalidità e per la vecchiaia degli operai’. Previdenza sociale 1: 35–98. Ilari, Virgilio. 1989. Storia del servizio militare in Itali. Vol. 1, Dall’ordinanza fiorentina di Machiavelli alla costituzione dell’esercito italiano, 1506–1870. Rome: Centro militare di studi strategici. Ilari, Virgilio. 1990. Storia del servizio militare in Italia. Vol. 2, La nazione armata, 1871–1918. Rome: Centro militare di studi strategici. Labanca, Nicola. 2002. L’istituzione militare in Italia. Politica e società. Milan: Unicopli.

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Mattera, Pablo. 2012. Momenti del welfare in italia. Storiografia e percorsi di ricerca. Rome: Viella. Mazzini, F. 1980. ‘Il sistema previdenziale in Italia fra riforma e conservazione’. In Amministrazione pubblica e istituzioni finanziarie, edited by Andrea Orsi Battaglini, 447–553. Bologna: Il Mulino. Mignemi, Adolfo. 1993. ‘Organizzazione e strumenti della propaganda nell’Italia in guerra’. L’impegno a. XIII, n. 1. Minesso, Michela. 2007. Stato e infanzia nell’Italia contemporanea. Origini, sviluppo e fine dell’Onmi 1925–1975. Bologna: Il Mulino. Monteleone, Renato. 1982. ‘La prospettiva riformistica di Nitti. Borghesia e nazionalismo’. In La disgregazione dello stato liberale, edited by Giovanni Cherubini, Franco Della Peruta, Ettore Lepore, Mario Mazza, Giorgio Mori, Giuliano Procacci, and Rosario Villari, vol. 21 of Storia della Società italiana, 191–222. Milan: Teti. Paci, Massimo. 1984. ‘Il sistema italiano di welfare tra tradizione clientelare e prospettive di riforma’. In Welfare State all’italiana, edited by Ugo Ascoli, 297–325. Bari: Laterza. Procacci, Giovanna. 2013. Warfare–Welfare: Intervento dello Stato e diritti dei cittadini (1914–18). Rome: Carocci editore. Rochat, Giorgio. 2005. Le guerre italiane 1935–1943. Dall’impero d’Etiopia alla disfatta. Turin: Einaudi. Salvati, Mariuccia. 1992. Il regime e gli impiegati. Nazionalizzazione piccolo-borghese negli anni del fascismo. Rome-Bari: Laterza. Sartori, Giovanni. 1976. Parties and Party Systems. Cambridge: Cambridge University Press. Seton-Watson, Christopher. 1967. Storia d’Italia dal 1870 al 1925. Rome-Bari: Laterza. Sylos Labini, Paolo. 1974. Saggio sulle classi sociali. Rome-Bari. Laterza. Vivarelli, Roberto. 1991. Storia delle origini del fascismo, vol. 2. Bologna: Il Mulino. Whittam, John. 1979. Storia dell’esercito italiano. Milan: Rizzoli.

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5 The Two World Wars and Social Policy in France Timothy B. Smith

I N T R O D U C TI O N In 1871, in the Palace of Versailles Hall of Mirrors, Otto von Bismarck sealed France’s national humiliation with the wax of the treaty concluding the brief war lost to Prussia. A newly unified Prussian-led Germany extracted reparations and took possession of Alsace and Lorraine. France had been overwhelmed by a smaller but better educated and organized nation—a perfect recipe for a national crisis of confidence. For the next forty years debates over the role of the state in matters of education, military readiness, and social welfare in France were framed by the German example. By the end of the 1880s, France had one of the most centralized systems of universal, free primary education in the world. The national curriculum was imbued with martial values and steeped in irredentist propaganda, such as the inclusion of Alsace and Lorraine as French territory in maps used in school texts. The French army was modernized, partially along German lines. Veterans’ pensions were a costly item in the national budget. The railroad and road systems were expanded with an eye toward military preparedness. The military’s political sway was crucial between the 1880s and World War I. The national university system was overhauled in an effort to cement national unity, promote scientific research, boost commerce, and strengthen the military. The years leading up to World War I led to bitter parliamentary debates over the length of military conscription, which was raised to three years in 1913, drawing more men into service. Income tax was debated for several decades and 200 bills had died in parliament before one was finally passed in July 1914. Its implementation was delayed by the outbreak of hostilities two weeks later and the tax was first levied in 1916 to help fund the war effort.

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With the exception of veterans’ pensions, the direct impact of the FrancoPrussian war on the social welfare ‘system’ is more complicated. Before World War I, France was still a ‘night watchman’ state that strove for balanced budgets. France’s rudimentary patchwork of municipal-based safety nets generally excluded able-bodied workers (Smith 2000, 147–84). Localism, voluntarism, and selectivity (means-tested relief) defined the French approach to the social question (Smith 1997, 997–1032). This reflected the relatively slow pace of urbanization, proletarianization, unionization, and industrialization in France compared with Britain and Germany. In the early 1900s, the charities of a typical large French city would spend ten to fifteen times as much per year as the municipal public assistance network (Cohen 1998; Smith 2003). Total social spending was just 2 per cent of GDP. France was, however, very concerned with its low birth rate and the military implications of a small conscript base. On the eve of World War I, parliament established important new programmes in support of maternal welfare (the 1904, 1913 laws), but where adults were concerned, social solidarity was in practice a communal affair. France was fragmented into 36,000 communes and this hindered collective action and the coordination of limited resources prior to 1914. Programmes for able-bodied adults were also opposed by critics who claimed that the German approach singled out certain categories of workers or citizens for special treatment and violated the republican vision of the French Revolution, which held that intermediary bodies should not intervene between state and citizen. Only those deemed to be less-than-full citizens, such as women and children, might conceivably be considered for special treatment. The very type of welfare state the French had resisted so vehemently during the period 1883–1914 is, however, precisely the type of state the French would build in the period 1928–48.

WORLD W AR I: THE RISE OF S TATISM AND THE MOBILIZATION OF LOCAL SOCIAL EFFORT World War I led to an almost threefold increase in state spending, at all levels. If we include local and departmental employees, the number of state administrative personnel increased by roughly 50 per cent between 1913 and 1920 (Porter 1994, 162–3). The war began a process of state-building that continued throughout the interwar period. For example, there were 43,000 public hospital employees in 1912, 51,000 in 1921, and over 100,000 by 1939

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(Ministère du Travail 1923, xxvi; Theil 1943, 129).¹ Paris hospitals, various social services, and other agencies together employed 5,000 more people in 1920 than they had in 1913. The number of ministerial circulars or directives increased dramatically: the Ministry of Health alone issued over 1,000 each year during the interwar period. Although there was certainly a political backlash during the early 1920s against the direct ownership of, or control over, large sectors of the economy, the experience of wartime controls was not fully wiped from the slate. Indeed, the French state created numerous ‘mixed companies with joint public and private ownership, it sequestered a share of mining profits, and it formed and assumed partial control of a domestic petroleum cartel. State controls remained in place in the railroad, electrical power, and river transportation industries’ (Porter 1994, 168). Many scholars argue that World War I was a temporary experiment in statist planning, but they often use the post-1945 outcome as their yardstick— when France became one of the most statist democratic capitalist nations in the world. This tends to downplay the degree of étatisme that survived beyond 1918 into the 1920s. In comparison with other rich nations during the 1920s, France was indeed engaging in a level of regulation of industry above the norm. Likewise, the state was actively involved in upholding the ‘rules of the game’ between business and labour. The Ministry of Munitions enforced important occupational safety legislation during the war. Initially most such regulation was directed at women, in order to preserve their reproductive capacity, but soon thereafter many men were covered by similar legislation (governing nightshift work, for example). Certain industrial sectors saw the advent of state-mandated minimum wage levels. And the Ministry of Labour enforced stricter labour codes and accident insurance laws, and ensured the timely transition, shortly after the war, to the eight-hour day. This activism certainly spilled over into the 1920s. Most new activity took place at the local level. During the war, large French cities controlled prices and subsidized and distributed fuel and food. Fuel subsidies survived the war. Cities of all sizes set up soup kitchens, nurseries, crèches, orphanages, mothers’ restaurants, milk distribution outlets, and dental clinics; most of these institutions survived the war and were expanded too. Over 100,000 makeshift municipal hospitals were built (Lyon and Toulouse each built two dozen); several dozen survived or formed the basis for new public health or maternity clinics. Cities together with state delegates (prefects) supervised foreigners and labour leaders. They also seized the property of citizens of enemy nations. In relation to 1913, municipal taxes were often doubled in real terms during the war years and tripled or quadrupled by the ¹ AML Box 742/wp/41, Prix des journées d’hospitalisation; Box AML 742/wp/41, Hospices Civils de Lyon (HCL) to Mayor, 13 April 1921; deliberations of the Hospices Civils de Lyon (HCL-D), 6 April 1921; Revue des établissements de bienfaisance (REB), 1934, 354.

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early 1920s. The local press was controlled; factories, houses, cars, and horses were requisitioned; new public health guidelines were imposed; and food and fuel were rationed. Some large cities implemented a ‘cost of living indemnity’ for municipal employees, recognizing the hardships caused by wartime inflation.² Such programmes sometimes served as a model for targeted local municipal benefits during the 1920s. The outbreak of war caused a disruption of industry in urban France (Glaser 1962, 97). A decree of 26 October 1914 created a national, central placement service for the unemployed and for refugees, the Office central de placement des chômeurs et des réfugiés. Here was the direct model for the dozens of departmental job placement centres that emerged in 1915 and that would shoulder a large portion of the burden of responsibility in helping the unemployed during the 1930s (Peyronnet 1924, 10). Regional job placement offices placed 1.1 million people in work in 1920 (Peyronnet 1924, 13, 15).³ Nothing in the pre-war political climate presaged such a scenario. The urban housing stock was under unprecedented strain during World War I. As of 1912, a national law permitted municipal public housing offices to operate, but most cities waited until 1919/20 to establish them. Housing became scarce as workers moved to the new factories of Paris, Lyon, and other cities. Rents rose until the government froze them. Between 1911 and 1918, Lyon’s metropolitan region grew from 524,000 people to over 700,000 (Becker and Berstein 1990, 76). In many reformers’ eyes, the issues of housing, urban planning, health, hygiene, and natality were inseparable.⁴ Housing policy was closely tied to pronatalism. Some cities reserved ‘apartments . . . for large families’.⁵ In July 1921, before the Chamber of Deputies, André Payer proposed the construction of 100,000 public housing units in order to ‘reduce mortality, increase natality, and alleviate the housing crisis’.⁶ Notice the order of his priorities. This sentiment underlay the Loi Loucheur of 1928, providing for the funding of up to 200,000 public housing units (habitations à bon marché, HBMs) and 60,000 moderately subsidised ones (habitations à loyer modéré, HLMs).⁷ In the end, over 130,000 units were built.⁸ By 1932, the Paris region had constructed 40,000 units (Marchand 1993, 254). Similarly, between 1918 and 1935, London County Council also built 40,000 units.⁹ ² AML Box 744/wp/98. ³ Société internationale pour l’Etude des questions d’assistance, Séance of 24 Dec. 1918. ⁴ Emile Mondon, ‘L’Hygiène et les plans de villes’, RM, Oct. 1931, 1728. ⁵ AML Box 747/wp/174, ‘Habitations à Bon Marché, 1919–26’, Mayor’s report to municipal council, May 1922. ⁶ Chambre des Députés, 2nd séance, 12 July 1921, in AML Box 747/wp/174. ⁷ Conseil Général du Rhône, Délibérations (CGR), 1937, vol. 1, 246. ⁸ For example, Conseil Municipal de Lyon, deliberations (CML), 12 Dec. 1927. ⁹ RM 827, Oct. 1928, 1026–7 and RM 828, Nov. 1928, 1045; Georges Guillet, 1935, in Archives de l’Assistance publique de Paris (AAP), AAP B-1435, L’Oeuvre du Conseil municipal de Paris et du Conseil général de la Seine, 1929–1935, 65. Paris.

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The Great War broke down regionalism and hostility to the central state, creating a ‘new geography of work’, easing the passage of national social legislation (Fridenson 1988, 236). French hospitals banded together to create a national association in order to coordinate their work and lobby Paris for more money. This Union hospitalière found its parallel in the emergence of a strong mayors’ association, which met annually and lobbied regularly for more central state funding and involvement in social policy between the wars (see Smith 1998, 1055–87). During the war, the state tried to uphold the notion of the male breadwinner norm, providing separation allowances of 1.25 francs per day (plus 0.5 francs per child) to women whose husbands had been called up for service; this constituted roughly half of a working-class man’s pre-war wage. Some cities provided additional allowances, recognizing the inadequacy of the national programme and the delays in setting it up. Local wartime initiatives like this often served as dress rehearsals for future national reforms. The same was true in the private sector. In Grenoble during the war the industrialist Émile Romanet organized France’s first family allowance caisse de compensation, a privately run equalization fund which ensured that no single employer would be at a competitive disadvantage by hiring, or by continuing to employ, an unusual number of family heads, who came attached with family allowance expenses (Offen 1991, 138–59; see also Dutton 1999, 445, n. 28). Shortly after the war, these caisses spread quickly to most regions in which heavy industry was located; by the mid-1930s there were almost 350 of them. In Paris, maternal health centres and nursing rooms were set up in war factories, such as those set up in Citroën’s automobile factories (Downs 1995, 169). In Lyon, a private charity, La Natalité lyonnaise, was founded in 1917 and provided a monthly allocation of up to 440 francs to women; by 1920, 6,120 women had received assistance.¹⁰ Pronatalist social services were at the core of urban France’s mini welfare states; in this realm the country was a world leader in spending and in the breadth of programmes provided during the 1920s. During World War I, the hospital commission declared, ‘[W]e are pleased that [we are providing] services to the working class as well as to the middle class’.¹¹ Cities wanted to add a new category of assisted, the ‘demi-indigent’ (Delore 1917, 32); those who could afford up to two or three francs per day for hospital care but no more. The model spread from Bordeaux, Grenoble, Lyon, and Annecy to other cities.¹² National social reform stemmed from grassroots demand, not just from the political programme of the ascendant left parties in ¹⁰ CGR, 1920, vol. 2, 750, 764; CGR, 1930, vol. 2, 461. ¹¹ CML, 16 Oct. 1916; CML, 7 May 1917. ¹² Concours médical (CM), 3 Jan. 1926, 37–8. The process of opening up the hospitals to the middle classes had begun in Grenoble and Annecy in 1913, but accelerated during the war.

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parliament. The interwar welfare state was firmly rooted in local responses to the material deprivation of wartime and the immediate post-war era. As Édouard Herriot observed towards the end of the war, ‘[I]magine the consequences of an operation which costs 400 to 500 francs in a worker’s or petit bourgeois’ family, which has an annual income of 2,500 to 3,000 francs; this is neither [a situation of] indigence nor is this a household which can afford the costs of a surgical operation.’ He envisaged subsidized healthcare for the lower-middle class and the working class—basically what emerged with the landmark 1928 law, discussed later in this chapter.¹³ During the war, broad-based coalitions of local actors worked with former political foes: a ‘union sacrée de bienfaisance’, as some called it. As one member said to the Conseil supérieur de l’assistance publique, ‘The social order cannot be maintained, in a France shaken by the terrible shocks of the war, without . . . the active collaboration of both public assistance services and private charitable works.’¹⁴ A rapprochement between solidarist republicans and Catholic conservatives (Glaser 1962, 167) could be seen in hundreds of venues including the Red Cross and the Comité du Secours national.¹⁵ The question of assisting the needy was never in doubt; the chief issue concerned how to do so, and at what level of jurisdiction (Ehrhard 1918; Pelé 1970). The wartime experience of cooperation goes a long way towards explaining why centre-right Catholic politicians, including André Tardieu and Pierre Laval, would abandon their camp’s opposition to national social legislation during the 1920s and indeed shepherd such legislation through parliament.¹⁶ Something approaching a consensus over core matters of social policy was rooted in the war experience, which served as a solvent that diluted old political divisions. During and shortly after the war large companies built crèches, canteens, leisure centres, cinemas, small sports centres, infirmaries, and even housing, especially for single women (Schweitzer 1982, 100–2). The participation of hundreds of thousands of women of all classes made it possible.¹⁷ Women staffed the cities’ hospitals and the central laundry services. They also organized the military provisioning service in city halls and staffed thousands of temporary war charities, and with direct reference to this contribution (Ehrhard 1918, 86), Lyon’s municipal council issued a unanimous resolution in 1917 in support of female suffrage.¹⁸

¹³ CML, 13 May 1918. ¹⁴ CSAP 112, 1918, 51. ¹⁵ Charles Voigt, 1921, ‘Collaboration de l’assistance publique et de la bienfaisance privée’, Revue philanthropique (RP), 406. ¹⁶ Charles Voigt, 1921, ‘Collaboration de l’assistance publique et de la bienfaisance privée’, RP, 406. ¹⁷ AML Box 747/wp/174, ‘Comité d’Assistance du 7è arrondissement, Compte-rendu de 1917–1918’. ¹⁸ CML, 18 Feb. 1917. Dr P. Bouloumié made the same observation in his important work on the war charities, in La santé et la guerre (Paris, 1922), 129.

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By July 1916, private citizens had donated almost one half of the revenues of the war works of Toulouse.¹⁹ By 1919, four million meals were served.²⁰ The philanthropic effort was impressive indeed, but it alone could not serve the population’s urgent needs nor pay the bills; the state’s indispensable role was made visible to all. Toulouse raised property taxes. The centime additionnel, the basic local tax in France, increased on average in large cities and in mid-sized ones, like Tours, by 300 per cent between 1914 and 1920 (Lhéritier 1926, 38–9).²¹ The impact of the war on public health was similarly dramatic. Many French hospitals found themselves serving thousands of wounded soldiers every year of the conflict. The strains of these burdens would bankrupt several institutions and lead to calls for a national pooling of resources, a sharing of the costs of the war. In this sense ‘national solidarity’ grew from the war experience—a practical solution to the challenge of bearing the costs of total war. The war killed 1.4 million Frenchmen, and it maimed and injured another three million. France mobilized some eight million men, or 79 per cent of men aged 15 to 49. Inevitably, women had to fill the gap in the labour supply (Pedersen 1993, 79–80). The war also added several hundred thousand people to the list of those who could claim a legal right to medical and social assistance: one million invalid soldiers and civilians, plus their 630,000 dependants, 680,000 widows, and 760,000 orphans de père who received assistance until their eighteenth birthday. A law of 31 March 1919 created a national military pension scheme and by 1939 10 per cent of the French population received a war-related pension or monthly assistance cheque, which consumed 16 per cent of national tax revenues—perhaps the clearest example of war-induced social spending (Huber 1931; Prost 1977; Becker and Berstein 1990, 150; Jackson 1992).²² The inventory of misery was fully stocked: during the 1920s, French newspapers were filled with stories of crushing inflation, the ruining of lower-middle-class savings and fixed-incomes, the problem of reinserting unemployed demobilized soldiers into the workforce, weak economic growth, and labour unrest. Total private fortunes of France’s lower-middle class dropped by roughly 50 per cent in value between 1913 and 1929 (Sauvy 1965, vol. 1, 291, and vol. 2, 466–70; on the impact of the war on the Parisian middle class, and on the emergence of the ‘new poor’ in Paris, see Marchand 1993, 241–2). There were 350,000 private homes to be rebuilt, as well as the ¹⁹ CML, 17 July 1916; CML, 10 Nov. 1919. ²⁰ CML, 17 July 1916; AML Box 300.495, Ville de Lyon, ‘L’Oeuvre municipale de 1905 à 1929’, 13; Dutacq 1924, 72. ²¹ Precisely, it increased from 57.46 to 182.6. ²² Guillaume 1998, 145; L. Chaptal, 1928, ‘L’assistance aux personnes dites “de condition moyenne” ’, RP, 1953, 821.

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11,000 public buildings, 62,000 km of roads, 5,000 km of rail, and 2,000 km of canals destroyed during the war (Becker and Berstein 1990, 150). Many at the time understood that war-induced economic hardship required higher social spending—the rise of the ‘new poor’ and the need to placate lower-middleclass voters demanded no less.²³ Smaller, poorer cities fared less well: the social policy journals during the period 1916–22 are filled with the pleas of small town officials for financial assistance from the state, citing the war’s negative impact on city finances and personal fortunes. Donations and bequests to hospitals amounted to a little more than 25 per cent of their annual revenues by 1920 and just 2 per cent in the mid-1930s. The charitable base that provided the lion’s share of funding during the nineteenth century had evaporated, largely due to wartime inflation. Hundreds of charities would close. France’s three levels of government had no choice but to fill this gap. Even the very wealthy Assistance publique (AP) organization of Paris had 71.6 per cent of its expenses covered by the city by 1920. In any given year in the early 1920s France’s largest cities spent, in real terms, over three times more on public assistance than they had in 1914. By the late 1920s, the nation’s municipal bureaux de bienfaisance had faded into relative obscurity. Even in Paris, the home to the greatest charitable tradition and concentration of wealth, by 1931, the city’s bureaux de bienfaisance had revenues of only 27 million francs.²⁴ The city spent over 565 million francs on other more modern services. During the municipal elections of the 1920s, left and right campaigned on what we now call ‘tax-and-spend’ platforms, vowing to invest in municipal infrastructure and social services. It would have been unimaginable without the new wartime taxes, and without the general shift in attitude towards municipal deficit spending that occurred during the war. Cities took out ‘mortgages’ to invest in ‘social capital’, often using, as Paris frequently did, those precise terms to justify breaking the taboo of budget deficits. In 1925, the Paris municipal council approved AP’s programme of ‘grands travaux’, responding with a large municipal tax increase and more than doubling its annual subvention to AP. In 1921, AP provided Parisians with 2.3 million medical consultations in the city’s hospitals and social service clinics; by 1935, 4.5 million were being provided.²⁵ Spending of this magnitude paved the way towards national reform, highlighting the inadequacies of the infrastructure of smaller cities. ²³ See, for example, AAP C-865, Rapport . . . par M. Chauveau, 4; RP, 1925, 50–7; RP, 1929, 259; and CSAP 127, séance of 25 June 1925. This concern was raised by Isidore Monteunis in Revue des hôpitaux (RH), 1923, 380–1, and by Léonie Chaptal in RP, 1928, 817–51. ²⁴ AAP, AP-CS, 27 Oct. 1932, 103. ²⁵ REB, June 1934, 219; CMP, 20 Dec. 1925; I. Gaussen, Apr. 1938, ‘Principes de fonctionnement de l’assistance publique en France’, Revue hospitalière de France (RHF), 169.

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T H E 19 2 0 s : DI V I S I O N OR CO N S E N S U S ? Immediately after the Armistice, in late 1918, a consensus emerged regarding the need to strengthen ‘human capital’ with programmes targeting the family, female workers, and children. A critical mass of French citizens and politicians now agreed that support for the working class was also necessary. The labour unrest of wartime, the rise of the Socialist Party, and the rapid growth in unionization rates were surely factors.²⁶ In any case, this represented a sea change in social and political thought. The advent of communist municipal councillors and a larger group of socialists in municipal and national politics certainly led to demands for more social spending, but the trend towards higher social spending is visible in cities of varied political complexions. War-induced inflation of 400 per cent (by 1920) had impoverished the lower-middle class, small shopkeepers, rentiers, and small pensioners by destroying savings; these ‘new poor’ had been traditional supporters of the major republican political parties. Conservatives, radicals, socialists, and communists alike would take up the cause of these people during the 1920s, competing for votes. France’s most important and costly piece of social legislation was ushered through parliament by a Conservative prime minister. Most of the debates during the 1920s and beyond concerned the details of future social programmes—how doctors’ professional autonomy would be respected, how the mutual aid sector would be affected by new programmes, to what extent workers would participate in the administration of new programmes—not the idea of social programmes per se. And yet France’s legislative advances went largely unheralded then and in the coming decades. Perhaps a slim majority of the general population perceived the country to be in decline, with its anaemic inflation-wracked economy, its constant currency crises, its weakened military position, its low fertility rate, and the eclipse of its Belle Époque scientific achievements. The general fractiousness of French politics served to conceal a basic consensus over matters of social policy, which can be linked directly to World War I. Much has been written about the widespread desire to secure a ‘people’s peace’ with ‘homes fit for heroes’ in post-war Britain. The same sentiment was widespread in France even if it was not articulated in as memorable a fashion. Many French leaders argued that the people’s sacrifices during this total war should be compensated with social reforms, such as family allowances. One local politician addressed his colleagues in July 1916: ‘It is truly lamentable when everyone preaches the virtues of repopulation that no general measures are taken by the state in favour of large families, which constitute our real ²⁶ Membership of the national trade union centre, Confédération générale du travail, doubled during the war, as did membership of the syndicalist movement.

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social capital. . . . After the war, this iniquity must cease, and it should not be charity, but allowances, allotted according to the number of children, which must be given to all families.’²⁷ Once the product of a charitable exchange, allowances were now presented as a quasi-civic right. During the war Lyon gave access to its restaurants des mères-nourrices ‘regardless of place of residence or social condition’—a direct challenge to two hallowed pre-war principles, localism and selectivity.²⁸ Paris, Bordeaux, Toulouse, and several other cities followed suit. These local experiments presaged national legislation, achieved in two steps, in 1923 and 1932.²⁹ ‘At a time when enemy armies are on our soil, when seven of our departments have been invaded, the interests of France must come before those of one city,’ said one local politician.³⁰ Pronatalism held the political class together during the 1920s (Ogden and Huss 1982, 283–98; McLaren 1983, ch. 11; Cohen and Hanagan 1991, 469–84; Pedersen 1993, ch. 2; Downs 1995, 166–74). To be sure, the polity would splinter during the 1930s with the rise of quasi-fascist militias and their political arms, not to mention a strong communist party, but where the welfare state was concerned the left and right had much in common. The first annual conference on the birth rate was held in France in 1919; in 1920, the government established the Conseil supérieur de la natalité, a sub-ministry devoted to the promotion of procreation. The Alliance nationale pour l’accroissement de la population française pressured the government into immediate action (Roberts 1994, 271, n. 53; on the organizations, see Talmy 1962). By 1922, the natalist movement had eight national and sixty-two regional associations. What had been a relatively scattered and amateurish movement knocking on the castle door prior to World War I was now a nationally organized professional bureaucracy hard-wired into the central state apparatus, readily accepted as a legitimate state actor or auxiliary. A consensus emerged over the need to suppress abortion and birth control and over the need to ‘protect’ the family. On 31 July 1920 the Chamber passed a law by 500 votes to 53 making both contraceptive propaganda and abortion illegal. As in Britain, the war gave birth to a new public health ministry: the Ministry of Hygiene, Social Assistance and Prevention, created in 1920 (a separate Ministry of Health emerged in 1930) (Murard and Zylberman 1987; Cole 1996, 671; Quine 1996, 65–6; Reggiani 1996). During the early 1920s, a network of state and voluntary agencies provided family allowances, subsidized public housing for large families, and gave subsidies to mothers to defray the costs of childbirth and postnatal care, educational programmes, and crèches. On the national level, the 1923 family allowances were given to all families with more than three children regardless ²⁷ CML, 17 July 1916. ²⁸ CML, 30 Nov. 1914. ³⁰ CML, 26 Dec. 1916; CML, 19 Nov. 1917.

²⁹ CML, 7 Feb. 1916.

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of financial need. Family allowances were extended significantly in 1932, when all employers were required to provide them (Dutton 2000, 375–412). Municipal institutions such as semi-public health clinics designed for the middle classes, retirement homes, maternity clinics, public pools and baths, sports stadiums, workers’ cultural centres and gardens, public housing complexes and job placement centres proliferated. Dozens of modern hospitals were built throughout the country. The 1920s and 1930s saw the most rapid development of social services in the history of France to date. In 1928, Parisian hospitals and public health clinics treated a quarter million more patients than they had in 1924. Previously, it had taken over sixty years—from 1853 until 1911—for a numerical increase of that order (Rochaix 1959, 159). The municipal subvention to Paris’ AP increased threefold during the war. Increased costs were brought on by expanded services: AP had 2,229 more permanent beds to fund in 1920 than in 1914, and several new services (Mignon 1926/7, 167–702; Bernard 1929; Murard and Zylberman 1986, 396–7; Murard and Zylberman 1996, 547).³¹ Increasingly, childbirth was directed to the hospitals.³² New state-funded institutions included venereal disease dispensaries in cities larger than 10,000 people, anti-tubercular dispensaries, and sanatoria. These institutions all grew out of wartime or immediate post-war public health concerns and legislation (the Bourgeois Law of 1916, the Honnorat Law of 1919) but most were actually built during the early 1920s.

THE ‘ NEW P OOR’ AND RISING MIDDLE-CLASS SUPPORT F OR SOCIAL INSURANCE Several cities extended hospital care even before the 1928 social insurance law, on the grounds that the war had created ‘nouvelles pauvres’, victims of warinduced inflation. By 1925, twenty-six departments (more than one quarter of the total) were providing financial support to hospitals that provided ‘demiassistance’ to members of the petit bourgeoisie and the respectable working class.³³ Dr Charles Gosselin wrote in medical journal Le concours médical: ‘An illness is more and more a costly affair. And more and more people want to protect themselves from this risk. A greater concern for health and well-being has penetrated the general population. This is a trend that has been evident for ³¹ From a 1913 report of the Inspection générale des services administratifs, in the RH, 1927, 239–41; RP, 1920, 273. ³² AAP D-312, Assistance publique, Compte-moral, Hôpital de la Pitié, Historique de l’année 1920; AAP D-308, Hôtel Dieu, Historique de l’année 1916, 2; AAP D-311, AP-CMA, 1919, 7, 8, 9. ³³ CSAP 127, séance of 25 June 1925, 50.

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a long time, but the upheaval of war has accelerated it. We can no longer claim that medicine is only for the poor.’³⁴ This sentiment explains the movement for health insurance and its eventual success (Rey 1924).³⁵ By the early 1920s the National Assembly was home to a significant group of supporters of a national medical insurance bill, led by Deputy Édouard Grinda of Nice and the Minister of Labour Paul Jourdain of Alsace. Grinda presented his bill as ‘a law in our national interest which will serve to protect the future of the race, improve its health, bolster the quality and quantity of our manpower, spread the benefits of hygiene, and secure social peace’.³⁶ Health insurance and old age pensions would also bring the rest of France in line with Alsace and Lorraine, which re-entered France with their welldeveloped social assistance institutions intact and whose example was always at the forefront of reformers’ rhetoric. The social insurance bill called for sickness, retirement, and invalidity insurance, with supplemental benefits for maternity and death. The bill passed in the Chamber in 1924 and it cleared the Senate in 1927, becoming law in 1928. Rare is the piece of social legislation that passes its final parliamentary vote by a margin of 550 for and just 20 against. (The bill was amended on 26 April 1930; the Senate voted 225 for, 17 against) (Dutton 2002, 106). The deal was sealed in 1930 when employee/employer contributions were set at 4 per cent (each) of salary and when doctors and leaders of the mutuelles were finally placated. Some of the law’s architects had hoped that worker participation in the new programme would help to ease class tensions, bringing the workers on board and giving them a stake in the new system (Merrien 1990, 264; Palier 2002, 86). The social insurance programme immediately extended hospital insurance to one third of the French population, about 13 million people. By 1939, over 20 million Frenchmen were covered and the nation was on a par with Britain, if not ahead, given that workers’ dependants gained medical coverage in France, unlike in Britain. Insofar as general taxes were funding public institutions that benefited primarily the bottom half of the income ladder, the 1928 law was redistributive.

³⁴ CSAP 116, 1920, ‘Règlement-modèle des hôpitaux et hospices’; RP, 1920, 270–81; REB, 1921, 58–61; RH, 1922, 338–9, 58–61; RH, 1924, 46–50. ³⁵ Société internationale pour l’étude des questions d’assistance 1920. Rapport présenté par M. le Dr. P. Boudin sur l’admission des malades payants dans les hôpitaux, 29 May 1920, in RP, 281. ³⁶ AAP C-864, Chambre des Députés, No. 5505, Annexe au procès-verbal de la séance du 31 janvier 1923. Rapport fait au nom de la Commission d’assurance et de prévoyance sociales . . . sur les assurances sociales, by M. Edouard Grinda, Paris, 1923, 7, 104, 2. The same alarming rhetoric is evident in AAP C-865, Sénat, No. 435, Annexe au procès-verbal de la séance du 8 juillet 1925, Rapport fait au nom de la Commission de l’hygiène, de l’assistance . . . sur les assurances sociales, by M. Chauveau, Paris, 1925, passim.

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This move away from the idea of assistance and towards the idea of insurance is also visible in the realm of unemployment relief.³⁷ At the national level, this intellectual and policy shift can be seen in the Prime Minister Léon Blum and the Popular Front’s 40-hour working week legislation and its twoweek vacation legislation. These new ‘rights’ tended to tame the market and endowed workers with something approaching citizenship-based benefits. On the eve of World War II, France was clearly moving in the direction of national social standards. In real terms, the departments’ expenses increased by 720 per cent between 1920 and 1940 and communes’ expenses increased by 240 per cent (Smith 2003, 189–90). The lion’s share of this increased spending was in the form of infrastructure investment, public housing, hospital construction, public hygiene, and other social spending. The state gave over 30 billion francs to the communes and departments between the wars for social infrastructure.

V ICHY When Marshal Pétain addressed the French people in a September 1940 article in the Revue des deux mondes, delivering a scathing indictment of the Third Republic’s social policy, he was, therefore, way off the mark: ‘The so-called “social” legislation of the Third Republic was pitifully inadequate. It did not raise the worker’s condition’ (Pétain 1941, 168). Pétain exaggerated the failure of his predecessors, but Vichy’s social policy indeed figured at the centre of its plan to reform society (Paxton 1972, 243; Kuisel 1981, 128). Under Vichy, each and every major social programme of the interwar years was expanded, particularly those targeted at the family—although Vichy had a guide in the form of the 1939 pronatalist decree-law Code de la famille passed shortly before the war began. Under Vichy, the number of assurés sociaux increased by over one million persons (Hesse 2001, 78–9). With the usual constraints of public and professional opinion, bureaucratic immobilism and, indeed, of local democratic government gone, Vichy had more room to act. But it lacked time, legitimacy, and political stability. The social policy elite was indeed ready for change, and many of the most prominent critics of the 1930s, such as Drs Pierre Theil, Henri Thoillier, and Paul Garnal, rose to the fore during Vichy, occupying important posts in the growing health and welfare bureaucracy and overseeing the regime’s new legislation. They also made a smooth transition to the Fourth Republic. ³⁷ Georges Rondel and Charles Orchebeuf, 1918, ‘L’influence que d’après des idées modernes doit exercer la prévoyance sur les questions d’assistance . . . ’, RP, 472–82; CGR, 1918, vol. 1, 460–73; Boulouis 2012, 223.

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The Charte du Travail (Charter of Labour) of 26 October 1941 was so draconian and heavy-handed its emergence would have been inconceivable in peacetime. It set out to redraw the map of French labour. It divided industry and commerce into twenty-nine occupational branches, each classified into six categories: employers, engineers, managerial and commercial cadres, foremen, white-collar workers, and blue-collar workers. Each category was to be represented by a single, national and obligatory union, or corporate entity. In this vision of labour organization, freely borrowed from fascist Italy, strikes and lockouts were outlawed. Local, regional, and national committees would make major decisions governing the functioning and regulation of each occupation. In addition, each firm employing over one hundred workers had to set up local comités sociaux d’entreprise (similar to the German DAF model but in practice less effective in integrating workers into the daily operations of firms), which would resolve disputes and provide social services. In these committees, the cards were stacked against the workers, who were under-represented.³⁸ The Revolution’s individualism (symbolized by the Le Chapelier Law of 1791, which had abolished the guilds) would end. In practice, however, Vichy corporatism was geared to the interests of big business and technocrats, not to workers, who saw their unions, in legal existence since 1884, outlawed and their real wages fall (Halls 1995, 246–7). In many ways, of course, Vichy rhetoric proved hollow, for the regime had a brief period in which to work and it operated under extreme conditions. But Vichy did increase spending on family and health policy; the law of 18 November 1940 gave an immediate baby bonus on the birth of the first child (a policy reversed in 1946), providing a wage increase of 10 per cent of the departmental average to those parents who had two children. The figure increased to 50 per cent for those with four or more children. A new law of 9 September 1942 extended family assistance (‘assistance à la famille’) to all widows, regardless of how many children they had, and to all families with three children or more (Ministère des Affaires Économiques, Statistique générale 1947, 9–11). In 1939, under the Third Republic, assistance was provided to 28,348 families and the state spent 14 million francs on the service (Ministère des Affaires Économiques, Statistique générale 1947, 20–1). By 1944, a total of 105,135 families had been assisted, at a cost of 469 million francs (Secrétariat d’Etat aux Affaires Économiques, Statistique générale 1949, 18–19).³⁹ If more people were being helped by certain assistance programmes, it was often because of the increased suffering of the population, in particular the ³⁸ Halls 1995, 250–1 has a good discussion of these issues. I have drawn heavily from this. ³⁹ The story I am telling here contrasts with that of Nord (2010, 116–18), who argues that Vichy did not accomplish anything important in matters of social welfare.

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elderly. At the local level, it is doubtful that the regime’s new legislation had much of a positive impact on people’s lives, given the hardships the country had to endure. Many people were battered back into the barter and subsistence economy; Lyon’s jardins municipaux ouvriers, workers’ gardens supported by the city, fed 100,000 people in 1941.⁴⁰ This was a common pattern in urban France. There were no fundamental innovations on the unemployment front under Vichy: the old funds continued to operate as before.⁴¹ The Assistance médicale gratuite programme witnessed a rapid expansion under Vichy, from 1,256,000 people assisted in 1939 to 1,774,000 in 1942 (in public institutions). When private wartime institutions are included, over two million persons were assisted in 1942 (Secrétariat d’Etat aux Affaires Économiques, Statistique générale 1949, 13). Of course, more people were assisted because many more people were suffering from malnourishment due to the war. There was a 33 per cent reduction in the number of people assisted by the nation’s bureaux de bienfaisance between 1939 and 1942, but those remaining on the rolls saw their benefits increase in value by one third. The number hospitalied increased slightly, from 1.12 million to 1.27 million (Secrétariat d’Etat aux Affaires Économiques, Statistique générale 1949, 29–30). In 1939, frais de séjour (public subventions for those treated under the terms of assistance laws plus social insurance reimbursements) had accounted for 46 per cent of hospital revenues. By 1944, the reimbursements of frais de séjour had increased to 71 per cent of national hospital revenues—an important but rarely discussed development (Secrétariat d’Etat aux Affaires Économiques, Statistique générale 1949, 30). By 1943, the Ministry of Health budget totalled over 10.2 billion francs, five times greater than in 1939.⁴² Its pretensions grew in tandem with its financial strength. It is too simplistic to write off as insignificant Vichy’s ambitions for the welfare state: here was an odious regime guilty of crimes against humanity, to be sure, but one that tried to expand the welfare state dramatically.

LIBERATION On 10 September 1944, the Lyonnais notable Justin Godart began his address to the newly assembled municipal council with a declaration of support for Mayor Herriot (who had been imprisoned) and for De Gaulle’s provisional government. Next he pledged Lyon’s support for ‘the development of democratic ⁴⁰ Bulletin municipal official du Conseil municipal de Lyon (BMO-CML), 30 Sept. 1941; BMO-CML, 23 June 1941. ⁴¹ BMO-CML, 2 Feb. 1942. ⁴² REB, Aug. 1943, 189–91.

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institutions and the rapid realization of social reforms’.⁴³ In his view, after years of war and occupation, some sort of fundamental social restructuring was owed to the French people. Long before Godart’s call for social reform, of course, the Resistance had been cooking up its own solidaristic ideas. Indeed, the Lyon region, as the capital of the Resistance, had been a seedbed of reformist visions during and shortly after the war. Many solidaristic schemes for national social welfare were hatched during the clandestine meetings of Resistance leaders. The pages of the locally edited Resistance newspapers, such as Le Maquis, are filled with calls for Beveridge-style social reforms and visions of post-war social democracy, anchored by a strong welfare state.⁴⁴ As the French emerged from the Vichy era, they envisaged, like the victorious British, national social security as a means to rebuild their world, to deliver the nation from a morally chequered chapter. With the right discredited and the liberalism of the Third Republic as dead as that political system, the time was ripe for planning (Rosanvallon 1990). The French now put their faith in Keynesian economics and in the coordination and planning of major sectors of the economy. All post-World War II leaders, right up to Jacques Chirac (president from 1995 to 2007), had in common their memory of World War II. It obliterated classical liberalism in France and ushered in a certain idea of statism, unique to France, which holds great sway to this day. Little in the 1930s presaged such a broad consensus on the need for economic planning; the French devotion to planning and the nationalizations of large swathes of industry (at times up to one quarter of all economic activity) is inconceivable without the experience of World War II. The Fourth Republic’s (1946–58) foundational myth revolved around the welfare state, through which political elites now derived the lion’s share of their legitimacy. During the darkest hours of the war, whether they were part of de Gaulle’s entourage ensconced in a London hotel or a Resistance leader living in a barn in the Vercors, the chief concern of those seeking to re-establish French democracy was how to remould social relations in the direction of fairness and equality. The welfare state was perhaps the chief concern of the Conseil national de la Résistance. Many of its members were present at the creation of the post-war welfare state. In constructing the post-war welfare state and in nationalizing up to one quarter of French economic activity, the French were, just like the British, attempting to create a ‘people’s peace’. A larger welfare state was crucial to the stabilization of society; a large nationalized sector would partially satisfy some workers’ demands for more control over the economy. Critics who charged ⁴³ CML, 10 Sept. 1944. ⁴⁴ For example, Le Maquis (at BML), 30 Sept. 1944, 21 Oct. 1944, 11 Nov. 1944, 30 Dec. 1944, 7 July 1945, 22–9 Sept. 1945.

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that France could not afford new spending on this scale were fought back, as they were in the UK, with the counter-charge that France could not afford not to buy social peace with the welfare state. William Beveridge’s intellectual impact on France was significant, providing a general philosophical blueprint if not a clear administrative or practical one. World War II swept away an entire world of thinking and led to a basic consensus shared by the socialists and the alphabet soup of mainstream parties (the Popular Republican Movement, Union for the New Republic, Radical, Union for French Democracy, Rally for the Republic, Union for a Popular Movement, etc.) right up until the Nicolas Sarkozy presidency of 2007–12. Laissez-faire in general was deemed guilty by association with the Great Depression. Critics discredited private industry by invoking leading industrialists’ collaboration with the Nazis (see Kuisel 1981). During the provisional government headed by de Gaulle (1944–6), French social reformers looked abroad for positive models to emulate, seeking to keep pace with other nations. The UK Beveridge Report (a 1942 policy blueprint which sold 800,000 copies) ‘was a constant reference-point in the French debate’ (Shennan 1989, 215–16). Beveridge called for the British state to maintain full employment (3 per cent unemployment or lower), to provide family allowances and decent pensions, to expand access to secondary education, and to provide a national health service. The French Resistance, including the followers of de Gaulle such as Pierre Laroque (soon to be France’s leading social reformer) and Alexandre Parodi (future Minister of Labour), were in London during the war, where they were influenced by Beveridge’s vision and the platform of the British Labour Party (Galant 1955, 29–38; Shennan 1989, 215–16; Laroque 1993; Kerschen 1994, 127–59). The knowledge of the ambitious British reforms reminded the French just how far they had to move to close the distance between the two nations (Jabbari 2012). In two ordonnances of October 1945, all French people, across the nation, were declared covered by social security. But the details were yet to be ironed out and what emerged in the end, largely as a result of the resistance of the professional classes (cadres) and the self-employed, was a nationally mandated, near-comprehensive, yet corporatist welfare state which consisted of several particularistic insurance funds organized by occupation and status, such as the separate system for the self-employed which was created in 1948 (the best account of the defeat of solidaristic reform is Baldwin 1990, 163–86). Professionals, the self-employed, skilled workers centred in the public sector, and the middle class in general defeated legislative attempts at Beveridge-style universalism and Swedish-style redistribution. In 1947, Roger Millot founded the Comité national de liaison et d’action des classes moyennes for the purpose of uniting professionals and the self-employed in an effort to thwart redistributive, universalistic social legislation (Baldwin 1990, 185–6).

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France’s complex demographic and occupational make-up was reproduced and mirrored in its healthcare and social security systems. From 1945 to 1950, those who already had favourable pension systems (public employees, miners, the military, railroad workers, and so on) resisted the idea of joining a universal system (Dreyfus 2001, 149–53). Neither these groups, nor independent workers, nor cadres, wished to be coupled with unskilled workers in a universal pension system, as reformers proposed (Netter 1965; Commissariat général du plan 1980, 40; Cochemé and Legros 1995; Tauran 2000). The divisive experience of war and occupation certainly did not help to foster broad or ‘large tent’ political parties; indeed, it may have had the opposite effect, serving to confirm the already splintered political complexion of France. Workers did not unite around one single party, and this served to fragment the social security system and reduce its universalistic and redistributive potential (for a detailed account of the defeat of solidaristic reform, see Baldwin 1990, 163–86). There was no grand vision articulated by any one of the half dozen key political parties and accepted by a majority of the population (Steinhouse 2001). The relatively weak and faction-ridden French parliament was an ineffective vehicle for universalistic reform (Weir and Skocpol 1985, 107–63; Weir 1989, 53–86). When attempts to introduce redistributive universalism had clearly failed, French reformers settled for one main health insurance fund and the supplementary mutuelles, plus dozens of separate occupation-based pension funds. The law of 17 January 1948 called for a system of separate pension systems for the various categories of the self-employed (Baldwin 1990, 185). A few small (in numbers) occupational categories held out until the 1960s and 1970s before they joined (Viatte 1951, 41–2). The result was a welfare state that gave official state sanction to existing social divisions. Whatever the nature of the complex post-war welfare state, there was support for it on both sides of the political spectrum. And there was support for spending at all levels of government. The public assistance budget of Lyon doubled between 1945 and 1946, rising from 83 million to 156 million francs (and again to 318 million francs in 1947). These increases were due, in large part, to an ordinance of March 1945 that increased the minimum monthly allotments to the elderly indigent, and due to rising personnel expenses—measures made with direct and explicit reference to the war experience.⁴⁵ Mayors of large cities saw national social security as a means to ease the burden that post-war dislocation had put on the municipal purse.⁴⁶ In the years shortly after World War II, the central state bailed out cities with extraordinary grants to cover increased assistance expenses.

⁴⁵ CML, 2 Mar. 1946.

⁴⁶ CML, 27 Feb. 1950, Ville de Lyon, ‘Projet de Budget pour 1950’.

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Nonetheless, the municipal tax, the centime additionnel, was increased by 450 per cent in Lyon (and other cities) between 1945 and 1947.⁴⁷ For the second time in thirty years, the French social service landscape was fundamentally altered by the experience of war. Social spending topped 10 per cent of GDP before the decade was out, putting the French near the top of the world’s spending leagues. The occupation-based nature of the post-World War II welfare state was firmly grounded in municipal and private corporate efforts alike—all tied together by the war experiences of the first half of the twentieth century, and the same could be said of the French turn toward dirigisme, or statist economic planning. According to Kuisel, ‘by 1945 liberal capitalism had to bear its share of the blame for a general sense of national decline. . . . [T]he accumulation of grievances against capitalism, the trauma of defeat, occupation and extensive physical damage to the productive plant led to a compelling desire for a new departure. The solution chosen by the French was for the state to take charge’ (Kuisel 1981, 278). In this way, France became perhaps the most statist parliamentary democracy of the post-war era, with a planning commission setting investment and production targets, with the commanding heights of the economy (banks, transport, much heavy industry, energy) controlled by the state, and with large subsidies and licensing restrictions for favoured sectors including agriculture and retail. With its foundational myth rooted in the immediate political aftermath of World War II, when the left was ascendant and capitalism was still on trial for its failures during the Great Depression, the French welfare state and dirigiste economic model would prove unusually difficult for future politicians to tamper with. The French welfare state is surely today one of the most firmly rooted political and social institutions in the wealthy world.

REFERENCES Baldwin, Peter. 1990. The Politics of Social Solidarity: Class Bases of the European Welfare State: 1875–1975. Cambridge: Cambridge University Press. Becker, Jean-Jacques and Serge Berstein. 1990. Victoire et frustrations, 1914–1929. Paris: Seuil. Bernard, L. 1929. La défense de la santé publique pendant la guerre. New Haven, CT: Yale University Press. Boulouis, Jean. 2012. Essai sur la politique des subventions administratives. Paris: Presses de Science Po. Bouloumié, P. 1922. La santé et la guerre. Paris: C. Lavauzelle. Cochemé, B. and F. Legros. 1995. Les retraites. Génèse, acteurs, enjeux. Paris: Armand Colin. ⁴⁷ CML, 30 Dec. 1946, Ville de Lyon, ‘Projet de Budget pour 1947’.

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Cohen, Miriam and Michael Hanagan. 1991. ‘The Politics of Gender and the Making of the Welfare State, 1900–1940’. Journal of Social History 24: 469–84. Cohen, William B. 1998. Urban Government and the Rise of the French City: Five Municipalities in the Nineteenth Century. New York, NY: St. Martin’s Press. Cole, J. H. 1996. ‘ “There are only good mothers”: The Ideological Work of Women’s Fertility in France before World War I’. French Historical Studies 19: 639–72. Commissariat général du plan. 1980. Vieillir demain. Paris: La Documentation Française. Delore, E. 1917. Nos hôpitaux de demain. Lyon: A. Storck. Downs, Laura Lee. 1995. Manufacturing Inequality: Gender Division in the French and British Metalworking Industries, 1914–1939. Ithaca, NY: Cornell University Press. Dreyfus, Michel. 2001. Liberté, égalité, mutualité. Mutualisme et syndicalisme (1852–1967). Paris: Editions de l’atelier. Dutacq, François. 1924. La ville de Lyon et la guerre. Lyon: Rey. Dutton, Paul V. 1999. ‘French Versus German Approaches to Family Welfare in Lorraine, 1918–1940’. French History 13: 439–63. Dutton, Paul V. 2000. ‘An Overlooked Source of Social Reform: Family Policy in French Agriculture, 1936–1945’. Journal of Modern History 72: 375–412. Dutton, Paul. 2002. Origins of the French Welfare State. Cambridge: Cambridge University Press. Ehrhard, Auguste. 1918. Les oeuvres de l’Hôtel de Ville pendant la guerre. Lyon: Rey. Fridenson, Patrick. 1988. ‘The Impact of the First World War on French Workers’. In The Upheaval of War: Family, Work and Welfare in Europe, 1914–1918, edited by Richard Wall and Jay Winter, 235–48. Cambridge: Cambridge University Press. Galant, H. C. 1955. Histoire politique de la sécurité sociale française, 1945–1952. Paris: Armand Colin. Glaser, William. 1962. ‘Local Government and Life in Paris, 1914–1918’. PhD diss., University of Missouri. Guillaume, Pierre. 1998. Le rôle social du médecin depuis deux siècles (1880–1945). Paris: Comité d’histoire Sécurité Sociale. Halls, W. D. 1995. Politics, Society and Christianity in Vichy France. Oxford: Berg Publishers. Hesse, Philippe-Jean. 2001. ‘Les assurances sociales’. In La protection sociale sous le régime de Vichy, edited by Philippe-Jean Hesse and Jean-Pierre Le Crom. Rennes: Presses Universitaires de Rennes. Huber, M. 1931. La population française pendant la guerre. New Haven, CT: Yale University Press. Jabbari, Eric. 2012. Pierre Laroque and the Welfare State in Postwar France. Oxford: Oxford University Press. Jackson, H. 1992. ‘L’Impact de la Guerre 1914–1918 sur la protection sociale’. In De la charité médiévale à la sécurité sociale, edited by André Gueslin and Pierre Guillaume. Paris: Editions ouvrières. Kerschen, Nicole. 1994. ‘L’influence du rapport Beveridge sur le plan français de Sécurité sociale de 1945’. In Comparer les systèmes de protection sociale en Europe. France, Grande-Bretagne, Rencontres d’Oxford, vol. 1, 127–59. Paris: MIRE. Kuisel, Richard. 1981. Capitalism and the State in Modern France. Cambridge: Cambridge University Press.

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Laroque, Pierre. 1993. Au service de l’homme et du droit. Souvenirs et réflexions. Paris: l’Association pour l’étude de l’histoire de la sécurité sociale. Lhéritier, Michel. 1926. Tours et la guerre. New Haven, CT: Yale University Press. McLaren, Angus. 1983. Sexuality and Social Order: The Debate over the Fertility of Women and Workers in France, 1770–1920. New York, NY: Holmes & Meier. Marchand, Bernard. 1993. Paris, histoire d’une ville. Paris: Éditions du Seuil. Merrien, François-Xavier. 1990. Politiques publiques et structures sociales. Etude comparative de l’édification et de l’évolution de l’Etat protecteur en France et en GrandeBretagne. Paris: CRSST. Mignon, A. 1926/7. La Service de santé pendant la guerre, 1914–1918, vols 1–4. Paris: Masson & Cie. Ministère des Affaires Économiques, Statistique générale. 1947. Statistique des institutions d’assistance. Années 1940, 1941 et 1942. Paris: Imprimerie nationale. Ministère du Travail, Statistique Générale de la France. 1923. Statistique des institutions d’assistance. Années 1920–21. Paris: Imprimerie nationale. Murard, L. and P. Zylberman. 1986. ‘L’autre guerre (1914–1918). La santé publique en France sous l’oeil de l’Amérique’. Revue historique 276: 367–98. Murard, L. and P. Zylberman. 1987. ‘La Mission Rockefeller en France et la création du Comité national de défense contre la tuberculose (1917–1923)’. Revue d’histoire moderne et contemporaine 34: 257–81. Murard, L. and P. Zylberman. 1996. L’hygiène dans la République. La santé publique en France, ou l’utopie contrariée, 1870–1918. Paris: Fayard. Netter, Francis. 1965. ‘Les retraites en France au cours de la période 1895–1945’. Droit social 7–8 (July–Aug.): 448–55; 9–10 (Sept.–Oct.): 514–26. Nord, Philip. 2010. France’s New Deal: From the Thirties to the Postwar Era. Princeton, NJ: Princeton University Press. Offen, Karen. 1991. ‘Body Politics: Women, Work and the Politics of Motherhood in France, 1920–1950’. In Maternity and Gender Policies: Women and the Rise of the European Welfare States, 1880s–1950s, edited by Gisela Bock and Pat Thane, 138–59. London: Routledge. Ogden, Philip E. and Marie-Monique Huss. 1982. ‘Demography and Pronatalism in France in the Nineteenth and Twentieth Centuries’. Journal of Historical Geography 8: 283–98. Palier, Bruno. 2002. Gouverner la sécurité sociale. Les réformes du système français de protection sociale depuis 1945. Paris: Presses Universitaires de France. Paxton, Robert O. 1972. Vichy France: Old Guard and New Order, 1940–1944. New York, NY: Knopf. Pedersen, Susan. 1993. Family, Dependence, and the Origins of the Welfare State: Britain and France, 1914–1945. Cambridge: Cambridge University Press. Pelé, E. 1970. ‘Le mouvement ouvrier lyonnais pendant la première guerre mondiale’. MA diss., Université de Lyon II. Pétain, Maréchal. 1941. Paroles aux français. Messages et écrits, 1934–1941. Lyon: H. Lardanchet. Peyronnet, Albert. 1924. Le Ministère du travail, 1906–1923. Paris: Berger-Levrault. Porter, Bruce. 1994. War and the Rise of the State. New York, NY: The Free Press. Prost, A. 1977. Les anciens combattants et la société française (1914–1939), vols 1–3. Paris: Presses de la Fondation nationale de sciences politiques, stampa.

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Quine, M. S. 1996. Population Politics in Twentieth-Century Europe. London: Routledge. Reggiani, A. H. 1996. ‘Procreating France: The Politics of Demography, 1919–1945’. French Historical Studies 19: 725–54. République Française. 1953. Législation hospitalière. Paris: Editions Berger-Lévrault. Rey, A. 1924. ‘Confédération général du travail’. Les assurances sociales. Paris: Félix Alcan. Roberts, Mary Louise. 1994. Civilization without Sexes: Reconstructing Gender in Postwar France, 1917–1927. Chicago, IL: University of Chicago Press. Rochaix, M. 1959. Essai sur l’évolution des questions hospitalières de la fin de l’ancien regime à nos jours. Paris: Fédération hospitalière de France. Rosanvallon, Pierre. 1990. ‘The Reception of Keynesianism in France’. In The Political Power of Economic Ideas: Keynesianism across Nations, edited by Peter Hall, 171–94. Princeton, NJ: Princeton University Press. Sauvy, Alfred. 1965. Histoire économique de la France entre les deux guerres, vols 1–2. Paris: Fayard. Schweitzer, Sylvie. 1982. Des Engrenages à la chaîne. Lyon: Presses universitaires de Lyon. Secrétariat d’Etat aux Affaires Économiques, Statistique générale. 1949. Statistique des institutions d’assistance. Années 1943 et 1944. Paris: Imprimerie nationale, Presses Universitaires de France. Shennan, Andrew. 1989. Rethinking France: Plans for Renewal, 1940–1946. Oxford: Oxford University Press. Smith, Timothy B. 1997. ‘The Ideology of Charity, the Image of the English Poor Law, and Debates over the Right to Assistance in France, 1830–1905’. The Historical Journal 40: 997–1032. Smith, Timothy B. 1998. ‘The Social Transformation of Hospitals and the Extension of Medical Insurance in France, 1914–1943’. The Historical Journal 41: 1055–87. Smith, Timothy B. 2000. ‘The Plight of the Able-Bodied Poor and the Unemployed in Urban France, 1880–1914’. European History Quarterly 30: 147–84. Smith, Timothy B. 2003. Creating the Welfare State in France, 1880–1940. Montreal: McGill-Queen’s University Press. Steinhouse, Adam. 2001. Workers’ Participation in Post-Liberation France. Lanham, MD: Lexington Books. Talmy, Robert. 1962. Histoire du mouvement familiale en France, 1896–1939, vols 1–2. Paris: Union nationale des Caisses d’allocations familiales. Tauran, Thierry. 2000. Les régimes spéciaux de Sécurité sociale. Paris: Presses Universitaires de France. Theil, Pierre. 1943. Le corps médical devant la médecine sociale. Paris: J. B. Baillière. Viatte, G. 1951. ‘Qui paie les charges sociales?’ Droit Social. Weir, Margaret and Theda Skocpol. 1985. ‘State Structures and the Possibilities for “Keynesian” Responses to the Great Depression in Sweden, Britain, and the United States’. In Bringing the State Back In, edited by Peter Evans, Dietrich Rueschemeyer, and Theda Skocpol, 107–63. Cambridge: Cambridge University Press. Weir, Margaret. 1989. ‘Ideas and Politics: The Acceptance of Keynesianism in Britain and the United States’. In The Political Power of Economic Ideas: Keynesianism across Nations, edited by Peter A. Hall, 53–86. Princeton, NJ: Princeton University Press.

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6 Welfare Policy and War in Japan Gregory J. Kasza

I N T R O D U C TI O N The Pacific War (1937–45) marked the most innovative period in the development of welfare policy in Japan, comparable to the 1880s in Germany, the 1908–14 era in Britain, and the 1930s in the USA. It is a cruel paradox, but war, despite its immediate, catastrophic effects on human well-being, has often accelerated the evolution of the welfare state. So-called trans-war theorists have stressed the continuities in Japanese public policy before and after 1945 (see, for example, Noguchi 1995; Garon 1997), but surprisingly few scholars of the Japanese welfare state have emphasized the impact of war. For instance, Toshiyuki Mizoguchi and Noriyuki Takayama write: ‘The period 1936 to 1946 was one of confusion and the experiences in this period were too abnormal to be used as reference for other countries’ (Mizoguchi and Takayama 1984, 226). And that is all they write about Japan’s welfare policies during the Pacific War. Even Japan’s Ministry of Health and Welfare, whose in-house history ably chronicles wartime policymaking, states in its White Paper of 1999: ‘[O]ur country’s social security system really began to develop only after World War II’ (Kōseishō 1999, 9). This neglect is remarkable because Japan is an intriguing case of war’s influence on public welfare programmes. During the Pacific War, the government adopted a number of core welfare policies with war-related rationales. Despite the connection of these policies to the emergency of war, officials intended them to be permanent, and many have endured to the present day. Japan’s experience speaks directly to theoretical debates related to welfare development. The Japanese record challenges the two primary schools of thought, namely, Harold Wilensky’s idea that public welfare develops in response to industrialization, and Gøsta Esping-Andersen’s rival hypothesis that it develops in response to the influence of leftist or labour parties. The welfare problems that war presented to Japanese policymakers differed from

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those associated with industrialization, such as cyclical unemployment or dangerous working conditions. There was full employment during the war, and Japan’s wartime policies exacerbated rather than relieved working conditions in the factories. Officials did not design their wartime welfare programmes to cope with these aspects of industrialization. Regarding Esping-Andersen’s theory, the notion that organized labour or leftist politics give rise to the welfare state falls flat in wartime Japan. The Japanese cabinet was under the control of military officers, bureaucrats, and a few civilian politicians who collaborated with them. The military regime dissolved Japan’s labour unions and replaced them with a compulsory, statemanaged Industrial Patriotic Society (sangyō hōkokukai), patterned partly after the Nazis’ German Labour Front. The Home Ministry’s appointed governors doubled as the organization’s prefectural heads, and its national chief was none other than the Minister of Health and Welfare. Genuine labour leaders had no voice in policymaking, even in the national offices of the Industrial Patriotic Society itself. Much of the wartime labour force comprised women and older men, who were relatively docile employees.¹ Parties, regardless of their political tendency, likewise had little to do with welfare policymaking during the war. Japan’s military regime raised mass participation in public life to unprecedented levels, but not through democratic means or party politics. The military regime disbanded Japan’s leftist parties and imprisoned their leaders, and by the time it forced the mainstream conservative parties to dissolve in 1940, they had already lost much influence. All significant welfare bills originated in the military–bureaucratic establishment and flew through the Diet. The Asahi newspaper reported on 31 March 1938: The government is presenting an unprecedented number of legislative bills, starting with general social laws sponsored by the Ministry of Health and Welfare, such as the National Health Insurance Law, the Social Work Law, the revision of the Employment Service Law [imposing state management] . . . Ordinarily, capitalists and other mainstream political forces would block these assistance laws. We must rejoice that on this occasion, due to the urgency of the wartime emergency and to the focus of public attention on weightier bills, these laws have passed safely without significant opposition. (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 525)

¹ Workers took action to dispute managerial policies an average of 245 times per year over the period 1938–44. In 1939, each incident involved an average of 203 workers and in 1940 an average of 122, but over the period 1941–4 the average annual number of participants per dispute was forty-seven. Such occurrences invited quick police intervention (Ōhara Shakai Mondai Kenkyūjō 1965, ch. 1).

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Japan’s military rulers overcame the structure of class forces that had long obstructed welfare policy, but they did so without any push from labour or the left. In the Japanese case, then, war adds a new dimension to the study of welfare policymaking, one not elaborated in the existing theoretical literature.

THE S TATUS QUO ANTEBELLUM What were Japan’s welfare policies on the eve of the Pacific War? It is essential to establish a baseline from which to judge wartime reforms, since obviously a war cannot cause the adoption of welfare policies that are already in place. Although Japan’s modern state-builders visited Germany in the 1880s and knew of Otto von Bismarck’s welfare innovations, they opted not to emulate them (Ishida 1989, 256–8; Sugaya 1990, 9–10).² Given their resources, they could hardly have decided otherwise. As of 1880, for instance, there were only forty-six university graduates among the 1,396 doctors who had passed the state medical exam (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 60). Public health insurance was thus not an option. The oligarchical constitutional monarchy that ruled into the 1910s introduced Western medicine and fixed standards for its practice starting in 1868. The government established the medical faculty of Tokyo Imperial University in 1877; other medical schools had to hire its graduates to earn official status. A common exam to practise medicine was introduced in 1879. In 1906, the Medical Practitioners Law required that doctors had to graduate from an official medical school in order to practise. Still, the founding of hospitals and clinics occurred mainly in the private sector. By 1898, private institutions accounted for 75 per cent of all hospitals (Yamagishi 2011, 21). The state standardized criteria for local poor relief in 1874, stipulating up to fifty days of support for people too old, young, poor, sick, or disabled to work, provided they had no relations to care for them. An annual average of 20,713 people received assistance from 1891 to 1900, and 17,200 people from 1921 to 1930 (Kōseishō 50-Nen Shi Henshū Iinkai 1988a, 815–16).³ The government’s chief welfare objective was to fight epidemics, but the resources committed were meagre and preventive measures few. The state’s main strategy was to isolate the sick, a task performed by police rather than medical personnel. In 1899, tuberculosis caused 7.1 per cent of all deaths, but the state did not ² One of the Meiji leaders’ advisors, Lorenz von Stein, was a champion of social policy (Rimlinger 1971, 101). ³ Some sources cite only the number of relief recipients at year’s end. The figures here include all who received relief at any time during the year.

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build urban clinics for tuberculosis patients until 1914 (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 72). The state instituted employers’ liability for industrial accidents, first for workers in some state-managed industries in the 1870s, then for miners and sailors (dangerous jobs that often attract early accident laws) in the 1890s, and finally for workers in firms of fifteen or more employees in the Factory Law of 1911. The Factory Law, whose enforcement began in 1916, was a weak measure, covering less than 5 per cent of the labour force. It placed few limits on unhealthy or dangerous working conditions; its benefits were modest in amount and duration; and the fines for violating the law were so light that some employers did so wilfully (Sugaya 1990, 37–46). War exerted but a modest influence on welfare policymaking before the 1930s. The Russo-Japanese War of 1904–5 was the only mass war Japan fought before the Pacific War, but although it had some influence on social policy, officials provided miserly support even for wounded veterans and the surviving relatives of the war dead. In 1904, the state promulgated a Law for Assistance to Low-Ranking Soldiers’ Families, aiding the poorer households with medical care. In 1906, the Veterans Accommodation Law gave support to veterans with permanent, service-related disabilities (Yamagishi 2011, 26–7). One reason the government could not adopt more ambitious welfare measures at the time was that it went deeply into debt to fight the war. In less than two years, the state borrowed seven times more than the central government’s entire tax revenues in fiscal year 1905 (Smethurst 2007, 189). While half of this money was raised abroad, the state increased or introduced taxes on land, business, income, sugar, alcohol, clothing, oil, transportation, and inheritance to cover the rest. None of these taxes were rescinded after the war ended. World War I had even less influence on public welfare because Japan was but a part-time participant. The only innovation of note was the Military Relief Law of 1917, which amalgamated earlier regulations and offered help to families of the war dead, but only if they were unable to make ends meet (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 53–94). The mass mobilization that occurred in Europe’s combatant nations sparked new departures in social policy because wartime conditions gave European labour movements new leverage against the state. Only the unions had the organizational means to mobilize workers behind the war, and they exacted concessions for their cooperation (Armeson 1964, 6, 59–61, 70–4, 81–2, 100, 138–9; Lowe 1982, 108, 115, 117, 123; Becker 1986, 69, 205, 210). Military conscription itself was a powerful form of mass political mobilization and European officials had to take seriously the economic needs of returning veterans, especially against the background of abortive socialist revolutions in post-war Germany and Italy. Due to Japan’s slight involvement in the war, it did not experience comparable effects on its labour movement or social policy. Japan’s economy underwent an industrial boom during World War I thanks to the temporary indisposition

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of its European competitors, and the post-war period did not give rise to veterans’ parties or movements such as those active in the European countries where mobilization was more advanced. Somewhat paradoxically, then, Japan did not witness substantial advances in public welfare during the Russo-Japanese War because the government was broke, and it did not witness such advances during World War I because officials felt little need or pressure at a time of full employment and economic prosperity. Rigorous means-testing and minimal benefits characterized most of Japan’s welfare policies through this period, including policies aimed at veterans, which reflected a residual approach of assisting only those unable to support themselves. Though it remained in form a constitutional monarchy, Japan enjoyed a period of quasi-democratic party rule in the 1920s, and in 1922 party governments enacted Japan’s first social insurance policy, the Health Insurance Law, which took force in 1927. It applied to workers employed for over sixty days in industrial firms subject to the Factory Law, covering them for sickness, injury, death, and childbirth. By excluding managers, temporary workers, and workers in small firms, this measure covered but 38 per cent of the industrial workforce. Employers and employees contributed equally, while the state paid 10 per cent of the cost. Benefits for a given injury or illness lapsed after 180 days. There were no benefits for the worker’s family (Sugaya 1990, 63–9). The government also adopted a new Relief and Protection Law in 1929 to assist the poor. Beneficiaries rose from 26,720 in 1930 to 157,564 in 1932, the law’s first full year of operation (Kōseishō 50-Nen Shi Henshū Iinkai 1988a, 816, 818). These two policies were the only enduring welfare achievements of Japan’s quasi-democratic regime of the 1920s, which legislated universal male suffrage in 1925. The state invested heavily in recovery efforts after the Kantō earthquake of 1923 and provided substantial relief to rural areas during the Great Depression of the early 1930s, but these measures did not give rise to ongoing commitments to protect the population against the risks of disability, sickness, poverty, unemployment, or old age. The one permanent welfare policy to emerge from the Depression was a law requiring firms of fifty or more employees to contribute 2 per cent of each worker’s wage into a provident fund to be paid at the time of retirement or dismissal. Voluntary leavers received only half of this modest benefit (Gordon 1987, 270). Apart from the scant influence of war, what explains Japan’s relative passivity in the welfare field before the 1930s? The logic of industrialization is of little help. Industrialization may promote welfare policy by creating welfare problems and generating the financial and technological means to solve them (Wilensky 1975, 24–6). Japan’s industrialization trailed that of Europe before 1920, so by this logic it may be unfair to describe Japan as a welfare laggard before then. But theories that associate welfare spending with

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industrialization would lead us to expect more extensive public welfare in the 1920s. In 1910, the proportion of industrial workers in the labour force was about 25 per cent higher in the least industrialized Western European country than it was in Japan,⁴ but by 1920 Japan had closed the gap.⁵ Beyond that point, organized labour’s weakness and the power of conservative businessmen and bureaucrats provide better explanations than the level of industrialization for the relative lack of progress. Labour governments helped to forge welfare states in many countries, but organized labour was not potent enough to take charge of the Japanese government or to frighten conservative elites into enacting extensive welfare programmes as a defensive measure. At their peak, pre-war unions organized only about 8 per cent of the industrial workforce, and the Public Peace Police Law of 1900 proscribed certain forms of union activity. Moreover, as late as 1930, young women, most of them working on contracts of two years or less, constituted over half of Japan’s factory workers. Such a workforce did not foster an aggressive labour movement (Garon 1987, 13). Labour disputes were neither as many nor as intense as they were in Western Europe. During Japan’s era of party governments, from 1918 to 1932, strikes and lockouts averaged 457 per year, while there were 874 per year in Britain, 990 in France, and 2,332 in Germany (Flora et al. 1987, vol. 2, ch. 10; Nihon Tōkei Kyōkai 1987–8, vol. 1, 439). Electoral pressure from labour and the left was minimal. The first Japanese election held with universal male suffrage occurred only in 1928, and the vote for workers’ parties during the democratic period peaked at 4.9 per cent in the election of 1930. By contrast, the German Social Democratic Party had won 9.1 per cent of the national vote already in 1877, including 38–40 per cent in industrialized areas such as Hamburg and Berlin (Ritter 1983, 31). To the extent that the fear of labour unrest might have stimulated Japanese officials to sponsor the workers’ health insurance law of 1922, it was a fear generated by foreign examples, not by pressure from Japan’s own labour movement. The resistance of better-organized conservative elites also helps to account for the sluggishness of welfare policymaking in the 1920s. In many European countries, conservative elites, motivated by paternal benevolence or fear of a nascent labour movement, adopted the first welfare policies to pre-empt the appeal of the left (Esping-Andersen 1990, 108). This did not happen in Japan. Japanese businessmen fought the efforts of at least some government officials ⁴ In 1910, the proportion of the workforce in secondary industry was 18.6 per cent in Japan, compared to 23.5 per cent in Austria, 24 per cent in Denmark, and 24.7 per cent in Sweden, the three least industrialized major states in Western Europe (Flora et al. 1987, vol. 2, ch. 7; Minami 1994, 212). ⁵ The percentage of the workforce in secondary industry was 23.5 per cent in Austria in 1910, 23.9 per cent in Italy in 1921, and 23.9 per cent in Japan in 1920 (Kyōtō Daigaku Bungakubu Kokushi Kenkyūshitsu 1958, 841; Flora et al. 1987, vol. 2, chs 3 & 7; Minami 1994, 212).

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to promote workers’ welfare. Enforcement of the Factory Law’s ban on night work for women and children, for instance, was delayed until 1929 due to resistance from business. The exploitation of female workers was extreme (Garon 1987, 15, 19–20, 29; Sugaya 1990, 45). Businesspeople and most officials abused the rhetoric of paternal benevolence to put a cynical gloss on their class interests. The traditional idea that the sovereign was responsible for his subjects’ welfare, manifest in the concept of a ‘social monarchy’ in Germany, got little play in Japan.⁶ More often industrialists trotted out paternalistic ideas to obstruct welfare laws, arguing that Confucian benevolence in the factory made welfare policy unnecessary, or even harmful to the warm bonds between employers and employees—this at a time when companies frisked workers as they left for home, to check for stolen tools (Gordon 1985, 82–5). Officials often echoed these sentiments.⁷ In short, the superior resources of conservative elites enabled them to block further efforts to bolster public welfare.

WHA T KIND OF WAR? Defining ‘war’ for our purposes is not simple. As Japan’s experience before the 1930s demonstrates, not all involvement in war produces the same effects on welfare policy. Many different aspects of war and military affairs can sway policymakers. Because the military profession is inherently dangerous and essential to the nation, soldiers are usually among the first groups targeted for public health and pension policies, regardless of actual involvement in wars (Esping-Andersen 1990, 91). War does not affect welfare policymaking only during periods of combat. The prospect of war can sway welfare policy in countries that remain at peace, and war’s impact on welfare is sometimes greater after the fighting ends than it is during hostilities. Regarding policy change during the event of war, the event itself contains a complex and variable bundle of causes. It may be longer or shorter; it may involve mass conscript armies or smaller professional forces; it may or may not involve the mobilization of civilians or combat on a country’s home territory. War is a different experience for people of different ages, occupations, genders, ⁶ For an official early Meiji statement of monarchical benevolence toward the poor, see Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 66. On the effect of paternalistic ideas on Germany’s welfare innovations of the 1880s and in earlier periods of Prussian history, see Dawson 1973, chs 2 & 3; Beck 1995. ⁷ Home Ministry bureau chief Takejirō Tokonami stated: ‘In foreign lands, individualism is advanced. . . . In our country the family is the society’s basic unit. . . . If this family sends a person out into the world who becomes a nuisance [meiwaku], to receive help from others brings shame on that family’ (Ishida 1989, vol. 1, 247–53).

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political affiliations, and so forth. To say that war has caused this or that is not a meaningful statement unless this complex phenomenon is disaggregated for analysis. What aspects of the Pacific War most affected welfare policymaking in Japan? In this case, most policy changes occurred during the event of war, which lasted a long eight years (1937–45). Note that Japan was engaged in a mass war in China before the usual starting date of World War II, which is one reason to distinguish the ‘Pacific War’ from the larger global conflict. By the time Japan attacked the United States in December 1941, 185,000 Japanese soldiers had already died in battle (Havens 1978, 34). By any standard, this was a mass war. There was general military conscription for young and middle-aged males and extensive mobilization of the civilian economy. The state corralled youth, women, workers, farmers, and neighbourhood residents into monopolistic mass organizations that it designed as civilian versions of the conscript army. These bodies rationed food and clothing and placed every aspect of daily life on a war footing (Kasza 1995). Officials compelled hundreds of thousands of small businesses to disband or merge with larger companies, forcing the surviving firms into compulsory cartels that subjected production to wartime priorities. Japan was governed by a highly authoritarian military-bureaucratic regime. The transition from the last party government in 1932 to a cabinet monopolized by military officers and bureaucrats in 1941 was gradual, but the end of the process was no less clear. In the cabinet formed in 1941, General Hideki Tōjō served simultaneously as Prime Minister, Army Minister, and Home Minister. Japan’s military-bureaucratic regime was more interventionist and oppressive that most regimes of its type (Kasza 1988, 164–7). By the end of 1940, it had dissolved independent labour unions and political parties. Parliament continued to meet and to influence policy in certain areas, but it had little impact on welfare policy. The state had a sophisticated administrative apparatus manned by highly educated bureaucratic officials, and military and civilian administrators were the key figures in welfare policymaking. Japan was more an aggressor in the Pacific War than the victim of an unexpected attack. War preparations preceded the fighting, and so I have noted some war-related aspects of pre-1937 policy planning. Japan was winning the war at least until the battle of Midway in mid-1942, after which its fortunes waned, a factor that helps to explain the timing of policy innovations. Combat reached Japan’s homeland in the form of air bombardment in the last eighteen months of the war. The four main islands were spared the bloody ground fighting that occurred in Okinawa, but sixty-six cities were heavily bombed (Dower 1996, 125, n. 16). Of a population of 73 million people, almost 3 million Japanese perished in the Pacific War. Widespread physical destruction and poverty challenged welfare policymakers in the immediate post-war period. In sum, this was a long, mass war involving

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extensive civilian mobilization, intense but relatively late air attacks on home territory, and heavy loss of life among soldiers and civilians. How, then, did this type of war affect the as yet rudimentary welfare programmes of Japan?

EFFECTS OF THE PACIFIC WAR ON JAPANESE WELFARE P OLICIES

Values During the war, new values came to motivate Japan’s welfare policymakers. Previously, the discourse about welfare had revolved around the concept of ‘social work’ (shakai jigyō). The goals of social work were to ameliorate class struggle and to halt the spread of socialism. That is why officials so often combined policies to promote welfare with others to stem political radicalism. The Health Insurance Law of 1922, which covered only industrial workers, exemplified ‘social work’. There was a conscious shift among wartime policymakers from the concept of ‘social work’ to that of ‘welfare work’ (kōsei jigyō). Though the specific Japanese word for ‘welfare’ (kōsei) was reportedly lifted from the Chinese classics, ‘welfare work’ became the translation of the German term Wohlfahrtspflege.⁸ Welfare work embodied a human resources (hitoteki shigen) perspective on policy. The purpose of welfare work was not to curb class struggle or socialism but to strengthen the nation’s human resources for war. Ironically, a large ‘Social Work’ Conference, which convened in 1940 on the mythical 2,600th anniversary of Japan’s founding, marked the triumph of the new ‘welfare work’ thinking. Various journal articles stress the significance of the switch from social work to welfare work.⁹ The concept of welfare work gave welfare policies a new legitimacy and expanded the acceptable range of welfare concerns. The legitimacy and reach of social work had depended upon its utility in the arena of class struggle; the policy debate had been one between state officials and businessmen over what ⁸ Takahashi 1997, 43. When the Ministry of Health and Welfare was founded, the government first planned to name it the social health ministry (hoken shakaishō). But when this proposal went to the conservative Privy Council for approval, it objected to the word ‘social’ (presumably because of its association with socialism) and changed the name to ‘welfare ministry’ (kōseishō), borrowing the latter term from a classical Chinese text. The official English translation of kōseishō is Ministry of Health and Welfare, and that is the English term used in this text (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 343). ⁹ Yoshida 1994, 162–9; Ishida 1989, vol. 1, 262–3, 280–3. In 1941, the Ministry of Health and Welfare’s prefectural ‘social sections’ (shakaika) changed their names to ‘welfare sections’ (kōseika) or ‘assistance sections’ (engoka) (Kōseishō 50-Nen Shi Henshū Iinkai, 1988b, 369).

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was needed to deter radical labour. At a time when neither the labour movement nor socialism presented much of a threat, the discourse of social work produced limited progress in welfare policy. But in a total war, the potential legitimacy and utility of welfare work were more comprehensive. Total war demanded the commitment of every Japanese person, so the welfare of every Japanese citizen became a concern of government. And the welfare debate now involved a powerful military establishment whose views were not limited by the alignment of class forces. The military’s slogan of ‘all people are soldiers’ (kokumin kai hei) introduced a new egalitarianism into welfare policymaking. The values noted above link welfare policy to the immediate demands of war, but they do not necessarily explain why Japan’s leaders saw their policies as permanent changes to Japanese society. In broader ideological terms, the dominant world-view of Japan’s military-bureaucratic elite during the war was called kakushin, a concept that falls between the English terms ‘reform’ and ‘revolution’. Proponents of the kakushin ideology included military officers and bureaucrats who had served in the Manchurian colony or engaged in total war planning. Many joined Japan’s new cabinet super-agencies (e.g. the Cabinet Planning Board and Cabinet Information Bureau) or clustered in the Ministry of Health and Welfare (see the following section, ‘Institutional Change’) and Ministry of Commerce and Industry, whose authority increased dramatically in wartime conditions. Kakushin officials tended to outnumber more conservative bureaucrats in these agencies. Kakushin also had the support of some prestigious civilian intellectuals, such as those in the Showa Research Association. How did they see the world in the 1930s? Kakushin ideologues believed that world history had reached a critical turning point in the interwar period. Reference to a ‘great world transformation’ began almost every kakushin piece of writing and speech. In their view, the period of ‘freedomism’ (jiyūshugi) was dying. It had begun with the French Revolution and revolved around individualism and personal liberty, democracy and party politics, and capitalism and materialism. Freedomism had been historically progressive in its time, as its factories and armies had outperformed those of the old absolute monarchies. The triumph of the USA, Britain, and France in World War I marked the culmination of this historical era, the victory of those countries that epitomized its ideals. But the era of freedomism was doomed in the 1930s. It had caused a world depression, and its democratic regimes were paralysed by liberal scruples and by selfish competition among parties, classes, and individuals. In short, kakushin thinkers viewed jiyūshugi as being on the brink of extinction, much as many people view communism today. The new era in the making was most often labelled the ‘national defence state’ (kokubō kokka) a term borrowed from German General Erich Ludendorff. In this new period of history, (1) the national community would take priority

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over the individual, (2) the state would be the instrument of historical change, (3) economic controls would replace market competition, and (4) unitary state-managed organizations would replace party and interest group competition in politics and society. A publication of the Cabinet Planning Board read as follows: The raison d’etre of the jiyūshugi state was its responsibility to respect individual freedom. . . . The national defence state fundamentally negates this concept of the state. It asserts that the individual’s life, property, and business must serve the state’s objectives. It is based on a totalitarian concept of the state in which the state as state guides and intervenes in every aspect of the individual’s life. . . . Politics, diplomacy, economics, science, thought, household living, film, music, and sports must all be subordinated to war. (Kikakuin Kenkyūkai 1941, 21, 23)

Kakushin elements believed that by coordinating the efforts of all members of society, the national defence state would be superior in productive and military capacity to the stagnating societies of jiyūshugi. Just as the French Revolution had reversed the rank order of states by introducing a new standard of national strength, so the new era of the national defence state would produce a new international power structure. Kakushin officials viewed the welfare policies that Japan adopted during the Pacific War as measures that embodied the national defence state, which was not scheduled to end with the war, but in their eyes reflected a new and enduring historical period.

Institutional Change The Ministry of Health and Welfare (MHW), created in 1938, became the prime mover behind wartime social policy. Chikahiko Koizumi, a career army officer and head of the Army Ministry’s medical bureau (imukyoku), began to lobby for a new ministry in 1935. In mid-1936, the Army Minister bemoaned the poor health of military recruits in a cabinet meeting, and the army medical bureau announced that the proportion of young men failing their draft physicals had risen from 25 per cent during 1922–6 to 40 per cent in 1935 (Sugaya 1990, 83; Shō 1998, 44–5). In May 1937, the Army Ministry proposed the creation of a ministry of health (eiseishō), but other ministries blocked this initiative.¹⁰ One month later, however, the army conditioned its acceptance of the new cabinet of Fumimaro Konoe upon his support for a new ministry to ¹⁰ There was a backlash from elected and bureaucratic civilian officials against the army’s growing interference in politics after the abortive coup by young officers in February 1936. This lasted until the China Incident of July 1937 embroiled Japan in a major war, after which the military began to increase its influence once again. In the interval between February 1936 and July 1937, civilian statesmen stymied many military proposals, the plan for a health ministry being one of them.

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oversee social policy and health. Konoe needed the army’s backing to become prime minister, and his cabinet resolved at its first meeting to set up a social health ministry (shakai hokenshō). Konoe ordered the Cabinet Planning Board (kikakuchō, later renamed kikakuin) to design the new ministry. As previously mentioned, this agency’s staff comprised bureaucrats and military officers who adhered to the kakushin world-view. They settled a dispute over whether the new ministry should have a physical fitness bureau (the army’s preference) or a labour bureau (the preference of Konoe and the Home Ministry) by including both, but they gave the physical fitness bureau (tairyokukyoku) pride of place as the ministry’s first subunit. This was one more sign of the shift from ‘social work’ to ‘welfare work’. The cabinet approved the new ministry’s design on 9 July 1937, two days after the Marco Polo Bridge incident enmeshed Japan in war with China, and the government christened the MHW in January 1938. This was a momentous event. As of 1936, states in Western Europe had an average of 2.4 ministries whose main duties were in social policy (education, welfare, health, and labour), but in Japan only the longstanding Ministry of Education fell into this category (Rose 1976, 264). Before war-related thinking took over in the late 1930s, public welfare had been just one of many tasks of the Home Ministry, which also managed local government, the police, elections, censorship, and countless other public programmes. Such catch-all ministries are typical of early state-building. With its many duties, the Home Ministry was rarely able to concentrate its efforts or the government’s attention on welfare policy. A dedicated MHW would be more effective. Apart from the Ministry of Munitions, the MHW was the only new ministry created during wartime, and it survives to this day.¹¹

Health Policy The MHW acted on health policy immediately. The Home Ministry’s ‘social bureaucrats’ had long wanted to expand public healthcare, and their efforts to promote a new law intensified during the Depression, but opposition from the Japan Medical Association and from Diet members had seen several bills die without a parliamentary vote. In April 1938, just four months after the MHW’s founding, the Diet approved a new National Health Insurance Law (kokumin kenkō hoken hō). MHW Minister Kōichi Kido averred that the China war had made its passage urgent (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 524). The law began with modest aims. It launched a voluntary system ¹¹ In 2001, the ministry merged with the Labour Ministry to form the Ministry of Health, Labour, and Welfare.

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of people’s health insurance associations (kokumin kenkō hoken kumiai), to be organized either in places of residence or in workplaces not covered by the earlier workers’ health law of 1922, which remained in force. The associations were to administer a national health insurance plan. If two thirds of the residents or employees opted to join, membership became compulsory for others in the same locale or workplace. The state provided limited funding, however, while the members paid insurance premiums as well as 30–50 per cent of the specific cost when they required treatment. Coverage was mandatory for health and optional for childbirth and funerals. By the end of 1938, only 523,223 people had enrolled (Kōseishō 50-Nen Shi Henshū Iinkai 1988a, 869–75; Sugaya 1990, 90, 92–3). In 1941 and 1942, as the war intensified, the national health insurance system expanded rapidly. In January 1941, the cabinet approved a ‘population policy’ and it urged the spread of national health insurance to lower the death rate (Shō 1998, 116–19). When General Koizumi, ever the force behind the MHW, finally became minister himself later that year, he devised a three-year plan to erect a health insurance association in every city, town, and village. He adapted the wartime slogan of ‘all people are soldiers’ into a campaign slogan of ‘all people should have insurance’ (kokumin kai hoken). Another of his slogans was ‘healthy soldiers, healthy people’ (kenpei kenmin). In February 1942, Koizumi sponsored a revision of the National Health Insurance Law as well as a new National Medical Treatment Law (kokumin iryō hō). These laws gave the MHW sweeping powers over the medical profession. They made membership in the Japan Medical Association (JMA) compulsory for all doctors and authorized the MHW and the prime minister to appoint its officers. They also empowered the MHW minister to fix the price of every medicine and medical procedure and to order doctors and pharmacists to participate in the health insurance system. The state could not have humbled the JMA, the main interest group of medical professionals, without the authority that wartime conditions provided. The organization had long opposed national health insurance and most forms of government intervention in the profession. In 1936, the JMA had gone so far as to circulate publicly a statement charging that ‘National Health Insurance will kill all of us’ (Yamagishi 2011, 60). Wartime conditions, and the army’s intervention most specifically, removed the JMA as a major player in health policy. The doctors’ only consolation was to be represented on a commission that would advise the MHW minister on setting prices. The policy shift of 1942 also enabled the Home Ministry’s prefects to order the creation of health associations in any locale within their jurisdictions. The goal was universal coverage and by 1944, 95 per cent of Japan’s cities, towns, and villages had health associations insuring 41.1 million people (Kōseishō 50-Nen Shi Henshū Iinkai 1988a, 875; Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 547). Along with those insured under the 1922 law, public health

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insurance had expanded its coverage from roughly 3.9 million people at the end of 1937 to over 50 million, or about two thirds of the population, at the end of 1944. These figures exclude the eight million soldiers whose healthcare had become the military’s direct responsibility.

Pension Policy The MHW also introduced a public pension programme, but its evolution was more disjointed. The main pre-war precedents were pension plans administered by mutual aid societies of state employees, including army and navy officers.¹² The MHW first sponsored a public pension system for seamen in 1939. Seamen had been privileged in welfare provision since the Sino-Japanese War of the 1890s, which had awakened officials to the military uses of maritime transport (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 533). The chief goal of the seamen’s pension was to sustain the workforce in this dangerous and critical profession during wartime. The Seamen’s Insurance Law of 1939 integrated their health and pension coverage into one package. Public pension insurance for workers followed in 1942. As revised by the Welfare Pension Law (kōsei nenkin hō) of 1944, pension insurance was compulsory for workers and office staff, including women, in businesses of five or more employees. Smaller firms might adopt it if their workers so petitioned and management agreed. The state covered 10 per cent of the cost as well as administrative expenses, while the employer and employee each contributed the equivalent of 5.5 per cent of the employee’s wages. The insurance covered old age, disability, and a death benefit. It would pay a full old-age pension after age 55 to those completing twenty years of work in insured enterprises. The old-age benefit was paid until death at a replacement rate of one third of the worker’s average salary during the period of employment. Those retiring with more than three but fewer than twenty years of insured labour were to get severance pay, but no pension. Conscripted workers, both Japanese and Korean, and women leaving work to marry, qualified for severance pay after six months. Enrollees in the pension programme rose from 3.46 million at the end of 1942 to 8.44 million at the end of 1944 (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 558–64; Sugaya 1990, 106–10). The Welfare Pension Law arose from wartime conditions, but its terms had more to do with economics than with welfare. Like the seamen’s pension, one goal was to keep people from switching jobs; there were no benefits until the worker completed three years of insured employment. But the immediate ¹² Kōseishō 50-Nen Shi Henshū Iinka 1988b, 554. The post office banks administered voluntary life insurance (1916) and pensions (1926) for their depositors, but these were little more than special savings plans and received no state subsidy.

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purpose of the workers’ pension was to curb consumption (Shō 1998, 134–9). In the short run, the state profits from pension insurance as workers must contribute for many years to earn full benefits. During the period 1942–5, workers’ pensions generated income of ¥1.5 billion against ¥78 million in benefits paid, or a ratio of 19.5 to 1 between revenues and expenditures (Sugaya 1990, 109–10). Nearly all contributions to workers’ pension insurance went to the Ministry of Finance to pay for the war (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 568).

Public Assistance/Unemployment Relief Public aid to the poor has always been meagre in Japan’s welfare system. Logically, one would not expect a long mass war to change this, at least not until the fighting stopped. Mass war tends to bring full employment, which works to reduce extreme poverty. Japan suffered a labour shortage in the early 1940s. Civilian employment rose from 31 million people in 1937 to 33.5 million in early 1944, and workers were so scarce that the state drafted three million students over the age of 10 and 1.3 million of its Korean subjects into the workforce (Havens 1978, 91, 101–4, 112). Air attacks eventually left masses of people poor and homeless, but by the time this happened the military situation compelled officials to invest all resources in the war effort, leaving little to assist the poor. Logically, then, one would not expect that the type of war Japan fought would lead to greater public assistance or unemployment relief. The failure to adopt unemployment insurance during the war conforms to this logic, but contrary to expectations, public assistance to the poor expanded markedly. Three factors prompted improvements in public assistance. First, mass conscription and combat led to an increase in aid to soldiers’ families. In 1937, the Military Assistance Law replaced the Military Relief Law of 1917 (Yamagishi 2011, 63). The new bill covered a wider range of war-related injuries and provided help to a wider group of family relations of servicemen. Officials also modified the procedures and conditions for aid to remove the stigma that was normally attached to poor relief; for instance, the families received aid without having to prove the lack of relatives’ support (Garon 1997, 58). A second factor was the state’s population policy. Officials increased aid to the poor to boost the reproduction of healthy soldiers. Various public and private providers had hitherto assisted the poor with healthcare. In 1941, the Health Preservation Law (iryō hogo hō) systematized and expanded this aid. The central government pledged to pay municipal governments 7/12 of the expenses they incurred to cover medical assistance for the poor, and to pay half of the expenses so incurred by private bodies. Prefectural governments

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paid both sources another quarter of their costs. Officials authorized private relief organizations to distribute coupons to the poor to cover doctors’ bills (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 369–70). In the background was a more general policy of encouraging public hospitals and discouraging the building of new private hospitals, which was adopted in 1942. A third stimulus for improving public assistance was that the war put private relief services in financial straits. As of 1936, 83 per cent of Japan’s facilities caring for the poor were privately owned and run. Amid the government’s campaigns to boost savings and curb consumption, these facilities saw their contributions decline and began to lobby the state for more support (Ichibankase and Takashima 1981, 70–1). The result was the Social Work Law of 1938, which authorized officials to license and regulate private relief activities. It also systematized official support for private efforts, and state aid to private relief services increased from ¥200,000 in 1937 to ¥1 million in 1939, the new law’s first full year of operation (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 368–9). The aftermath of surrender saw further changes in public assistance and unemployment policy. Since the US army governed Japan from 1945 to 1952, these reforms do not have the same status as those discussed previously. The occupying army implemented an ambitious agenda of social reform, greatly improving the status of women and organized labour, for example, but it did not include big changes in welfare policy. Many of Japan’s welfare programmes, though temporarily disrupted by the country’s devastation, were more advanced than those of the USA, so the occupiers did not arrive bearing a more enlightened approach to public welfare than they found. The US government’s concerns about the Allied occupation’s cost also militated against major innovations. Nonetheless, mass starvation and homelessness and the task of reintegrating millions of veterans into society demanded state action. Within a month of the war’s end, US authorities ordered the Japanese government to adopt a Livelihood Assistance Law (seikatsu hogo hō), which the MHW revised on its own initiative in 1950. In that year, public assistance accounted for 46 per cent of the ministry’s budget, and over two million people (roughly 2.5 per cent of the population) received benefits (Kōseishō 1999, 16). This law sought to secure a minimum standard of living for the poor. Most of the initial beneficiaries were handicapped veterans, the families of soldiers killed in battle, and the chronically unemployed (Soeda 1985, 122–3, 137–8). The Allied occupation powers refused to authorize a special law to assist veterans and their families, and their plight was clearly one stimulus for this legislation. The Livelihood Assistance Law was the first Japanese welfare measure that ordained a citizen’s legal right to benefits. The revised version of 1950 referred to article 25 of the post-war constitution, which stipulated that all Japanese people had ‘a right [kenri] to maintain the

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minimum standards of a healthy and cultured living’. The constitution also enjoined the state to act ‘for the promotion and extension of social welfare and security and public health’. The occupation forces inserted these progressive provisions even though they were lacking in the US constitution. Although unemployment had not been a problem during the war, it reached critical proportions afterwards. To cope, the Diet passed the Unemployment Insurance Law (shitsugyō hoken hō) in 1947. Though the MHW drafted this law, the new Labour Ministry, founded in the same year, implemented it. The Labour Ministry’s creation is yet another example of the institutional flexibility that war-related conditions permit, and unemployment insurance was the weightiest new welfare programme legislated during the occupation. It initially provided compulsory insurance for the employees of firms subject to the Health Insurance Law, but its coverage expanded further in 1949.

Housing The movement of workers into regions of high military production created acute housing shortages and caused the state to undertake its first construction of public housing. Officials launched a new Public Housing Corporation (jūtaku eidan) in 1941. It is noteworthy less for what it accomplished than for the precedent it set. By the end of 1944, it had built only 95,000 residences, a fraction of the number lost to enemy air raids (Kōseishō 50-Nen Shi Henshū Iinkai 1988b, 371–2). But as the state’s first ‘business unit’ (eidan), it became a model for other public corporations. In the post-war period, it was reborn as the more active Japan Public Housing Corporation (Nihon jūtaku kōdan). Such were the highlights of Japan’s welfare policymaking related to the Pacific War. This review has focused on policies that had a big and lasting impact in mainstream welfare areas. Many significant policies fall outside the scope of this study. The National Eugenics Law of 1940 resulted in 538 sterilizations of people deemed genetically defective, including the mentally ill, between 1941 and 1947. The government evacuated millions of schoolchildren to rural areas where they would be less exposed to air bombardment, much as occurred in Britain and Germany. The state took control of the food supply, which left it in charge of selling Japan’s rice crop for decades to come. The list of minor welfare measures adopted during wartime is endless.

AN ENDURING L EGACY Japan’s new programmes in health, pensions, public assistance, and unemployment were not one-time allocations of funds to deal with an emergency, nor were they

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merely additions of funds to existing policies. In the economic shambles of defeat, officials had to rebuild these programmes, but they marked an enduring expansion of the state’s responsibility for public welfare. Scholars often ignore war’s effects on domestic politics because they see these effects as temporary—hence the many books that end their chronologies when a war begins, or begin their analyses after a war ends. Why waste one’s analytical skills on a short-lived situation untypical of ‘normal’ times? And, to be sure, many welfare policies adopted during wars are temporary. But the fact that policymakers act in an atmosphere of crisis does not mean that their handiwork need be short-lived. Japan’s post-war public health insurance system is largely an artefact of wartime policy. Points of continuity include: the jurisdiction of the Ministry of Health and Welfare; national public health insurance (alongside the earlier workers’ health insurance programme); compulsory participation by physicians and pharmacists; the patients’ ability to choose their doctors; fixed prices for medical treatments and drugs; an advisory commission to help the ministry set prices; and co-payments for service by patients. Local governments undertook to administer health insurance for residential groups, but most of the wartime innovations persist to this day. Even after a thorough revision in 1954, many traits of the wartime pension system also endured. The system continued to serve employees in firms of five or more workers and to require twenty years of contributions for a full pension, and for fifteen years after the war nearly all changes in the system involved the adjustment of resources committed to it. The rampant inflation at the war’s end required financial restructuring. Rather than a purely earningsbased pension, officials set a flat-rate old-age benefit of ¥25,000 per month with an earnings-related supplement. The minimum age for receiving a pension was raised from 55 to 60. Premiums and benefits rose and fell in accord with financial conditions. But the basic responsibility officials had undertaken during the war did not change until the state adopted a complementary pension insurance scheme for the rest of the citizenry in 1959. The government formalized the wartime practice of channelling pension funds into public investment in the early 1950s. Post-war pension contributions have flowed into the Fiscal Investment and Loan Programme, the biggest source of state capital for Japan’s industrial development.¹³ The Livelihood Assistance Law similarly fixed many lasting characteristics of poor relief. For example, it made assistance the responsibility of the central government, prohibited discrimination in the disbursement of benefits, and established the legal right to a minimum standard of living. The Unemployment Insurance Law, though amended several times, was not replaced until 1975. ¹³ On the evolution of this fund, see Johnson 1978, ch. 4. Another source that surveys the links between pension policy and capital investment in post-war Japan is Estévez-Abe 2001.

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How is one to explain the persistence of these core policies? After all, many of the reasons that Japan originally adopted these policies vanished after 1945. The kakushin ideology, which construed the new welfare programmes as long-term components of the national defence state, found few post-war advocates. Given the country’s defeat, who could argue for the superiority of the national defence state over the allegedly dying states of freedomism? Many of the more immediate goals of wartime welfare policy, for example to bolster human resources for war, also lost their relevance afterwards. Article 9 of the new post-war constitution forbade Japan from engaging in an aggressive war, and the country no longer practised mass military conscription or maintained a mass army. Interest groups such as big business and the JMA, which had opposed ambitious welfare policies before the mid-1930s, regained much of their autonomy and no longer had to bow to the priorities of the military establishment after the war. Finally, a foreign army governed Japan for seven years after the Pacific War, and this might lead one to expect limited continuity between wartime and post-war welfare policies, especially since the primary occupying power (the USA) did not itself possess a highly advanced welfare state. But even in these circumstances, war left a lasting legacy. For one thing, the war bequeathed a more favourable institutional environment for welfare policy than had preceded the war. The MHW maintained a powerful vested interest in the survival of wartime policies and did its best to expand those policies after war’s end. In 1947, the ministry devised plans for a comprehensive, integrated public welfare system that would cover every Japanese citizen for sickness, injury, death, childbirth, child care, old age, and unemployment. It was known as bebariji no nihonban, Japan’s version of the Beveridge Report. Officials also sought to standardize health insurance for people in different occupations. In 1953, the ministry called for an integrated national pension system that would similarly supersede the many segmented systems then in force (Sugaya 1990, 193; Campbell 1992, 54–5). Between 1957 and 1961, the ministry finally won the political backing it needed to make both health and pension insurance universal, if not egalitarian. Reportedly, Japan was the fourth country in the world to make public health insurance universal, and the twelfth to make old-age pensions universal (Shinkawa 1993, 69). To publicize the campaign, the ministry revived General Koizumi’s slogan of kokumin kai hoken (‘all people should have insurance’) and further modified it into kokumin kai nenkin (‘all people should have pensions’). Both were variations of the wartime slogan of kokumin kai hei (‘all people are soldiers’) that most adult Japanese people at the time would have remembered. Japan’s dominant post-war conservative political party, the Liberal Democratic Party (LDP), whose predecessors had opposed most welfare innovations before the war, also became a strident force in favour of welfare expansion in

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the 1950s. The party was more active in promoting universal health and pension coverage in this period than were Japan’s leftist parties. When LDP Prime Minister Hayato Ikeda announced his famous income-doubling plan at the start of the 1960s, he stated: ‘With the aim of building a welfare state, our party has provided health insurance for the whole nation as well as national pensions. But as part of the new policy, an epoch-making expansion of social security will be carried out so as to guarantee that there will not be a single hungry or poverty-stricken person in the nation’ (quoted in Calder 1988, 367). Over 1960–75, during Japan’s so-called economic miracle, the government’s annual growth rate of real social expenditure was 50 per cent higher than the annual growth rate of real GDP (Organisation for Economic Co-operation and Development 1985, 21). The thinking of both the MHW and the LDP reflected a powerful egalitarianism that was born of the war and continued for several decades afterwards. The US occupation forces acted for and against Japan’s welfare programmes after the war. Initially, American officials in Japan, many of whom had prior experience in the New Deal, supported the MHW’s efforts to integrate Japan’s public welfare policies into a coherent package. However, when the American Medical Association got wind of this, it strongly opposed the effort lest it muster support for similar plans that President Harry S. Truman had proposed for the USA. It took the JMA some time to recover as an autonomous body after the war, but, interestingly, the post-war JMA had largely abandoned its one-time opposition to public health insurance. Citing Takeshi Kawakami, Takakazu Yamagishi writes that ‘after major public health insurance programmes were created in Japan during World War II, bureaucrats and the JMA saw them as a given, such that abolishing them never became an option in their minds’ (Yamagishi 2011, 8). In sum, the war’s legacy in terms of values, institutions, and practical policies proved a solid foundation for the endurance and expansion of Japan’s welfare state after the war. Yamagishi rightly sees the war’s impact in Japan as a ‘critical juncture’ that produced long-term, path-dependent outcomes (Yamagishi 2011, 7–8; cf. Collier and Collier 1991).

OV ERV IEW OF THE COMPARATIVE STUDY OF WAR AND WELFARE P OLICY War outweighed all other factors in causing Japan’s welfare transformation over 1937–50. This section summarizes war’s impact on values, institutions, and policies in a way that might be compared to the experiences of other countries. I emphasize that ‘war’ here refers to the type of lengthy mass war

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described in this chapter. War had two main effects on values related to welfare policy: (1) Mass war leads to an evaluation of people as ‘human resources’ to be cultivated and used for the war effort. Policies promoting the health of conscripts, the long-term production of more soldiers, and the welfare of civilian workers, embody this perspective. (2) The sense that everyone in society is contributing to the war effort (‘all people are soldiers’) fosters an egalitarian sense of social justice that calls for the expansion of social services (‘all people should have insurance’). As the Japanese case shows, this egalitarianism may be found in authoritarian as well as democratic regimes. In a democracy, the contribution of all citizens to war may result in the extension of civil or social rights, but an authoritarian regime’s preoccupation with war may produce a welfare doctrine nearly as egalitarian as one based on rights of citizenship. Authoritarian rulers, too, may come to view every human being as a vital contributor to the nation’s military mission. Although in many ways their subjects may enjoy only an equality of subservience, war did provoke Japan’s military-bureaucratic regime to institute an egalitarian and nearly universal system of public health insurance. The institutional effects of war were as follows: (3) The urgency of war facilitates rapid institutional change. The sense of urgency that accompanies war serves to justify radical innovations, and the sheer volume of war-related business makes it impossible for legislators to scrutinize every new measure carefully. It is easier to launch new state agencies in wartime than it is in peacetime. Thus war often constitutes a critical juncture in the evolution of a country’s welfare policies. (4) War makes the military a major player in welfare policymaking. In Japan, the military’s role in welfare policymaking through the Army Ministry’s medical bureau and later through the MHW transformed official policy. (5) The urgency of war enables the state to compromise the autonomy of elite interest groups, like the medical profession and big business, and to demand their support for public welfare. War is the supreme raison d’état, for no private interests can logically take precedence over national survival. (6) The marshalling of resources for war puts financial pressure on private purveyors of poor relief and other welfare services. This causes the state to increase its regulation and funding of private welfare providers and to expand public welfare to pick up the slack. War’s direct effects on the content and timing of welfare policies were as follows: (7) War requires healthy soldiers to man a conscript army, thus extending the reach of the state’s health policies to much of the adult population. Mass conscription compels the state to confront the health problems of all those

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eligible for the draft, while mass war makes government the health provider for armies that comprise a sizeable percentage of its population. (8) Mass war generates policies to secure the long-term production of more soldiers. Even though Japanese officials did not believe that the Pacific War would last long enough to engage the children of the early 1940s, the event of mass war caused them to adopt a long-term population policy that led to improved public healthcare and poor relief. (9) Mobilization of the civilian economy for war requires welfare measures to maintain a healthy, stable workforce. Since the state drafts young and middle-aged men to serve in the military during a mass war, concern for civilian workers forces officials to consider the welfare of women and the elderly, who labour in their place. This concern influenced both health policy and pension policy in Japan, the latter designed partly to discourage job switching. (10) The absence of male breadwinners during war invites policies to safeguard the health and livelihood of soldiers’ families. In Japan, this concern led to the expansion of public health insurance and to new terms of public assistance for soldiers’ families. (11) War requires the state to curb consumption, and welfare policies can serve this end. In Japan, workers’ pension insurance was the best example of this, but many lesser measures served the same purpose. Official women’s groups, for example, taught their members how to prepare cheaper, more nutritious meals. (12) (a) Employment increases during a mass war, which is therefore unlikely to produce improvements in unemployment insurance (an inverse relationship between war and welfare policy). (b) The devastation of home territory and the challenge of reintegrating veterans into the civilian economy may elicit new employment policies once a mass war has ended. (13) Lasting, systemic changes in war-related welfare policy are most likely to occur (a) while a country is winning the war and/or (b) when its home territory is not under attack. Most big welfare innovations in Japan occurred early in the Pacific War, many within the first year. When Japan’s fortunes in war declined in mid-1942, major innovations slowed, even though existing programmes continued to expand. While Japan was winning, officials could plan the shape of their future empire, but battlefield reversals focused their attention on military matters in a narrow sense. The destruction and loss of life that resulted from air bombardment were obstacles, not boons, to lasting change in welfare policy, at least until the war was over. In Japan, only the construction of public housing quickened its pace during the bombing. Virtually all major innovations in welfare policy preceded the air assault on the Japanese homeland or occurred after surrender. During the event of war, the chaos and deprivations of combat on home territory render systematic policy

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planning impractical. Officials respond to such a situation with one-time emergency measures, not permanent programmes. While the army’s responsibility for soldiers’ health increases sharply with mass war, neither combat injuries nor illness affected the adoption of new welfare policies in Japan. Thus the aspect of war that would logically seem to require new welfare programmes most urgently, namely, the rise in the number of injured and sick people, did not affect policy much until war’s end.

CO NCLUSION War has not been an incidental factor in the evolution of the welfare state but rather one of its primary causes. Most of today’s advanced welfare states have experienced long, mass wars, and their war-related policies have served as models for other countries that have not fought such wars. The neglect of war in welfare research is an unjustifiable oversight rooted in political and academic prejudices. Scholars attached to leftist explanations, or who are otherwise disinclined to incorporate war-related causes into their general theories, have tended to overlook war as a source of welfare policy. Military defence is one of society’s first functions, an imperative for survival. To think that the era of long, mass wars would leave welfare policymaking untouched is to miss a basic fact of modern politics, yet all the major theories of the welfare state seem to have missed it. Classic convergence theory claims that industrialization is both a necessary precondition for modern welfare policy and its immediate stimulus. But while some level of industrialization is necessary to finance extensive welfare programmes, war may provide an equally potent stimulus for their adoption. When it does, the timing and content of a country’s welfare development are likely to depart from expectations based on levels of industrialization only. Classic convergence theory cannot accommodate this fact. The power resources variant of divergence theory asserts that the power of class-based parties in the cabinet determines the course of welfare policymaking, but no political parties, leftist or otherwise, participated in the most dynamic period of welfare policymaking in Japan. The war-related values that provoked the adoption of new welfare policies, such as the appraisal of people as resources for war and its attendant egalitarianism, did not follow the logic of class interests. In Japan and many other combatant states, the wartime expansion of public welfare won cross-class support in the post-war period and garnered the backing of political parties of diverse ideologies. Such support seems to reflect wartime values (and the national unity cabinets that they sometimes spawned) more than it does class interests or the political dominance of a labour party.

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War’s impact on welfare policy also asks hard questions of the ‘varieties of capitalism’ approach to welfare research. Practitioners of this approach analyse welfare programmes as complements to a country’s production system. Since national production systems presumably differ, this approach predicts a corresponding divergence between welfare systems. Although officials do adopt some welfare programmes in wartime to meet the needs of production, many new programmes address wartime concerns that are unrelated to production, such as the plight of fatherless families or the health of military conscripts. When war presents various states with similar welfare problems unrelated to production, those states may adopt similar welfare measures in response, no matter how much their production systems differ. In those instances, the prediction that different production systems generate divergent welfare policies will not hold true. The persistence of wartime welfare policies into the post-war period presents another problem for the ‘varieties of capitalism’ approach. To the extent that policymakers do devise wartime welfare programmes to complement production systems, it is wartime production systems, not post-war production systems, that they have in mind. Yet the ‘varieties of capitalism’ research on welfare policy in Japan analyses the fit between welfare policies originally adopted during or before the war and Japan’s post-war production systems. There are some continuities between wartime and post-war production systems, but there are also marked differences. It seems unlikely that welfare policies designed for wartime or pre-war production systems would mesh just as well with the different production systems of the post-war era. The fact that war may influence welfare policy differently from country to country is no excuse for its exclusion from every major theory of the welfare state. Monocausal, deterministic explanations of the evolution of welfare states are untenable (Carrier and Kendall 1977). None of the usual causes is decisive in every case. Social values, unsafe factory conditions, the rise of a powerful labour movement, mass political participation—none of these elements necessarily produces great advances in welfare policy. Nor does a long mass war. Once a country has attained the levels of wealth, technology, and administrative capacity required to sustain modern welfare policies, any one or several of these factors may stimulate policy innovation. A general theory that would explain the development of welfare states must recognize that the impact of war and these other elements, while far from random, will differ somewhat with time and place. The lesson of Japan’s experience is that long, mass wars may stand among the primary causes of the welfare state. The welfare state is not always the creation of paternalistic conservatives, humanitarian liberals, or labour activists. The history of many countries shows that war provides numerous stimuli for the making of welfare policy. In wartime Japan, the government may have done all the right things in welfare policy for all the wrong reasons, but that

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does not make the policies forged in that era any less important as linchpins of Japan’s modern welfare state. In many respects, these policies resemble those crafted elsewhere by peace-loving social democrats. As it happened, Japan’s wartime welfare policies made the transition to democratic, pacifist post-war Japan with little difficulty. It took Japan a decade to get its welfare programmes up and running again after the war, but it entered the era of its post-war economic miracle with a strong and enduring foundation in welfare policy.

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7 Foreign Policy on the Home Front War and the Development of the American Welfare State Robert P. Saldin

INTRODUCTION American engagement in foreign wars was a major force behind the growth of state capacities and social reforms in the age of mass warfare. This story is an important complement to the more familiar accounts of American state development that have centred on two expansionary periods. The first of these is the period between the Civil War and the introduction of the New Deal. It was during this time that critical administrative capacities were developed and the welfare state began to take form with new benefit programmes for military veterans and poor mothers (Skowronek 1982; Skocpol 1992). The second of these periods is that of the New Deal itself, when President Franklin Roosevelt led a transformation of the American state by instituting an array of new economic and social programmes along with the agencies to oversee them. These domestic-based accounts of US state development are, of course, essential to an understanding of American political development. But recent years have also seen a much-needed consideration of the ways in which international forces have also facilitated the development of the American state (Katznelson and Shefter 2002; Mayhew 2005; Saldin 2011; Sparrow 2011). It is notable that these changes occurred despite the fact that—with the exception of the Civil War—the US has not fought wars on its own territory. In contrast to many European states, then, these alterations to the American state came about even though there was no domestic destruction, no regime changes caused by war, and no social policy changes enforced by occupying powers. From the late nineteenth century through to the middle of the twentieth century, wars spurred state growth, public capacities, regulatory oversight, and social reforms. These changes drastically extended the sphere in which

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government operated, recasting American political, economic, and social life. Many of these changes were focused directly on veterans and the social problems that emerged in the aftermath of wars. Indeed, this era’s wars foreshadowed what Jennifer Mittelstadt has termed the ‘military welfare state’ that emerged following the Vietnam War. For instance, the introduction of health provisions for World War I veterans was the first form of government-sponsored healthcare. It also facilitated veteran mobilization to demand government assistance during the New Deal. Likewise, World War II led to the GI Bill, which launched millions of veterans into universities and, ultimately, into the middle-class. And while these programmes were limited to veterans, their existence gave legitimacy to the idea that government had a role to play in various realms of American social life (Mettler 2005; Mittelstadt 2015). Yet some of the changes were more broadly based. For instance, the overhaul of the federal revenue system and the rise of the American tax state are particularly illustrative and were important developments insofar as these transformations provided the basis for many of the other state expansions. Another, related thread running through America’s foreign entanglements in the age of mass warfare is the extension of more complete civil and social rights to those marginalized groups that contributed to the war effort. Because major wars place tremendous strains on state capacities and require personnel, it has often been necessary to reach out to previously underutilized segments of society. In the conflicts explored here, women’s service in World War I helped them earn the franchise, and African-American service during World War II and the Korean War led to civil rights advances and the desegregation of the military. In all of these cases, work in pursuit of these goals had been underway long before the war in question, particularly with regard to changing roles for women. But those efforts had yielded little and faced long odds prior to the conflicts. Only with war did the political and social environment shift in a favourable direction. This chapter proceeds chronologically, beginning with a brief contemplation of the Civil War and the origins of the American welfare state before considering the key developments emanating out of World War I, World War II, and the Korean War.¹

T H E C I V I L W A R AN D T H E OR I G I N S O F THE A MERICAN WELFARE S TATE While public education and assistance to the ‘worthy’ poor was widespread prior to the 1860s, it was the Civil War that launched the first major expansionary

¹ This chapter draws on Saldin 2011.

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episode of the American welfare state. These new social provisions were still targeted to groups deemed worthy of public assistance. Yet, as Theda Skocpol has demonstrated, the war produced a new demographic that was quickly elevated to the top of the list: Union veterans who had ‘saved the Nation’. This class of citizens—and their dependants—were rewarded with pensions that were quite generous. The tariff was an important instrument for funding these new benefits (Skocpol 1992, ch. 2). The Civil War was also notable in that it facilitated the introduction of the nation’s first income tax (Ratner 1967; Witte 1985). Instituted in 1862, it was progressive, with incomes over $600 taxed at 3 per cent and those at $10,000 or more taxed at 5 per cent. Two years later, the top rate was boosted up to 10 per cent. But in effect, many citizens were entirely exempt from this tax because their earnings fell below the $600 threshold. Once the Civil War was over, calls to abolish the income tax commenced and were eventually answered in 1872, yet the income tax stayed alive in intellectual discourse. In the early 1900s, a second stage of expansion—what Skocpol has termed ‘the maternalist era’—extended the scope of beneficiaries deemed worthy of public support (Skocpol 1992, pt. 3). Notably, broader efforts at pushing the USA toward a European-style welfare state during this era failed due to scepticism about the government’s ability to administer such policies honestly and efficiently. But due to the organizational capacity of women’s voluntary associations, children and mothers (and potential mothers) were a prominent exception to the rule. Important maternalist reforms included protections for women and children working in factories, compensated leave for new mothers, the establishment of the Children’s Bureau, milk inspection, education reforms, programmes to support health education for mothers and babies, and stateenacted laws protecting female workers (on the basis of ensuring their future as potential mothers). Prior to America’s entry into World War I, then, the US welfare state was weak relative to European standards, but important groundwork had been laid in the form of pensions and protections for slices of society deemed especially deserving. The war spurred other additions.

W O R L D WA R I The Great War began in 1914, but the USA didn’t join in until 1917 following the sinking of the RMS Lusitania and the issuing of the Zimmermann Telegram. Yet in the conflict’s final year and a half, Americans still suffered over 125,000 deaths on European soil. Prior to the war, American social provisions included a patchwork of programmes at local, state, and federal levels. These included public education, pensions for veterans and their dependants,

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means-tested public assistance, and various forms of support for mothers, children, and workers. Tariffs were a particularly important source of funding for the generous veteran pensions. However, these social programmes were not universal and often varied widely by location. World War I sparked important changes to this regime. The US regulatory state saw some development, most notably with the introduction of a permanent income tax, which was established as a direct outgrowth of the war. This enduring legacy established new and lasting layers of regulatory federal bureaucracy that continue to provide the national government with most of its revenue. The Great War also led to changes in social policy and the extension of voting rights to women.

A Collectivist Turn and the Development and Institutionalization of a Permanent Income Tax The US experience during World War I pushed the country in a collectivist direction, which the Progressives had been championing but which had been effectively resisted. The Progressive Movement was a loose coalition, which drew from both major political parties, called for a wide range of reforms including the regulation of big business and ‘trusts’, and advocated for a more equal distribution of wealth. As historian Daniel T. Rodgers has noted, progressive ideas were ‘catapulted by the war into a new world where the old shibboleths no longer carried force’ (Rodgers 1998, 286). New war-related economic regulations and initiatives were wide-ranging, particularly with regard to labour. The government implemented and oversaw the National War Labour Board, the War Industries Board, the Shipping Board, the Food and Fuel Administrations, military conscription, the construction of a stateowned shipping fleet, and implementation of railroad regulations. One illustrative and enduring war-wrought change was the permanent establishment of an income tax, a key plank of the Progressive agenda. The Democratic Party, too, was moving in a direction that favoured the income tax. Democrats had long opposed the tariff, but when they succeeded in having it reduced, they needed a plan for replacing the lost revenue. They latched onto income tax as a substitute. This move was consistent with a broader transformation in Democratic ideology that was more populist and class-based and favoured the redistribution of wealth (Gerring 1998, 169, 193–200). These shifts eventually facilitated the return of a permanent, though modest, income tax in 1913. Those making less than $4,000 a year were entirely exempt, with higher earners paying between 1 per cent and, for those earning over $500,000 annually, 7 per cent. This structure left all but 2 per cent of households off the hook, and the tariff and excise taxes still accounted for the vast majority of federal revenue (Witte 1985, 77; Brownlee

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1997, 60). In sum, prior to World War I, the income tax was characterized by its occasional use, low rates, high levels of exemption, and minor contributions to federal coffers. It was only with World War I that income tax developed into the leading source of federal revenue and gave structure and form to the American tax code as we know it (Witte 1985, 79). In a familiar pattern, the war quickly tapped available resources leaving the government in need of other revenue. The initial step in this direction took place prior to, but in anticipation of, America joining the war. The Revenue Act of 1916 increased revenue for war preparation by doubling the lowest tax rate to 2 per cent and raising the highest rate to 15 per cent. This income tax was altered again with the 1917 War Revenue Act. First, the $4,000 exemption, dating back to 1913, was cut to $2,000, thereby creating many new income tax payers. Additionally, the rates were raised again, along with the number of individuals included in each bracket. The top rate shot all the way up to 67 per cent. Corporate taxes were also raised. As a result of these alterations, federal revenue increased significantly, from $800 million in 1917 to $3.7 billion in 1918. And income tax became the largest source of federal revenue. Further changes were incorporated with the 1918 War Revenue Act, which saw the minimum rate increase to 5 per cent, earnings over $4,000 taxed at 12 per cent, and the maximum rate boosted to 77 per cent (Brownlee 1985, 173; Witte 1985, 84–5; Saldin 2011, 67–74). The significance of these World War I-wrought changes is worth noting. Many more individuals were paying income tax, although this still amounted to only 5 per cent of the total US population. Additionally, tax rates had increased substantially, with top income earners paying over ten times the pre-war levels. Following the end of the war, these rates were gradually reduced, but the top rate would never fall below 24 per cent again (Brumbaugh et al. 2005). World War I was central to the creation of this progressive income tax system. The war’s financial demands greatly accelerated the slow cycle of development that the US tax system has been on and instituted an entirely new tax regime. In sum, World War I was an event that sent progressive ideas for reform ‘leapfrogging over peacetime obstacles’ (Rodgers 1998, 286). The American regulatory state was brought to life with wide reach across the economy. Illustrative of this transformation was the institutionalization of the income tax, which would soon become the major source of US government revenue, replacing the tariff and excise taxes. This shift had the effect of raising more revenue and making enforcement easier. And its popularity was enhanced by its progressive structure. To be sure, the roots of the contemporary tax structure preceded World War I, but it was only with that conflict that the income tax matured. Before the war, the income tax generated less than 4 per cent of federal revenue, applied to just 1 per cent of American citizens, and carried a top rate of 7 per cent. Following the war, by contrast, the income tax generated almost 60 per cent of federal revenue, applied to a still modest but

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greatly increased 5 per cent of American citizens, and carried a top rate of 77 per cent. Ensuing years did see reductions to this war-based tax system, but it remained in place and the income tax has retained its position as the number one source of federal revenue to this day (Ratner 1967, 556 (see Table 1); Witte 1985, 86). This development was critical in the growth of the American state insofar as the precedent of an income tax was established and the public was reasonably comfortable with it. And this, in turn, led to growing state capacity for addressing issues that previously could only be met in the private sector. The ability to generate additional resources through the income tax and the enhanced profile of the federal government in society also signalled the emergence of the regulation state.

Social Policy and Women’s Suffrage World War I also galvanized the growing capacity of the state in the social sphere. The legitimacy of social insurance, for instance, benefited from the success of the War Risk Insurance Act and its creation of the Bureau of War Risk Insurance in the Treasury Department. This law established optional life insurance and disability insurance opportunities for military personnel. Additionally, the Temperance Movement realized its dream of a constitutional amendment mandating alcohol prohibition. The war whipped up anti-German sentiment and saw boycotts of products associated with that country, most notably beer and schnapps. Laws were also passed to conserve grain and prevent drunkenness in soldiers, by banning alcohol sales near military bases. This new patriotic and anti-German wartime environment gave prohibition the final push it needed, and this major social reform represented a new federal regulation in a realm that had previously been exclusively overseen by the states. Likewise, the labour movement enjoyed successes in the areas of increased minimum wages, regulations to protect workers and children, and state-assisted housing for shipyard and war munitions workers. Finally, with the end of the war came an effort known as ‘reconstruction’ in which progressives sought to maintain and institutionalize the wartime spirit and new extensions of the state into the economy and American society. While the Progressives’ utopian vision went unfulfilled, the USA did not simply revert back to the pre-war status quo (Davis 1967; Rodgers 1998, ch. 7; Saldin 2011, 74–8). World War I also extended the ‘maternalist’ policies that had been a hallmark of the prior round of welfare state development. Most notable here was the extension of the franchise to women. Like the maternalist advances prior to the war, suffrage represented an important early step in a still-ongoing process of re-evaluating gender roles in American society. While the iconic World War II-era image of Rosie the Riveter is well known, women played a nearly identical role in World War I. With many

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men joining the fight in Europe, women were called upon to step into the workforce and power the domestic war effort. This highly visible, mass contribution to a national cause from a readily identifiable group greatly accelerated the momentum behind the suffrage effort. Having played a critical role in the war effort, suffragists’ moral claim to having earned the franchise carried increased legitimacy and enhanced women’s status as deserving citizens. Of course, it seems certain that women would have eventually gained the right to vote in the absence of World War I, but there can be no doubt that the war greatly expedited the process. The Seneca Falls Convention of 1848 is generally seen as the beginning of the women’s movement (see, for instance, Keyssar 2000, 172–221). Growing out of the abolitionist and prohibition movements, the women’s cause was spearheaded by the National American Woman Suffrage Association (NAWSA). After running successful efforts to gain voting rights in a number of Western states in the 1890s, Congress considered a constitutional amendment in 1914, 1915, and 1916. These pre-war efforts failed to gain a majority in a single congressional chamber, let alone the much higher threshold for a constitutional amendment. But when the USA entered World War I, there was an opportunity to reshuffle the deck. In effect, the war aided the suffrage movement by allowing it the opportunity to help mobilize for the war, thereby countering the old argument that women did not deserve to vote because they did not fight to defend the country. And while few women literally took up arms, NAWSA played an important organizational role in coordinating volunteers, assembling and distributing food, selling bonds, producing clothes, and aiding the Red Cross (Keyssar 2000, 215–16). On an individual level, many women also contributed economically to the war effort by entering the workforce. A government propaganda campaign encouraged them to do exactly that. Wartime posters urged women to be ‘Our Second Line of Defense’, deemed them ‘The Girl Behind the Man Behind the Gun’, and reminded them that ‘Our Boys Need Sox, Knit Your Bit’ (Theofiles 1973, 151, 152, 165). Women heeded the call. One million took up new jobs, many of which contributed directly to the war effort. For instance, the number of women employed in manufacturing jobs doubled, while those working as servants, dressmakers, and laundresses declined steeply. This shift, however, was not easy and usually involved long workdays and less pay than men in the same positions. In sum, World War I saw women leave their normal jobs or their homes to contribute directly to the war economy. And through this mass movement, they established their importance during a time of national crisis. The war’s impact on America’s perceptions of women can be appreciated by understanding the transformation it induced in the thinking of a key figure, President Woodrow Wilson. Like most Democrats of his day, Wilson was a staunch opponent of women’s equality. During his first campaign for the presidency, he said that he was ‘definitely and irreconcilably opposed to

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woman suffrage’, that a ‘woman’s place was in the home, and the type of woman who took an active part in the suffrage agitation was totally abhorrent’ (Stockbridge 1924, 567). But World War I—and women’s key contributions to the American cause—shifted his thinking. And it certainly did not hurt that the NAWSA prominently supported Wilson’s war policy at a critical time when many citizens were beginning to express serious doubts (Behn 2012). In his statement of support for a constitutional amendment, he called the suffrage cause ‘an act of right and justice’ and ‘a vitally necessary war measure’ (Wilson 1984, 545; Wilson 1985, 160). Beyond the direct contributions women had made to the war effort, Wilson had also come to the conclusion that it was a moral necessity for the country to grant voting rights and that failing to do so might mean losing international prestige (Wilson 1985, 158–60). It was the war experience that led Wilson to change his view. ‘The women earned it,’ Wilson explained to his brother-in-law. He was ‘only sorry it had to come through war’ (Ferrell 1985, 220; see also Graham 1983–4, 674, 678; Kyvig 1996, 234). And Wilson’s evolution on the suffrage question helped the amendment eclipse the required two thirds threshold in Congress (Kyvig 1996, 234). The House quickly voted in favour of the amendment 274 to 136 in January 1918, a sharp turn away from its 174 to 204 tally from just two years earlier. But the upper chamber was more resistant, which led Wilson to rally for the cause by taking to the Senate floor in September 1918 to deliver an unprecedented and impromptu speech, which emphasized the connection between the war and women’s suffrage: [The amendment is] vitally essential to the successful prosecution of the great war of humanity in which we are engaged . . . We have made partners of the women in this war; shall we admit them only to a partnership of suffering and sacrifice and toil and not to a partnership of privilege and right? This war could not have been fought . . . if it had not been for the services of women . . . The tasks of the women lie at the very heart of the war . . . [and this amendment] is vital to the winning of the war and to the energies alike of preparation and of battle. (Wilson 1985, 158–60)

Wilson’s argument represented something of a twist on the traditional argument linking voting rights to military service. Wilson effectively extended the argument by saying that women deserved the vote based on their service to the country rather than dismissing their worthiness by noting their failure to take up arms for the cause. Yet despite Wilson’s best efforts, the amendment still fell three votes short in the Senate. But when a new Congress was in place several months later, the amendment passed through the House by an even wider tally than it previously had and by a 56 to 25 margin in the Senate. By the fall of 1920, three quarters of the states had ratified the Nineteenth Amendment granting voting rights to women (Kyvig 1996, 234; Keyssar 2000, 216–17).

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To be sure, suffrage marked a milestone in domestic social development in the World War I era, but it was merely one—albeit critical—part of a growing attention to gender roles and the family. Indeed, women’s suffrage could be viewed as an extension of the ‘maternalist’ welfare state that had begun emerging prior to the war. However, there was one important difference. Whereas the pre-war maternalist policies all sprung from the general observation that women, children, and families were uniquely vulnerable and therefore in need of special protections, voting rights had been earned by women’s contributions to World War I. In this manner, women’s suffrage represented a turn toward understanding gender roles on the basis of equality rather than in terms of distinct spheres based on relative vulnerability.

THE I NTERWAR PERIOD AND THE NEW DEAL The ‘reconstruction’ movement following World War I saw Progressives attempt to maintain and expand upon the collectivist gains they had made, particularly with regard to the war economy. Hopes were especially high for a fully fledged social insurance system. But the ‘war-radicalized’ labour movement came head-to-head with employers and other segments of society eager to return to the pre-war status quo. Federal agencies instituted during the war shut down. And while organized labour sought to capitalize on advances made during the war and appeared initially to have the upper hand amidst extensive strikes, a widespread pushback that connected labour with socialism was largely effective. Ultimately, then, the Progressive reconstruction agenda withered. However, important elements of the wartime changes endured. In particular, labour regulations and the labour movement were stronger after the war, the concept of state–business ventures endured, and the memory of wartime collectivism was nurtured and kept alive and would later provide inspiration for aspects of the New Deal (Rodgers 1998, ch. 7; Saldin 2011, ch. 7). While war has often been the catalyst for the expansion of state authority, it was a domestic crisis that provided the impetus for the most famous era of American welfare state development. The Great Depression crippled the US economy and swept Franklin Roosevelt and his Democratic Party into power in Washington. The president’s ‘New Deal’ agenda centred on expanding and directing government resources and regulatory capacity to confront the nation’s economic woes (Katznelson 2013). Key areas of focus included job creation, infrastructure projects, and assistance for the poor and the elderly. And of course, an array of new federal agencies was created to manage all of these initiatives. State interventions into the economy were plentiful and included banking reforms, stock market reforms, and aid to states and

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localities. The Wagner Act offered critical protections for collective bargaining by labour unions, and the Fair Labour Standards Act instituted a series of national labour standards such as the forty-hour working week, overtime regulations, limitations on child labour, and a minimum wage. Two New Deal social programmes stand out as particularly important. Social Security, which offers monthly living stipends to seniors, was passed in 1935 and stands today as America’s largest governmental programme. Over time, it also evolved into what is effectively the first universal social programme in the USA. The New Deal also instituted unemployment benefits. Under the auspices of Social Security, a cash benefit programme was implemented in which states administered the programme while the federal government provided the funding.

W O R L D WA R I I State capacities expanded greatly during World War II. Indeed, historian James T. Sparrow has pointed toward an array of war-wrought changes to argue that contrary to most accounts of American political development, it was President Roosevelt’s warfare state, rather than the New Deal, that created ‘big government’ in the USA (Sparrow 2011). The war ratcheted up the scope of national federal agencies, rapidly surpassing the reach of the New Deal programmes. New agencies like the War Production Board, the National War Labour Board, and the War Manpower Commission thrust the American state into the position of instituting and overseeing a vast war finance system that reshaped the economy and impacted day-to-day life. The government, for instance, exerted control over materials and resources deemed essential to the war effort and instituted systems of price control, wage control, and rationing. The Fair Employment Practices Commission oversaw the labour practices of firms receiving war contracts and placed the state in the position of overseeing and regulating workplace discrimination. Taken as a whole, the intrusion of these and related agencies into the American economy was extraordinary relative to anything that had come before. Another unprecedented extension of the state came in the form of a permanent peacetime draft in anticipation of the USA entering the war. This move reshaped the lives of young men for decades and provided a source of manpower that could be quickly tapped and put to use. By many measures, these changes exceeded those of the New Deal. For instance, federal outlays (as a percentage of GDP) during the war quadrupled those of the New Deal period. And while the New Deal’s welfare programmes touched 28.6 million Americans, mobilizing for the war fundamentally restructured daily life for the over 85 million citizens serving in the military, buying bonds, paying income tax, rationing key supplies, or working

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in support of the war effort. In short, American mobilization for World War II may have been built on the New Deal foundation, but it went much further. Equally as important, the war conferred legitimacy on the national state in a country with a long history of suspicion of centralized power. And with this reduced level of scepticism toward Washington came increased expectations about government entitlements.

The Growth of the State and the Modern, Mass-Based Income Tax Illustrating these wide-ranging expansions of state influence during World War II is the transformation of the income tax into the mass-based revenue source we know today. If the Great War institutionalized a permanent income tax, World War II saw it take on its modern and enduring form, moving from a tax on a small wealthy segment of the population to a mass-based tax. Prior to the conflict, only about 3 per cent of Americans—roughly four million people—paid the tax, meaning it was irrelevant to the vast majority of the country. But following World War II, income tax would become a feature of contemporary life for the average American. President Roosevelt initially wanted to continue with a tax-the-rich approach in which no one would be allowed to earn more than $25,000 a year (Witte 1985, 116). However, the president faced opposition in Congress and criticism that his plan would cause instability in the economy. Others favoured a national sales tax. The compromise, introduced with the Revenue Act of 1942, was a broad but progressive income tax that brought the middle-class into the fold. For instance, it lowered the exemption for couples to $1,200 and boosted the lowest tax rate by over 100 per cent. More than twice as many Americans became subject to the tax (Witte 1985, 117–18; Brownlee 1997, 90–1). The following year, Roosevelt hoped to significantly increase the tax’s progressivity and shift much more of the burden to the wealthy and corporations. But Congress rejected the president’s approach by carving out new exemptions for business and instituting only minor increases in individual rates. Roosevelt denounced Congress’ approach as ‘not a tax bill but a tax relief bill’ (Brownlee 1997, 93). He issued a veto, only to see it overridden. Roosevelt’s 1943 defeat represented a turning point in American tax history by cementing the basic structure of the income tax as a mass-based form of revenue that leaned heavily on the middle class. Progressives and New Dealers who wanted the entire tax burden to fall on the wealthy and corporations would have to reconcile themselves to a broader sharing of the load. The new tax structure put in place in 1942 dramatically reshaped federal revenues. Prior to the war, federal taxes brought in $2.2 billion; by 1945 this had jumped to $35.1 billion. Looked at from a different angle, tax revenue was

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now for the first time being directed mostly toward Washington. Before the war, only 16 per cent went to the federal Treasury with the rest used to fund state and local governments. But over half was being sent to Uncle Sam by 1950 (Brownlee 1997, 93). Finally, in yet another appreciation of the transformation, the new tax structure upended the sources of national revenue. Corporate and individual income taxes generated about 40 per cent of federal revenue before the war, but the figure for individual income tax had shot up to 75 per cent by the end of the war. Moreover, this basic sourcing of federal revenue remained in place for decades, though recently the Social Security tax has approached the income tax as the primary source of revenue (Witte 1985, 123). Of course, the shift was also felt by American citizens. Rates went up; deductions went down; new taxpayers were brought into the fold. The lowest income tax bracket carried a 24 per cent rate or roughly the same as the highest pre-war rate. Meanwhile, the highest earners were taxed at 93 per cent (Witte 1985, 177–8; Kennedy 1999, 624). Most citizens were affected. By the end of World War II, ten times as many people were paying income tax as before the war, amounting to 60 per cent of the workforce (an additional 30 per cent submitted annual tax returns) (Brownlee 1997, 93). There was an effort to win acceptance of the mass-based income tax at the cultural level. To help ease concerns that the tax would be perceived as an overwhelming burden, the 1942 tax went mostly uncollected. This was deemed necessary because implementing the payroll deduction programme created a situation in which taxes for 1942 were due in full under the old system just after 1 January 1943, the same time at which withholding began. To ease this burden and undercut charges of ‘double taxation’, the 1942 tax was simply eliminated for most Americans, and even those still liable only had to pay 25 per cent of what they would have previously owed (Ratner 1967, 517). A second front in the effort to gain acceptance of the tax played to Americans’ sense of patriotic duty (Jones 1989). Previously, the income tax had a populist, class-based appeal because it only required the wealthy to pay. Roosevelt and others argued that the tax was a means of correcting for concentrated wealth. But this source of popularity would no longer work for a mass-based tax. To gin up a new foundation of support, the administration turned to a patriotic advertising campaign that blanketed print media and radio. Slogans like ‘Taxes to Beat the Axis’ became ubiquitous. Roy Rogers told his radio listeners: ‘Your income tax money pays for Victory.’ And Irving Berlin was tapped to write a new song, entitled ‘I Paid My Income Tax Today’ (Jones 1996, 114). In sum, World War II sparked the creation of the mass-based income tax on which the American welfare state has relied ever since. And while this development marked a critically important step in the growth of American

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state capacities, it was only one of many war-induced transformations of the role of the federal government. Notably, these developments did not merely extend the state’s reach into new areas. They also established new precedents for the types of activities that were seen as legitimate for the government to undertake. And, just as importantly, because American citizens had sacrificed for the war effort—be it on the front lines, in the factories, as consumers, as tax payers, or as bond buyers—the wartime state expansion instilled among citizens a sense of having earned new state-distributed privileges of one sort or another. In other words, it provoked citizens to expect and demand more of their government.

African American Civil Rights World War II also brought civil rights advances for African Americans. Like women in the Great War, black Americans contributed to the war effort in valuable ways and also benefited from a favourable shift in moral and intellectual discourse that developed out of the war. Marcus Garvey predicted that a war could have these kinds of effects for black America two decades before the attack on Pearl Harbor: I do hope for war; I am not such a Christian as not to desire war at this time. I am that Christian that believes that [except] for the shedding of blood there will be no remission of sins [and that it will] be the agent through whom four hundred million Negroes see salvation, and if it comes to-morrow, or the next day or a month from now, I am praying that it will come because only through the coming of another great war in Europe will we get the opportunity to strike the blow for our freedom. (Quoted in Tucker 1986, 43)

Three developments during World War II brought Garvey’s vision closer to reality. African Americans’ service in the military initiated changes in white attitudes. Additionally, the war was leveraged by black leaders on the home front. Finally, the war altered the intellectual environment by highlighting the hypocrisy of fighting for freedom abroad while tolerating race-based discrimination at home. At the outset of the war, African Americans were not considered to be desirable as military personnel because they were assumed to be unreliable and likely to flee under pressure or even to assist the enemy (Kennedy 1999, 772). But as the war dragged on, manpower shortages forced the military to take a broader view in its efforts to plug holes. As such, a million black Americans served in the US armed forces with millions more working in the defence industry (on this topic, see Motley 1975; Klinkner and Smith 1999, 161–201; Keyssar 2000, 244–53). In some respects this was not new. African Americans had served in previous American wars, but they had been segregated and were

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usually placed in temporary positions. Black regiments were typically disbanded once wartime crises ended. Indeed, prior to World War II, there were no black Americans serving in the Marines or the Army Air Corps with only a small handful serving in the navy, and then only in the dining facilities. By 1942, all branches of the military technically allowed black Americans to serve, but literacy tests and other measures placed significant limits on their participation. By 1943, 300,000 African Americans applicants had been rejected, and those who were allowed to serve did so in segregated units tasked with support work far from the front lines. However, after the Battle of the Bulge in 1944, the army was depleted and needed to utilize black Americans as replacement soldiers. Dozens of African American platoons were quickly assembled and served alongside white platoons in the same companies. Similar manpower issues plagued the navy and air force, both of which then turned to black personnel to fill the gaps (Kennedy 1999, 773). These changes were undertaken reluctantly, but they were necessary for successful prosecution of the war. General George Patton captured the spirit of the times, remarking: ‘I don’t care what color you are, so long as you go up there and kill those Kraut sonsabitches’ (Lee 1963, 611). Indeed, it was this practical sensibility, as opposed to crusading idealism, that was the determinative consideration in permitting black Americans to serve more broadly in the armed forces. Whatever the motivation for these changes, there is evidence that it produced at least some shift in racial attitudes among whites, though one recent study has found that these effects were less dramatic than has sometimes been claimed (see White 2016). For instance, a survey of white service members found that while 64 per cent of respondents initially had unfavourable attitudes towards serving with African American units, 77 per cent reported ‘more favourable’ feelings after doing so and none reported feeling ‘less favourable’ (Klinkner and Smith 1999, 190). The war also spurred organizing efforts in the black community thereby laying some of the rhetorical, procedural, and institutional foundations for the Civil Rights Movement. Philip Randolph and others were well aware that the war provided a good backdrop for advancing African American civil rights. His assessment was that the nation was in need, and that if the African American community was going to assist in the war effort, they should get something out of it (Randolph 2014). Randolph’s appeal was grounded in the quintessential American rhetoric of rights, citizenship, and national unity. A similar sentiment appeared in America’s pre-eminent black newspaper just after the country had entered World War II: ‘What an opportunity this crisis has been and still is for one to persuade, embarrass, compel and shame our government and our nation . . . into a more enlightened attitude toward a tenth of its people!’ (Pittsburgh Courier 1942, ‘Voiceless in Congress’, 6; see also Dalfiume 1968, 96–7).

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Using this backdrop, civil rights groups were organized with the understanding that the war called for great sacrifices but also offered the opportunity for leveraging those sacrifices in the pursuit of civil rights. It was an opportunity that could not be passed up (Klinkner and Smith 1999, 164; see also Sitkoff 1981b, 11; Dittmer 1994, 1–18). One notable step was the formation of the Congress of Racial Equality in 1942 (see Meier and Rudwick 1975). This group organized protests for the integration of public facilities and bolstered its organizational presence in the North-East and Midwest. The long-established National Association for the Advancement of Colored People saw its membership climb tenfold during the war (see Gilber 2007). This activism and organization helped establish the procedures, grounded in non-violence, that would go on to become a foundation of the Civil Rights Movement (Klinkner and Smith 1999, 165; see also Meier and Rudwick 1975). Finally, World War II ushered in a new moral and intellectual climate that was more conducive to policy changes benefiting minorities. Motivating this shift were unflattering comparisons between the USA and Nazi Germany. In this realm of ideas, Adolf Hitler denounced America as unintelligent, mediocre, and doomed by racial mixing (Kennedy 1999, 392). He said: ‘I don’t see much future for the Americans . . . It’s a decayed country. And they have their racial problem, and the problem of social inequalities . . . American society [is] half Judaized, and the other half Negrified. How can one expect a State like that to hold together?’ (Shirer 1960, n. 895). The USA took this critique in stride and asserted its moral superiority and commitment to democracy (Keyssar 2000, 245). But leaders in the African American community highlighted the issue as well. For example, journalist Horace Cayton claimed that ‘the only difference between Hitler’s plans for non-Aryans (were he to win the war) and the treatment of African-Americans in the South was that Hitler was talking in future terms, while in the South the treatment was current practice’ (Layton 2000, 40; see also 39–41). As such, World War II highlighted some of the contradictions between American ideals and American reality, thereby delegitimizing racial supremacy. One telling example was the reaction to a joint statement issued by Roosevelt and British Prime Minister Winston Churchill to identify eight ‘common principles in the national policies’ of the two countries ‘on which they base their hopes for a better future for the world’ (Churchill and Roosevelt 1950, 314). These principles included respecting ‘the right of all peoples to choose the form of government under which they will live; and [the USA and Britain] wish to see sovereign rights and self-government restored to those who have been forcibly deprived of them’ (Churchill and Roosevelt 1950, 314). The American intellectual class was not particularly impressed. The New Republic, for instance, noted that Jim Crow laws and other forms of discrimination on the home front made a ‘mockery of the theory that we are fighting for

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democracy, and we are giving aid and comfort to the enemy thereby’ (1942, ‘Back to Jim Crow’, 221). Likewise, The Nation asserted: It is time for us to clear our minds and hearts of the contradictions that are rotting our moral position and undermining our purpose. We cannot fight fascism abroad while turning a blind eye to fascism at home. We cannot inscribe on our banners: ‘For democracy and a caste system.’ We cannot liberate oppressed peoples while maintaining the right to oppress our own minorities. (1943, ‘Defeat at Detroit’, 4)

In sum, the altered intellectual climate produced by World War II brought racial issues to the forefront of American consciousness, changed the discourse surrounding it, and laid the groundwork for the Civil Rights Movement. The war highlighted embarrassing contradictions embedded in America’s claims of moral superiority. It also forced the military’s hand when manpower shortages necessitated enlisting black Americans in large numbers. This new attention to race also led to new discussions of policy. In particular, it led to a consideration of whether African Americans’ wartime service required a reassessment of their treatment at home. Their participation in the war effort created a compelling rationale for extending new rights. As had been the case with various other groups seen to be contributing and sacrificing in support of a war effort, black Americans were rewarded. As noted earlier, reforms in the military were critical advances, but even more important were the war’s effects on labour and voting rights. New labour policies were put in place because of the war experience. Highly paid skilled labour opportunities in the defence industry opened up and the number of black Americans working in this area increased dramatically. Federal government initiatives were designed to boost black employment and facilitated this change. For instance, the War Labour Board prohibited race-based wage differences (Klinkner and Smith 1999, 191–2). And the National Labour Relations Board quit certifying labour unions that placed restrictions on black membership. Similarly, the US Employment Service barred listing jobs on the basis of race (Polenberg 1972, 116–17; Klinkner and Smith 1999, 191). All told, these changes put the federal government in the position of enforcing a broad anti-discrimination policy for the first time (Collins 2003, 28). But the most important World War II-induced policy changes for African Americans probably came in the area of voting rights. Just as women had won the vote after their efforts in support of World War I, black service members in World War II won enhanced voting rights as a result of their participation. The Soldier Voting Act of 1942 was one major policy change. It nationalized the right of soldiers to cast absentee ballots and eliminated the poll tax, a device that effectively decreased black citizens’ ability to vote in the South.

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There had been previous efforts to ban the poll tax, but they had made little progress due to resistance from Southern Democrats. However, calculations changed when America entered World War II. Opposition to ending the poll tax for soldiers fighting abroad was hard to justify and came to be seen as antisoldier and unpatriotic (Lawson 1976, 66). With the war as a backdrop, the bill became law and represented a turning point in the drive for black voting rights (Keyssar 2000, 247). The Soldier Voting Act was the first expansion of voting rights for African Americans since Reconstruction. A second major change in this area came from the US Supreme Court in the 1944 case Smith v. Allwright (1944, Smith v. Allwright, 321 U.S. 649, No. 51).² The 8 to 1 decision reversed Grovey v. Townsend, which had concluded that because political parties were private associations, they were not bound by anti-discrimination requirements in the Fifteenth Amendment (1935, Grovey v. Townsend, 295 U.S. 45, No. 563).³ By contrast, Smith deemed the ‘white primary’ unconstitutional. Arthur Krock reported in the New York Times that ‘[t]he real reason for the overturn [was] that the common sacrifices of wartime have turned public opinion and the court against previously sustained devices to exclude minorities from any privilege of citisenship the majority enjoys’ (Krock 1944, 20; see also Elliot 1974, 78–80; Sitkoff 1981a, 229–37; Keyssar 2000, 248; McMahon 2000; McMahon 2004). Indeed, as historian Darlene Clark Hine has written, the ‘white primary was one of the first casualties of World War II’ (Hine 1979, 236–7). The Smith decision ushered in significant change. From 1940 to 1952, the number of black Americans registered to vote in the South quadrupled. And these new voters were permitted to participate in the all-important Democratic primary (Klinkner and Smith 1999, 195). In important ways, Smith also laid the groundwork for Brown v. Board of Education a decade later.⁴ To be sure, African Americans still had a long way to go in gaining full voting rights, but World War II helped initiate a process that would eventually lead to the Civil Rights Movement, Brown, and the Voting Rights Act of 1965.

THE P OST-WAR PERIOD As had been the case following the Great War, the end of World War II raised the question of which elements of the wartime state would remain in place and which would be cast aside in favour of a return to the old status quo. This time, much of it endured. Most broadly, the concept behind Roosevelt’s ‘Second Bill ² https://supreme.justia.com/cases/federal/us/321/649/case.html. ³ https://supreme.justia.com/cases/federal/us/295/45/case.html. ⁴ https://supreme.justia.com/cases/federal/us/347/483/case.html.

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of Rights’—that Americans were entitled to a number of new rights that went beyond those encapsulated in the Constitution—took root in the American mind. Announced during his 1944 State of the Union Address, the speech would have been unthinkable prior to the war in the way it reset the relationship between the citizen and the state. The new rights that Roosevelt pointed to were all geared around an expanded welfare state, including healthcare, education, housing, and employment. The war-forged mass-based tax system also remained in place to help finance these new state aspirations. A number of programmes were targeted toward returning veterans. For example, they enjoyed preferences in employment that facilitated improved life chances. But perhaps the most important programme for returning soldiers was the GI Bill. It provided an array of benefits designed to reward the sacrifices made by veterans. The centrepiece of the legislation was tuition coverage to enrol in college or pursue other educational opportunities. The GI Bill also included provisions for low-interest home and business loans and unemployment benefits. This legislation was transformative for many veterans and their families, paving their way into the middle class. Moreover, while this programme was exclusively directed at former service members, like other areas of wartime state expansion, it set a precedent and expectation that the government had a role to play in the provision of education and housing for its citizens. It thereby laid the groundwork for future expansionary episodes (Sparrow 2011, ch. 7; Mittelstadt 2015, 4). However, progressive aspirations for a broader set of social programmes did not come to pass. Most notably, health reform failed. It has been argued that, following World War II, the US welfare state had an opportunity to develop in a way that was much more in keeping with the trajectory of most other developed countries. But any momentum in a social democratic direction was stymied with the emergence of the Cold War (Bell 2010).

THE KOREAN W AR The Korean War was one of America’s two significant hot wars within the larger Cold War. It is known as the ‘forgotten war’ in the USA because it was sandwiched between the great triumph of World War II and the great tragedy of Vietnam. Yet, like the world wars before it, Korea had significant domestic ramifications. It appears to have been important, for instance, in the trade-off between spending on ‘guns and butter’. During America’s engagement in Korea, there was a decline in social spending (Hartman 1973; Domke et al. 1983). However, it also spurred a further extension of democratic rights to a marginalized group that contributed to the war effort.

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Integrating the Military Considerable scholarship has explored the connection between the decadeslong Cold War and civil rights advances for African Americans (Klinkner and Smith 1999, chs 7 & 8; Layton 2000, see especially ch. 2 & p. 150; see also Dudsiak 2000; Borstelmann 2001; Plummer 2003). Like the World War II case, the general thrust of the literature suggests that domestic racial discrimination contradicted the American promotion of freedom and equality abroad. And yet the Korean War, like other armed conflicts requiring the participation of marginalized groups, led to the integration of the US army. The effort actually began two years before the Korean War broke out, when President Harry S. Truman issued Executive Order 9981 in July of 1948 (Gardner 2002, 105–21; see also Moskos 1969; Moskos and Butler 1996). The order brought a formal end to segregation in the military, stating: ‘It is hereby declared to be the policy of the President that there shall be equality of treatment and opportunity for all persons in the armed services without regard to race, color, religion or national origin. This policy shall be put into effect as rapidly as possible’ (Truman 2017b). Yet the army ignored the order. General Omar Bradley, the president’s army Chief of Staff, captured the prevailing sentiment when he publicly attacked the Executive Order, saying: ‘The Army is not out to make any social reforms. The Army will put men of different races in different companies. It will change that policy when the Nation as a whole changes it’ (Dalfiume 1969, 172). According to the New York Times, this resistance to Truman’s order was widely supported within the army by both black and white Americans alike where the consensus held that integration would harm morale and efficiency (Baldwin 1948, 51). In sum, despite Truman’s order, the army was committed to maintaining segregation and there was no easy way to force it to abandon the practice (Dalfiume 1969, 175, 178, 182; Klinkner and Smith 1999, 323). But the outbreak of the Korean War shook up the status quo. The biggest revelation was that—faced with the need to quickly mobilize for war— segregation was inefficient. This became apparent at army training camps. South Carolina’s Fort Jackson, for instance, had to process massive numbers of new recruits and, according to one commander, found it ‘totally impractical to sort them out’ according to race. As a result, integration began informally. When it was deemed a success, staffers from the Department of the Army went to Fort Jackson to learn how they had handled the task. Then, on 18 March 1951, all army basic training camps were officially desegregated (Dalfiume 1969, 203, 209). Over on the Korean peninsula, there was a similar process at work. Like the navy during World War II, the army quickly altered its stance on segregation as casualties mounted. These casualties hit white units disproportionately because they were seen as more reliable and were therefore sent to the front.

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Black units, meanwhile, were largely relegated to support roles far from combat and therefore took few losses. Given the situation, commanders began plugging holes in white units with black soldiers on an informal basis. According to one officer, ‘forces of circumstance’ provoked the move. ‘We had no replacements . . . We would have been doing ourselves a disservice to permit [black] soldiers to lie around in rear areas at the expense of still further weakening of our [white] rifle companies’ (Lee 1954, 112). The unofficially integrated units proved to be effective in combat and, with the persistent shortage of troops, the army continued its policy of informal desegregation (Dalfiume 1969, 209). While efficiency and manpower shortages were the initial reasons for integrating the army, a new rationale emerged as the war went on. This was that African Americans deserved equality because of their wartime sacrifices; they had earned it. The New York Times’ Arthur Krock wrote that ‘recognizing racial prejudice and establishing racial inferiority among Americans who have assumed the risk of dying for their country, freely or by draft, is a system as repugnant to decency as to democracy’ (Krock 1950, 24). And President Truman made similar points in arguing that segregation in the armed forces was ‘morally wrong’ (Truman 2017a). In early 1952, the army began integration on an official basis. The process was completed by late 1953 when almost all black soldiers were in integrated units (Dalfiume 1969, 218–19).

CO NCLUSION International crises have often facilitated domestic social reforms and the development of the American state. Outside of periods of upheaval, the protection of liberty and scepticism of centralized government have made building state capacities and social reforms difficult. But wars have a way of breaking down those formidable barriers. In the American case, wars spurred state development and capacities, new regulations, and social reforms through a number of mechanisms. Wartime legacies are especially evident. Actions undertaken under emergency wartime conditions have often stuck around, at least in some form. At other times, the legacies of actions taken during wartime have served as a model and rationale for future developments. American wars have also witnessed altered social structures and have seen pushes toward democratization in the form of extending fuller social and political citizenship rights to members of groups that contributed to the war effort. The rise of the tax and regulatory states was intricately tied to wars. And the US system of higher education was overhauled—and the American middle-class greatly expanded—with the GI Bill, following World War II.

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The wars explored here required levels of funding and personnel in excess of available resources. The obvious recourse was to increase state capacities, create new institutions, and incorporate marginalized groups more fully into society as citizens from whom sacrifices were required and to whom new rights were conferred. Taken cumulatively, these alterations to the American state and its welfare system expanded the realm of government activity and reshaped the norms and expectations of its citizens. Among other things, the wartime experiences expanded Americans’ sense of what were proper and appropriate activities and spheres of society for government to be engaged in. As transformative as war has been in American history, relative to many of the other countries explored in this volume, the USA has been shielded from some of the devastating effects experienced elsewhere. Because wars during the period in question were not fought on American soil (with the exception of the Pearl Harbor attack), the US was spared many of the ruinous consequences that might have led to even more sweeping changes. And yet it is still undoubtedly the case that the American state was transformed as a result of war.

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Dalfiume, Richard M. 1968. ‘The “Forgotten Years” of the Negro Revolution’. Journal of American History 55: 90–106. Dalfiume, Richard M. 1969. Desegregation of the U.S. Armed Forces: Fighting on Two Fronts, 1939–1953. Columbia, MO: University of Missouri Press. Davis, Allen F. 1967. ‘Welfare, Reform, and World War I’. American Quarterly 19: 516–33. Dittmer, John. 1994. Local People: The Struggle for Civil Rights in Mississippi. Urbana, IL: University of Illinois Press. Domke, William K., Richard C. Eichenberg, and Catherine M Kelleher. 1983. ‘The Illusion of Choice: Defense and Welfare in Advanced Industrial Democracies, 1948–1978’. American Political Science Review 77: 19–35. Dudziak, Mary L. 2000. Cold War Civil Rights: Race and the Image of American Democracy. Princeton, NJ: Princeton University Press. Elliott, Ward E. Y. 1974. The Rise of Guardian Democracy: The Supreme Court’s Role in Voting Rights Disputes, 1845–1969. Cambridge, MA: Harvard University Press. Ferrell, Robert H. 1985. Woodrow Wilson and World War I. New York, NY: Harper & Row. Gardner, Michael R. 2002. Harry Truman and Civil Rights: Moral Courage and Political Risk. Carbondale, IL: Southern Illinois University Press. Gerring, John. 1998. Party Ideologies in America, 1828–1996. New York, NY: Cambridge University Press. Graham, Sally Hunter. 1983–4. ‘Woodrow Wilson, Alice Paul, and the Woman Suffrage Movement’. Political Science Quarterly 98: 665–79. Hartman, Stephen W. 1973. ‘The Impact of Defense Expenditures on the Domestic American Economy, 1946–1972’. Public Administration Review 33: 379–90. Hine, Darlene Clark. 1979. Black Victory: The Rise and Fall of the White Primary in Texas. Millwood, NY: KTO Press. Jonas, Gilbert. 2007. Freedom’s Sword: The NAACP and the Struggle Against Racism, 1909–1969. New York, NY: Routledge. Jones, Carolyn C. 1989. ‘Class Tax to Mass Tax: The Role of Propaganda in the Expansion of the Income Tax during World War II’. Buffalo Law Review 37: 685–737. Jones, Carolyn C. 1996. ‘Mass-Based Income Taxation: Creating a Taxpayer Culture, 1940–1952’. In Funding the Modern American State, 1941–1995: The Rise and Fall of the Era of Easy Finance, edited by W. Elliot Brownlee, 107–47. New York, NY: Cambridge University Press. Katznelson, Ira. 2013. Fear Itself: The New Deal and the Origins of Our Time. New York, NY: W.W. Norton. Katznelson, Ira and Martin Shefter, eds. 2002. Shaped by War and Trade: International Influences on American Political Development. Princeton, NJ: Princeton University Press. Kennedy, David M. 1999. Freedom From Fear: The American People in Depression and War, 1929–1945. New York, NY: Oxford University Press. Keyssar, Alexander. 2000. The Right to Vote: The Contested History of Democracy in the United States. New York, NY: Basic Books. Klinkner, Philip A. and Rogers M. Smith. 1999. The Unsteady March: The Rise and Decline of Racial Equality in America. Chicago, IL: University of Chicago Press.

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Shirer, William L. 1960. The Rise and Fall of the Third Reich. New York, NY: Simon and Schuster. Sitkoff, Harvard. 1981a. A New Deal for Blacks. New York, NY: Oxford University Press. Sitkoff, Harvard. 1981b. The Struggle for Black Equality, 1954–1980. New York, NY: Hill and Wang. Skocpol, Theda. 1992. Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States. Cambridge, MA: Harvard University Press. Skowronek, Stephen. 1982. Building a New American State: The Expansion of National Administrative Capacities, 1877–1920. New York, NY: Cambridge University Press. Sparrow, James T. 2011. Warfare State: World War II Americans and the Age of Big Government. New York, NY: Oxford University Press. Stockbridge, Frank Parker. 1924. ‘How Woodrow Wilson Won His Nomination’. Current History 20: 561–72. Theofiles, George. 1973. American Posters of World War I. New York, NY: Dafran House. Truman, Harry S. 2017a. ‘Address in Harlem, New York, Upon Receiving the Franklin Roosevelt Award’. Public Papers of the President (11 October 1952). Truman Presidential Museum and Library Online Archive, accessed 26 April 2017: https:// www.trumanlibrary.org/publicpapers/index.php?pid=2278&st=Roosevelt&st1%20=. Truman, Harry S. 2017b. ‘Executive Order 9981’. Public Papers of the President (26 July 1948). Truman Presidential Museum and Library Online Archive, accessed 26 April 2017: https://www.trumanlibrary.org/executiveorders/index.php?pid=869& st=Executive+Order+9981&st1=. Tucker, Joseph G. 1986. ‘Report by Special Agent Joseph G. Tucker’, 7 October 1922. In The Marcus Garvey and Universal Negro Improvement Association Papers, Vol. 5: September 1922–August 1924, edited by Robert A Hill, 31. Berkeley, CA: University of California Press. White, Steven. 2016. ‘Civil Rights, World War II, and U.S. Public Opinion’. Studies in American Political Development 30: 38–61. Wilson, W. 1984. ‘A Statement’, 9 January 1918. In The Papers of Woodrow Wilson: Vol. 45, edited by Arthur S. Link. Princeton, NJ: Princeton University Press. Wilson, W. 1985. ‘An Address to the Senate’, 30 September 1918. In The Papers of Woodrow Wilson: Vol. 51, edited by Arthur S. Link. Princeton, NJ: Princeton University Press. Witte, John F. 1985. The Politics and Development of the Federal Income Tax. Madison, WI: University of Wisconsin Press. Newspapers The Nation. 1943. ‘Defeat at Detroit’. 3 July. The New Republic. 1942. ‘Back to Jim Crow’. 16 February. Pittsburgh Courier. 1942. ‘Voiceless in Congress’. 10 January. US Supreme Court Cases 1935. Grovey v. Townsend, 295 U.S. 45 No. 563. 1944. Smith v. Allwright, 321 U.S. 649, No. 51. 1954. Brown v. Board of Education, 347 U.S. 483.

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8 War and the Development of the British Welfare State David Edgerton

INTRODUCTION The standard history of the British welfare state, in which a particular argument about the effect of war was central, was first outlined by Richard Titmuss in the 1950s. Titmuss’s story is one of ‘the great surge in legislation . . . during the decade before the First World War’ and then of ‘the second great revolution of this century in social care, beginning after Dunkirk and quickening into effect after 1945, [which] continued the process’ (Titmuss 1958, 22). War was involved in both revolutions. The poor quality of recruits to the Anglo-Boer War led to school medical inspections, school meals in elementary schools, and efforts to reduce infant mortality (Titmuss 1958, 81). World War II had a more general effect, for it depended on ‘virtually the effort of all citizens’, united by calls for ‘social justice’ (Titmuss 1958, 82). In World War II, the ‘social measures that were developed during the war centred on the primary needs of the whole population irrespective of class, creed or military category’ (Titmuss 1958, 82). A comprehensive system of medical care for those ‘injured and disabled’ (Titmuss 1958, 82–3) was introduced. In food policy ‘it was no longer thought appropriate for members of the Armed Forces to receive better diets than the civilian population’ (Titmuss 1958, 83). The trend was towards ‘universalising public provision’; the reforms of the 1940s were the result in part of wartime strategy, which needed to ‘fuse and unify the conditions of life of civilians and non-civilians alike’ with a particular emphasis on support for dependants (Titmuss 1958, 83–4). By contrast, the Anglo-Boer War and World War I (though not World War II) are seen by Titmuss as imposing costs down to the 1950s, including war pensions and widow’s benefits (Titmuss 1958, 80). The only positive effect of World War I, he notes, is the creation of facilities for both civilians and soldiers for the treatment of venereal disease (Titmuss 1958, 82). This account continues to structure textbook

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accounts to this day (see, for example, Fraser 2003; more nuanced in Harris 2004), though the positive effects of World War I have become more prominent, and World War II has been treated more critically. Since Titmuss’s time the story of the welfare state has become very closely bound up with the history of the state in general, such that for the twentieth century the British state is a proto- or actual welfare state in the dominant social democratic historiography (Edgerton 2006, ch. 7). The standard account has been criticized in many ways, with historians’ reservations generally entered as caveats in the standard story rather than overturning it. Yet some historical work clearly casts doubt on the validity of the whole standard narrative. Some of the most important revisions for the arguments to be presented here concern gender—especially around and during the Great War (Pedersen 1993; Thane 2000)—and work on the history of pensions, especially, which stresses the significance of the 1920s (Macnicol 1998), as well as work on other aspects of welfare and war. The overall effect of these and other critiques is to make the history of the welfare state distinctively less celebratory. It is also to highlight key features and principles that were not at the fore previously—the focus on the support of the employed breadwinner (and all the many implications this had for gender relations) and on the importance of the flat-rate contribution and benefit insurance principle, which was at the heart of the new welfare state. These twin revisions highlight the neglected significance of the 1920s—making this, not the Edwardian or World War II years, the key period of development. It was this system of social services that Sir William Beveridge’s 1942 scheme rationalized and extended. In noting this, we might also discern some neglected aspects of the new welfare system of the 1940s in particular, the crucial ones not involving insurance. For the study of the effect of war, then, the Great War emerges as significant in ways the older historiography does not recognize. The political complexion and values involved change radically too, from New Liberalism and Social Democracy to Conservatism. Another set of historiographical developments recognize the continuing and evolving importance of local government welfare services, which have been neglected in accounts centred on national legislation, and look in particular at health provision, again highlighting the significance of the interwar years (Pickstone 1985). Another revision has highlighted the role of the warfare state in both war and peace, a state that had at least as great a significance in shaping the development of the British state as the welfare state. For example, the warfare– welfare spending ratio was higher in the 1940s and 1950s than in the interwar years. Furthermore, contrary to the implication of universalism, there were distinct systems of welfare support for those engaged in the warfare state compared to the mass of the population (Edgerton 2006, 286–93; Edgerton 2011a; 2011b). This perspective opens up for the British case what has

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been obvious for others—that war increased the power, influence, and cost of the military. In this paper I develop two existing challenges to the older story which highlight, first, the systematic differences between welfare policies for the armed forces and for civilians (a point glossed over for World War II, not least by Titmuss), and second, the significance of the generalization of the insurance principle in working-class welfare in the 1920s. The classical arguments thus appear misleading in important respects, though some elements appear more important than before (notably the universalism of Beveridge’s proposals). The post-World War II British system, seen as being created on the basis of the 1942 Beveridge Report, then and since famous well beyond Britain, is known in the comparative literature as universal, cheap to administer, and decidedly lacking in generosity (Baldwin 1990; Esping-Andersen 1990; but see Kasza 2002). Yet it is a mistake to view this system as a product of World War II: a near-universal welfare system of Beveridgean character was created in the 1920s. What was distinctive about the 1940s was not merely a more radical universalism, but the full state administration of the system, and tax-funded and nationalized systems of healthcare and national assistance. If we need to push key aspects of Beveridgism backwards in time, we need to recognize that a second key conceptual tool associated with Britain, the notion of the ‘welfare state’ itself, needs to be pushed forward. In its modern sense such a concept was unknown to contemporaries until the 1950s. The term ‘welfare state’ appeared in English for the first time in the 1920s. It was used initially in the work of the then bishop of Manchester, William Temple, in 1928, meaning something like a democratic state in contrast to a power state. It was also in this sense that Sir Alfred Zimmern, Montague Burton Professor of International Relations at the University of Oxford between 1930 and 1944, used the term (Edgerton 2006, 59–60; Petersen and Petersen 2013, 45). It was a concept utterly disconnected from the ‘social services’, as can be seen from the fact that Temple and others did not use the term when writing about the social services (Petersen and Petersen 2013, 45–7). In fact it was rarely used until the 1950s, and when it was employed it was usually adopted critically, in the modern sense. However, in the context of the Cold War it quickly became well established as a positive term to describe both particular civil functions of the state and, increasingly, the state itself. ‘Welfare state’ became the central concept used to think about the post-war state, and especially the British state (Edgerton 2006), allied to the names not only of Beveridge but also of John Maynard Keynes. It is also, as Titmuss recognized, though not sufficiently in his historical account, that there was not one welfare system, but many, suggesting the limits of the concept of universalism. Titmuss himself noted the very great significance of the ‘fiscal welfare state’ in the British case (though it remains massively understudied) and indeed of the very generous welfare and pension

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for public sector employees, for example those of the National Health Service, pointing sharply to the distinctions made between being employed by the welfare state and being subject to it (Titmuss 1958, 25).

BEFORE THE GREAT WAR In 1900, Britain was the most urban and least agricultural large economy on the globe—it had as many coal miners as agricultural workers. Indeed it had a uniquely well-organized and large working class, with strong unions, though no significant socialist party, and many voluntary (and commercial) workingclass savings and insurance organizations. The United Kingdom followed a policy of free trade, the only major economy to do so, and internally too the economy was very lightly regulated and the state had low revenues and expenditures. There were many provisions for collective welfare, but they were generally either commercial or associated with trade union and mutual societies. The British economy was also exceptionally well integrated, leading to a homogeneous set of markets with comparable prices across the land. There was also a very important peculiarity in relation to the armed forces. Unlike nearly all world powers, the USA being an exception, along with the British dominions and empire, Britain had professional armed forces. This was the case even during the Anglo-Boer War and the first years of the Great War (1914–16). It only had peacetime conscription after 1945, and it was abolished quickly from 1960 or so. The armed forces were usually servants of the state, not the people in arms, and were strongly oriented towards the navy (later reinforced by a focus on the air). Before the Great War only a few from the right, and even fewer from the left, called for conscription, linking military service to citizenship. In the Edwardian years the welfare measures of the central state were limited compared to the continued efforts of the local state. Under the ancient but famously amended Poor Laws, there was provision made for the destitute through means-tested poor relief. It was carried out by Poor Law Guardians and financed by local property taxes (the ‘rates’), though it became increasingly subsidized by central taxes. It included outdoor relief and indeed hospital care too. As will be noted, Poor Law institutions and methods, under different names and often shifted to central government control, became of huge though underappreciated importance later on. The extension to central government of Poor Law practices of taxation, rather than insurance funding, and of the means test are important but neglected aspects of British welfare history. One could usefully tell much of the history of British welfare as the transformation of Poor Law practices and institutions, rather than as the politically necessary account that stressed its supersession in stages by a new welfare

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state. To put it another way, the means test never went away. The issue in the twentieth century was never whether welfare should be provided but rather to whom, in what form, and on what terms. The first major national partial departure from the local Poor Law model through centralization was the 1908 Old-Age Pensions Act. It provided a noncontributory pension to the very old (over 70) and the very poor (determined by means test) at a level that was not meant to be sufficient to live on but rather a supplement to other income, a miserly maximum of 5s. (25p) a week, one eighth of a worker’s wage.¹ A clear majority of the recipients were women. It was meant to reach those who would not apply for degrading poor relief, and indeed to take some of the aged poor off poor relief (as it did). The number of old people on poor relief went down very markedly and quickly, once those who had not previously claimed poor relief were no longer disqualified (Thane 2000, 216–35). It was thus a departure in that the central state, through the Post Office (a central state body), paid a means-tested public assistance pension, but it provided only a small proportion of funding to support the aged. The second important welfare reform of the last Liberal government was the National Insurance Act of 1911. This provided compulsory sickness insurance for workers earning less than £160 per annum, the level below which no income tax was paid (80 per cent of the employed population). Its aims were limited to the financial support of the worker when sick and the provision of non-hospital medical care. It was a compulsory insurance system, and while David Lloyd George claimed the worker got a package of ‘ninepence for fourpence’, only tuppence came from the state; the rest came from workers and employers. The support it gave was distinctly ungenerous: sickness benefit was at a flat rate of 10s. (50p) a week. A skilled male worker might earn £100 a year, or £2 per week, in which case sickness benefit was only one quarter of his wage. The act was administered through ‘approved societies’, including friendly societies that had previously supplied health insurance to a minority of workers, and also by private life assurance companies engaged in ‘industrial assurance’, that is insurance for the working classes, such as the Prudential Assurance Company, which insured over four million workers under the scheme by 1946 (Heller 2008). The arrangement was far from a comprehensive health insurance scheme—it applied to workers only, not their families, and it did not cover hospital services. It supported the earning capacity of the usually, but not always, male breadwinner when incapacitated by sickness. It was not, nor was it ever intended to be, an insurance-based health service. There was indeed government support for hospitals, through Poor ¹ In Britain, workers’ wages were paid weekly so that the weekly wage became the quoted wage; for middle-class salaries, the annual salary was quoted. Similarly, insurance contributions were taken weekly and benefits paid weekly, whereas tax was generally paid yearly until the introduction of the pay as you earn system during World War II.

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Law infirmaries, and through municipal hospital provision too. Much was voluntary, with many saving schemes available to workers and their families. Medicine was always largely of the people, and largely free, at least for the working class. The 1911 act also provided compulsory unemployment insurance (which required an additional contribution) for a small fraction of workers, some two million in total. The rationale was that support was needed in industries where work was seasonal (building and civil engineering), or where the business cycle was strong (hence the inclusion of shipbuilding and vehicle building) (Clapham 1938, 425). The flat-rate unemployment benefit came to only 7s. (35p) a week. Low flat-rate contributions leading to low flat-rate benefits would be central to the future British social insurance model. There was also a notable set of developments under local authorities outside the Poor Law regime. One important area in which concerns about ‘national efficiency’ were directed was the health of infants and children, and indeed the Edwardian period saw the development of many local government efforts in this direction (Dwork 1987). The extension of specific welfare measures for infants and children was also a feature of World War II. Unlike in other European parliaments, workers were not represented by a socialist party before 1914. There was a Labour Party (numbering a few tens of MPs, elected by agreement with the Liberal Party), but it comprised very few socialists. Most Labour MPs were, as they were intended to be, officials of trade union. They were mainly from unions that had particular interests in state regulations of conditions of work—railway workers, cotton operatives, and coal miners—and generally, of course, in trade union questions. In Britain, hours of work were not generally regulated, except for women and children (thus an issue in textiles)—but there were exceptions, coal mining being one. The miners achieved the eight-hour (underground) day in the Coal Mines Regulation Act of 1908. Perhaps the greatest achievement of the miners, following their first national strike in 1912, was the establishment of a legal minimum wage. Workers’ representatives were finding a small place in administration—an interesting case being the cotton-worker MP and trade unionist David Shackleton, who became a senior government official concerned with labour matters in the Board of Trade, which was introducing labour exchanges and boards for the regulation of ‘sweated trades’. At the level of trade union law, the role of Labour was to push for the enactment of statutes that reversed judge-made law that interfered with the rights of unions and the right to strike (strictly there was no such thing, only immunities from contract law). Organized labour was always a much more important concern of the state than the Labour Party as such. In the years before the war, in the face of a major wave of strikes, the state moved to create a new system of industrial politics, negotiating with organized labour and capital outside of Parliament (Middlemas 1979).

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Lloyd George’s so-called People’s Budget of 1909 raised taxes to finance (about equally) the welfare state and the developing warfare state, more specifically the old-age pension and a new generation of battleships. State funding for the new National Insurance was minimal, as intended. The Britain that went into war thus had some state-funded social services, though these were intended as a complement, or last resort, to a mixed system of great complexity. Britain went to war in 1914 with professional forces supplemented by very large numbers of volunteers who formed the great New Armies. It was not until 1916 that conscription was introduced. Perhaps the most important point to remember about the war is that it was not so much a mobilization of society but rather the bringing of millions into the direct and indirect service of the state. The mobilization, supply, and care of this vast force were achieved with great success, such that the great British Army of 1918 was second to none. That organizational effort itself had important welfare elements, not least in the case of medicine. Here, innovations in treatment, and above all in organization, were seen by some as models for post-war civil health services (Cooter 1993; Sturdy and Cooter 1998). In the professional services the great majority of those serving were not married, nor permitted to marry. In the army some senior NCOs were allowed wives, who were ‘on the strength’, meaning employed and deployed alongside men and stationed with the men both at home and abroad. Over 10 per cent was added to the size of the army by these wives (plus children). The new armies required the general recognition of the existence of wives—they and dependants were to be paid separation allowances (once available only to ‘on the strength’ wives) (Pedersen 1990). These were huge payments, part of the wages of the soldiers but paid to wives. At first there was a very heavy charitable and voluntary element (Pedersen 1990; Lomas 2000). Susan Pedersen sees these payments in part as benefits, following what she calls a feminist understanding during the war of these as payments by the state to wives and mothers (rather than soldiers’ pay), and sees here the origin of the notion that in the post-war benefits system benefits came to women as wives, not in their own right (Pedersen 1990). It is the case that the allowance was also a benefit, inasmuch as it depended on the number of children and, of course, was not paid to unmarried soldiers. Officers’ dependants would not be given separation allowances until the end of the war. Military officers, like senior civil servants, officers of the state, had long had retirement pensions and other benefits; their widows too were supported, with payments through the Post Office. Other ranks’ wives ‘on the strength’ received widow’s pensions from the Anglo-Boer War, at 5s. a week. But ‘off the strength’ wives depended on organized philanthropy (Pedersen 1993). At the beginning of the Great War, widow’s pensions for all wives of other ranks were introduced. With conscription came a Ministry of Pensions to pay this

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and other aid to the forces and families. It remained in place after the war to pay pensions to widows and dependants, and also to veterans. The vast system of support for injured veterans and widows accounted for the majority of welfare expenditure in 1920s Britain (Table 8.1). War pensions were not based on contributions, were rank dependent, and were more generous than civil benefits. After the war the old-age pension and the new contributory widow’s pension (1925) were at a flat rate of 10s. (50p), less than half the war widow’s pension of a private. This comparison should not be read as a criticism—they were intended to be very different sorts of payments. Indeed, we need to see one of the main points as not so much that war created the welfare state, but that war created important new needs for welfare—the widows, the injured, the orphaned children of the great armies. While these payments were not as generous as many wished, in contrast to Germany there was very significant charitable and voluntary support for disabled servicemen, which was one reason for the political quiescence of British veterans (Cohen 2001). Immediately after the war, for a little over a year, a generous scheme of unemployment benefits specifically for ex-servicemen and munitions workers operated. The Treasury funded an ‘out of work’ donation that lasted to March 1921 (for servicemen; for civilians in the munitions industry it lasted only to November 1919). It paid out £60 million, the number of claimants peaking at just over one million. It was highly discriminatory, was outside the insurance and Poor Law systems, was more generous financially, and included provision for dependants (as had the separation allowances granted to service personnel). Of course the war affected not just service personnel and their families. There was a great transformation in society as a result of the conflict. The state intervened, for example, to restrict alcohol consumption, to ration some food at the end of the war and, from 1915, to control rents. One very important feature was the rapid growth in trade unionism—membership doubled during the war—and the scope of actions of unions, as well as the emergence of a reconstructed Labour Party as an independent political force in 1918. Labour became important in the political machine—there were a handful of Labour ministers, trade unionists concerned mainly with directing the new Ministries of Labour and/or Pensions, both created in 1916. Many important industries came under state control, for example the coalmines and the railways. Wages rose, especially at the end of the war, and morbidity and mortality of civilians improved, albeit with a slight worsening in 1915, though it may well be that the rate of improvement was no greater than pre-war, not least in infant mortality, which was improving radically from 1900 (Gregory 2013). The combination of the rise of the Labour Party, the deployment of mass conscript armies, and the work of women in factories, unblocked controversies over the franchise, leading to universal male franchise (down to age 19 for servicemen)

Gross Public Expenditure of central government on selected social services. £m (for contributory schemes, only the amount paid by central government is given)

1920 1925 1933 1938

Local government’s total expenditure on selected social services £m.

Old-age pension (non-contributory, over 70s)

Ministry of Pensions (armed services and dependants only)

Contributory pensions (ages 65–70)

Ministry of Labour unemployment

Ministry of Health/National Health Insurance

Poor relief (local)

Housing

19.3 25.8 39.7 45.4

99.4 69.0 46.9 40.2

– – 11.0 16.0

3.3 14.4 77.9 23.7

10.7 21.1 22.2 25.7

19.2 31.5 32.7 34.3

1.4 18.1 41.8 42.3

Sources: Mitchell and Deane 1962; Table Public Finance 4a, 400; Table Public Finance 10, 418. In this period the combined employees’ and employers’ contributions totalled £70–£100 million, with employers paying slightly more than half. These contributions, not included above, accounted for most health insurance expenditure and also most of the contributory pension (Mowat 1955, 496–7). In calendar year 1938, the insurance fund paid out £51 million in unemployment benefits, and received £42 million from employees and employers. Ministry of Labour, Report for the Year 1938, 1938/9 [Cmd. 6016] Appendix XXI.

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Table 8.1. Central and local government expenditure on social services, 1920–38

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and a limited franchise for women over the age of 30, transforming the size of the electorate. Organized labour was now a force in the land, represented in many negotiations at many levels, making demands not only over wages but over such things as the nationalization of the mines and welfare provision. The years 1919–21 saw a huge wave of strikes, comparable only to those of 1911–12. They were necessarily political—they were responses to inflation, and then to the drive-down of wages concurrent with the government-induced deflation that brought high unemployment by 1921. The great welfare reforms of the early 1920s need to be seen in this light.

T H E IN T E R W A R YE A R S The British state that emerged from the Great War was a very powerful one. It had raised its capacity to tax greatly, so that around half of war expenditure was met from taxes. After the war it continued to tax, not merely to meet new expenditures but to pay off the huge national debt, which it refused to deflate away. It had also not only created great new armies and the supplies they needed, but whole new industries, and had developed a new capacity for intervention. It could be argued that the British welfare state was created in the immediate post-war years, as a consequence of the Great War. First and foremost was the welfare state for veterans and dependants run by the Ministry of Pensions, and the ‘out of work’ donation. But such provision raised the issue that it was not just armed military personnel who had served; others too had worked for their country. While Labour (which emerged as a powerful electoral force in the 1920s) pushed for new benefits from general taxation, the Liberals and Conservatives developed the insurance principle for unemployment insurance. Indeed, the 1920s saw an extraordinary extension of the limited Edwardian insurance system. In 1916 the National Insurance unemployment insurance was extended to munitions workers, taking the total insured to over three million. The great change in unemployment benefit provision came with the 1920 National Insurance Act, which created compulsory unemployment insurance for the great majority (twelve million) of workers earning below £250 per annum (major exclusions were domestic and agricultural workers, permanent railway workers, civil servants, and local government employees). It was not generous: benefits were restricted to fifteen weeks and were low, at 15s. (75p) for men and 12s. (60p) for women. Previously, under the 1911 act, unemployment provision—a single benefit (though different for men, women, boys, and girls)—was paid irrespective of circumstances. However, vitally important emergency changes were initiated in 1921 (becoming permanent in 1922): the introduction of dependants’ allowances. The 1920 Act had

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envisaged that benefit sums would be adequate, but they were simply not enough to fund families (Garside 1990, 41). There was another hugely important extension to the insurance system in a 1925 act that created compulsory contributory widows’, orphans’, and old-age pensions (again for workers earning less than £250 per annum), and the provisions were extended in 1929 with the argument that they represented savings on poor relief. This gave contributory pensions for 65- to 70-year-olds and maintenance for widows (with no government contribution) at 10s. (50p) for the single pensioner or widow, that is, well under the unemployment benefit rate. At 70 the pensioners moved onto the provisions of the 1908 act, where the pension was also, as of 1919, 10s. (50p) per week. The contributions were paid by all who contributed to national health insurance with the same stamp (on a form now labelled National Health and Pension Insurance) (Macnicol 1998). All were managed, through approved societies, by the Ministry of Health (established in 1919). This ministry, also responsible for local government, was thus responsible for the bulk of the complex system of social services: pensions, health insurance, hospitals, the Poor Law, and housing (Table 8.2). The Ministry of Labour ran unemployment insurance. For a Liberal–Conservative and a Conservative government in the 1920s to create compulsory insurance for health and unemployment, and pensions for the working class (some 80 per cent of the population) was a project Table 8.2. Structure of interwar social services: expenditure and contributions Public Social Services Expenditure and Receipts, 1936. England and Wales £000. Expenditure

Receipts Total Contributions, Parliamentary Local rates Total expenditure etc. vote and block receipts grants

Unemployment benefit Unemployment allowances National Health Insurance Widow’s, orphan’s and old-age pensions* Old-age pension War pensions Education Public health hospitals Housing Poor relief Total (including small sums not listed above)

38,319 34,708 35,553 40,487

38,407 – 32,221 27,924

19,078 34,708 6,742

57,485 34,708 38,963 27,924

45,785

40,009 35,535 100,454

13,264 3,605 36,843 107,230

14,261 37,304 44,283 442,275

40,009 35,535 100,454

7,999

40,009 35,535 46,670

14,261 37,304 44,283 431,550

934 19,788 3,453 133,471

63 13,911 3,987 201,574

* The balance came from Exchequer contributions, but was not technically a vote so not included. Source: Public social services (total expenditure under certain acts of Parliament), etc. 1938/9 [Cmd. 5906].

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remarkable for its scope and for its nature. It was done in the face of a growing labour movement demanding benefits from taxation. Crucially, the programme was based on flat-rate contributions and a benefit insurance principle, as a deliberate way of constraining expenditure to what the poorer working class could afford (Macnicol 1998, 181–224; Thane 2000, 308–32). Rights accrued to the employed, who paid the contributions and, through them, to dependants. Before the war the dependants issue had not arisen—there were no dependants’ benefits under health insurance or the limited unemployment insurance, or under the 1908 Old-Age Pension. Benefits for dependants had enormous gender implications—most workers were men; most women were married and did not work outside the home. This raises the question of whether this dimension was a product of the wartime separation allowance (Pedersen 1990), or the post-war decision to use the insurance principle (Macnicol 1998). These insurance measures were for the long term, but could not cope with the mounting unemployment from 1920/1, as many of the unemployed had either not paid in enough to qualify or their unemployment outlasted fifteen weeks. A new act of 1921 introduced limited additional ‘uncovenanted benefit’ or ‘extended benefit’ (later called ‘transitional benefit’) at the discretion of the state, a provision that changed from discretion to right back and forth over the 1920s. From 1921 onwards the supplementary schemes paid more (just) in each year than the standard benefit (Garside 1990, appendix 3.1). In fact these benefits were administered by Poor Law authorities and successors, until taken in hand by a new national Unemployment Assistance Board. Local committees were often quite generous, and the nationalization of 1934 generally lowered rates, which is why it met with protests. From 1931, and to some extent earlier, these benefits were provided on the basis of a household means test. In 1936, most of the unemployed were equally divided roughly between the insurance scheme, the Unemployment Assistance Board, and a further 20 per cent under the Public Assistance Committees (Mowat 1955, 483). It should be noted that the insurance system was not self-financing: it was kept going by loans from the state, loans that were paid back in the late 1930s. By World War II, the insurance fund was in massive surplus. But the key point is really that the state did spend huge amounts on the support of the unemployed. For all the talk of scroungers, no Briton, not even an able-bodied one, would be left to starve, nor crucially were most left to be cared for under poor relief. Perhaps most important of all is the fact that there was a radical reconfiguration of the central state as a result—the pre-war central state expended half of its income on the armed forces: the major expenditures of the interwar state were welfare (both for war pensions and the civil welfare functions) and debt interest (welfare for the rich). In the interwar years central government also transformed local social services. A notable development was the abolition of the Poor Law authorities under the conservative 1929 Local Government Act (the responsibility of the

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Minister of Health, Neville Chamberlain) and their replacement by Public Assistance Committees. Poor Law hospitals, municipal hospitals, and voluntary hospitals all expanded, as did provision for child welfare (under the Maternity and Child Welfare Act 1918). As John Pickstone commented, ‘We tend to forget the sheer size of the Poor Law facilities as we concentrate on novel developments in welfare or in the development of clinical medicine’ (Pickstone 1985, 213). By the 1920s, in Lancashire, Poor Law hospitals were in some cases general hospitals that took surgical cases the voluntary hospitals would not. Fairly comprehensive municipal hospital and other welfare facilities were available from the 1930s. Even in the case of the voluntaries—which had contribution schemes—‘the provision was for the community’ (Pickstone 1985, 7). There was also a huge expansion in the municipal housing provision following the Housing Act passed by the Labour Minister of Health, John Wheatley, in 1924, building on the key Housing Act of 1919. This was the origin of very significant ‘council house’ building in the 1920s, often in the form of ‘estates’ on greenfield sites, some the size of towns, such as the Knowle estate in Bristol, or Wythenshawe in Manchester, or Becontree outside London. Although socialism was anathema to the elite in the interwar years, the Labour Party was not. It was permitted to form minority administrations in 1924 and 1929–31, the last government collapsing when the Labour prime minister and some senior colleagues formed a national government with the Conservatives to deal with the economic crisis. The immediate cause was a demand to cut unemployment benefits. Accommodation with (very) moderate Labour Party leaders, and more importantly with the trade union movement, was a central elite policy, in a context where organized labour was progressively weakened. Deflation and unemployment from 1921 led to major defeats, for example for the miners in 1921, and for the engineers in 1922. The miners’ lockout of 1926, which lasted for months and was accompanied at the beginning by a short-lived general strike, was a last rearguard action that resulted in a catastrophic failure for organized labour. In this context, trade union leaders, notably but not only Ernest Bevin, the right-wing leader of the Transport and General Workers’ Union—the largest trade union in the world—were recognized as speaking for labour. Internationally too Britain was regarded as, if not a model, then at least a place with highly organized labour, a distinctive industrial relations landscape where collective bargaining was very important, and indeed an extensive system of social insurance. The British government, with the agreement of employers and unions, signed up to the new International Labour Organization’s forty-eight-hour week, known as the Washington Hours Convention, in 1919. But it was never formally implemented through British statutes, though this was not surprising. Essentially there was reluctance to interfere in collective bargaining, and also special cases arose. The railways had agreed forty-eight hours plus guaranteed overtime.

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Although the miners had achieved the seven-hour day (underground) in 1919 by an act of Parliament, after their defeat in 1926 this was raised to eight hours underground (Lowe 1982), although this was later reduced to seven and a half hours. In compensation a welfare fund was established, which was to be the key to the eventual establishment of pithead baths.

WORLD WAR II AND AFTER The idea that the post-war Labour government created the welfare state out of little, and that it did so in the wake of the great popular mobilization of the war, dies hard. This interpretation of the war was to become central, especially from the 1960s onwards—thus A. J. P. Taylor ended his English History with the claim that in the war ‘the British people came of age. This was a people’s war . . . Imperial greatness was on the way out; the welfare state was on the way in’ (Taylor 1965, 726–7). In the Britain that ‘faced defeat between 1940 and 1942’, wrote Angus Calder in The People’s War (the book title that essentially coined the term in the standard sense it is used in British historiography today), were the ‘seeds of a new democracy’; the rulers had to ensure the cooperation of all society by making ‘concessions in the direction of a higher standard of living for the poor, greater social equality and improved welfare services’ (Calder 1969, 17). A whole historiography developed claiming a wartime consensus around the need to create a welfare state, brought into being after 1945 (see, for example, Addison 1975). This has been challenged by asking ways—first, whether there was a consensus at all (Smith 1986; Jeffreys 1987); second, to what extent the welfare measures were as generous or novel as they appeared (see, for example, Pollard 1983; Harris 1992; Welshman 1999); and third, by taking a fresh look at the war from a perspective much broader than that of the historiography of the social services, noting the new inequalities the war produced (Edgerton 2011a).² Yet the key point was long in the literature, though seemingly forgotten: in the 1930s Britain already had an elaborate system of welfare for the working class (that is around 80 per cent of the population): all was ready for Sir William Beveridge to rationalize, and ‘by the legislation of 1945–1948 the gaps were filled, the walls finished, and a roof put over all’ (Mowat 1955, 595). Britain went through the war with pre-war welfare services—a welfare state was not created during the war (nor, as we have seen, was the term used), and the war was not

² Much of the criticism of the wartime ‘welfare state’ or ‘people’s war’ consisted of criticizing a notion of unspecified origin and significance that implied much more equality than was ever plausible.

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thought of as a ‘people’s war’; the term was rarely used in wartime Britain, and when it was it was as an aspiration, not a description (Edgerton 2011a). Britain went to war in September 1939 with conscription already in place. The great bulk of the conscript armies recruited spent most of the war in training—in Britain and overseas. Losses were generally light, only becoming problematic for the army very late in the conflict. The numbers mobilized were very large—at the peak over four million service personnel, supplied by about the same number of workers in the munitions industry. Special provisions were made for the armed services and munitions workers in the war, with important new discriminations arising (Edgerton 2011a). First, although conscripts’ wages were low, benefits for their dependants were higher than for dependants of the unemployed. The war widow’s pensions were considerably higher than state widow’s pensions or indeed unemployment benefits or public assistance. These were all set at the equivalent of £1.30 per week in 1948, while a single war widow of someone who had served in the ranks received the equivalent of £1.75 to £2; an officer’s widow was given a yearly sum of £150 to £350, say £3 to £7 per week (all figures for a single childless person) (Institute of Fiscal Studies 2017). During the war the disparity was even greater, as the civil widow’s pension was only 50p (discussed later in this section). Service personnel received better food than the average civilian. Their food allocation, known as the Home Service Ration, was very generous and included significantly larger quantities of food than those of the civilian ration, including at least twice the quantity of meat (Edgerton 2011a). Many munitions factory workers could get additional quantities of otherwise rationed foods in canteens. The Mass Observation reporter noted of the EKCO radar factory in Malmesbury that the women workers there ate a great deal while at work—tea and cheese rolls at 10 a.m., ‘a good helping of roast meat and vegetables, followed by pudding, for under a shilling’ at 1 p.m., and a high tea of something like cheese pie or fishcakes at 6 p.m. This was usually preceded by a hot breakfast at home, followed by a hot supper at home, and supplemented in most cases by cakes and sandwiches brought from home. It seems meat was usually available, and if not it was replaced by proteinaceous beans (Mass Observation 1987, 73–6). Health provision during the war became increasingly discriminatory. The Emergency Medical Service (EMS), sometimes wrongly seen as the wartime predecessor to the National Health Service (NHS), was not designed to improve healthcare in general but to deal with military and air raid casualties. It led to the emptying of hospitals. Some new hospitals were built for the EMS, like the Churchill which, however, lay empty and was eventually handed over to the US army. Civil doctors went into the forces, leaving fewer doctors to deal with civilians. It was service personnel who received the penicillin or the vastly increased supplies of sulphonamides (Davenport 2012). In some cases, however, civilians who were directly engaged in dangerous war-like operations

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were hardly in a different position than they were prior to the war—the merchant navy stands out here (Lane 1990). Richard Titmuss’s 1950 official history Problems of Social Policy was in fact limited in detailed treatment to the social issues directly concerned with the war (evacuation, the Emergency Medical Service, rehousing of the bombedout and the like). It does not deal with welfare services in general. Overall, however, he shows that the war was bad for social services; so bad, indeed, that this in itself promoted post-war reform. It was the dire treatment of the elderly, for example, that pricked people’s consciences (Titmuss 1950, 501). As Titmuss put it: ‘Somebody had to pay the price of war by going without, waiting longer, getting less or being pushed about to make room for others.’ He notes that ‘among those who suffered most were the poorest, the most helpless and the “useless” members of the community’ (Titmuss 1950, 486). Far from being universal, there was a hierarchy in the provision of hospital treatment, with the aged and chronically ill at the bottom, followed by the ordinary sick and expectant mothers in need of beds, air raid casualties, evacuees and, at the top, ‘Service patients, the most favoured group of all, who got the lion’s share of hospital care throughout the war’ (Titmuss 1950, 489). The war ‘deprived the civilian population of a large part of its pre-war medical resources’, not only in hospitals but in dental surgeries, in schools, in maternity and child welfare clinics, and in public health. GP services were badly affected, with a decrease of over one third in numbers of GPs, with a rise in their average age (Titmuss 1950, 530). In 1943, in Britain, there were five times more doctors per soldier than per civilian (Titmuss 1950, 531). Yet Problems of Social Policy has come to be known for the argument that Dunkirk and the Blitz inaugurated a radically new practice of welfare. Titmuss suggests that the Blitz was crucial in broadening social services to a wider population than the destitute, a subtle and important point about the principles underlying welfare. But it is no more than a suggestion, and not a thesis argued even over a chapter. In fact, Titmuss makes minimal claims for wartime extensions of social services: the increase in the number of school meals, their provision beyond the really needy, the national milk scheme for nursing mothers and children, and the improvements to the old-age pension. Some groups, such as children, nursing mothers, and the infirm, had special supplements and concessions. There was, for example, a huge increase in school meals during the war, and in the supply of milk to schoolchildren. Pregnant women were also receiving milk preferentially. There was certainly no general improvement in welfare services, and the novelty of milk and over-provision was rather exaggerated by downplaying the significance of earlier provision (Macnicol 1986; Welshman 1997). It should be noted that the focus was on areas of welfare pioneered before the Great War, a maternalist and pronatalist emphasis that was important throughout World War II, especially for Conservatives.

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There were in fact two other areas of wartime reform of some note in the social services. There was a relaxation in the means test, from the interwar household means test to one focused on individuals or couples, which meant it ceased to be contentious (Deacon 1982). A significant reform was made during the war with the Old-Age and Widow’s Pension Act of 1940. It was clearly not the war but the pre-war conditions and campaigns, not least by pensioners, that led to the changes—the Act was in fact passed by the national government before the formation of the coalition in May 1940. The reforms reduced the contributory pension age for women to 60, but made supplementation with means-tested benefits a matter for the central state (through the Assistance Board, as the Unemployment Assistance Board had become), rather than local authorities. A key point was that the Act did not raise the dire level of the pension (indeed the war was used as an argument against this, though proponents noted that there was no shortage of money for fighting the war), but applications for relief were very much larger than expected—1.5 million pensioners applied, rather than the anticipated 400,000 (Deacon 1982; Macnicol 1998, 340–1). For the poorest of these pensioners the overall benefit was nearly twice the standard pension, bringing it up to nearly £1 (Macnicol 1998, 344). It is notable that there was no increase in the basic pension (50p) from 1919 to 1946 (Macnicol 1998, 350). Since the war itself, the claim that World War II was good for the people’s health has been a staple of celebratory commentary. The usual argument is that improved nutrition and public health (and for some, more economic equality) led to health improvement. In fact, civil health indicators got worse more or less universally in 1940/1. This was not due to bombing or differential recruitment into the military—the worsening applied to all ages and all places. Nor was it due to road traffic accidents. Why this happened is not known—indeed the phenomenon is itself only very partially known, and has tended to be explained away. In later years, mortality and morbidity improved but not because of special wartime conditions, as is usually implied. The improvement was taking place at the same rate as it had been pre-war. The story of civilian health should probably be exactly what one would otherwise expect—war interrupted, indeed reversed, for two years, what was otherwise a steady improvement in mortality and morbidity in the civilian population (Edgerton 2011a). The war caused three important changes: it ensured full employment, increased wages in many cases, and strengthened trade union. The latter now clearly had more influence in government and were also much more closely involved in discussions with employers across the board. Although strikes were made illegal, trade unionism nearly doubled, and employers were forced to recognize unions in previously resistant firms and industries. As had happened during the Great War, Labour entered into a coalition with the government, but it did so from a much more powerful position.

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It aligned with Churchill in May 1940, having refused to collaborate with Chamberlain. The Labour leader became (in 1942) deputy prime minister, and Labour MPs took key positions, perhaps the most important being Ernest Bevin’s appointment to the Ministry of Labour and National Service, with the backing of his powerful Transport and General Workers’ Union. Older social democratic histories insist that the Labour Party was in charge of the home front, while the Conservatives and Churchill controlled the fighting. In fact, the key domestic positions, not least in industrial and financial areas, were in the hands of Conservatives (Edgerton 2011a). That said, Labour and the trade union now held a place in the system of administration they had never had before. But that administrative power, as the left of the party complained, came at the expense of the exercise of public political power, and the acceptance of many policies and practices it would otherwise have rejected. During World War II there were, in many belligerents, plans for a fresh universalistic and progressive ‘social security’ (Baldwin 1990, 108). In December 1942, the economist, expert in social insurance, and former director of the London School of Economics, Sir William Beveridge published his famous report advocating a new system of ‘social security’, as he called it, based centrally on compulsory ‘social insurance’. He called for ‘social insurance against interruption and destruction of earning power and for special expenditure arising at birth, marriage or death’ (Beveridge 1942, para. 17). Beveridge wanted not to replace private provision, but to provide a minimum: ‘The State should offer security for service and contribution. The State . . . should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family’ (Beveridge 1942, para. 9). Rhetorically he called for compulsory social insurance (for all, not just the working class) at the core, with national assistance and voluntary contributions filling holes. Beveridge endorsed the flat-rate contribution and flat-rate benefits, with no means testing or time limit (Beveridge 1942, paras 17, 19). Benefits were to be set at ‘subsistence’ level (but see the following further explanation). There were, however, some important novelties that were required by this plan: the universal family (that is childrens’) allowance and the new comprehensive health system, which owed little to Beveridge. In short, what was novel was not all due to Beveridge, and what was due to Beveridge was by no means all novel. The problem for Beveridge was that the near comprehensive insurance system of the 1920s had not in fact worked very well. Unemployment insurance did not work with high levels of unemployment, which was one important reason for Beveridge to stress the low unemployment condition. High unemployment implied a different system. The coalition committed itself to maintaining a high level of employment in the 1944 Employment Policy White Paper. The problem was wished away and did not arise in practice

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for many years. The second major problem was that, as John Macnicol has forcefully pointed out, Beveridge’s scheme could not provide subsistence-level pensions. So great was this problem that it in effect made the whole Beveridge scheme take on a new look. Pensions, some two thirds of the projected expenditure (and about one half if childrens’ allowances are included), were in Beveridge’s plan to stay very considerably lower than other, subsistence, benefits (Beveridge proposed 14s. (70p) compared to the existing 10s. (50p), a tiny increase in real terms). As Macnicol puts it: ‘Universality legitimated the insurance principle, and the insurance principle legitimated inadequate pensions’ (1998, 354). Insurance-based universal subsistence pensions could not be funded by flat-rate insurance. In Beveridge’s scheme, poor pensioners were forced to remain on supplementary means-tested benefits (as under the 1940 Act) to get them up to subsistence levels; only after twenty years would the subsistence universal retirement pension be payable (Macnicol 1998, 347–84). Furthermore, the new pensions were paid not as a right to old women, as under the still operating 1908 Act, but on the basis of the working partner’s contributions (Macnicol 1998, 354). In short, except in universalization, this was no advance on the position of 1940 in this, the crucial benefit. Macnicol makes the point that this position was not forced on Beveridge—both he and Keynes wished it so (Macnicol 1998, 371–9). What Beveridge proposed was in fact politically unacceptable, and the government was forced to accept publicly in 1943, under pressure from Ernest Bevin, that the full pension would be paid from the beginning of the new scheme (Macnicol 1998, 391). The 1944 White Paper (which rejected subsistence, stressing the importance of contributions), set the pension at 20s. (£1), markedly higher than Beveridge had set it, though still at a very low level. Under Labour, a full rate adjusted up to 26s. (£1.30) was adopted immediately (that is, before the beginning of the new scheme in 1948). The 1940s universal subsistence pension was thus due to Labour, and not to Beveridge. Beveridge’s proposed system was also dependent on two new tax-funded and comprehensive schemes—children’s allowances for all families, whether on benefits or not, and comprehensive health and rehabilitation services, also for all. Family Allowances were voted for under the Conservative caretaker government, which ruled briefly between the end of the coalition and the general election in 1945, as a result of a long campaign by the Independent MP Eleanor Rathbone (Pedersen 1993, 316–36). Family Allowances were a pronatalist, pro-family measure to give non-taxpayers support for children (as received by taxpayers), and in the context of Beveridge, a necessary prop to the insurance system, for without family allowances to all there would be many families who would be better off unemployed than employed, given that the unemployment benefit was a flat rate. The health services of the 1930s, varied as they were, were not regarded at the time as being in a state of crisis, but rather the contrary: they were well-regarded, generally speaking. Furthermore,

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the call for something like an NHS as it emerged was a minority taste (Hayes 2012). There was a move towards thinking about a more planned and coordinated system, and crucially one that was free, but the form it would take was up for discussion.

T H E P O S T - W A R YE A R S The National Insurance Act of 1946 was the key Beveridgean measure. It extended to everyone (with special contributions for those not working or self-employed) and not just workers below a certain income (which had been raised to £420 in 1940). It was a compulsory insurance system with a flat-rate contribution and benefit, and provided many benefits that had been previously restricted and paid under separate schemes from the 1920s—for example, unemployment, and widows’, orphans’, sickness, and retirement pensions, all at around 26s. for a single person (£1.30). Unemployment and sickness benefits were still time-restricted (though more generously than pre-war): Beveridge had suggested no limit, but the 1944 White Paper proposed them and Labour stuck to a limit. The flat-rate insurance and contribution principle made the system regressive. Indeed, it had been consistently opposed by the Labour Party for just this reason, but by 1937 the Labour Party had accepted the insurance pensions, and was to endorse their continuation, and the extension of the insurance principle. As Macnicol puts it, ‘Thus the Treasury had largely succeeded in setting up a tax-funded scheme, based upon a flatrate poll tax, which possessed all the political advantages of a contributory system with none of the economic disadvantages [that is, of a tax-based system understood as such]’ (Macnicol 1998, 398). However, the new universal nearsubsistence pension for all, which Labour insisted on, was a major change, as was the fact that it was all administered by the state. There were three important tax-based benefits. The Family Allowances Act came into force in 1946. Benefits were set for second and subsequent children at 5s. (25p) (paid to 4.5 million children), rather than the 8s. (40p) suggested by Beveridge. That it was below subsistence is clear from the fact that from 1951 the unemployed were not expected to depend on family allowance alone for second and subsequent children—a supplement to the allowance was added. Already another key principle was eroded, with low universal benefits meaning that recourse had to be made to supplements to benefits, or to national assistance. The second set of benefits was limited and means tested. The National Assistance Act of 1948 continued to provide for central and local support, on a means-tested basis, for those not provided for, or not sufficiently provided for, by the insurance system (which included more than a quarter of pensioner households in the mid-1950s). The Assistance Board was taken into

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the National Assistance system. Healthcare under the NHS was the only universal benefit set at a decent level. The National Health Service Act provided a health service out of taxation (though many believed it was funded by the insurance stamp) on a universal basis. The post-war NHS did not create new hospital services, at least not immediately, but ‘the NHS built on one of the great virtues of the previous hospital arrangements. It inherited the goodwill enjoyed by pre-war hospitals as community institutions. Hospitals seemed to be provided by and for the majority of the population’ (Pickstone 1985, 6). The NHS radically generalized the existing but limited principle of free service at the time of need, now for all. Importantly, the NHS did away with national health insurance, with private health insurance for the family, with municipally funded hospital services, with contributory schemes for voluntary hospitals, and also with the middle classes’ professional fees. The NHS was notable in that it nationalized all hospitals, whether public or voluntary, and in doing so adopted the medical and political interest of the voluntaries over the democratic control represented by municipalization. It was a huge reorganization, but it did not involve any radical extension of actual medical services. No significant civil hospital was built in the late 1940s, and what expansion in capacity there was, during and after the war, might not have been enough to raise bed provision per capita (Tomlinson 1997, 249). But there was another very important change—the administration of schemes became fully a task for state authorities—the role of private and mutual bodies in the provision of health insurance was eliminated. The NHS as it emerged was clearly not something the Conservatives would have enacted. Housing and health were both still the responsibility of the Ministry of Health under Aneurin Bevan. The war saw a collapse in investment in housing, with slow recuperation in the late 1940s, but the 1930s levels of building were not reached until the 1950s. However, in the 1940s the proportion of public housing was significantly greater than in the 1930s. Bevan was notable for insisting on high specifications for these post-war council houses and, in another sign of the significance of universalism, he changed the law so that councils could build houses for anyone, not just the working classes. A very important move was the administration of benefits and the supply of healthcare from within the public sector. The Ministry of Pensions, created in 1916, moved smoothly in and out of World War II. The new Ministry of Health of 1919, responsible now for health insurance and soon the contributory pension too, was also in charge of local government questions, including the old Poor Law institutions from 1929 (it was formed in 1919 through a merger of the Local Government Board and the National Insurance Commission). It acted through local government and through approved societies. The new Ministry of Labour, also a Great War creation, was to take over unemployment insurance. But the new Ministry of National Insurance (established in the former German Embassy in 1944) would take over all

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benefits from other ministries after the war and would also take over the (military) Ministry of Pensions in 1953, paying and administering all the benefits itself. In 1966, it took over the National Assistance Board and became the Ministry of Social Security (Beveridge’s intended name). The Ministry of Health, shorn of its local government and housing responsibilities in 1951, would oversee a great new nationalized industry itself. In 1968, a comprehensive Department of Health and Social Security was established. Thus, as Jose Harris has so rightly emphasized, referring to the post-1945 years, the Beveridgean insurance system was less significant in Britain than on the continent of Europe (Harris 1992). In Britain, a great deal of expenditure was based on either universal provision from taxation (the National Health Service and family allowances) or taxpayer-paid public assistance to those poor not covered or insufficiently covered by the insurance system. The Beveridge scheme was just that—it was not fully introduced; some parts were rejected, not least to make it more generous. It was an attempt to make a particular kind of insurance system work. But it did not last long. The family allowances drifted down, with the benefit system needing to increase children’s benefits as a result. In the longer term, the flat-rate contribution was seen as regressive, and this changed for employees from 1975; the fixed benefits were also seen as too low and there were moves to additional state pensions, earnings-related pensions, and earnings-related unemployment benefits. But these also did not last, and the British system reverted in the 1980s to one of very low benefits indeed (Wincott 2011). The combination of low insurance benefits and rising needs of parts of the population who were non-insurable in the usual way, led to a vast expansion in means-tested benefits, especially in the 1970s. The great legislative activity of the late 1940s, important as it was in establishing new universal systems on both old and new principles, should not be confused with a massive extension of welfare spending. According to Jim Tomlinson, ‘Labour in the 1940s constructed an austerity welfare state’ in which new consumption of resources was minimal (Tomlinson 1998, 74). The biggest new expenditure was on the state pension. The total of public expenditure, whether from rates (local taxes) or taxes, on the social services (that is, excluding employer and employee contributions) was 2.1 per cent of national income in 1900/1; 2.9 per cent in 1910/11, and essentially unchanged a decade later. But through the interwar years the increases were notable: to 5.2 per cent by 1925/6 and 8.2 per cent a decade later; the proportion actually fell to 6.8 per cent in 1947/8, only to increase with the creation of the NHS in 1948/9 to 10.7 per cent (Stirling 1952, Appendix). Roger Middleton has shown that the rise in welfare spending was much greater following World War I than it was following World War II and that after around 1950 the rise in public spending was remarkably low, certainly lower than in the interwar years (Middleton 1996). Sidney Pollard cautioned long ago that ‘In spite of a widespread belief

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to the contrary, Britain did not spend significantly more on the social services after 1948 than she did before 1939 apart from the retirement pension’ (Pollard 1983, 272). The estimated total public and private health spending was £150 million in the mid-1930s (about 3 per cent of GNP) and public expenditure was around 1.2 per cent (Webster 1998, 12–13). That amount would have been worth around £300 million in the late 1940s, which suggests that since the early years the NHS was spending around £400 million, a hardly revolutionary increase of about 25 per cent over a decade. A revised analysis of post-war poverty suggests, contrary to contemporary claims, that post-1936 welfare measures (excluding food subsidies) reduced the number of workingclass households below the poverty line by only 3.7 per cent (Hatton and Bailey 2000). The really big expansion in state expenditure between the 1930s and the early 1950s was not in welfare but in warfare. In the years before the Great War, expenditures on social services (by all public authorities) were lower but similar to expenditures on the armed forces. In the interwar years, by strong contrast, they were notably greater than warfare expenditures. In the years after World War II, although welfare expenditure was higher than warfare expenditure, the gap had narrowed. The post-World War II state had a higher warfare–welfare ratio than the interwar state (Cairncross in Timmins 2001, 6; Edgerton 2006). Labour built not just a New Jerusalem but a new Sparta (Edgerton 2011a, 299). As before 1914, the people were taxed for warfare at least as much as for welfare. Indeed, as has been correctly noted, the great expansion in British welfare expenditure started in the 1950s as the huge burden of war expenditure decreased (Clark and Dilnot 2004). As Jose Harris observed, the statistical sources consistently show that post-war Britain was a low spender on social services in comparison with European nations (Harris 1992).

CONCLUSIONS How does the British case fit into the matrix of periods and mechanisms outlined in the Introduction to this book? In the war preparation phases we need to distinguish clearly between both world wars. Britain did not conscript in peacetime, except just before World War II and for a decade or more after it. Yet before the Great War, around the time of the Anglo-Boer War, there was concern about the health of the population, reflected in programmes for maternal and child health. Population was never an important concern in military matters, partly because the empire could raise troops overseas and partly because capital replaced labour as much as possible in British thinking about war. Interestingly, the long rearmament

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phase of the 1930s did not bring novelties in welfare in its train. In the British case, literacy was not a significant concern. For the mobilization periods it needs to be stressed, in the British case, that the military was the great beneficiary of spending, and that there were significant cutbacks in many areas of the welfare state in both world wars. The wars were both fought with pre-war welfare structures for civilians and pre-war levels of expenditure. Where there was a definitive move forward was in provision for mothers and children, which is curious because that would have had no impact on the current war. The important universal Family Allowances of 1945 are a case in point. The question of securing the loyalty of the masses through welfare was clearly a factor in both world wars when it came to those of immediate importance to the state—the armed forces themselves and workers in key munitions industries. In 1918, for a wartime election, Britain introduced universal male suffrage (at age 21, but 19 for those in the forces) and a limited female suffrage. The creation of a mass and then a conscript army led to the creation of a system of additional allowances for men with dependants, and a general system of war pensions. On a smaller scale, the same was true for munitions industry workers, who were included in national insurance for unemployment during the war. There was in the Great War a clear sense of collective loss of young men (though the casualty rate for the nation was significantly lower than for France or Germany). There was a radical extension of taxation as well as borrowing, without major problems. There was increased state intervention of many sorts, driven by the needs of arms production and shipping constraints. The support of organized labour was required: Labour became part of the coalition and took on key labour-related portfolios. Policy diffusion was not a significant issue in Britain, though there was talk of Prussianization during World War I around conscription and import controls, but not around welfare measures. World War II was fought with essentially the pre-war civil and military welfare systems. For example, while there were improvements in civilian morbidity and mortality in both world wars, it appears to have been a matter of continuation of pre-war trends in both cases. The direct effects of war on health appear to be primarily negative, setting back improvement by a few years. There were some extensions of facilities for mothers and children, and an important late war innovation of universal family allowances. Distinctions between service personnel (and munitions workers) and the mass of the population developed, for example in rationing. There was, however, a preference shift towards support of rationing as fair shares. In World War II the impact of bombing as a collective threat has been exaggerated—it lasted only for some months and only applied to certain restricted places. There was no potential problem of loyalty in Britain, where Labour was in the coalition from 1940, and there was no threat of an anti-war movement, especially from June 1941. In World War II plans for the future had an important role to play in

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wartime politics, but that is a rather different point. There was a demand for a new post-war politics, especially in light of what were seen as the failures of laissez-faire policies in the interwar years, the miseries of unemployment, and the means test. The most important collective experiences concerned rationing, though here too there were differences, in actual treatment, between ordinary civilians and munitions workers on the one hand, and service personnel on the other. Taxation was extended without contestation or major problems, and a system for the immediate deduction of tax from pay packets was installed. As in the Great War, Labour was in the coalition, and in strength. Policy diffusion was not a significant issue. As far as the post-war period is concerned, the years after the Great War are notable for innovation in welfare, though this is not well recognized in the older literature. A new and vast system of veterans’ benefits was crucial, including temporary support for unemployment. That, along with the strength of labour, influenced the post-war government to create a comprehensive unemployment insurance system for the working class after the Great War. Clearly the state was more capable, and showed it, for example in housing and in establishing a near-comprehensive welfare system for the working class in a world where organized labour and a potentially socialist Labour Party were growing. Clearly, the specific circumstances of the war led to particular post-war issues that were addressed by a radical expansion of welfare provision. The years after World War II in some respects saw less innovation that those after the Great War; indeed the systems in place after the Great War remained in place to cover unemployment, the health system, and veterans’ benefits. Where the legacy of war mattered was in making the system universal, rather than confined to the working class, and in making it work better than the existing system. That meant full employment, universal family allowances (tax-funded), and a health service (also tax-funded). Yet it is important to recognize the extent to which the Beveridge Plan was an attempt to salvage the principles of the 1920s, and to recognize the extent to which the means of achieving it were new. A new political reality, a majority Labour government, with a great extension in state capacity and state legitimacy, led to another change—the bringing into the public sector of all the administration of welfare and the nationalization of the health system. Finally, the question of expenditure: it is now very clear that World War I and its aftermath ratcheted up welfare expenditures much more than World War II, though both did. By any reasonable measure Britain had a welfare state in the interwar years, which was made more generous and more universal after 1946–8. The state grew massively between the 1930s and the 1950s— this was not mainly due to the welfare state but rather to the extension of the warfare state. Table 8.3 summarizes the major warfare–welfare mechanisms of the twentieth century for the British case as discussed in this chapter.

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Table 8.3. Overview of warfare–welfare mechanisms in Britain Pre-war

World War I

World War II

1) Concerns about public health

Yes

No

2) Conscription and social citizenship

No conscription until 1916

Conscription

3) Population policies

Some

No

4) Education

No

No

No significant expansion in welfare Not evident

No significant expansion in welfare Some shift to ‘fair shares’

7) Collective experience of threat and loss

Losses at front, but lower than for other belligerents

Low, and exaggerated in the literature

8) Legitimacy through social policy

Not significant except with regard to soldiers

Promise of improvement was important, but not actual improvement

9) Rise of the tax state

Yes

Yes, but not difficult

10) Growing state regulation

Yes

Yes

11) Policy diffusion (learning and coercion mechanisms)

Yes, but not in welfare

No

Veteran and dependants’ support. Potential unemployment among soldiers

Housing

13) Wartime legacies (state capacity)

Yes, capacity to fund increased

Yes, especially with regard to public sector administration of welfare

14) War-related changes

No

No

15) Changing social structure

Increased role of women in the labour force, but had little impact on structure of welfare

No

16) Democratization

The most important electoral change took place during the war. Rise of Labour Party

Rise of Labour Party

Mobilization 5) ‘Guns and butter’ trade-off 6) Preference shift (micro and macro)

Post-war 12) Growing social needs (warrelated)

Britain is special, but not in the ways usually suggested. The old story, hugely influential, stressed the significance of World War II in the creation of a British welfare state. The account given above is notably different and it depends on a new story of what made Britain different. The tendency in the older arguments was to stress the often unachieved desire and need for

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universal, unifying welfare measures in the British case, stimulated by the necessary unity brought about through war. But this is to misunderstand both war and welfare. Modern war did not put everyone in the same boat. New discriminations arose. War divided society into those who were needed for the war effort and those who were not. Welfare measures were not simply accommodations to Labour—the principles of the emerging British welfare system were not necessarily those of the Labour Party. They were designed, especially in 1911, 1920, and 1925, and again in the 1940s, on principles that Labour would come to accept but were not its own, on principles whose aim was to keep welfare spending low, or rather ungenerous. This was the essence of the flat-rate insurance principle, designed not by Labour but by Liberal and Conservative intellectuals and politicians. The British state was successful in both world wars and in containing the strains they threw up; the state had the capacity to tax and developed the capacity to act. It had the legitimacy to create a special regressive tax for working-class welfare, as well as the ability to make good the deficiencies in the system. That the literature has not emphasized these issues is a measure of how unproblematic these issues were.

BIBLIOGRAPHY Addison, Paul. 1975. The Road to 1945: British Politics and the World War 2. London: Cape. Andrews, Maggie and Janis Lomas, eds. 2014. The Home Front in Britain: Images, Myths and Forgotten Experiences since 1914. London: Palgrave. Baldwin, Peter. 1990. The Politics of Social Solidarity: Class Bases of the European Welfare State 1875–1975. Cambridge: Cambridge University Press. Beveridge, Sir William. 1942. Social Insurance and Allied Services. London: HMSO. Calder, Angus. 1969. The People’s War: Britain 1939–45. London: Cape. Clapham, John H. 1938. An Economic History of Modern Britain: Machines and National Rivalries (1887–1914) with an Epilogue (1914–1929). Cambridge: Cambridge University Press. Clark, Tom and Andrew Dilnot. 2004. ‘British Fiscal Policy since 1939’. In The Cambridge Economic History of Modern Britain, Volume 3: Structural Change and Growth, 1939–2000, edited by Roderick Floud and Paul Johnson, 368–98. Cambridge: Cambridge University Press. Cohen, Deborah. 2001. The War Come Home: Disabled Veterans in Britain and Germany, 1914–1939. Berkeley, CA: University of California Press. Cooter, Roger. 1990. ‘Medicine and the Goodness of War’. Canadian Bulletin of Medical History [Bulletin canadien d’histoire de la médecine] 7: 147–59. Cooter, Roger. 1993. Surgery and Society in Peace and War: Orthopaedics and the Organization of Modern Medicine, 1880–1948. London: Macmillan. Cooter, Roger, M. Harrison, and S. Sturdy, eds. 1999. Medicine and Modern Warfare, Vol. 55. Amsterdam: Rodopi.

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Davenport, Diana. 2012. ‘The War Against Bacteria: How were Sulphonamide Drugs Used by Britain During World War II?’ Medical Humanities 38: 55–8. Deacon, Alan. 1982. ‘An End to the Means Test? Social Security and the Attlee Government’. Journal of Social Policy 11: 289–306. Dwork, Deborah. 1987. War is Good for Babies and Other Young Children: A History of the Infant and Child Welfare Movement in England, 1898–1918. London: Tavistock. Edgerton, David. 2006. Warfare State: Britain 1920–1970. Cambridge: Cambridge University Press. Edgerton, David. 2011a. Britain’s War Machine: Weapons, Resources and Experts in the Second World War. London: Allen Lane. Edgerton, David. 2011b. ‘War, Reconstruction, and the Nationalization of Britain, 1939–1951’. Post-War Reconstruction in Europe: International Perspectives, 1945–1949 (Past & Present) 210: 29–46. Esping-Andersen, Gøsta. 1990. The Three Worlds of Welfare Capitalism. Cambridge: Polity Press. Fraser, Derek. 2003. The Evolution of the British Welfare State, third edition. London: Palgrave. Garside, W. R. 1990. British Unemployment 1919–1939: A Study in Public Policy. Cambridge: Cambridge University Press. Gorsky, Martin. 2008. ‘The British National Health Service 1948–2008: A Review of the Historiography’. Social History of Medicine 21: 437–60. Gregory, Adrian. 2013. The Last Great War: British Society and the First World War. Oxford: Oxford University Press. Harris, Bernard. 2004. The Origins of the British Welfare State: Society, State and Social Welfare in England and Wales, 1800–1945. London: Palgrave. Harris, Jose. 1990. ‘Enterprise and Welfare States: A Comparative Perspective’. Transactions of the Royal Historical Society 40: 175–95. Harris, Jose. 1992. ‘War and Social History: Britain and the Home Front During the Second World War’. Contemporary European History 1: 17–35. Hatton, Timothy J. and Roy E. Bailey. 2000. ‘Seebohm Rowntree and the Postwar Poverty Puzzle’. Economic History Review 53: 544–64. Hayes, Nick. 2012. ‘Did We Really Want a National Health Service? Hospitals, Patients and Public Opinions Before 1948’. English Historical Review 127: 625–61. Heller, Michael. 2008. ‘The National Insurance Acts 1911–1947, the Approved Societies and the Prudential Assurance Company’. 20th Century British History 19: 1–28. Institute of Fiscal Studies. 2017. ‘Fiscal Facts: Tax and Benefits’. http://www.ifs.org.uk/ tools_and_resources/fiscal_facts, accessed 25 April 2017. Jefferys, Kevin. 1987. ‘British Politics and Social Policy During the Second World War’. The Historical Journal 30: 123–44. Kasza, Gregory J. 2002. ‘The Illusion of Welfare “Regimes” ’. Journal of Social Policy 31: 271–87. Lane, Tony. 1990. The Merchant Seamen’s War. Manchester: Manchester University Press. Lomas, Janis. 2000. ‘ “Delicate Duties”: Issues of Class and Respectability in Government Policy Towards the Wives and Widows of British Soldiers in the Era of the Great War’. Women’s History Review 9: 123–47. Lowe, Rodney. 1982. ‘Hours of Labour: Negotiating Industrial Legislation in Britain, 1919’. The Economic History Review, New Series 35: 254–71.

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Macnicol, John. 1980. The Movement for Family Allowances, 1918–45: A Study in Social Policy Development, vol. 12. London: Heinemann. Macnicol, John. 1986. ‘The Evacuation of Schoolchildren’. In War and Social Change: British Society in the Second World War, edited by H. L. Smith, 3–31. Manchester: Manchester University Press. Macnicol, John. 1998. The Politics of Retirement in Britain, 1878–1948. Cambridge: Cambridge University Press. Mass Observation. 1987 [1943]. War Factory. London: Cresset Library. Middlemas, Keith. 1979. The Politics of Industrial Society. London: Deutsch. Middleton, Roger. 1996. Government and Market: The Growth of the Public Sector, Economic Management and British Economic Performance, c.1890–1979. Cheltenham: Elgar. Mitchell, Brian R. and Phyllis Deane. 1962. Abstract of British Historical Statistics. Cambridge: Cambridge University Press. Mowat, Charles Loch. 1955. Britain Between the Wars: 1918–1940. London: Methuen. Pedersen, Susan. 1990. ‘Gender, Welfare, and Citizenship in Britain During the Great War’. The American Historical Review 95: 983–1006. Pedersen, Susan. 1993. Family, Dependence, and the Origins of the Welfare State Britain and France, 1914–1945. Cambridge: Cambridge University Press. Petersen, Klaus and Jørn Henrik Petersen. 2013. ‘Confusion and Divergence: Origins and Meanings of the Term “Welfare State” in Germany and Britain, 1840–1940’. Journal of European Social Policy 23: 37–51. Pickstone, John. 1985. Medicine in Industrial Society. Manchester: Manchester University Press. Pollard, Sidney. 1983. The Development of the British Economy, 1914–1980, third edition. London: Arnold. Smith, Harold, ed. 1986. War and Social Change: Britain in the Second World War. Manchester: Manchester University Press. Smith, Harold L. 1996. Britain in the Second World War: A Social History. Manchester: Manchester University Press. Stirling J. 1952. ‘Social Services Expenditure During the Last 100 years’. Advancement of Science 8: 379–92. Sturdy, Steve and Roger Cooter. 1998. ‘Science, Scientific Management, and the Transformation of Medicine in Britain c.1870–1950’. History of Science 36: 421–66. Taylor, Alan J. P. 1965. English History 1914–1945. Oxford: Clarendon Press. Thane, Pat. 2000. Old Age in English History: Past Experiences, Present Issues. Oxford: Oxford University Press. Timmins, Nicholas. 2001 [1995]. The Five Giants: A Biography of the Welfare State, second edition. London: HarperCollins. Titmuss, Richard M. 1950. Problems of Social Policy. London: HMSO. Titmuss, Richard M. 1958. Essays on ‘The Welfare State’. London: Allen & Unwin. Tomlinson, Jim. 1997. Democratic Socialism and Economic Policy: The Attlee Years, 1945–1951. Cambridge: Cambridge University Press. Tomlinson, Jim. 1998. ‘Why so Austere? The British Welfare State of the 1940s’. Journal of Social Policy 27: 63–77. Webster, Charles. 1990. ‘Conflict and Consensus: Explaining the British Health Service’. 20th Century British History 1: 115–51.

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Webster, Charles. 1998. Health Services Since the War. 2 vols. London: HMSO. Welshman, John. 1997. ‘School Meals and Milk in England and Wales, 1906–45’. Medical History 41: 6–29. Welshman, John. 1999. ‘Evacuation, Hygiene, and Social Policy: The Our Towns Report of 1943’. The Historical Journal 42: 781–807. Welshman, John. 2006. Underclass: A History of the Excluded 1880–2000. Hambledon: Continuum. Wincott, Daniel. 2011. ‘Images of Welfare in Law and Society: The British Welfare State in Comparative Perspective’. Journal of Law and Society 38: 343–75. Zweiniger-Bargielowska, Ina. 2002. Austerity in Britain: Rationing, Controls and Consumption, 1939–1955. Oxford: Oxford University Press.

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9 Reinforcements for the Wage-Earners’ Welfare State? The Effects of the Two World Wars on Australia’s Model of Welfare Christopher Lloyd and Tim Battin

FOUNDATIONS AND STRUCTURAL PEC ULIARITIES O F THE AUSTRALIAN POLITICAL ECONOMY AND WELFARE S YSTEM The development of the Australian welfare system reflects, in part, the constitutional history of the country as a series of self-governing and almost independent, democratic colonies in the second half of the nineteenth century that prospered under the Pax Brittania. Apart from small volunteer involvements in foreign, imperial wars in New Zealand and Africa, Australians had no significant experience of warfare, and once federated in 1901, the new, independent nation had no significant armed forces. The welfare system that later developed owed much to the federal character of the governance system with a large retention of states’ rights, as well as the settler society experience of resource-rich prosperity, labour scarcity, and high employment, until the experience of an economic depression and severe unemployment in the early 1890s. A form of democratic and constitutional liberalism reinforced an unusual combination of state ownership, active labour organization, and sociocultural egalitarianism that stressed fairness and lack of class distinction but also the value and necessity of masculine solidarity, supposedly in order to prosper in a difficult environment. We argue that, as deeply set as this structure was, World War I did change the scale of welfare in the new federation, and World War II changed the welfare system in both scale and structure.

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The Australian welfare system on the eve of World War I reflected this political economy and society that had developed in Australia by that time. By the late nineteenth century Australia had the highest average income per capita in the world, the product of the settler socio-economic system of resource-dependent export development and a nascent import-replacement, protectionist industrial policy. At the same time, a significant organized labour movement had developed and by the early twentieth century the Labor Party had risen in strength to have the highest working-class-party support in the world. The first national Labor government achieved office in 1904, and the 1904–16 period was dominated by the party. In the era before World War I, labour and liberal political ideology and programmes established a system of state intervention in economy and society, which we can call labouristprotectionism (Lloyd 2003), and which had the beginnings of a system of social welfare that later become known as the ‘wage-earners’ welfare state’ (see the section ‘Where Does Australia Fit?’). The fundamental features of this system were the promotion and protection of high levels of employment, high wages, and the male-breadwinner model of work and family life. Welfare measures were seen as supplementary to the high employment/high wages ideal. This can be understood as a strategy by organized labour and socialharmony liberals to redistribute the economic rents from resource export wealth to the development of a home-owning, working-class and lowermiddle-class suburban society. The key institutions that implemented this policy were the Court of Arbitration (legislated 1904), the corresponding encouragement of high rates of unionization, national industrial protectionism (from 1906), public ownership of many productive enterprises (including state savings banks and the Commonwealth Bank of 1911), public-housing schemes, and several limited welfare measures, such as old-age pensions and work-based sickness benefit. By 1914 the unusual wage-earners’ welfare state had been cemented in place. At the outbreak of war the Australian government responded to the British need with alacrity, even though military strength played no significant role in Australian life at that time. In 1914 the armed forces were deliberately kept very small under the Defence Act of 1903, which effectively prevented a standing army from being formed. Therefore, the sudden ‘call of the British Empire’ in 1914 had to be met with an all-volunteer army to be equipped rapidly, trained, and transported to the other side of the world in order to participate in the British/French Dardanelles Campaign of April 1915. The Australian Army stayed on in the Middle East, and more so in the Western Front theatres, suffering large casualties (see the section ‘The Scale of the Involvement and Cost’), yet remaining a volunteer force, conscription having been rejected in two referenda in 1916 and 1917.

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The Deeper Structural Context of War Impacts Due to the large number of casualties and the increasingly politically divisive nature of Australia’s involvement, the initial impact of World War I upon the further development of the welfare system was very significant but does have to be seen in context as one of many forces at work over a longer time span. That is, as well as with the influence of the two world wars, the development of the system has to be seen as largely determined by several long-term, interconnected structural forces that pre-dated World War I, including: • The socio-economic culture of a particular combination of informal, collective social cooperation and self-reliance that sprang from Australia’s founding, first as a penal colony and then as a settler society, and which had the significant extra dimensions of the large Irish-Catholic contribution to the population (and therefore feeding an undercurrent of antiBritish feeling), which was reflected later in the resistance to conscription; • The White Australia Policy of immigration restriction, associated with the Anglo-Celtic settler society and a policy Australia had in common with several other countries in the Pacific Rim (Bashford 2014); • An interventionist state that was central to the process of assisted immigration, settlement, and economic development through ‘state experiments’ (Reeves 1902) and which continued to play a central role in ownership and economic management, such that the period from the 1860s to the 1930s has been described as a period of ‘colonial socialism’ (Butlin 1959);¹ • The divisive party political class and ethnic politics deriving from the economic depression and political crisis of the early 1890s (reflected in the bitter struggle over war conscription in 1916–17 and the consequent split in the labour movement); • The complexities of the structure of the federal polity that emerged by 1901, in which the states (more than central government) retained the main welfare powers; • The dependence on the varying electoral fortunes of the Labor Party for the furtherance of welfare and interventionist economic policy from the early twentieth century. Into this set of continuing structural contexts came the scale of veterans’ needs following extensive (but almost entirely off-shore) military involvements in two world wars. As detailed below, Australian forces had major ¹ The data on the size of public spending show that Australia was the highest in the world in the 1870–1910 period (Higgins and Dow 2013, 279, drawing on Lindert 2004), and on the narrower measure of social transfers Australia was above the advanced-country average until at least the mid-1920s (Higgins and Dow 2013, 281).

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involvements in both world wars in many theatres of operation (e.g. the Middle East, Europe, North Africa, and the Pacific) and suffered hundreds of thousands of casualties (dead and wounded) in total. On the other hand, however, Australia suffered almost no on-shore physical damage requiring post-war reconstruction. Instead, the key term for post-war rehabilitation was ‘repatriation’, that is, the bringing home of military personnel (able and disabled) from foreign theatres of war, caring for them, and reincorporating them into civilian life, which was no less of a long-term process. The shock of the World War I involvement and aftermath reverberates culturally, politically, and socially still today² and has greatly conditioned the responses of state and society, especially with regard to welfare development and, on a larger scale, the total war mobilization of World War II.

The Significance of the Australian Constitution As mentioned above, understanding the constituted structure of the Australian polity is essential for understanding the history of the welfare system and the impact of the wars: the federal constitution of 1901 (underpinning at present nine parliaments and fifteen houses of parliament, each with substantial and jealously guarded powers),³ the two-party system, which in turn is an outgrowth of the Westminster-style system of responsible government (i.e. where the executive is formed within and responsible to the parliament), and a preferential voting system of single-member constituencies for the House of Representatives.⁴ A further complication is the American-style composition of the Senate, with equal representation from each state and, since 1949, a complex proportional representation voting system. A consequence of this is that most governments lack a majority in the upper house and this can result in a form of gridlock. The two-party system was consolidated prior to World War I (in 1909); one of the two parties, the Australian Labor Party (ALP), had been, and so remained, the chief architect of the Australian labourist-protectionist and associated welfare system ever since it had begun to crystallize in the late

² The ANZAC legend was a conscious creation as a sort of national founding myth stemming from the blood sacrifice and supposed courage and ‘mateship’ that arose from the Great War ‘sacrifice’ by volunteer soldiers on behalf of freedom. ³ Castles and Uhr (2005) have rightly argued that the federal structure has been a significant hindrance to welfare development. ⁴ The Australian electoral system does have other significant features, notably proportional representative voting for the Senate, compulsory voting, and preferential voting. The consequences of these have been a reinforcement of the two-party system in the House of Representatives, the dominant legislative chamber, and a multi-party Senate, usually without a majority party.

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1890s.⁵ The ALP and its developmental, employment and welfare agenda had roots in the conflicted colonial-level (pre-federation) politics of the 1890s. From the very beginning, one of the fundamental commitments of the ALP (as one of several labour parties in the pre-federation colonies from 1891) was state intervention in industrial relations through legally sanctioned conciliation of disputes, wage setting and, later, forced arbitration of disputes over wages and conditions. While the topic cannot be covered here, it is important to acknowledge the influence of Catholic social thinking on the ALP (the party which then, and for most of the twentieth century, had a high Catholic membership and support base). As Paul Smyth (2003, 18–20) has shown, in the Australian setting this meant that emphasis would be placed on a living wage based on the family unit, together with the means of self-sufficiency provided to social groups by the state. From very early on then the ALP became associated with an interventionist and developmental state that tied together an agenda of public ownership and associated promotion and protection of industrial development and high employment, redistribution via the wage system and work-based welfare, combined with limited, state-provided and mainly targeted welfare measures. Transferring the rents from the resource-rich export economy to raise the material standard of the working class, largely through the wage system, suburbanization, employment protection, and public investment, was the implicit foundation of the labouristprotectionist ideology. Several other important characteristics of the federal constitution that helped determine the complicated way in which the welfare system and its ALP instigator emerged and developed are pertinent to the present discussion about the impact of the wars. These characteristics include the fact that the main revenue powers have been shifting towards the federal level of government throughout the twentieth century, especially since the war emergency of 1942 when the Commonwealth assumed control over income-tax collection. This trend occurred while expenditure powers on health, education, family welfare, and justice (all areas of increasing expenditure throughout the twentieth century) remained with the states.⁶ But defence (and therefore veterans’) affairs were federal matters. The crucial industrial-relations power was divided ⁵ Australia had universal male suffrage, secret voting, and legal unionism since the 1860s in all the colonies and so gaining the franchise was not an issue for organized labour. In the 1890s, two of the six colonies also implemented female franchise and it was included in the national election of 1902. The pre-1901 political history is sometimes insufficiently known by comparative political science scholars of welfare systems, who too often seem to think ‘Australia’ did not exist before 1901. In fact the six predecessor ‘colonies’ (actually independent countries in all but foreign policy) had already come together to form a semi-unified country (and four of them had already been unified until the 1850s) with similar political economies, policies, and cultures across the continent. For examples of this ‘blindness’, see Schustereder 2010 and Schröder 2013. ⁶ Power over old-age and invalid pensions was always federal. In 1946, a constitutional amendment transferred from state to federal all other social service powers, such as unemployment

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between state and federal parliaments. Furthermore, the Senate was created as a very powerful chamber, equal to the House of Representatives in all matters other than in the initiation and amendment of money bills, and although supposedly formed to protect states’ rights, it was in fact a party political house from the very beginning, although sometimes not reflecting the party majority in the House of Representatives where governments are formed. In addition, however, the role of the High Court (the constitutional court) has proven crucial at various stages in the welfare story through important decisions that have altered the balance of power between state and federal levels.

The Beginnings of an Official Welfare System The labourist-protectionist set of measures that the Lib–Lab (Liberal–Labor) unofficial or official majority legislated into existence in the 1904–12 period was both a regulatory regime of the capitalist economy and a rudimentary welfare system that aimed to limit welfare to being just a supplement to the policy of job protection, high wages, and industrial development. These early foundations, together with the peculiar and lasting historical path of the regime that was established through the success of working-class politics between 1890 and 1913, provide the context for any examination of the impact of the two world wars on the development of the unusual nature of the Australian welfare regime. Before 1900 welfare had largely been a private and charitable matter. Australia, unlike Britain or Canada, had no Poor Law system, but it did have an extensive network of charities and non-government insurance agencies that provided for sickness insurance for about one third of the population. The growing disquiet over the impoverished elderly and the sick prompted state governments and the new federal government to begin to take up their responsibilities for welfare in the first decade of the twentieth century, mostly within the framework of the wage-earners’ welfare state, supplemented by various charities (especially church organizations and friendly societies) that were engaged in welfare provision. Even though the new constitution gave the pension power to the federal parliament, some states saw the urgency of acting, and introduced old-age pensions before the federal government acted, which it finally did in 1909, thus subsuming the state schemes (Table 9.1). This pension, in line with the emerging model, was means-tested and paid for from general revenue. Overall, then, one of the main effects of this path-dependent, structural complexity set out above has been that the welfare system has developed in a payments, widows’ pensions, pharmaceutical and hospital benefits, medical and dental services, child endowment, and family allowances.

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Christopher Lloyd and Tim Battin Table 9.1. Main Australian social security benefits, 1901–12 Benefits Age pensions (Victoria) Age pensions (New South Wales) Invalid pensions (New South Wales) Age pensions (Queensland) Age pensions (federal) Invalid pensions (federal) Maternity allowance (federal)

Date Commenced 1901 1901 1907 1908 1909 1910 1912

Source: Jones (2002, 7).

patchy and uneven way, depending largely on the electoral success of Labor at state and federal levels, on Senate obstruction or its lack, and on jurisdictional changes through agreements, constitutional referenda, or High Court judgements. Veterans’ welfare, however, has always been an activity of federal parliaments and is therefore a major part of the welfare story, as discussed presently.

Where Does Australia Fit? The Shifting Nature of the Australian System The peculiarity of the Australian system that had this early birth is certainly noteworthy. Despite attempts by Esping-Andersen onwards (cf. Hall and Soskice 2001) to place Australia in the liberal-market-economy model of welfare and capitalist development, such a characterization does not suit it. Francis Castles and Deborah Mitchell (1992), Castles (1994; 1996), John Murphy (2010; 2011), Chris Deeming (2013), and others, have argued that Australia (along with New Zealand) really represents a ‘fourth world’ of capitalism and social welfare development from the late nineteenth century onwards. The fundamental reasons for this claim are that Australia does not fit any of Esping-Andersen’s three worlds, nor does it fit either of Hall and Soskice’s two varieties, because historically it, along with New Zealand, has had a peculiar combination of several features not found elsewhere,⁷ in addition to some of the more usual features of advanced welfare states. To reiterate briefly, these peculiar features are: • The centrality of compulsory arbitration and wage-setting in the labour market, with corresponding reinforcement of (legalized) craft unionism, ⁷ Large-scale (mostly assisted) immigration for labour supply was an important component of the Australian model, and was a policy shared with some other Pacific Rim settler societies. The racial basis of the ‘White Australia’ policy was also not unique; some other Pacific Rim countries relied on similar approaches (Bashford 2014).

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• • •

•

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workplace organization, and demarcation with historically very high working-class wages and historically high rates of union density; A close link between wages, employment, and industrial protection; A close link between certain welfare provisions (e.g. sickness benefit and later child care and maternity leave) and employment; A non-contributory system of welfare benefits paid instead from general revenue—a corresponding rejection by Labor of social insurance in favour of retention of the social model said to be based on the male bread-winner benefiting from industrial arbitration and workplace bargaining in the context of progressive income tax and subsidized home ownership; Strict means-testing of state welfare benefits and a corresponding rejection of universalism for most measures;⁸ A reliance on other patchy, privately negotiated, additional welfare measures paid by employers as bargained workplace benefits, such as maternity leave; An ambitious, subsidized housing policy between 1945 and the early 1960s, leading to one of the world’s highest levels of home ownership at that time; Some limited, legislated, universal (not means-tested) state-provided measures such as old-age and veterans’ pensions, annual leave, annual bonuses, long-service leave and, until the 1980s, a gradual reduction in normal hours of work.

We can sum up, then, this ‘fourth world’ of welfare with Castles’ term ‘wage-earners’ welfare state’, a system based essentially on principles of workbased welfare, a full-employment policy (in the third quarter of the twentieth century), a housing policy, and the targeting of most state welfare measures through means testing. It is therefore essential to see that welfare was intertwined with the labourist-protectionist regime of the political economy, particularly in the early twentieth century (but modified significantly in the 1940s, as we will show later in this chapter), through which high employment was supposed to be achieved. The 1930s was of course a great problem for this policy and the short-lived Labor government of 1929–31 was unable to prevent an undermining of the arbitration and wage system through austerity, which was still in place in 1937–8.⁹ The Depression laid bare the limitations of ⁸ Denmark and the UK also had non-contributory and means-tested welfare benefits, so those features were not entirely peculiar to Australasia. ⁹ Indeed, one of the initial impacts of World War II was a rapid achievement of full employment, starting from a level of 10 per cent unemployment in 1939, and this despite beginning with limited war-preparedness before the hostilities broke out. Most political leaders, unlike the leading economists, were not yet Keynesian in outlook, and achieving genuinely full employment was not coherent or urgent policy (Millmow 2010, 255–6).

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the labourist foundation of Australia’s political economy and welfare system, and the policy of the non-labour parties was shifting towards a contributory social-insurance model that Labor saw as yet more regressive (see the section ‘The Failure of National Insurance…’). World War II changed the dynamic, however, and allowed the ALP to reconsider its reliance on labourist strategy. It has been argued by Rob Watts (1987) that the 1941–9 era of Labor government saw the birth of the Australian welfare state in its essential structure in the post-war period. Critically, however, between 1943 and 1974 social welfare policies were underpinned by full employment, a point that Watts, for example, does not appear to see as significant because, according to him, ‘no affront to the fundamental prerogatives of capital could be or were contemplated’ (1999, 95). The case for Australia’s peculiarity made by Castles, and by those taking a similar course, has been augmented by Paul Smyth’s argument (1994; 1998) that the middle of the twentieth century is the more significant of the two periods—the early twentieth century (‘social laboratory’ period) and the 1940s (‘reconstruction’ period)—which are usually singled out in analyses of Australian social policy because of the policy shift that occurred in the latter of the two and because of the success of full-employment, Keynesian, economic policy. Labor’s preferred model had always been one of income distribution via the wage and industrial-relations system and means-testing of redistributive transfers from general revenue since it argued that this was the most egalitarian approach. The consequence is that this has tended to restrict the majority position of Labor into a comparatively low-tax, means-tested (rather than universal) welfare system. In the 1940s, however, the ALP government shifted considerably towards a social democratic rather than a labourist position.¹⁰ The counterfactual scenario of what might have developed if more Labor governments at the national level had been elected during the full employment period of 1943–74 cannot be resolved. Certainly, the collapse of full employment was central to a tax backlash in the late 1970s and the 1980s (Stretton 1980), which, in turn, abated in the 1990s after the effects of neo-liberal policies were felt. However, the pervasiveness of neo-liberal thinking inhibits the possibility of building a more progressive tax system. In addition to this, Australia has had no inheritance or wealth taxes since the 1970s.¹¹ Castles, however, citing the work of van Arnhem and Schotsman (1982, 290), has made the point that if we accept the welfare state as the primary

¹⁰ See also our comment on Marian Sawer’s (2014) argument in ‘The Failure of National Insurance…’ later in this chapter. ¹¹ Inheritance taxes, which are usually progressive, are constitutionally a state matter in Australia and their abolition in 1979 through a process of interstate competition was a revealing example of the problematic fiscal nature of the Australian Federation.

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agency of social protection, then it is critical to recognize that until the early 1970s Australia (as a heavily means-tested welfare state) was achieving among the lowest levels of income inequality amongst the Organisation for Economic Co-operation and Development (OECD) nations: ‘only the Netherlands, Sweden, and Norway…manifested greater post-tax, post-transfer, income equality than Australia’ (Castles 1989, 18). Part of this picture of functional equivalence was the effect of the high level of house ownership and a low mortgage interest rate regime in the post-war years (the result of a combination of state-built housing, cheap land, cheap building materials in a benign climate, and low interest rates through state and mutual lenders), which had the effect of underwriting the old-age standard of living (Castles 1996).

AUSTRALIA’ S WORLD WARS: OVERVIEW OF THE E FFECTS As we have argued, it is within the ‘fourth world’ of the wage-earners’ welfare system that the effects of the world wars have to be contextualized. In doing this it is necessary to distinguish between the structural history and the scale history, that is, the issues concerning (a) the history and differences between the path dependency (if it’s so) of Australia’s peculiar model of a means-tested, wage-earners’ welfare state and the alternative model of a social democratic welfare state, which have to be separated from (b) the issues of expansion and scale of the welfare system in terms of total expenditure and the range of measures adopted. World War I, while having the larger effect of the two wars on the minds and bodies of Australian combatants (62,000 killed and 152,000 maimed) had a lesser effect on the peculiarity of the welfare system. Clearly this was a consequence of the far less developed welfare system that existed at the outset of the war and the strength of the path dependencies of political economy that had developed in the previous decade or so. In contrast, there is no doubt about both the shift in scale that occurred between 1939 and 1949— £16 million to £123 million (R. M. Crawford, cited by Watts 1999, 84)—and a corresponding shift in government revenue, as well as a federal jurisdictional and ideological shift. One question is concerned with how much this can be attributed to World War II and how much to the long-term consequences of the Great Depression. Both played a role, but it is clear that the war was decisive as a mechanism. In parliamentary debate and in broader public discourse, the justification for uniform income taxation collected by the Commonwealth (overriding erstwhile state prerogatives from 1942) was

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made consistently in terms of the war effort. When introducing legislation dealing with social welfare, the Treasurer, Ben Chifley, couched the argument in terms of ‘every benefit which one section of the community has over another must be surrendered in the interests of total war’ and, in opposition to the six states, that the usual conservative argument about states’ rights should have no decisive role in the context of war.¹² The two wars had significantly different policy effects because their historical, economic, and political contexts were different. World War I saw the split and demise of Labor and the emergence of a stronger (but electorally unsuccessful) socialist left. The two ALP splits of 1916 and 1931 assisted the hegemony of conservatism throughout the era 1916–40. Notwithstanding, or perhaps because of, this hegemony, 1928 and 1938 saw two attempts to legislate social insurance (which perhaps should be seen as early attempts at privatization), opposed by Labor broadly on the grounds of protecting the male-breadwinner, arbitration, and redistributive model. World War II had a different political effect, and the 1941–9 period (under the prime ministerships of John Curtin and Ben Chifley) was one of radical reform and improvement of welfare, although the federal constitution thwarted the move towards an even more comprehensive social democratic system. That war certainly necessitated a new level of state economic and social planning and regulation.¹³ The effect of the war was to consolidate Labor’s electoral strength, which, it can be argued, continued into the early 1950s, despite electoral loss in 1949.¹⁴ The 1955 Cold War split in the party, however, marked the end of the era, from which Labor did not recover until 1972, attributable in part to the anti-communist, right-wing, splinter party, the Democratic Labor Party (DLP), which directed its support to the conservative parties ahead of the ALP. The effect of the Cold War, then, was profound in keeping the ALP from governing in the prosperous late 1950s and 1960s when new social movements were agitating for a broader conception of citizenship and inclusion. Were it not for the combination of the split and the DLP’s support for Conservatives, Labor’s performance would likely have met with electoral successes in 1961 and 1969, and arguably also in 1963. Only in the ‘Vietnam War election’ of 1966, which was further narrowed to conscription, was Labor not competitive.

¹² Commonwealth Parliamentary Debates (Hansard) Canberra. 1942. House of Representatives 170: 15.5.1942, 1285–7. ¹³ A contemporary of the World War II reconstruction period, Ronald Walker, records that a question of the time was whether a mixed economy of full employment and a more complete set of social services ‘would evolve rapidly in the direction of complete socialism or…continue to offer a field for private enterprise’ (Walker 1947, 341). ¹⁴ Labor was strongly competitive in the 1951 election, and won the popular, two-partypreferred vote (50.7 per cent) in the 1954 election but was thwarted by a gerrymander.

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IMPACT OF WORLD WAR I: EMERGENCE OF PARALLEL WELFARE REGIMES

The Scale of the Involvement and Cost Returning now to World War I in more detail, we see that Australia joined the war as Britain’s quasi-colonial dependency and ally at the immediate onset of hostilities.¹⁵ From the population of about five million, a significant volunteer army, the Australian Imperial Force (AIF), was rapidly raised. This army was then despatched to the emergent Middle East theatre of war for further training in Egypt. On 25 April 1915, a combined Australian and New Zealand Army Corps (ANZAC) entered hostilities as part of a larger British and French invasion of Turkey at the Gallipoli Peninsula. This whole campaign became an Allied military disaster (and a Turkish victory but at a great cost in terms of casualties) and had to be withdrawn by December 1915, with about 8,000 Australian dead and 20,000 wounded, and larger numbers of other Allied dead, as well as more than 56,000 Turkish killed. The AIF then moved mainly to the Western Front and a cavalry regiment was despatched to the Palestine– Syria theatre of war. About 420,000 Australians enlisted for service throughout World War I, which represented 38.7 per cent of the male population aged between 18 and 44.¹⁶ About 350,000 served in overseas theatres of war. By the end of hostilities on 11 November 1918, about 62,000 individuals in the Australian forces had been killed and 152,000 injured. This mortality rate was one of the highest casualty-to-combatant ratios of all belligerents (thanks to the use of the AIF in some of the heaviest fighting on the Western Front). The Australian contribution to the defence of the British Empire came at a dreadful cost to human welfare, as was the case with all the Great War belligerents. As David Noonan points out, Of those Australian soldiers who survived, more than half of them were discharged medically unfit. Of those who were not discharged medically unfit, 60 per cent of them applied for pension help in the post war period; so four out of five servicemen survivors were damaged or disabled in some way. Of those who did not survive, it is now estimated that 62,300 died (+/− 400), approximately 550 by their own hand,

¹⁵ Following the 1901 federation Australia was, by 1914, an independent country but there was, as with other ‘dominions’ of the Commonwealth, a lingering official dependency on foreign policy which was not officially severed until the Statute of Westminster of 1931, requiring, in turn, ratification by dominion parliaments. There were also very strong cultural, political, ethnic, and economic ties between Britain and Australia. The entry into belligerency in 1914 was thus not in doubt, legally or emotionally. ¹⁶ Australian War Memorial. https://www.awm.gov.au/articles/atwar/first-world-war, accessed 17 April 2017.

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mainly in 1919 and 1920, and a further 8000 men would die a premature death due to war-related causes in the post war years. (Noonan 2014)

Significantly, the Australian Army was one of the few armies (including the Indian Army) that remained all-volunteer throughout the war. This was despite the intentions and efforts of the Australian government to implement conscription for overseas service via two defeated referenda in October 1916 and December 1917. These were instigated after voluntary recruitment began to decline following public knowledge of the heavy casualties of 1916 and 1917 and growing home-disenchantment with the involvement. The first referendum, strongly instigated by Labor Prime Minister William Morris Hughes, but opposed by a majority of the party, resulted in a split in the government and the expulsion of Hughes and his minority. His faction was supported, however, by the Conservative opposition to stay in government, and together in early 1917 they formed the new Nationalist Party, which won the May 1917 election. Even though the second referendum was lost (by a larger margin), Hughes retained the prime-ministership until 1923 and so became the pivotal figure in the war and early post-war years. This political development within the very conflicted political climate of the period from 1916 to the early 1920s, in common with much of the Western world, was important for the way the state responded to the aftermath of the war, as we shall see presently. Financing the war was a major issue for the federal government and required important innovations with long-term consequences for welfare, particularly in the sense of extending the federal domination of fiscal power. The introduction of a national income tax in 1915, shared with the states, was permitted under the emergency powers provision of the constitution. After the war, however, this tax was not abolished, as the states agreed to continue with it in the face of growing debt-servicing obligations at both levels of government, albeit levying it at different rates in different states. This permanent increase in total government revenue became significant when World War II broke out. Another innovation was the issuing of federal war bonds by the Commonwealth Bank, a financial innovation that also contributed to the shift of financial power to the federal level of government, which would contribute to the shift from coordinate to cooperative federalism that characterized twentiethcentury governmental relations in Australia. This general shift was consolidated firstly by the 1927 Financial Agreement between state and federal jurisdictions, giving effective power over all public debt to the federal level, confirmed by successful constitutional change and the establishment of the Commonwealth Grants Commission in 1933, which was (and still is) responsible for horizontal fiscal equalization. These institutional innovations, attributable in part to the costs of World War I, became very significant in the World War II era. The costs of veteran repatriation were very high and immediately overshadowed other federal welfare measures—old-age and invalid pensions, workers’

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compensation for workplace injury, and maternity allowances. War pensions were begun already in late 1914. John Murphy points out how the new veterans’ welfare system that emerged by 1920 drew on the existing precedents of social policy regarding needs and did not represent a significant institutional innovation: The aged pension provided a model for thinking about war pensions, workers’ compensation schemes provided a precedent for compensation for impairment, and the existence of a male basic wage was a benchmark against which the value of benefits and the desirability of returning veterans to work were measured. The basic wage, reflecting as it did the norms of a male breadwinner model of society, profoundly affected how veterans’ and war widows’ pensions were imagined. (Murphy 2011, 110)

In other words, veterans and war widows were considered to have the same needs as civilians, and the return-to-work policy was a central imperative of veterans’ welfare. Keeping the costs as low as possible was also always an imperative of Conservative governments.

The Parallel Veterans’ System Once the great scale of need became apparent, however, the federal government was obliged to recognize the necessity for a fully formed bureaucracy, and an extensive set of rehabilitation measures was implemented. In 1918, a Repatriation Commission with a dedicated bureaucracy was established within the Federal Department of Repatriation and was given responsibility for the new system of benefits. These included: • • • • • • • • •

A one-off war gratuity (in the form of an interest-bearing bond); Sustenance payments while waiting for work; War veterans’ and war widows’ pensions; Rehabilitation and training schemes; Hospitals and hostels for the incapacitated; Free medical care for veterans; Medical benefits for widows and their children; Educational allowances for veterans’ children; War service homes for sale for which there were financial and interest rate subsidies; • Extensive subsidized land settlement (soldier settlement) schemes for veterans (Murphy 2011, 119).¹⁷

¹⁷ The soldier settlement system was largely an eventual failure due to inadequate size of holdings, often in marginal areas, over-burdensome debt obligations, and drought (Lake 1987).

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Apart from the trauma of the returned soldiers, two other groups also suffered in the sense of a reduction in their social position and welfare. These were the women and the so-called enemy aliens. While women had been incorporated to some extent into new war-work roles, especially in munitions and agriculture, and had become more independent generally as heads of households, they were ‘required’ to revert to their pre-war roles as non-working wives and mothers. As Michael McKernan points out, women were both excluded from the drinking camaraderie of veterans (something that the men used to help them cope with traumatic memories) and from the workforce: At an organisational level the lives of Australian women did revert to normality soon after peace was declared…most women became full-time wives and mothers again. It would not require much imagination to see that the transition might not always have been smooth. The woman whose husband was at war was independent, she managed the house, handled the money, took all the decisions. On her husband’s return she had to learn again to be submissive, to leave things in his hands, to be, at best, a partner, rather than a manager. She had to learn to tolerate his new friends and to accept that there was a part of his life she could not share…. She had to be his emotional supporter as he struggled to cope again with domestic and civilian life. And in many cases she had to learn to live on his pension, if he did not return, or if he came back incapacitated. (McKernan 1984, 222)

As for ‘enemy aliens’, the approximately 7,000 German and Austrian nationals (not Australian citizens) who had been interned during the war were shown no leniency and were almost all deported afterwards. Of course, not all people of German descent were interned, but there may have been as many as 100,000 such people by 1914. Many were citizens, but many of them also hid their national origins and changed their names. The deportees’ spouses went too, unless they were citizens before marriage and could therefore stay if they chose to, as could their Australian-born children. This was harsh and unbending, and the policy and its war-scarred background served to reinforce the xenophobic superiority of the British ascendency within the White Australia Policy, which had been showing signs of weakening before 1914. The war served to increase nationalist fervour and jingoistic hostility towards foreigners. Thus there emerged by the early 1920s a much greater welfare system than existed before the war, in the form of the veterans’ welfare state. The cost was also much greater. War pensions were more generous than the civilian old-age pensions, and war widows continued to receive a veteran’s pension after their husbands were deceased. By 1934, 72 per cent of war pensioners were women. The costs also continued for decades. The total expenditure on veterans and their widows and children was higher in 1939 than in 1923, after the initial

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spike of expenditure following the war. Murphy (2011, 124) shows that the total annual expenditure on veterans was approximately £8 million in 1924 and £9 million in 1939. For the entire interwar period the ongoing federal welfare costs of the war roughly equalled the costs of the civilian welfare system. According to Murphy: ‘They were, in this sense, parallel welfare states, marked by boundaries of whom they were for, and why’ (2011, 125). These repatriation costs had to be added to the much greater ongoing financial cost of the war due to interest on the massive loans raised to fight it. In the 1920s servicing the war debt comprised between one quarter and one third of federal government expenditure, despite the higher revenue from federal income tax from 1915. These ongoing costs of war and repatriation have been cited by Stephen Garton (1966), among others, as a reason for social policy paralysis in the interwar period. This, however, neglects the fundamental structural philosophy of the welfare system that had emerged by the 1910s, that of the wage-earners’ welfare state, into which the veterans’ welfare system was more or less fitted. There was, for example, always an emphasis on encouraging veterans into (supposedly well paid)¹⁸ work with the aim of becoming free of welfare but with the option of being supported by the state safety net if this was unachievable. As in the case of the parallel civilian system, it was state-consolidated revenue rather than any insurance fund that paid out. In this regard, and contrary to the institutional inertia view, it is not true to say there were no attempts by the conservative hegemony to innovate in the welfare area in the interwar period.

The Failure of National Insurance and the Opposition of Labour Indeed, two attempts were made to legislate for national insurance for pensions and other measures, in 1928 and 1938. At the time it was argued that the great cost of the veterans’ welfare system made this a necessity. This is, of course, quite a different model for financing welfare and one much more common in Europe at that time, having been pioneered in Germany in 1883–4 and implemented in a limited way in the UK by 1911, before being extended in 1920 to include a range of social welfare measures. The chief argument adduced for such a major change was fiscal: the rising cost for the federal government in a context of inadequate revenue and the financial legacy of the

¹⁸ The problem of inflation that had arisen during the war and which had eroded the ‘living wage’ level was dealt with afterwards through the Arbitration Court by a system of indexation of award wages. The aim was to restore the purchasing power of wages and the general prosperity of the early 1920s (due largely to booming food and raw-material exports), assisted by the restoration of employment.

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war, which necessitated the means test and targeted financial assistance. But other factors were influential (and encouraged by the state): the conservative ideology of self-reliance and thrift, and the liberal ideology (reflected in Lloyd George’s British model) of self-respect (Murphy 2011, 131). In 1928, a National Insurance Bill was proposed to the federal parliament, which contained a compulsory contribution provision to be paid equally by employers and employees earning up to twice the basic wage. The new benefits would include sickness, disability, payments for dependant children, widows and orphans, and an old-age pension. There was no provision for unemployment insurance. However, growing opposition both from within and without parliament—from the perspective of private insurance companies, friendly (mutual) societies, employers generally, and the industrial and political labour movement—succeeded in first delaying the bill until after the election of November 1928 (narrowly won by the conservative Nationalist government) and then, in August 1929, postponing indefinitely any further consideration of the bill. A major opponent of national insurance was the labour movement on the grounds of the regressivity of that model and, in effect, their commitment to the wage-earners’ welfare state model, to which they became increasingly committed as the post-war decade proceeded. The principle of the ‘living wage’ for a whole family was by then widely incorporated into award wages, and the Arbitration Court ensured its enforcement. The progressive income tax system was supposed to fund the entitlements system. This had obvious consequences for women, who were expected to be wives and mothers, rather than workers, and were heavily discriminated against in the wage and employment system. Trade unions had become co-opted more or less completely into the conciliation and arbitration system, especially after the defeat of the One Big Union concept in the early 1920s. The national ‘common sense’ consensus was shown clearly in the attempt by the Bruce Nationalist government to undermine greatly or even abolish the federal Arbitration Court, which led to Bruce’s election defeat in October 1929, where he even lost his own seat.¹⁹ Further to this, progressive taxation under the income tax system was supposed to ensure that wage earners were already paying for the future of their old age as an entitlement. Of course, not all the labour movement was against national insurance, especially for unemployment, but federal/state jurisdictional division and employer resistance meant that by the 1920s Australia lagged well behind the more advanced European countries in this regard, with only Queensland having an unemployment benefits scheme by the onset of the Great Depression. The rapid rise and persistence of very high ¹⁹ Stanley Melbourne Bruce is one of only two prime ministers to lose his seat at an election, the other being John Howard, who in 2007 lost his at a federal election on the issue of weakening the centralized industrial relations system.

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unemployment in the early 1930s was the greatest test yet faced by the system. A patchwork of organized and ad hoc charities, together with self-reliant and cooperative food production, was initially all that stood between unemployed workers and destitution. State governments began to step into this desperate scene as the Depression went on. By 1933, the states had low-paid sustenance schemes tied to work programmes (‘work for the dole’) but these had to be supplemented by charities. Thus a sequence of Conservative governments was responsible for the repatriation and welfare of veterans, and the general management of the return to a peacetime economy and society. The split in the ALP in 1916 with its pro-imperial faction becoming the core of the Nationalist Party, together with an internal conflict between the radical left and the centrists meant that Labor struggled electorally in the 1920s, having lost both its rightwing faction and then its radical-left faction by 1920. Thus the ALP, the natural developer of the welfare system, was not in a position to build on the pioneering measures of the period up to 1916. The short-lived Labor government of 1929–31 was a victim of the Depression struggles. Another deadly split saw the right-wing minority again defect to the Conservatives and win the subsequent election. And a left-wing split also exacerbated the party’s dilemma. Labor seemed to be in the political wilderness, unable to respond to the ongoing economic and social crises of the 1930s. By the late 1930s, because the Depression had exposed the brittle nature of the wage-earners’ welfare state, Labor thinking began to turn towards a much broader role for the state. Meanwhile, the issue of national insurance returned in 1938 under the Lyons United Australia Party²⁰ government and the arguments in favour were much the same—fiscal and moral. The government had a majority in both federal houses and the National Insurance Act was passed in July 1938 (despite significant opposition from Labor inside parliament and vested medical and insurance interests outside), establishing a National Insurance Commission to implement the new system. This commission began work immediately. But the powerful financial and medical interests that opposed the commission gathered their strength and within nine months the government conceded defeat and the system was abandoned before the onset of the war. Labor also continued to oppose the contributory model (as regressive) in favour of the reliance on consolidated revenue and the arbitration system on the old grounds of wageearners’ welfare and the principle of the ‘living wage’. Without necessarily detracting from this view, Marian Sawer (2014), focusing on old-age pensions in Australasia, argues that there has been too little attention paid to the ²⁰ After the second of the Labor Party splits, in 1931, and the associated defection of right-wing Labor parliamentarians to the non-Labor side, the latter changed its name from ‘Nationalist’ to the ‘United Australia’ Party.

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connection between the advocacy of non-contributory welfare measures, on the one hand, and the principle of minimum and equal payments to men and women who are delinked from employment status, on the other. In other words, a non-contributory system, all other things being equal, will benefit women more than a contributory one.

IMPACT O F WORLD WAR II: DEVELOPMENT OF A WE L F ARE S TATE As with the onset of World War I, Australia entered World War II as Britain’s close ally and, as with the 1914–15 beginning, a volunteer army was rapidly equipped and sent overseas. At various times during the war this Second Australian Imperial Force, and later previously home-based militia battalions, was engaged in hostilities in North Africa, Greece and Crete, the Mediterranean, the Levant, the Dutch East Indies, Malaya, Singapore, Borneo, and New Guinea. Significant personnel were also employed in the European theatre of war in air and naval battles, especially in the Royal Air Force. In total, 37,000 combatants died (including thousands in Japanese prisoner-of-war slave labour camps) and 25,000 were wounded out of a total enlistment of 993,000 personnel, from a total population of about seven million (Australian Bureau of Statistics 1946–7). Of the total enlistment, 550,000 saw service abroad. The onset of the Pacific War in December 1941 necessitated the institution of a total-war economy in the face of the invasion threat. This resulted in full manpower direction and total mobilization of all human resources in the national defence. A massive increase in expenditure necessitated a large increase in taxation and borrowing. The election of 1940 saw the return of a minority Conservative government, which relied on the support of two Independents, but by the middle of 1941 criticism of its ability to prosecute the war effort effectively, together with dissent within the government, led to its disintegration. In early October 1941, the Independents switched their support to the ALP. Thereafter, the combination of Labor governments led by Curtin (1941–5) and Chifley (1945–9), the total-war emergency economy with full manpower direction by 1942 (with organization far beyond that of World War I due to the imminent threat from Japan), and the post-war socio-economic ‘reconstruction’, were deciding factors in the development of the welfare system. (The terms ‘post-war reconstruction’ and ‘reconstructionist’ are commonly used in Australia to denote both the official terminology of the time (in and of the new bureaucracy) and the normative connotations—the mixture of planning, socialist, and social democratic ideas and policies—associated with it.) James Walter’s 1988 case study of how intellectuals can bring about a turning point is an important micro-history of the reconstruction period. He argues that World War II brought about a break with pre-World War II

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conservatism, laissez-faire rhetoric, and policies that served the interests of the pre-war order (1988, 265). Walter makes the point that the tendency of some commentators to characterize the efforts of the reconstructionists (the economists and administrators clustered around Chifley’s leadership) ‘as variants within a liberal hegemony, and then to deal primarily with the alleged insufficiencies’ that pertain to the post-war changes, ‘obscures the fact that it was [the reconstructionists’] argument that won the day’ (1988, 263).

The New War-Induced State System This is, however, to get ahead of the story. First, a broad sketch of the scale and structure of the changes brought about by the war is necessary: • The Commonwealth (federal) public service doubled in size between 1939 and 1945 and became more coherently organized in order to prosecute the war; • In 1939, the Commonwealth Department of Social Services was created, although it was not operational until April 1941, when it became responsible for the administration of the Invalid and Old-Age Pension Act and the Maternity Allowances Act; • Young, highly educated intellectuals were recruited to public services in an unprecedented proportion, and many were personally affected by the Depression legacy of social degradation; • Universal income tax was assumed by the Commonwealth in 1942. This measure was justified by the Commonwealth on the basis that its adoption could ensure that individuals in states where taxation was too light would contribute on an equal footing during wartime; • The Department of Post-War Reconstruction was created in December 1942; • Widows’ pensions were established in 1942, and maternity benefits were extended to Aboriginal women; • Funeral benefits and improved maternity allowances, which became universal, were paid in 1943; • The National Welfare Fund was established in 1943; • Reciprocity with New Zealand in old-age and invalid pensions was realized in 1943; • In November 1945, the (completely independent) Commonwealth Court of Conciliation and Arbitration handed down a decision in favour of two weeks of annual holiday; • In 1947, a forty-hour-week ruling was made by the Commonwealth Court of Conciliation and Arbitration, and took effect on 1 January 1948; • Sickness and unemployment benefits were paid from 1944;

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• Pharmaceutical benefits were introduced in 1944, and were challenged in the High Court; • Hospital benefits were paid from 1945; • The Commonwealth Employment Service was established in 1945; • Child endowment, initiated in New South Wales for low-income families in the late 1920s, was extended to the entire country by the Commonwealth, paid on a universal basis, and delinked from employment status. It was passed into law by the coalition government in 1941 with crossparliamentary support, and amended by the Labor government in 1942; • The National Health Service Act, eliminating all charges to public patients in public hospitals and covering 50 per cent of the fees charged by general practitioners (and a range of specialists), was gazetted in late 1949, but ruled invalid by the High Court; • Broad constitutional change affecting the economy and welfare was sought by referenda in 1944, 1946, and 1948. In 1946, federal responsibility was secured for social security provision. The central question is what role the war played in bringing about these changes. To some extent, the answer is obvious. A generation that lived through the Depression, either as children or as young adults, all having either experienced unemployment directly or who knew of relatives or friends who were unemployed,²¹ was enlisted one decade later to fight against European fascism and Japanese militarism. The combined experiences set up an obvious quid pro quo, or what the historian Jill Roe has called ‘never again’ (Roe 1976, 217–27). Phrases such as ‘victory in war and victory in peace’ and ‘a war to win—a world to gain’ captured a mood that carried connotations of both class and nation. The war demonstrated that government intervention and public spending could achieve full employment, in contrast to the collective experience of the 1930s along with its attendant conservative and laissez-faire opinion. All this is consistent with Titmuss’s classic statement on the relationship between war and welfare: ‘The aims and content of social policy, both in peace and in war, are thus determined—at least to a substantial extent—by how far the co-operation of the masses is essential to the successful prosecution of the war’ (1958, 86). The more particular phenomena to trace are the precise ways in which this sociopolitical force expressed itself. One agency through which the socio-political weight of mutual obligation was articulated was the Joint Parliamentary Committee on Social Security, established by the Conservative coalition government in early 1941, but which also survived the collapse of this same coalition government. In terms of the ²¹ At more than 30 per cent, Australia had one of the highest unemployment rates among comparable countries.

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social security plans of the Labor Party, Thomas Kewley (1965, 179) has assessed the committee as something Curtin and Chifley looked to for crossparty consensus-building rather than inspiration. This is supported by Sheila Shaver (1987, 422) who, while finding the committee was decisive on some important questions, evidences Chifley’s ‘meagre blessing’ when the committee resumed its deliberations after the formation of the Labor government in late 1941. Apart from its cross-party composition, and the fact that the committee was one of the few joint committees to have survived the change of government, the legitimation the committee offered was partly achieved by its consultative approach, having held 177 community meetings across the country and taken evidence from some 400 witnesses by the time it was wound up in 1946. It produced ten reports, which covered a broad array of social services, including housing. A young Ronald Mendelsohn, who would later write an authoritative history of welfare policy in Australia (Mendelsohn 1979), serviced the committee and gave significant input to its reports. An important contextual point about the committee’s deliberations was the determination of the Labor government to begin the transition to social security while the war was being prosecuted, the ALP’s federal conference in November 1942 having resolved that post-war reconstruction must not be regarded as a diversion from the war effort but as part of it. Similarly, on unemployment, the committee drew a direct connection between individuals being ready to do whatever the government thought fit in terms of the war and being reasonably maintained (Joint Parliamentary Committee on Social Security 1942, Second Interim Report, para.11, 6 March).

Labour and Communism If it is accepted that historic changes of the kinds considered in this volume are to be explained in reference to the balance of class forces, as any ‘history from below’ would contend, then a critical agent to consider is the Communist Party of Australia (CPA) and the influence it was able to exert generally and, in particular, within the Australian Council of Trade Unions. The CPA, not unlike communist parties in other countries, employed methods to infiltrate the broader labour movement and had considerable influence from the late 1930s to the mid-1940s (Gollan 1975a). However, another instrument utilized by the CPA, which has received little attention, is the CPA’s organizing ability within the Army Education Service (AES) of the Australian Army.²² Salt, the authorized education journal of the Australian Army, commenced publication in 1941, had a print run of 185,000, and was distributed free of charge. The ²² See also Herbert Obinger, ‘War Preparation, Warfare, and the Welfare State in Austria’, Chapter 3 in this volume, for an account of publications in the Austrian Army.

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motto of the journal, ‘pass the salt’, increased the circulation to at least three times that of the print run, and the publication performed a central role in the work of the AES, which extended to lectures, classes, and group activities. A minimum of thirty minutes training for soldiers per week was set aside, but in reality this time was often extended. The mix of topics covered in Salt was eclectic, but a principal theme was the desire for (and expectation of) ‘economic security in the post-war period’ (vol. 4, no. 5, 3 August 1942). In social security matters, Salt covered the basic wage (February 1942), child endowment (April/May 1942), housing and demobilization (September and November 1942 and June 1943), university entry for servicemen and women after the war (February 1943), post-war careers (December 1943), and health (January 1944). These and other aspects of social welfare were also addressed in several articles on legislative changes and constitutional referenda, especially the 1944 ‘Fourteen Powers’ referendum, and the wartime election of August 1943. In 1942, the Army Education Service and the Commonwealth Office of Education commenced publication of the Current Affairs Bulletin (CAB), which contained longer articles, to encourage the principle that ‘servicemen and women should have freedom of thought’ (Salt, vol. 4, no. 13, 28 September 1942). Together with Salt, the CAB intended ‘to keep the soldier informed on the changing world and the avenues of employment likely to be open when peace comes’ (Salt, vol. 5, no. 1, 5 October 1942, 46). Criticisms were sometimes made about the left-wing bias of Salt but nothing ever seemed to come of the complaints. The relationship between the CPA and the ALP in the 1940s would seem to hold a clue about the ALP not being diverted from its preferred way of dealing with social security, at least not as a result of pressure from its left. Robin Gollan, a historian of the period and a member of the CPA at the time, recording the criticism of the broader economic and social programme (but offering no particular judgement on the ALP’s stance on social security) explains that the CPA’s criticism was muted in 1945 by the desire to present a united front. According to Gollan, the CPA saw the ALP programme as moving in a progressive direction, but had misgivings about the limited scope for public ownership (1975b, 219). Social security does not feature in this criticism, nor does it feature in Gollan’s more extensive treatment of the period (see, for example, 1975a, 161). Gollan captures the essence of the ALP’s position, which was that full employment—and all necessary planning to achieve it—was the road to social security (1975a, 111). Full employment was the necessary foundation upon which an expanding social security system would be efficacious. The rift between the CPA and the ALP came later, and not over economic or social policy, but rather over the CPA’s attempt to seize the leadership of the union movement (Gollan 1975b, 220), the countermove by anti-communist groups (which would bring into being the DLP, referred to previously), and

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over the Cold War more generally. In other words, there is no evidence to suggest that the CPA was agitating for a significantly different system of social security from the model adopted by the ALP. This seems unsurprising, as its stance until the watershed year of 1949 was that the capitalist system, in its entirety, required replacement. Arguing about the inadequacy of specific welfare payments in such circumstances was unlikely. (The topic of social welfare is not covered, for example, by Alistair Davidson in his 1969 book, The Communist Party of Australia: A Short History.) In terms of assessing the role of mass conscription, the Australian case presents a convenient one-country contrast, as conscription in World War I was a highly divisive social and political issue, whereas this was not the case in World War II. At the time of the European War of 1914–18, Australian society was riven with sectarianism, which an imperialist war, and more particularly the conscription debates surrounding the two referenda in 1916 and 1917, served to reinforce. During World War II the growth in support of conscription owed much to the capacity of the Curtin Labor government to argue for its adoption, which largely turned on Japanese aggression in the Pacific, including the attacks on Darwin and Sydney. (The policy of appeasement followed by the coalition between 1935 and 1939 meant that the Labor government would always be better placed to argue for an all-out effort.) The relative unity around conscription for the Pacific War also gained resonance when the CPA changed its stance towards the war, following Hitler’s invasion of the Soviet Union. A general prohibition on CPA activities that the previous conservative administration had put in place in June 1940 was lifted by the Labor government in December 1942. Not unrelated to the matter of conscription is the military participation ratio, which was one person in every seven of the total population. The ratio is higher (one in five) if militaryrelated production workers are included (De Maria 1989; Macintyre 2015).

The Significance of Constitutional Change A manifest connection between the World War II campaign and the development of welfare policy in Australia is to be found in the constitutional referenda of 1944, 1946, and 1948, all of which attempted to create greater capacity for social and economic policy. The most comprehensive of the referenda was the ‘Post-War Reconstruction and Democratic Rights’ or ‘Fourteen Powers’ referendum of August 1944. The referendum sought authorization for the federal government to legislate, for a period of five years after the cessation of the war, in areas that were not in the jurisdictional purview of the national government. The Labor government adopted the tactic of bundling the fourteen powers together, thereby asking for a bloc vote. Five of the areas pertained directly to welfare, including jurisdiction for Aboriginal people

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(a generation before the successful referendum in 1967), repatriation of service personnel, employment and unemployment, health, and family allowances. The other areas comprised wide-ranging economic policy issues. Garnering 46 per cent in favour, the referendum failed, but won support in two of the six states. The failure of the referendum is sometimes attributed to the dissipation of the war crisis period of 1942–3, and to the public being less inclined to give more power to the central government than it would have been a year or so earlier. The bundling of the questions, however, also seems to have been a factor, as when the question about social services was later separated in the 1946 referendum, the referendum was carried in all six states and by a comfortable national margin. Largely free of the constitutional frustration it had faced up to that point, the Labor government was able to legislate in several areas of welfare that would reconstitute the system, but was later frustrated again by the High Court over the matter of a national health scheme. Stuart Macintyre’s recent history of the reconstruction period (Macintyre 2015) identifies an important factor in the failure of the 1944 referendum. He shows that the hesitancy and procrastination of John Curtin was probably pivotal in the wartime referendum being lost (Macintyre 2015, 254–5, 471). Had the referendum been held around the beginning of 1943, when the government was making an all-out appeal to the population, soon after having gained support for conscription, constitutional success may well have been secured (Macintyre 2015, 270). One area of intervention that fitted the peculiarity of the Australian model of welfare was housing. The Committee on Social Security (referred to previously) argued in its first report for housing to be seen as a social welfare matter and devoted the entirety of a fourth report to the issue. The Commonwealth Housing Commission was established in 1943 as one of three commissions created by the Department of Post-War Reconstruction (the other two being the Rural Reconstruction Commission and the Secondary Industries Commission). An invigorated housing programme that straddled both social policy and broader economic policy commenced with the Commonwealth– State Housing Agreement (CSHA) of 1945. As part of the reconstruction programme, much had been made in various Labor government publications of the depleted housing stock and the existence of slums. Without power under the constitution to carry out housing policy, it was necessary for the Commonwealth to enter into agreements with the states. The agreement of 1945 is an instance of prototypical cooperative federalism. Between 1947 and 1961, the housing stock increased by 50 per cent—just on half of which was directly contributed by state governments and the Commonwealth— compared with a 41 per cent increase in the Australian population over this period. By the mid-1960s Australia had a home-ownership rate of over 71 per cent of the population. More important in terms of social welfare was the design of policy to cater for low-income earners who could not afford to

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purchase a dwelling. The urban researcher Patrick Troy (2012) has recorded the evolution of CSHA in the post-war period to show how the 1945 agreement set a high standard of social equity by giving preference to tenants by providing quality public housing and putting the emphasis on increasing public stock (see also Macintyre 2015, 300–1). From 1956, the emphasis would shift to home ownership, and from 1978, the idea of housing as a social right would be abandoned altogether (Troy 2012).

CONC LUDING REMARKS The path marked out for Australia at the beginning of the twentieth century was indeed one of social protection by other means, a wage-earners’ welfare state. As we have seen in this discussion, Australia must be regarded as one of the social-transfer pioneers, at least up until 1920, with much of the progress being made before 1910. Between the wars, however, there was a long period of little change. One of the effects of World War I was the massive fiscal shock to the federal government, for welfare and war debts, at the same time (during the 1920s) as the states began borrowing heavily for infrastructure, education, and housing to build ‘a suburban land fit for heroes’. Thus the late 1920s and early 1930s was a period of major fiscal crisis for the federal structure induced largely by the consequences of war and then exacerbated by the Depression, as a result of the imbalance between federal revenue and expenditure powers, the ongoing war-cost overheads, and growing state indebtedness. As already mentioned, the institutional solution to the crisis of a further transfer of fiscal power to the Commonwealth, and then a complete consolidation of that transfer by the World War II emergency, can be attributed to the wars.²³ The crisis of World War II did have a significant effect on the welfare path taken, at least for a time. As writers such as Smyth (1994) have shown (see also Smyth and Cass 1998, and more recently Macintyre 2015), and as we have underlined here, the reconstructionists were determined that full employment would be the centrepiece of economic and social policy (see Battin 1997). The reconstructionists placed such heavy emphasis on full employment because social protection was already linked to employment, and the experience of the Depression was a major motivation for innovative policy. The orientation of ²³ It could be argued that the Commonwealth Grants Commission, along with the Court of Conciliation and Arbitration and the Commonwealth Bank (all Labor innovations) were the three most significant institutional innovations in the first third of the twentieth century, which together played a fundamental role in social and political stabilization, thereby consolidating the federation through amelioration of class and regional conflict. Horizontal fiscal equalization is fundamental to federations and is one of the most significant deficiencies in the eurozone architecture of the twenty-first century.

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the political party in office, together with the balance of class forces that World War II witnessed, had a significant impact on both the scale and structure of the welfare state. World War II, which was initially a distant war and one Australians were reluctant to join at first, arrived on the country’s doorstep in December 1941. These circumstances made it possible for a wartime government to redeem the efforts of a generation by shaping post-war reconstruction in the image of social equity in the peculiarly Australian welfare system. The 1940s reconstructionists had a social democratic vision and wished to move beyond the wage-earners’ welfare system. That they did not fully succeed is testament to the power of the structural path dependencies that we have identified, particularly the federal constitutional structure. On the other hand, the argument for the continuing path-dependent strength of labourism against social democracy is significantly undermined by the 1940s developments. Labourism is concerned with narrow workplace gains, social democracy with the entitlements of citizens. The reconstructionists were attempting to break the old structure in a way that was a form of social democracy but in a peculiarly Australian way. The reason Australia did not develop a more social democratic regime from then onwards would appear to be more contingent than structural, especially with regard to the inability of Labor to return to office, exacerbated by contingent Cold War influences. It could be suggested that the Cold War, while not a time of mass warfare, did significantly affect the ability of Labor to govern at a national level and thereby thwarted its aim to develop the welfare state further. The strength of labourism over social democracy in the trade union movement was still considerable in the 1940s. The Labor Party’s commitment to full employment as the centrepiece of economic policy necessitated an appreciation of the crucial role played by an incomes policy in distributing economic and social benefits more broadly (Rowse 2003, 230–5). Labor figures such as Chifley understood this, which explains the Herculean efforts to amend the constitution in 1944 (employment, and profiteering and prices), in 1946 (terms and conditions of employment, and incomes of primary producers), and in 1948 (rents and prices), in order to give the federal government the capacity to affect purchasing power of wages. Without constitutional power over the incomes of capitalists, Labor had to rely on a mixture of arbitration and a voluntary social contract with trade unions as a second-best instrument. The coal strike of 1949 and the fall of the Chifley government revealed the problems with this approach, yet full employment and a reconstructed welfare system were to survive. When Labor eventually returned to office in 1972, the government did begin to further develop the welfare system and to steer it in a more universalist and social democratic direction, including towards the provision of universal medical insurance. Summing up the overall development of the Australian welfare state and the effect of mass warfare, it is a sad fact that it took World War II to act as

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the transformative force that broke the stranglehold of the stultifying effect of coordinate federalism, which then introduced a more cooperative structure, which, in turn, permitted a greater state capacity to deliver a more advanced and egalitarian welfare system. Thus World War II was a necessary but insufficient condition for welfare development since it brought about a more social democratic outlook amongst key Labor leaders. However, the subsequent lag in the evolution of the Australian system was more to do with the balance of class/political forces (including the gerrymander) in the Cold War era that kept Labor out of office for so long.

REFERENCES Australian Bureau of Statistics. 1946–7. ‘Australian Services During World War II, 1939–45’. Year Book Australia, 1946–47. Commonwealth Government, Canberra. http://www.abs.gov.au/ausstats/[email protected]/featurearticlesbytitle/F19B5A51A60904F3 CA2569DE0020331F?OpenDocument, accessed 25 April 2017. Australian War Memorial. n.d. https://www.awm.gov.au/articles/atwar/first-worldwar, accessed 17 April 2017. Bashford, Alison. 2014. ‘Immigration Restriction: Rethinking Period and Place from Settler Colonies to Postcolonial Nations’. Journal of Global History 9: 26–48. Battin, Tim. 1997. Abandoning Keynes: Australia’s Capital Mistake. Basingstoke: Macmillan. Butlin, Noel G. 1959. ‘Colonial Socialism in Australia: 1860–1900’. In The State and Economic Growth, edited by H. G. J. Aitken, 26–78. New York, NY: Social Science Research Council. Castles, Francis. 1989. ‘Social Protection by other Means: Australia’s Strategy of Coping with External Vulnerability’. In The Comparative History of Public Policy, edited by Francis Castles, 16–55. Cambridge: Polity Press. Castles, Francis. 1994. ‘The Wage Earners Welfare State Revisited’. Australian Journal of Social Issues 29: 120–45. Castles, Francis. 1996. ‘Needs-Based Strategies of Social Protection in Australia and New Zealand’. In Welfare States in Transition: National Adaptations in Global Economies, edited by Gøsta Esping-Andersen, 88–115. London: Sage. Castles, Francis and Deborah Mitchell. 1992. ‘Three Worlds of Welfare or Four?’ Governance 5: 1–26. Castles, Francis and John Uhr. 2005. ‘Australia: Federal Constraints and Institutional Innovations’. In Federalism and the Welfare State: New World and European Experiences, edited by Herbert Obinger, Stephan Leibfried, and Francis Castles, 51–88. Cambridge: Cambridge University Press. Commonwealth Parliamentary Debates (Hansard) Canberra. 1942. House of Representatives 170: 15.5.1942, 1285–7. Davidson, Alistair. 1969. The Communist Party of Australia: A Short History. Stanford, CA: Hoover Institution Press.

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De Maria, William. 1989. ‘Combat and Concern: The Warfare–Welfare Nexus’. War and Society 7: 71–86. Deeming, Chris. 2013. ‘The Working Class and Welfare: Francis G. Castles on the Political Development of the Welfare State in Australia and New Zealand Thirty Years On’. Social Policy and Administration 47: 668–91. Garton, Stephen. 1966. The Costs of War: Australians Return. Melbourne: Oxford University Press. Gollan, Robin. 1975a. Revolutionaries and Reformists: Communism and the Australian Labour Movement 1920–1955. Canberra: Australian National University Press. Gollan, Robin. 1975b. ‘The Ideology of the Labour Movement’. In Essays in the Political Economy of Australian Capitalism, vol. 1, edited by Ted Wheelwright and Ken Buckley, 206–26. Sydney: ANZ Book Co. Hall, Peter and David Soskice. 2001. Varieties of Capitalism: Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press. Higgins, Winton and Geoff Dow. 2013. Politics Against Pessimism: Social Democratic Possibilities Since Ernst Wigforss. Berne: Peter Lang. Joint Parliamentary Committee on Social Security. 1942. Second Interim Report, 6 March 1942. Canberra: Commonwealth Government. Jones, Michael A. 2002. ‘Australia’. In The State of Social Welfare: The Twentieth Century in Cross-National Review, edited by John Dixon and Robert P. Scheurell, 1–42. Westport, CT: Praeger. Kewley, Thomas. 1965. Social Security in Australia. Sydney: Sydney University Press. Lake, Marilyn. 1987. The Limits of Hope: Soldier Settlement in Victoria 1915–38. Melbourne: Oxford University Press. Lindert, Peter. 2004. Growing Public. Cambridge: Cambridge University Press. Lloyd, Christopher. 2003. ‘Economic Policy and Australian State Building: From Labourist–Protectionism to Globalisation’. In Nation, State and the Economy in History, edited by A. Teichova and H. Matis, 404–23. Cambridge: Cambridge University Press. Macintyre, Stuart. 2015. Australia’s Boldest Experiment: War and Reconstruction in the 1940s. Kensington: Newsouth. McKernan, Michael. 1984. The Australian People and the Great War. London: Collins. Mendelsohn, Ronald. 1979. The Condition of the People. Sydney: Allen and Unwin. Millmow, Alex. 2010. The Power of Economic Ideas: The Origins of Keynesian Macroeconomic Management in Interwar Australia 1929–39. Canberra: ANU Press. Murphy, John. 2010. ‘Path Dependence and Social Policy Stagnation Between the Wars’. The Journal of Policy History 22: 450–73. Murphy, John. 2011. A Decent Provision: Australian Welfare Policy, 1870–1949. Farnham: Ashgate. Noonan, David. 2014. ‘Why the Numbers of our WWI Dead are Wrong’. The Sydney Morning Herald, 30 April. http://www.smh.com.au/comment/why-the-numbersof-our-wwi-dead-are-wrong-20140428-zr0v5.html, accessed 25 April 2017. Reeves, William Pember. 1902. State Experiments in Australia and New Zealand, 2 vols. London: Grant Richards. Roe, Jill, ed. 1976. Social Policy in Australia: Some Perspectives 1901–1975. Sydney: Cassell Australia.

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Rowse, Tim. 2003. ‘The Social Democratic Critique of the Australian Settlement’. In Whitlam and Modern Labor: It’s Time Again, edited by Jenny Hocking and Colleen Lewis, 219–43. Melbourne: Circa. Salt: Authorized Education Journal of Australian Army and Air Force. 1941–6. Melbourne: Army Headquarters. Sawer, Marian. 2014. ‘Revisiting the Antipodean Social Laboratory’. Paper delivered to the New Zealand Political Studies Association Conference, Auckland, December. Schröder, Martin. 2013. Integrating Varieties of Capitalism and Welfare State Research: A Unified Typology of Capitalism. Basingstoke: Palgrave Macmillan. Schustereder, Ingmar. 2010. Welfare State Change in Leading OECD Countries: The Influence of Post-Industrial and Global Economic Developments. Wiesbaden: Gabler Verlag/Springer Fachmedien. Shaver, Sheila. 1987. ‘Design for a Welfare State: The Joint Parliamentary Committee on Social Security’. Historical Studies 22: 411–31. Smyth, Paul. 1994. Australian Social Policy: The Keynesian Chapter. Kensington: UNSW Press. Smyth, Paul. 1998. ‘Remaking the Australian Way: The Keynesian Compromise’. In Contesting the Australian Way: States, Markets and Civil Society, edited by P. Smyth and B. Cass, 81–93. Melbourne: Cambridge University Press. Smyth, Paul. 2003. ‘Reclaiming Community? From Welfare Society to Welfare State in Australian Catholic Social Thought’. Australian Journal of Politics and History 49: 17–30. Stretton, Hugh. 1980. ‘Social Policy: Has the Welfare State All Been a Terrible Mistake?’ In Labor Essays 1980, edited by Gareth Evans and John Reeves, 19–39. Richmond: Drummond Publishing. Titmuss, Richard M. 1958. Essays on the Welfare State. London: Allen & Unwin. Troy, Patrick. 2012. Accommodating Australians: Commonwealth Government Involvement in Housing. Annandale: Federation Press. Van Arnhem, J. C. M. and G. J. Schotsman. 1982. ‘Do Parties Affect the Distribution of Incomes? The Case of Advanced Capitalist Democracies’. In The Impact of Parties, edited by F. G. Castles, 283–364. Beverly Hills, CA: Sage Publications. Walker, Edward Ronald. 1947. The Australian Economy in War and Reconstruction. New York, NY: Oxford University Press. Walter, James. 1988. ‘Intellectuals and the Political Culture’. In Intellectual Movements and Australian Society, edited by B. Head and J. Walter, 237–73. Melbourne: Oxford University Press. Watts, Rob. 1987. The Foundations of the National Welfare State. Sydney: Allen & Unwin. Watts, Rob. 1999. ‘Warfare and the Australian Welfare State’. Journal of Australian Studies 23: 85–95.

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10 Wars, Nation, and the Welfare State in Finland Pauli Kettunen

INTRODUCTION In public constructions of the national past in Finland, two major themes currently predominate: the wars of the twentieth century and the making of a Nordic welfare state. Sometimes they represent rival ideas about the historical core of national agency, but they also intertwine. This paper takes the current intertwining of these national narratives as a point of departure for analysing the social policy role of wars in Finland. From this perspective, the paper also discusses Finland as a specific case within the history of Nordic welfare states. The dominant public narrative of the making of the Finnish welfare state includes the reconciled confrontation of the Civil War of 1918 between the socialist Reds and the bourgeois Whites. It also involves images and legacies of national integration during World War II, when Finland was involved in two wars against the Soviet Union: the Winter War of 1939–40 and the Continuation War of 1941–4, as well as the Lapland War of 1944–5 to expel German troops, ‘the brothers in arms’ of the preceding Continuation War. In political debates, ‘the spirit of the Winter War’ is often referred to for revitalizing Finnish potential to unite in defence of what are seen as joint national achievements. The welfare state currently appears as such an achievement, and rescuing the welfare state is an argument for a wide range of political objectives, including those of austerity politics. The rhetoric associating wars with national agency and with the welfare state can refer to real experiences and memories. The casualties of the Civil War of 1918—including those 12,000 Reds who died in prison camps after the war—amounted to about 38,000 people killed. In World War II, about 700,000 men served as soldiers; of these, 93,000 soldiers and 2,000 civilians died, and about 95,000 soldiers were permanently disabled. The population of

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the territories ceded to the Soviet Union (more than 400,000 people) was relocated within the rest of Finland. In 1940, the population of Finland was 3.7 million. The political system and the international position of the country were profoundly affected by the experiences and outcomes of wars, which influenced the definition of social problems and solutions, and political battles over the right ways to define and solve social problems. Wars have influenced social policies by destroying and damaging human life and by changing economic and social conditions, that is, through their direct impact on what can and must be ‘constructed’ as social problems (cf. Spector and Kitsuse 2011). However, the impacts of wars on social policies have also been mediated through the role they have played in the formation and transformation of the nation state, and national polity and its different actors. Wars have affected the relationship between ‘the space of experience’ and ‘the horizon of expectation’ (Koselleck 1979) in national politics and policies. Thus, they have shaped the institutional and ideational frameworks for defining and solving social problems. The notion of external challenges and an internal national will responding to those challenges is an ingredient of nationalism, especially in small countries. Finland is one of those countries in which the threats, experiences, and outcomes of wars have significantly contributed to this mode of thought and action. It reveals itself in the intertwining of the welfare state and wars in current national narratives. These consensual narratives are far from sustainable as historical interpretations, but they reflect an important war-related ideational aspect in the development of Finnish social policies, that is, a concern about the agency of the nation in the world of external challenges and necessities. This chapter is structured in three parts, corresponding to three periods. Each part takes into account the direct and indirect impacts of experienced or anticipated wars, short-term and long-term policy measures and outcomes, and institutional continuities and discontinuities. The first part encompasses a period of one hundred years from the beginning of nineteenth century until the first years of twentieth century. It includes three wars that played a crucial role in the making of Finland: the Russo-Swedish War of 1808–9, the Crimean War of 1853–6 and the Russo-Japanese War of 1904–5. In the second part, the experiences and outcomes of World War I and the Civil War of 1918 are examined. The third part of the chapter focuses on World War II as a significant phase in the processes combining social policies with concerns about national agency. From this perspective, the role of wartime experiences and the outcomes of the war in post-war social policies are also discussed. The conclusion identifies multi-layered historical legacies of wars in the postWorld War II transformations that we, from our modern-day perspective, may call the making of the welfare state, and the focus is, as it is in the chapter

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in general, on how wars have shaped the notion of national agency as a framework of social policymaking.

WARS IN THE MAKING OF F INLAND AND I TS SOCIAL QUESTION Sweden lost its Eastern provinces in the Russo-Swedish War of 1808–9, linked with the Napoleonic Wars, and they were reshaped as the Grand Duchy of Finland of the Russian Empire. In the nineteenth century, the Grand Duchy developed into an autonomous nation state. In the borderlands of the Russian Empire, old Swedish legal and religious (Lutheran) institutions and traditions persisted, utilized by, and intertwined with, the new Finnish nationalism that was largely compatible with the Russian imperial interest of promoting the separation of Finland from Sweden. The conclusions drawn by the new Emperor Alexander II from the experiences of the Crimean War of 1853–6 launched a period of reforms in the empire. In the loyal Grand Duchy of Finland, the old Swedish Four-Estate (nobility, clergy, burghers, farmers) Diet was reintroduced in 1863—the year of the Polish uprising against the Russian Empire that led to Poland losing its autonomy. Space for political debate and civic organization opened up in the 1860s. ‘The people’ emerged in the debates of the political elite as a target for education and ‘national awakening’ and as the source of political legitimacy. Conflicts tended to be shaped as struggles for the right way and the privilege to speak in the name of ‘the people’. This was evident in the controversies between the so-called Fennomans and the so-called Liberals from the 1860s onwards, concerning the role of language, culture, and constitution in the making of the nation, and it was also characteristic of later political conflicts concerning the right ways of defending Finland’s autonomy and the handling of social class divisions (Alapuro 1988; Klinge 1993; Pulkkinen 1999). Economic reforms in the 1860s and 1870s removed mercantilist privileges and regulations, and were completed by further reforms that gradually realized the principle of a free labour market. Accordingly, the Bill of Poor Relief was revised in 1879 in accordance with the liberalist work-discipline spirit of the English Poor Law of 1834, imported to Finland via the Swedish Bill of Poor Relief that had been revised a few years earlier. Poor relief and care of the sick were the responsibility of municipalities that were, in 1865, separated from the parishes of the Lutheran Church. At that time, Finland was a poor rural country in which extreme natural conditions imposed major economic constraints. The last nationwide famine, in 1866–8, and the diseases associated

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with it, killed approximately 150,000 people, about 8 per cent of population (Häkkinen and Forsberg 2015). In a small country like Finland which, even by Nordic standards, was late to industrialize, international comparisons came to play a prominent role in the definition of social problems and solutions. From the second half of the nineteenth century onwards, such comparisons became integral to the way the educated elite analysed society and defined socio-political tasks. It was a question not only of imitating more developed countries but also of deliberately attempting to anticipate social problems by taking on board experiences from ‘more civilized’ countries. One may characterize this mode of thought and action as the avant-gardism of the intellectual elite of a peripheral country. For this pattern of thought, the outside world provided a framework of external preconditions and constraints, hopes and threats, intriguing but also alarming ideas, examples of both model and unpleasant societal arrangements, and opportunities to be grasped as well as necessities to be responded to. A long period of time often elapsed between the definition of a social problem and its solution, with the help of imported ideas on the one hand and the practical application of these definitions and solutions on the other. However, as early as the 1880s and 1890s, when the far from democratic system of the Estates still operated, and there was no labour movement proper, two acts of principal importance were adopted: the Act on the Protection of Industrial Workers, which established the institution of factory inspection (1889), and the Workers’ Compensation Act (1895). Finland was not a laggard when it came to the statutory regulation of industrial work—indeed it was not even a latecomer among the Nordic countries. Thus, for example, the adoption of a special female factory inspectorate was launched in Finland in 1903, ten years earlier than in Sweden (Kettunen 1994, 32–91; Kettunen 2001b, 233). The state was the central agent in the integration of Finland in expanding industrial capitalism, as it was in other Nordic countries too. Bureaucratic interest in increasing state revenues motivated market-promoting reforms, and political and economic elites adopted a state-centred image of a national economy that from the 1860s had its own currency, customs, and state railways. The latter provided an important infrastructure for Finnish nationbuilding, while also strengthening the connection of the Grand Duchy to the capital of the Russian Empire, Sankt Petersburg, and also playing a role in Russian military plans (Polvinen 1962). As a result of the infrastructural role of the state, a considerable part of what can be called the ‘aristocracy of labour’, for example locomotive drivers, had the formal status of civil servants and corresponding social benefits, including pensions (Kettunen 1976). Indicative of the autonomous status of the Grand Duchy, a Finnish Army, separate from the Russian Army, was founded in 1878. It was based on general conscription by ballot, with a peacetime strength of 5,600 men. In 1901, the

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Russian government decided to extend the empire’s conscription system to Finland and to dissolve the separate Finnish Army. Because of Finnish resistance, however, the introduction of imperial conscription in Finland largely failed. In 1905, the Russian government backed down on this attempt, and instead of imperial conscription, the Grand Duchy was obliged to contribute financially to the costs of the Russian Army (Screen 1996). Conscription was a major issue in the conflict that emerged between the Finnish polity and the Russian Empire at the turn of the century. It was a collision between the consolidation of Finland as an autonomous political, economic, and cultural unit, and the Russian effort to promote a stronger administrative unity of its empire. However, imperial integration policies temporarily lost much of their force, as the Russian Empire was weakened by its defeats in the Russo-Japanese War of 1904–5. This had longstanding consequences for Finnish polity and society. In connection with revolutionary turmoil in Russia, a breakthrough of mass politics and the labour movement took place in Finland. After the General Strike of 1905, representation through the Estates was suddenly replaced by the most democratic representative system in Europe. Even though restricted by the re-established authority of the emperor, after 1906 Finland had a political system based on a universal franchise that included women (Jussila 1999, 79–91). National integration in terms of increased cultural homogeneity (Alapuro 1988, 92–110) greatly contributed to the development of class conflicts. The nation as ‘imagined community’ (Anderson 1983) provided socially subordinated groups with criteria for a critique of prevailing circumstances and with a frame of reference within which they could politically interpret and generalize their local experiences of injustice. In one of the most rural countries of Europe, one of the—in relative terms—largest labour movements in the world emerged. The strength of the Finnish labour movement was based on its success in creating an alliance between urban workers and rural landless workers and tenant peasants. Reflecting this background, the Social Democratic Party was considerably larger than the trade unions in quantitative, social, and territorial terms. The discourse of the ‘social question’ included several ‘questions’: a ‘labour question’, a ‘tenant question’, and a ‘landless population question’. Often the concept of a labour question referred to all urban and rural social problems and divides. Conflicts between the Socialists and the bourgeois parties were evident, yet social policy reforms were, in varying ways and with divergent intentions, included in the programmes of all parties. Laws concerning labour protection, regulation of labour relations, and unemployment funds were legislated by parliament (Eduskunta) before World War I. However, only a very few of them were implemented as the legislative power of parliament was restricted by the authority of the Russian Emperor, who frequently refused to confirm an act.

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W O R L D WA R I , T H E CI V I L W A R , A N D DI V E RG E N T VISIONS OF SOCIAL PEACE

World War I in Finland Through the connection with Russia, World War I greatly affected Finnish society and economy. The war was experienced as an extended presence of Russian military units; restrictions on civic activities by the imposition of martial law; reorganization of industrial production to serve the needs of Russian warfare; large fortification works and associated labour mobility, and vast unemployment after the end of these works; accelerating inflation; and finally the shortage of food. Particular ‘war taxes’ were introduced without obtaining parliamentary consent that was normally required for decisions on taxation (Linnakangas 2015). However, Finland did not directly become a World War I battlefield and the Finns also avoided compulsory service in the Russian Army. There were, however, Finnish officers who had made their careers in Russia, Carl Gustaf Emil Mannerheim being the most famous example. After the beginning of World War I, Finnish volunteers joined both the Russian Army and the German Army: 700 in the former and 2,000 in the latter. The young men joining the German Army were mobilized through a clandestine organization of anti-Russian activists. After returning to Finland at the beginning of 1918, these Jägers, who were prepared to battle against the Russians, came to form the core officer group of the White Army in the Civil War—under Commander-inChief Mannerheim, a general in the Russian Army who had returned to Finland after the revolution. Parliament was not permitted to assemble in the early years of World War I. Parliamentary elections were, however, arranged in 1916, and for the first time the Social Democratic Party gained a majority, winning 103 seats out of a possible 200. Parliament met again after the Russian February Revolution in 1917, and a national coalition government of socialists and the bourgeois parties was formed. The head of government came from the Social Democratic Party. A very rapid mobilization of workers in trade unions took place in the spring of 1917. A traditional key objective of the international labour movement, the eight-hour working day, proved to have particular mobilizing power. Many trade unions had already compelled employers to accept this norm before parliament passed the Act on Eight-Hour Working Day. Some of the social policy edicts that parliament had accepted before World War I were confirmed after the February Revolution: an act extending workers accident insurance and another regulating and supporting voluntary unemployment funds.

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Soon after the formation of the socialist-led coalition government it became obvious that the economic and social situation was worsening. Less grain could be imported from Russia, leading to a shortage of food; inflation accelerated; and mass unemployment emerged as fortification works ended (Haapala 2014). Yet, as the Finnish sociologist Risto Alapuro (1988, 150–60) points out, these socio-economic troubles were not uniquely Finnish and cannot explain why a civil war began less than one year after the national cross-class enthusiasm of the spring of 1917. In order to understand this, we must pay attention to two major questions that emerged after the February Revolution. One was the question of what body would assume supreme authority after the emperor ceased to rule, and the other concerned the organization of the coercive power of internal order and security after the replacement of a police force that had been largely ‘Russified’ in previous years. In the context of World War I, and closely linked with different phases of the Russian Revolution, these two unresolved questions gave impetus to the conflicts that resulted in a confrontation between two armed political forces that emerged in a weakly coordinated fashion on the basis of the earlier established class-based political divide.

The Civil War A decisive turn occurred between July and August 1917. The Social Democrats, aiming to extend national autonomy and to raise parliament to a dominant position in the political system, pushed through the so-called law on authority. The law left only foreign policy and military affairs in the sphere of authority of the provisional government of Russia and proclaimed the full internal autonomy of Finland. The provisional government was unwilling to concede this and dissolved parliament with support from bourgeois groups. This also meant the end of coalition government. The Social Democrats did not recognize the dissolution of parliament, but nevertheless self-confidently participated in the new election in October 1917, and shockingly lost their majority. While still participating in parliamentary work, the Social Democrats did not fully recognize the legitimacy of the decisions made by the new parliament and the bourgeois government. At the same time, the radicalized mass of workers, in part together with Russian soldiers still remaining in Finland, formed a force to a large extent outside of the Socialist leaders’ control (Upton 1980; Siltala 2014). After the October Revolution, the achievement of full national sovereignty became an urgent issue for all Finnish parties. For the Social Democrats, the decisive factor was that the Bolsheviks, now in power, had been the only party in Russia that had declared willingness to approve Finland’s independence, whereas, among the bourgeois groups, the fear of Socialist revolution urged

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the separation from Russia. In December 1917, Finland was declared independent and the Bolshevik government recognized this independence. This did not, however, prevent the escalation of political confrontation into a full-scale civil war at the end of January 1918, with the left forming a Red government and assuming revolutionary power. Decision-making in the Social Democratic Party and other working-class organizations prior to the abortive revolution was confused and fragmented, and there were controversies about the legitimacy of an armed revolution; yet only a few leading Social Democrats eventually declined to participate and no one joined the opposing side. The notion of defending the progressive course of history that had been reversed by the events of July and August 1917 contributed to the legitimacy of the decision. Bolshevist influences and encouragement played a role, but it was only after the total defeat of the revolution that the labour movement was divided into Social Democrats and Communists. The Red government was formed by leaders of Social Democratic Party and trade unions, and it dominated Southern Finland and the largest cities. The bourgeois government had fled to Ostrobothnia, a province of independent farmers with their own particular political and cultural traditions, which became the stronghold of the White Finland mobilization and, later, of the White legacy of the Civil War. The strength of both sides, the Red Guards and the White Guards, was about 80,000 troops. The Red Guards, a poorly trained army with hardly any military expertise, received arms from Russia and were assisted by Russian soldiers; however, the withdrawal of Russian troops from Finland was continuing and the peace treaty between Soviet Russia and Germany in March 1918 further diminished this source of support. The White government, in turn, received support from Germany, which not only trained the Finnish Jägers but also sent to Finland a first-rate military unit, the Baltic Division, which played a significant role in the last phase of the war. The German troops conquered Helsinki in April, and on 16 May 1918 a victory parade of the White Army, led by General Mannerheim, marched through the city. Among the 38,000 casualties of the Civil War, about 10,000 died in battle; the rest were killed in executions outside of military engagement and in prison camps after the war. Seventy-five per cent of casualties were on the Red side. Social policies concerning invalids, widows, and orphans were spoils of the victors. Soon after the Civil War, a law on pensions was passed for those wounded or those having lost a provider on the White side. Until World War II, war invalids on the Red side were only eligible for support through poor relief, and one of the ways of assisting Red orphans was to send them to be re-educated in Ostrobothnian White farmer families (Kaarninen 2008). However, assistance for Red widows and orphans was a focus of labour movement activities after the Civil War (Saarela 2014).

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Strategies of Social Peace Despite the counter-revolutionary outcome of the Civil War, Finland was, by the constitution of 1919, established as a parliamentary republic. Again, this solution had its antecedents in international transformations. The alliance of the White winners with the German Empire lost its basis when Germany not only lost World War I but when the empire itself was also dissolved through revolution. In Finland, the parliamentary form of democracy persisted throughout the 1920s and 1930s, even though it was threatened and limited by right-wing pressure, especially in the early 1930s. The persistence of democratic forms made Finland exceptional among the new nation states created through the collapse of multi-ethnic empires at the end of World War I. Any explanation of this exceptionality must recognize that Nordic political traditions had played a crucial role in Finnish nation-building. However, the outcomes and memories of the Civil War became an integral part of social, political, and cultural structures. Thus, the Whites controlled military power in the army and in the vast, semi-official paramilitary Civil Guards organization. The White legacy of the Civil War, including a view of Russia and the Soviet Union as the enemy to be sooner or later confronted in a war, was mediated through military education in an army that was based on general conscription. Through conscription, this legacy also became an ingredient of the ideal of masculine citizenship. At the same time, general conscription implied the need for strategies for national integration and popular legitimation of the regime, as a great many of the conscripts came from families with Red-side experiences and memories (Ahlbäck 2014). To the White winners of the Civil War, the free landowning peasant became the symbol of the White Army as the antithesis of the harmful Red alliance between urban workers and the rural, landless population. A free independent peasantry also constituted the ideological centre around which ‘social peace’ had to be ‘rebuilt’ and defended against the threats associated with the collectivism of wage earners (Kettunen 1997, 103–24). On the basis of previous plans, land reforms were carried out rapidly after the Civil War. These reforms ‘liberated’ tenants, transforming them into land-owning small-scale farmers, and facilitated the colonization of the landless, rural proletariat. The mode of thought and action according to which social peace should be based on political democracy and an independent freeholder peasantry as the core of the nation, was especially characteristic of the Agrarian Party, which gained a powerful position in the political system in the 1920s. However, efforts to foster national reconciliation after the Civil War also included legislative reforms concerning industrial working life. Politicians and civil servants representing social liberal traditions took up earlier plans of regulating individual employment contracts and collective interest conflicts.

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Inspiration was taken from a new international organization that was designed to combine the objectives of international peace and social peace, the International Labour Organization (ILO), founded in 1919 as an autonomous part of the League of Nations and as Versailles’ answer to Bolshevism. This labour peace orientation was also inspired by Nordic cooperation, not least in the wider context of ILO activities (Petersen 2006; Kettunen 2013). In the early 1920s, parliament passed acts on employment contracts (1922), collective agreements (1924), and the mediation and arbitration of industrial conflicts (1925). These reforms were designed to facilitate a shift towards a comprehensive regulation of labour relations by collective agreements between trade unions and employers. However, this vision was not realized prior to World War II, as employers, especially those in the wood processing, textile, and other manufacturing industries, successfully adhered to a policy rejecting collective agreement whilst utilizing repressive, ideological, and paternalist company welfare means against trade union influence. The ideology that made ‘the will to work’ of the independent farmer the core of social peace provided ideological legitimization for the policy of industrial employers. Labour law reforms were not costly. A far more expensive social reform, also motivated by the integrative conclusions drawn from the Civil War, was that of compulsory education. The act was passed in 1922, and it increased the responsibilities of municipalities in which decision-making had been democratized by the legislative reform in 1917. The new Bill for Poor Relief of 1922 included more modest changes in current municipal practices. Taxation was reformed in the early 1920s at state and municipality levels, and the principle of progressivity was implemented by a law of 1920 in the state-level taxation of income (Lindberg 1934; Linnakangas 2015). Discussion and planning for social insurance had begun in the 1880s, but before the 1920s only workers’ accident insurance had been introduced (1895) and then extended (1917). The first act regulating and facilitating voluntary funds was passed in 1897, with a focus on sickness provision. In 1917, an act permitting voluntary unemployment funds established by trade unions was passed, an embryo of the so-called Ghent System in Finland. In post-Civil War debates on options to extend social insurance, the relative priority of sickness insurance and old-age insurance became an issue of dispute. While the sickness insurance of wage earners was the first priority of the Social Democrats, the Agrarian Party disliked social benefits that were targeted only at wage earners, and it put old-age and disability insurance before sickness insurance. After much debate, the Old-Age and Disability Insurance Scheme was legislated in 1937, after compromises between the coalition partners of the new government, the Social Democrats and the Agrarian Party. An act on sickness insurance did not become law until 1963 (Kettunen 2001b).

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Labour Movement in a Post-Civil War Nordic Country After the abortive revolution, the Finnish labour movement was divided between Social Democrats and Communists. The Communist Party of Finland was illegal until 1944, and its leaders, the former heads of the Red government of 1918, lived in exile in the Soviet Union. Most were killed in Stalin’s purges in the late 1930s. In the 1920s, the Communists and their sympathizers nevertheless had opportunities to act in public labour organizations, most notably in the trade union movement (in which they held leading positions in the 1920s) and even in parliament. In 1930, those categorized as Communists were excluded from public political arenas. In terms of electoral support, the Social Democratic Party was still the largest political party in Finland in the 1920s and 1930s. However, in different ways, both major wings of the labour movement were preconditioned by the post-Civil War regime, which did not provide a favourable context for comprehensive political projects that would include less than the goal of a socialist society but more than particular piecemeal social policy reforms. Support for the labour movement in Finnish parliamentary elections in the 1920s and the late 1930s was at the ‘Nordic’ level, close to 40 per cent, but it was unthinkable that the Social Democrats could have achieved a leading position in defining the political agenda in the same manner as in other Nordic countries in the 1930s. This remained true after World War II. The Social Democrats faced the Communists as their fierce rivals in the labour movement after the Civil War and more so after the Continuation War when the Communist Party gained a legal status. The Agrarian Party (from 1965, the Centre Party) played a central role in the political system and in social policies after World War II, both as an opponent and as a coalition partner of working-class parties. Agricultural policies were closely connected with social policies; these were two policy sectors that partly represented competing views on the problems of social order. And until the 1960s, the power of cultural conservatism still reflected the heritage of the counter-revolutionary White victory in 1918, a continuity that was far from totally broken by the postWorld War II political changes. ‘Nordic’ was an attribute of Finnish society, but its meaning was a matter of political contestation, partly as a result of conflicts concerning the position of the Swedish language in Finland, but also because of a charge following the confrontation of the Civil War. In the White heritage of the Civil War, ‘Nordic’ was associated with the idealized tradition of the free Nordic peasant and local community, whereas for the Social Democrats ‘Nordic’ in the 1930s began to represent democracy, in contrast to authoritarian regimes and the prevailing state of industrial relations in Finland. The concept of Nordic democracy, as it was defined in the cooperative undertakings of Nordic Social

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Democrats in the 1930s (Kurunmäki 2011), included a combination of parliamentary political democracy and institutions of collective negotiation and agreement in labour markets. The argument of the Social Democratic trade union leaders in the 1930s was that, while Finland was a Nordic society, it did not fulfil the criteria of the Nordic democracy (Kettunen 2006, 56–9). In any case, for the development of the notion of Finland as a Nordic democracy, the coalition of the Social Democratic Party and the Agrarian Party in the late 1930s was important. This Scandinavian-type coalition of ‘the worker and the farmer’ crossed the boundaries of the 1918 Red/White conflict and contributed to national integration and the stabilization of parliamentary democracy—although the limits of democracy were marked by the illegality of the Communist Party until 1944. The so-called Nordic orientation of the Finnish foreign policy in the late 1930s became associated with ‘Nordic democracy’, a way of defining Finland’s position in a world of threatened democracy and the increasing danger of war.

WO RLD WAR II: NATIONAL AGENCY AND WARTIME QUESTIONS

Finland in World War II In October 1939, after preceding diplomatic messages to Finland in 1938/9, the Molotov–Ribbentrop Pact in August 1939, and the British and French declarations of war on Germany after its invasion of Poland, the Soviet Union invited representatives of Finland to negotiate in Moscow. The Soviet leaders demanded a territory exchange that would push the Finnish–Soviet border farther from Leningrad. They also wanted to obtain a military base on the northern coast of the Gulf of Finland. The Finnish response did not meet Soviet demands, and the Soviet military offensive started on 30 November 1939. The Finnish resistance proved stronger than Stalin had expected, both militarily and in terms of national unity. The Winter War was an event of great international interest during the otherwise relatively undramatic first winter of World War II. The war ended in March 1940. About 27,000 Finns were killed; the number of Soviet casualties was much higher. Finland ceded one fifth of its territory to the Soviet Union as well as a naval base on the Gulf of Finland. The treaty did not require the Finnish population to leave the ceded territory, but practically the entire population chose to relocate. About 410,000 Finnish Karelians, or 12 per cent of Finland’s population, were relocated to other areas of Finland. During the Continuation War of 1941–4

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most of the displaced population returned to Karelia, but in summer 1944 they were evacuated again. After the Winter War, Finnish political decision-making was influenced by further Soviet pressures, fears caused by the Soviet annexation of the Baltic countries, and the desire to reclaim what had been lost in the Winter War, partly inspired by right-wing nationalist visions of a Great Finland that would extend to Eastern Karelia (which had never before belonged to Finland). After the summer 1940, Finland gradually aligned more closely with Germany, and in the spring of 1941, the Finnish military joined the German military in planning for the invasion of the Soviet Union. In late June 1941, Finland was once again at war with the Soviet Union. The war was described as the Continuation War, implying that it was a defensive continuation of the Winter War with a distinctly Finnish–Soviet rationale; yet Finland was now in fact in alliance with Nazi Germany and contributing to Hitler’s Operation Barbarossa. In the offensive phase, Finnish troops proceeded to the East, far beyond the country’s old border, and occupied Eastern Karelia. After the German defeat at Stalingrad, Finnish political and military leaders began to seek a way out of the war. The powerful Soviet offensive in June 1944 urged a solution. In September, an armistice treaty was signed between Finland, the Soviet Union, and the United Kingdom, which in 1941 had also declared war on Finland, although without subsequent military action. A most urgent feature of the treaty was a focus on expelling German forces from Finland: there were 213,000 troops in Northern Finland at that time. The so-called Lapland War began in September 1944 and ended in April 1945, when all German troops had withdrawn. The control commission of the Allies, dominated by the Soviet Union, controlled the implementation of the armistice treaty until its conditions were confirmed by the final Peace Treaty of Paris 1947. However, Finland was one of the few countries participating in World War II to have never been occupied. The number of Finns killed in the Continuation War exceeded 65,000; in the Lapland War the number was less than 1,000. Territorial losses included those ceded to the Soviet Union after the Winter War and the area through which Finland had access to the Arctic Ocean, and a naval base close to Helsinki was hired by the Soviet Union (although they withdrew from it during the so-called ‘first détente’ in 1955). Finland had to pay large war reparations; it also had to put wartime leaders on trial. Prison sentences were handed down to eight political leaders, including President Risto Ryti and the leading Social Democrat Väinö Tanner, but not Marshall Mannerheim, who was Commander-in-Chief of the White Army in 1918 and the Finnish Army in the wars of 1939–45, and president of the Republic in 1944–6. Mannerheim had gained status as the most respected national figure, and Stalin obviously took this into consideration.

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The armistice treaty of 1944 opened the way for political changes. The Communist Party ceased to be illegal and became a major political force, and organizations categorized as fascist or anti-Soviet were banned instead. They included the vast paramilitary Civil Guard organization that had been built on the basis of the White guards in 1918 and its sister association, Lotta Svärd, a very important organization mobilizing women in the war effort. The Finnish League of Companions in Arms was also proscribed. This had been founded in 1940 after the Winter War to provide social support and assistance to soldiers and their families, war invalids, widows and orphans, and to control political opinion and broader popular views, especially among workers. Several young Social Democrats were active in this organization, and after the war many of them became leading figures in the Social Democratic Party and in the struggle against Communists in the labour movement.

Controversial Legacies: Wartime National Unity or the Post-War Political Turn Significant continuities appeared through wartime and post-war political changes and associated social policy orientations. Controversial post-war accounts of what had been the most important and permanent changes reflected those continuities. The accounts were politically influential in postwar Finland, and pointed either to the overcoming of Civil War cleavages in the national unity of the wartime experience, especially during the Winter War, or to the extension of democracy by the political turn after the end of the Continuation War. The self-definition of the academic discipline ‘social policy’ was shaped by persons active in various wartime social policy initiatives. They influentially interpreted wartime problems and solutions as the decisive reinforcement of social solidarity and social policy thinking. In the view of leading post-war social politicians such as Heikki Waris, the first Professor of Social Policy at the University of Helsinki from the late 1940s, the so-called January Engagement during the Winter War in 1940 was the ‘historically most important’ social policy achievement of the wartime period (Waris 1973, 24–5). The January Engagement was a considerably short joint declaration, in which the national central organizations of trade unions and industrial employers promised to negotiate on common issues in the future. Employers were now ready to soften their views on trade unions, as it was important to convince Nordic and Western opinion that Finland, a democratic Nordic country, was the target of Soviet aggression. The practice of mutual negotiations was institutionalized by corporatist representation in wartime economic regulations. After the Continuation War, at a time of rapidly increasing trade union power, this practice was modified into the

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system of collective labour market agreements, decades later than in Denmark, Sweden, and Norway. Law-based social solidarity was extended through the provision of benefits to disabled soldiers and the families of fallen soldiers in the form of pensions and support for employment and education. The crucial role assigned to voluntary organizations could be seen as evidence of reinforced national unity. Close links were established between voluntary organizations and governmental authorities at central, provincial, and local levels in managing wartime production, distributing and allocating scarce labour resources, and arranging social support. In new national umbrella organizations, workingclass and bourgeois associations cooperated across political borders (Waris 1973, 24–6; Urponen 1994, 213–16). The wartime legacy of national integration included these home front experiences and what was called ‘the spirit of companions in arms’. It has been popular to explain later compromises in social and labour market policies, for example the pension reform of 1961 and the beginning of the so-called incomes policy in 1968, through the shared battle experiences and companions-in-arms spirit of the men who now met each other as trade union leaders and employers. In terms of empirical evidence, this explanation proves to be questionable as it bypasses interest-based calculations (Julkunen and Vauhkonen 2006, 289–319). It is true, nevertheless, that in the municipal policies of many cities, in particular, the so-called ‘companions-in-arms axis’ between Social Democrats and Conservatives was effective during post-war decades. In post-war national historical narratives (Kinnunen and Kivimäki 2012), an unbroken theme has emphasized that wartime efforts and sacrifices had preserved the country as unoccupied, independent, democratic, Nordic, Western, and neutral, although within the limits of a special relationship with the neighbouring Soviet Union. According to this account, the armistice treaty heralded a period of injustice and danger, but Finland survived the threat of Communism. In 1945, the Communists, the Social Democrats, and the Agrarian Party formed a coalition government, but this collaboration, and the Communist participation in government, only lasted until 1948. Within the trade union movement, the Social Democrats were dominant from the late 1940s. Nevertheless, with a solid electoral base of around 20 per cent of the electorate until the 1970s, as well as with their strong positions in many trade unions and real and assumed support from the Soviet Union, the Communists could be identified as having presented a major challenge to national integration (Rainio-Niemi 2008). After the 1966 elections in Finland, resulting in a socialist majority in parliament, a so-called popular front government was formed, consisting of Social Democrats, Communists, and the Centre Party (the former Agrarian Party). The Communists became involved in reformist

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politics through coalition governments with the Social Democrats and the Centre Party, as well as through cooperation with the Social Democratic majority in the trade union movement. The process resulted in political integration but also in an actual, although not formal, split within the Communist Party, between the reformist majority and the minority intent on preserving its strong loyalty to the Soviet Union and proletarian internationalism. However, instead of celebrating and defending wartime national solidarity, many critics at the time, as well as later commentators, identified the end of the Continuation War in 1944 as the beginning of a new democratic era. With varying emphases, such an account was shared by the Communists and those Social Democrats and the representatives of political centre who had formed the so-called peace opposition in the last phases of the Continuation War. This account gained widespread popularity, especially in the 1960s and 1970s. The new post-war era could not be interpreted as an achievement of resistance, because no powerful resistance movement had existed in Finland. Nevertheless, one could with good reason argue that, after the national unity of the Winter War, significant left-wing political protests emerged and that a large machinery of ideological and repressive control of opinions was required for maintaining national cohesion in the time between the Winter War and the Continuation War, as well as during the Continuation War. Not only many Communists but also the leaders of the left-wing opposition of the Social Democratic Party languished in prison during the Continuation War. In the late 1940s, the concept of a ‘Second Republic’ was coined by the advocates of new policies. It did not refer to any constitutional change— the constitution of 1919 remained untouched—but was meant to point to the post-1944 changes in foreign policy (notably with regard to relations with the Soviet Union) and the widening of democracy, indicated by the legitimacy of Communism and the breakthrough of collective agreements in labour relations. After the collapse of the Soviet Union, this interpretation, which pointed to the positive value of the post-war political changes drawing from the lessons of the lost war, was pushed aside. True, historians are currently conducting research on wartime control policies, the dark side of the collaboration with Nazi Germany, the harsh treatment of Soviet prisoners of war, and the practices of ethnic segregation in Russian Eastern Karelia (Aunesluoma 2013; Silvennoinen 2013). However, in public debates, those representing post-Cold War neo-patriotic perspectives are influential, arguing in favour of the general legitimacy, correctness, and necessity of Finnish wartime decisions. Such a view also informs the way war veterans are widely respected both as a result of the sufferings and horrors they faced and for being the most significant actor group in the creation of contemporary Finland.

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War Veterans and Karelian Evacuees as Social Problems Many debaters in contemporary Finland regret that in the period before the collapse of the Soviet Union, and especially during the period of strong leftwing influence in the 1960s and 1970s, war veterans failed to achieve the respect they deserved. This claim tends to neglect the fact that the generation of war veterans was a powerful force in politics, the economy, and culture in the post-war decades, especially in the 1960s and 1970s, while at the same time facing the protests of a younger generation. An important aspect of the formation of the welfare state in post-war decades were policies aimed at defining and solving the social problems of war veterans and other groups hard hit by the war, especially the citizens of the ceded territories. Social benefits, assistance, and care targeted at soldiers and their families were provided through manifold fragmented practices during the war years. These were coordinated at the end of the 1940s by legislation on pensions and compensation to disabled soldiers and the widows and children of fallen soldiers. The Finnish League of Companions in Arms had been banned after the Continuation War, but the Disabled War Veterans Association of Finland, founded after the Winter War in 1940, was an active initiator and organizer in these policy areas. Its effective fundraising campaigns included, for example, handling sales of Coca-Cola that was imported to Finland for the Helsinki Olympic Games in 1952. Two in part rival national war veteran associations were founded in the late 1950s and early 1960s, and they played an important role in bringing war veteran pensions onto the political agenda. Legislation on war veteran pensions came into force in 1971, launching a system of means-tested pensions. In the following years, pension benefits were extended and increased, and since 1982 the war veteran pension system has also encompassed the women who had been involved—unarmed—in warfare-associated tasks, many of them in the Lotta Svärd Organization banned after the Continuation War. A comprehensive system of healthcare and rehabilitation for aging war veterans was constructed and maintained by means of public funding, voluntary organizations, and popular fund-raising campaigns, strongly emphasizing the national ‘debt of honour’ of younger generations to war veterans (Sulamaa 2007; Uino 2014). The Karelian population of the ceded territories was, after the 1944 armistice, permanently settled in Finland. Many evacuated families faced a massive post-war housing shortage in the cities (Palomäki 2011; Malinen 2014). However, the dominant policy was to give them homesteads in rural municipalities. The right to homesteads was extended also to war veterans and war widows and orphans. The huge project of settling Karelian people did not proceed without cultural friction and conflicts of economic interest. It involved large socio-economic and cultural changes, but there was also

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strong continuity in the modes of thought and action concerning national agency and integration. As late as 1940, about 60 per cent of the Finnish population earned their living from agriculture and forestry. The expansion of the rural class of small farmers, drawing from the experience of the Civil War of 1918, continued to be a major policy of national integration, and was also applied to the outcomes of World War II. The number of small-sized farms increased until the 1950s. The livelihood of farmers was dependent on the linkage between agriculture and wood processing industries through peasant-owned forests and, especially, the seasonal demand for labour in the logging industry. As this linkage weakened through technological development and the subsequent diminished need for manpower in forestry, a change in socioeconomic structures rapidly accelerated in the late 1950s and in the 1960s. The Finnish welfare state was built up by efforts to manage this very rapid and profound structural change and the simultaneous large-scale challenge of the very large baby boom cohorts entering schools and the workplace. Reforms to social policy and the educational system were an integral part of the establishment of an industrialized and urbanized wage-work society. While wartime and immediate post-war ideas on national integration had been premised on the continuity of rural Finland, wartime ways of defining urgent social problems and their solutions now provided elements for the ideational and institutional frameworks of these reforms.

Population and Individual Capacities as Targets of Rational Planning World War II enhanced an understanding of a modernizing nation-state society in which the objectives of economic rationalization, social integration, and individual self-discipline intersected. New and old elements were mixed in how such a society was conceived as a target of knowledge and reform. Concerns about the quantity and quality of population became effective arguments for rational societal planning. After the Winter War, in 1941, the Population and Family Welfare Federation (Väestöliitto, now the Family Federation of Finland) was founded with a strong pronatalist spirit. After World War II, the federation, led by a leader of the Agrarian Party, became an active promoter of societal planning initiatives (Bergenheim 2017). Immediate solutions were needed for urgent problems. Among these were initiatives in housing policy, urged by the large number of returning soldiers and their families as well as evacuated Karelian families. After all, one had to recognize that rural colonization policies did not solve housing shortages in urban centres. The institution of state-subsided

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housing loans was legislated by a Social Democratic government in 1949 (Malinen 2014). Later, Väestöliitto sought to facilitate the education and employment of baby boom cohorts and made further efforts to control accelerating socio-economic and regional changes by means of science-based planning. In wartime, concern about children’s living conditions and malnutrition gave rise to a Nordic project, initiated by voluntary organizations and, in particular, by the Mannerheim League for Child Welfare (which was founded after the victory of the White General in the Civil War of 1918). The project transferred between 70,000 and 75,000 Finnish children to Sweden and, to a lesser extent, to Denmark, where they lived with families; the majority of them returned home after the war. The experiences of these ‘war children’ are one of the subjects of the current debate on the long-term mental consequences of war in Finland (Korppi-Tommola 2008, 445–55). Concern about children’s well-being and the nation’s vitality also resulted, for example, in a parliamentary decision in 1943 that all primary schools must provide a free lunch to children (although the municipalities had five years within which to implement this decision). A bill on cash support to poor families with many children was passed in 1943. Women’s associations played a significant role in initiating and implementing wartime population and family policies. Many of their leading figures advocated urban, middle-class family ideals, but with limited success. In a rural society such as Finland, the gender division of labour never followed male-breadwinner ideals, and women—even married women—had also worked in manufacturing industries. The role of female labour power nevertheless increased significantly in all sectors of the economy during the course of the war. This change in the gender division of labour was only in part a temporary wartime phenomenon. The participation of women in industrial working life was supported by the fact that the shortage of labour power continued until the end of the 1940s, instead of the large-scale unemployment that had been expected to arise after the return of men from the front. True, the ideological impulses of wartime experiences were controversial. An ideal of family as a basic unit of society was actually reinforced by taxation, as later appears. A male-breadwinner model was advocated by both wartime and postwar proposals of family allowances as a part of a wage settlement. However, these proposals were soon rejected, and in 1948, at the same time as in other Nordic countries, child allowances began to be paid to all mothers. This was the first universal social benefit in Finland (Bergholm 2013, 315–19). The quantity and quality of population as a target of knowledge and politics was interlinked with the issue of how best to fit individuals into the functions of society. This was an urgent problem on the wartime national agenda of politics and administration. Jobs became classified according to the amount of food and calories needed and people became categorized according to their occupational skills and political reliability. A classification of medical practices

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was needed in the treatment and employment of disabled soldiers, and the development of psychiatric methods was fostered by the need to somehow recognize the most acute and obvious forms of psychological damage. In the Continuation War, about 17,000 ‘shaken-up’ soldiers were taken into psychiatric care and treated with new methods such as electrical and insulin shock treatment; yet, after the war, these individuals mostly failed to be recognized and classified as war invalids entitled to social support (Kivimäki 2013). Wartime experiences inspired institutional novelties in improving the quality of population and individual capacities. This was obvious in the foundation of the Institute of Occupational Health (Työterveyslaitos). The decision to set up this institute was made in 1945 and it was fully operational from 1951. The institute was initiated by young doctors and organized through the cooperation of governmental authorities, employer organizations, and trade unions. In the activities of the institute, the knowledge of physicians, engineers, and psychologists was combined. Models came not only from Sweden but also from the United States. The American pragmatist orientation inspired an attempt to combine different fields of scientific knowledge in seeking solutions to working-life problems. The Rockefeller Foundation gave significant economic support to the institute (Kettunen 1994, 378–92). The promotion of economic efficiency, or a ‘rationalization movement’, had been discussed in Finland since the import of scientific management ideas prior to World War I. Although Finland was only indirectly involved in that war, linkages to the war economy of the Russian Empire provided some incentives for similar efforts to foster a more rational organization of urgent economic activities in a manner characteristic of the countries participating more fully in the conflict (Devinat 1927). During World War II, rationalization was quite explicitly declared as a joint national task and necessity. To introduce and implement time and motion studies, the main method of Taylorism, a special office was founded in connection with the army headquarters. The German rationalization movement had inspired Finnish engineers since the early 1920s, and lessons were adopted from Germany during wartime as well. For many advocates of rationalization, the German mode was orientated to the common good of the people and the nation, and had thus a better ‘spirit’ than similar developments in America, where the interests of private companies were seen as being too dominant. Such a view was not always associated with sympathy towards the Nazi regime. Yet it was clear that the trade union leaders who were involved in wartime rationalization efforts did not look to German models of labour relations, but wished instead to associate British and Swedish ideas of industrial and economic democracy with rationalization (Kettunen 2001a, 235–55). American management techniques were eagerly adopted in post-war employer policies of industrial companies. Finland did not join the Marshall Plan as the Soviet Union was opposed. However, Western, and especially

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American, connections played an important role. They were important not only in terms of international post-war social aid, but also for the ideological and practical flavour they gave to the way in which social problems were defined as targets of science-based knowledge. This was evident in the Institute of Occupational Health and also in the Institute of Industrial Supervisor Training (Teollisuuden Työnjohto-opisto, now the Management Institute of Finland) that was founded by employer organizations in 1945 for the defence of capitalist society. Courses of the American programme ‘The Training Within Industry’ were adopted in the late 1940s as part of the curriculum of the institute (Kettunen 1994, 355–61). More generally, American ideas of management became, in various ways, connected with the efforts of science-based societal planning, mixed with conclusions drawn from wartime experiences.

The State as an Agent of Rational Planning In attempts to respond to immediate wartime needs, the ethos of economic and societal rationalization was reinforced in a way that combined different ideational ingredients from abroad with a notion of a national community as an agent defining and solving its own problems. This also implied a reinforced legitimacy of the state as an economic actor, regulator, redistributor, and provider. Wartime rationalization efforts had been, on the one hand, focused on the acute tasks of exceptional circumstances, such as the management of hugely increased railway transportation, the reorganization of industrial production for military needs, and the erection of defensive fortifications, all of this by means of scarce and largely unskilled labour. These efforts were entwined with a greatly reinforced role of government in the national economy. Annual state expenditure in the years 1940 to 1944 was about three times as high it had been in 1938. Military spending had increased in the 1930s and was in 1938 more than 20 per cent of state expenditure. In 1940, the proportion of military spending exceeded 80 per cent (Lehtinen 1967; Eloranta and Tanaka 2015). The increased spending was covered by several forms of revenue enhancement. In 1938, the government responded to the danger of war by raising income and property taxes by 20 per cent for military preparations, and additional increases as well as new forms of taxation were introduced during the wars (Jäntti 2006; Linnakangas 2015). A part of spending was covered by loans, about three quarters of which were domestic, and by printing notes (Lehtinen 1967). On the other hand, the ethos of rationalization as a vital national task also linked together earlier international Great Depression conclusions concerning the need for national coordination of private economic action, or

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the ‘rationalisation of rationalisation’ as the ILO put it (International Labour Office 1931, 376), and wartime international ideas of ‘post-war planning’. According to a widely shared view, increased state intervention implied a permanent shift in priorities and would only in part be removed after the war (Teräs 2013, 189–214). In Finnish wartime debates, the New Deal, the Beveridge Plan, and Nazi social policies were all referred to as evidence of the new active role of the state in the future post-war world. After the war, the definition of national necessities and the content of state intervention clearly became a matter of political controversy. Yet even the Communists shared much of the mode of thought emphasizing economic rationalization as an urgent national task, not least due to their view that reparations to the Soviet Union—a crucial economic necessity for Finland until 1952—were an anti-fascist and democratic national duty. Both the Communists and the Social Democrats interpreted their quite divergent socialist goals as a transition to true national economic rationality. In reforms of taxation, responses to immediate wartime needs also implied long-term changes (Linnakangas 2015). Turnover tax was introduced in 1941. The collection of income tax was made more effective in 1943 by adopting a pay-as-you-earn system in which the employer withholds the tax. The administration of state and municipal taxation was reformed. The law on progressive income and property tax was revised in 1943. One of the long-term changes proved to be a return to the joint taxation of spouses in 1943 legislation. In 1935, separate income taxation had been introduced, motivated by the marriage law of 1929 that prescribed the independence of wives in economic terms, but also by efforts to oppose the moral threat of unmarried cohabitation (Karppi 2008). In the return to joint taxation in 1943, fiscal calculations played a role, but it also reflected an ideal of the married couple as an economic unit, with the husband as the dominant partner. One interpretation of this is that the pattern of rural households had gained still more ideological power through the wartime subordination of individuals to joint effort, yet the return to joint taxation was paradoxical given the fact that the employment of married women in waged work had significantly increased in wartime. In 1976, separate taxation was again introduced, now in the Nordic wave of similar reforms and as an aspect of what Lars Trägårdh (1997) calls ‘statist individualism’ in the making of the Nordic welfare state.

National Necessities in the Post-War Making of the Welfare State The immediate post-war period ended in the early 1950s, when reparations to the Soviet Union (mostly in the form of products of engineering industries that were largely extended) had been completed and the comprehensive

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system of rationing was dissolved. Now a more or less articulated national strategy of prosperity was widely adopted. It was based on a high rate of investment and the hope and assumption that sacrifices in the form of a more moderate growth of consumption would result in general prosperity in the future (Pohjola 1994, 237). A traditional mode of thought and action was reinforced in which social policies were assessed from the point of view of the limits imposed by economic resources. A divergent argument, pointing to a virtuous circle between expanding social policies and economic growth, also emerged. It is evident in Pekka Kuusi’s (1961) book on social policy for the 1960s, often characterized as the plan of the Finnish welfare state. Promoting social equality through the redistribution of income, social security and labour power policy would release people’s productive capacities; the vicious circle between poverty and passivity would be broken. Nevertheless, in Kuusi’s narrative, there was also a strong emphasis on national necessities. This derived from Finland’s place in the world of international competition between national societies. Finland was situated between two highly dynamic and growth-oriented societies: Sweden and the Soviet Union. The mission Kuusi outlined was indeed a matter of life and death: if Finland was to survive between these two societies, ‘we ourselves are doomed to grow’ (Kuusi 1964, 59). Kuusi was not advocating any third way between the societal systems of Sweden and the Soviet Union. His argument was, rather, an example of the Finnish tendency to avoid any explicit association of social policy with Cold War confrontation. He located social policy in the sphere above—or beneath—the political and inter-systemic confrontations between East and West, in which the basic process was the evolution and growth of industrial society, with Sweden and the Soviet Union variously exemplifying the emergence of such a society. This implicit convergence ideology had obvious advantages for the national(istic) legitimization of social policies in the Cold War era. Cold War inter-systemic confrontation was a significant factor behind socio-political considerations. Relatively strong support for Communism, in particular, was a major concern for all those who believed in social policies as a means of national social cohesion, and even for the political right, most notably the National Coalition Party, an actively anti-social policy stance was not a viable alternative (Smolander 2000). However, while the Swedish Social Democrats had integrated their policy objectives in ‘democratic welfare politics’ and contrasted it to capitalism and communism (Edling 2013), in Finland the dominant orientation was to depoliticize social policies. Thus, social reforms were often discussed as functional needs, pragmatic steps along the road of general progress within the limits of economic resources, or as issues of the pragmatic adjustment of conflicting interests in the name of the common national interest.

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The left-wing majority governments of the period 1966–70 have remained in the history books as the ones that set the broad parameters of the welfare state in Finland into motion. Indeed, one may say that in the late 1960s the willingness to compromise reached a point where it became possible to gain broad political support for major Nordic-type reforms in social and educational policies as well as in industrial relations. However, the welfare state was no ‘project’ in Finland before it became, in the 1980s and 1990s, an achievement to be defended. The concept of welfare state did not play any central role in how the socialist parties expressed their goals (Kettunen 2014). Moreover, important reforms of pension systems, sickness insurance, and unemployment policies had already been made in 1955–65, a period of great parliamentary instability (Bergholm 2009), and all of these social security reforms were achieved through political competition, interest conflicts, and compromises within the limits of what were conceived of as national economic and political necessities. These necessities were in the 1950s and 1960s associated with a profound socio-economic and regional change that was preconditioned by the previous path-dependent way of dealing with the outcomes of war.

CO NCLUSION For an historical interpretation of the legacies of wars in the making of the Finnish welfare state, it is useful to pay attention to the combination of interest conflicts, on the one hand, and the emphasis on external necessities to be responded to by internal national will, on the other. It is easy to find evidence for a conflict-laden past in Finland. The Civil War of 1918, with its class-based preconditions, had long-term effects through social memory and political institutions. In the post-World War II era, the relatively strong support of the Communists was one of the political phenomena that made Finland exceptional in the Nordic context. In industrial relations, obvious ‘low-trust’ elements remained until the 1980s, indicated by comparative strike statistics. The parliamentary system was unstable and short-lived governments were typical of Finland until the early 1980s. However, an argument suggesting that, in Finland, there was a special emphasis on national consensus can easily be supported by referring to the historical record, as well. One may refer to the remarkable national unity during World War II, especially during the Winter War, with its long-term ideological legacy. During the Cold War, the political agenda and political agency were shaped by the necessity of coping with the tight limits for manoeuvre in international politics. Many economists and sociologists have also pointed out the special capability of the Finnish export industry to acquire hegemonic

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power through presenting its particular interests (international competitiveness) as the general national interest (e.g. Pekkarinen 1992; Kosonen 1993). Arguably, the Finland of too much conflict and the Finland of too much consensus preconditioned each other (Kettunen 2004). The ideal of national consensus developed in the nineteenth-century nation-building that took place in the former Eastern provinces of the Swedish realm, after the Russo-Swedish war in 1808–9, within the framework of the Russian Empire. The strong consensus ideal tended to shape political conflicts into struggles about the right way and the privilege of speaking in the name of the whole, ‘the people’. This kind of struggle can also be found as a significant aspect of the Civil War. In the early 1960s, the sociologist Erik Allardt distinguished between four ‘basic cleavages’ of the Finnish society. They existed between the Finnishspeaking and Swedish-speaking Finns, between rural and urban Finns, between the working class and the bourgeoisie, and between the Communists and the rest of the people (Allardt 1964, 97–131). One might argue that the political significance of these cleavages stemmed from their historical anchorage in rival claims of speaking in the name of ‘the people’ or the ‘will of people’. Allardt observed that steps had been taken to recognize and regulate these cleavages and thus reinforce national integration. One should proceed in this direction, especially in relation to Communists. In the Durkheimian spirit, and inspired by the class conflict theory of Ralf Dahrendorf, Allardt concluded that, in a modern society with a deepening division of labour, social integration could only be reinforced by diminishing the pressure for conformity. Conflicts, when recognized and thus institutionalized, would promote integration and improve the performance capacity of the society. This novel idea of national integration was seen as a way of overcoming the conflicts nourished by a strong demand for national consensus. However, as Risto Alapuro argues, it was actually compatible with another older feature of Finnish political culture, ‘a curious combination of the demand for unanimity and the toleration of disagreement’ (1997, 196). World War II experiences had reinforced this combination. Wartime experiences fostered the notion of society as a functional whole that must and can be steered and rationalized by means of scientific knowledge. These experiences also created prerequisites for a problem definition focusing on how to fit different individuals into different functions of society. However, in addition to the level of large society and the level of different individuals, there was also a third level that was recognized as a target of problem-solving knowledge. It was found between society and the individual, a social sphere that could not be reduced to the norms and institutions of the societal system nor to the properties of individual people. This was discussed in sociological studies of the 1940s and 1950s concerning conflicts between official and unofficial norms and about the group dynamic as a force with its own autonomous laws, a phenomenon recognized in soldiers’ collective

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behaviour in army units and later in post-war industrial working life (Kettunen 1997, 163–5). One of the most influential treatments was that given by Väinö Linna in his novel The Unknown Soldier (1954). Linna’s novel and sociological studies implied that disobedience and conflicts between official and unofficial norms were characteristic of Finnish culture and, moreover, that they could have a positive impact on the operations of an organization. This line of argument re-emerged with new strength in 1960s sociological and sociologically inspired political discourse. By recognizing conflicts and institutionalizing them, it was suggested, the efficiency and cohesion of society could be improved. This argument achieved considerable influence in the politics of social policy, but it was still connected with the framing idea of the nation-state society as an historical agent that responds to external threats by means of its internal will and capacity. Different historical layers can be found in the legacies of wars, and they seem to actualize in different phases of welfare-state history. Currently, the welfare state is modified to fulfil competition–state functions in a globalized economy, and that being so, the usefulness of conflicts is hardly a popular argument. The national ‘we’ appears as the creator of the welfare state in Finnish public discourse. Such a consensual belief seems to be more widely shared in Finland than in other Nordic countries, especially in Sweden, where a real struggle is going on between the Social Democrats and the bourgeois parties regarding ownership of the history of the welfare state (Kettunen et al. 2015, 86–7). Ideological associations to wartime joint efforts are evoked, for example, by the Finnish word talkoot, meaning that the members of the community voluntarily, out of an internal sense of duty, cooperate to fulfil an urgent task. This rural word was in constant use in the organization of home front activities during World War II, and remains popular in current political rhetoric. The need of national talkoot for rescuing the welfare state is a favourite phrase in advocating for austerity politics, consensual corporatism, improved competitiveness, and many other objectives.

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Korppi-Tommola, Aura. 2008. ‘War and Children in Finland during the Second World War’. Paedagogica Historica 44: 445–55. Koselleck, Reinhart. 1979. Vergangene Zukunft. Zur Semantik geschichtlichen Zeiten. Frankfurt a.M.: Suhrkamp. Kosonen, Pekka. 1993. ‘The Finnish Model and the Welfare State in Crisis’. In The Nordic Welfare State as a Myth and as Reality, edited by Pekka Kosonen, 45–66. Renvall Institute Publications 5. Helsinki: Renvall Institute, University of Helsinki. Kurunmäki, Jussi. 2011. ‘ “Nordic Democracy” in 1935: On the Finnish and Swedish Rhetoric of Democracy’. In Rhetorics of Nordic Democracy, edited by Jussi Kurunmäki and Johan Strang, 37–82. Helsinki: Finnish Literature Society. Kuusi, Pekka. 1961. 60-luvun sosiaalipolitiikka. Porvoo: WSOY. Kuusi, Pekka. 1964. Social Policy for the Sixties: a Plan for Finland. Helsinki: Finnish Social Political Association. Lehtinen, Artturi. 1967. ‘Sotatalous 1939–1945’. In Itsenäisen Suomen taloushistoriaa 1919–1950, edited by Eino Jutikkala, Matti J. Castren, Hugo E. Pipping, and Markku Järvinen, 193–233. Historian Aitta 17. Porvoo and Helsinki: WSOY. Lindberg, Valter. 1934. Utvecklingen av den allmänna inkomstskatten i Finlands statsskattesystem. Akademisk avhandling. Helsingfors: Helsingfors Universitet. Linna, Väinö. 1954. Tuntematon sotilas. Porvoo: WSOY [1957. The Unknown Soldier. London: Collins]. Linnakangas, Esko. 2015. ‘Tuloverotuksen synty ja kehtys’. Verotus Suomessa 1865–2015, 7–18. Helsinki: Verohallinto. Malinen, Antti. 2014. Perheet ahtaalla. Asuntopula ja siihen sopeutuminen toisen maailmansodan jälkeisessä Helsingissä 1944–1948. Helsinki: Väestöliitto. Palomäki, Antti. 2011. Juoksuhaudoista jälleenrakennukseen—Siirtoväen ja rintamamiesten asutus- ja asuntokysymyksen järjestäminen ja sen käänteentekevä vaikutus asuntopolitiikkaan ja kaupunkirakentamiseen. Tampere: Tampere University Press. Pekkarinen, Jukka. 1992. ‘Corporatism and Economic Performance in Sweden, Norway, and Finland’. In Social Corporatism: A Superior Economic System?, edited by Jukka Pekkarinen, Matti Pohjola, and Bo Rowthorn, 297–337. Oxford: Oxford University Press. Petersen, Klaus. 2006. ‘Constructing Nordic Welfare? Nordic Social Political Cooperation 1919–1955’. In The Nordic Model of Welfare: A Historical Reappraisal, edited by Niels Finn Christiansen, Klaus Petersen, Nils Edling, and Per Haave, 67–98. Copenhagen: Museum Tusculanum Press. Pohjola, Matti. 1994. ‘Nordic Corporatism and Economic Performance: Labour Market Equality at the Expense of Productive Efficiency?’ In Transformation of the Nordic Industrial Relations in the European Context, edited by Timo Kauppinen and Virpi Köykkå, 223–41. IIRA 4th European Regional Congress, Helsinki, Finland 24–6 August, 1994. Helsinki: The Finnish Labour Relations Association. Polvinen, Tuomo. 1962. Die Finnischen Eisenbahnen in den militärischen und politischen Plänen Russlands vor dem ersten Weltkrieg. Helsinki: Societas Historica Finlandiae. Pulkkinen, Tuija. 1999. ‘One Language, One Mind. The Nationalist Tradition in Finnish Political Culture’. In Europe’s Northern Frontier: Perspectives on Finland’s Western Identity, edited by Tuomas M. S. Lehtonen. Jyväskylä: PS-Kustannus.

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Rainio-Niemi, Johanna. 2008. ‘Small State Cultures of Consensus: State Traditions and Consensus-Seeking in the Neo-Corporatist and Neutrality Policies in Post-1945 Austria and Finland’. PhD diss., University of Helsinki. Saarela, Tauno. 2014. ‘To Commemorate or Not: The Finnish Labor Movement and the Memory of the Civil War in the Interwar Period’. In The Finnish Civil War in 1918: History, Memory, Legacy, edited by Tuomas Tepora and Aapo Roselius, 331–62. Leiden and Boston, MA: Brill. Screen, J. E. O. 1996. The Finnish Army 1881–1901: Training the Rifle Battalions. Studia Historica 54. Helsinki: Finnish Historical Society. Siltala, Juha. 2014. ‘Being Absorbed into an Unintended War’. In The Finnish Civil War in 1918: History, Memory, Legacy, edited by Tuomas Tepora and Aapo Roselius, 51–89. Leiden & Boston, MA: Brill. Silvennoinen, Oula. 2013. ‘Janus of the North? Finland 1940–44: Finland’s Road into Alliance with Hitler’. In Hitler’s Scandinavian Legacy, edited by John Gilmour and Jill Stephenson, 129–46. London: Bloomsbury Academic. Smolander, Jyrki. 2000. Suomalainen oikeisto ja ‘kansankoti’. Kansallisen Kokoomuksen suhtautuminen pohjoismaiseen hyvinvointivaltiomalliin jälleenrakennuskaudelta konsensusajan alkuun. Bibliotheca Historica 63. Helsinki: Suomalaisen Kirjallisuuden Seura. Spector, Malcolm and John I. Kitsuse. 2011. Constructing Social Problems. New Brunswick, NJ and London: Transaction Publishers. Sulamaa, Kaarle. 2007. Veteraania ei jätetä. Suomen Sotaveteraaniliitto 1957–2007. Helsinki: Edita. Teräs, Kari. 2013. ‘Private Entrepreneurship and the State: Discursive Power Struggles during the Regulated Economy 1939–1949’. In Multilayered Historicity of the Present: Approaches to Social Science History, edited by Heidi Haggrén, Johanna Rainio-Niemi, and Jussi Vauhkonen, 189–214. Publications of the Department of Political and Economic Studies 8. Helsinki: University of Helsinki. Trägårdh, Lars. 1997. ‘Statist Individualism: On the Culturality of the Nordic Welfare State’. In The Cultural Construction of Norden, edited by Øystein Sørensen and Bo Stråth, 253–85. Oslo: Scandinavian University Press. Uino, Ari. 2014. Sotiemme veteraanit. Rintamalta rakentamaan. Kirjokansi 65. Helsinki: Suomalaisen Kirjallisuuden Seura. Upton, Anthony F. 1980. The Finnish Revolution 1917–1918. Minneapolis, MN: University of Minnesota Press. Urponen, Kyösti. 1994. ‘Huoltoyhteiskunnasta hyvinvointivaltioon’. In Armeliaisuus, yhteisöapu, sosiaaliturva. Suomalaisten sosiaalisen turvan historia, edited by Jouko Jaakkola, Panu Pulma, Mirja Satka, and Kyösti Urponen, 163–260. Helsinki: Sosiaaliturvan Keskusliitto. Waris, Heikki. 1973. Suomalaisen yhteiskunnan sosiaalipolitiikka, 5th edition. Porvoo: WSOY.

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11 From Military State to Welfare State The Warfare–Welfare Nexus in Denmark, 1848–1950s Klaus Petersen and Nils Arne Sørensen

INTRODUCTION Compared to most other countries, Denmark was only marginally affected by the two world wars. And if we take a bird’s-eye perspective of the development of the welfare state, it is characterized by continuity throughout the twentieth century. Social rights were expanded step by step, and after 1945, Denmark became an example of what in comparative welfare state research is labelled the Nordic model: characterized by universalism, tax-financed, and with comprehensive social security and social services organized by the state. At first glance, the impact of the major European wars on Danish welfare state history appears to be marginal and mainly negative. However, taking a closer look and a longer perspective it becomes clear that the Danish welfare state was not unaffected by the wars. In this chapter we locate three types of effects: First, wartime was a critical juncture leading to extraordinary interventions that sometimes strengthened existing tendencies, and in this way, war was a pacemaker for significant changes in the long run. Second, war had a direct positive impact on the growth of the state. Third, we find indirect effects, where the wartime experience changed the social, economic, and political contexts for the development of the Danish welfare state. In this chapter, we take our point of departure from three main arguments. The first argument is related to discussions of war and state formation. The history of the Danish state features high levels of continuity, but the formation of the Danish nation state is directly linked to war and to military defeats in the Napoleonic Wars and especially the Schleswig Wars, when Denmark ceded Norway to Sweden in 1814 and Schleswig and Holstein to German states in 1864. As a result, Denmark gradually went from being a mediumsized European power to a small nation state with a very homogeneous

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population in terms of religion, language, and ethnicity. These are historical factors that existing research has highlighted as foundations for the development of comprehensive universal welfare states (Pedersen 2014). The second argument is related to the small state. War looks different from the perspective of a small state compared to the major European powers. Small states do not seek war and mostly realize that war is not a feasible strategy for solving problems with neighbouring countries. This means that both the preparation and the war phases of small states involve different political dynamics from those of the major European powers. From 1870 to the end of the Cold War, the overall Danish security strategy was a passive one, based on the intention to avoid war and rather to focus on inner stability and legitimacy. The welfare state is part of this story. Still, war was a reality, even though it has to be understood mainly as an externality (an unwanted change in the historical context), and both world wars affected the Danish social security system in various ways. We also hint at a third argument that might merit further development. As a consequence of Denmark’s status as a small and weak state since the 1860s (at the latest) and the subsequent policy choice of a very defensive neutrality with a strong focus on domestic aspects, the voice of the military was marginalized in politics and almost completely absent in debates on social issues. The military played a smaller political role than in larger and more militarized countries. There are, however, some indications that the military tried to improve its status and role from the 1930s by positioning itself as a defender of the developing welfare state. Thus, one might argue that the welfare state came to be used as an argument for the development of the military, rather than the other way round.

A S MALL PEACEFUL DEMOCRATIC NATION S TATE BORN I N W AR The traditional master narrative of Danish history is strikingly parallel to what Herbert Butterfield famously labelled ‘The Whig Interpretation of [British] History’ (Butterfield 1965). In the Danish version, a combination of benign rulers and an almost innate capacity for compromise secured the transition to modernity from the late eighteenth century onwards without any major bloody confrontations, revolutionary upheavals, or civil wars. While this narrative cannot be dismissed as pure fantasy, the Danish monarchy did undergo dramatic shifts in its transformation from a multi-ethnic absolutist state to a constitutional nation state, and this transformation was closely linked to both revolution and war.

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In the mid-nineteenth century, the absolutist regime came under growing pressure from a nationalist–liberal opposition that combined demands for a liberal constitution with a nationalist agenda (Frantzen and Jespersen 2008, 26–73). The latter focused on the duchies of Schleswig and Holstein, which were ruled by the Danish king but not integrated into Denmark proper. To Danish liberals, the linguistically split Schleswig should be incorporated into Denmark, while the Holsteiners ought to pursue their German destiny as part of a future German nation state. Unsurprisingly, German nationalists in the duchies (and elsewhere in the German states) contested the interpretation of Danish liberals, and Schleswig became a bone of contention between the Danish and German nation-building projects. This became decisive for the path of Danish history from 1848 onwards. In the spring of 1848, the European wave of liberal revolutions fed into the competing national projects in the Danish monarchy. In Copenhagen, liberals marched on the royal palace demanding a constitution, while liberals in Kiel demanded not just liberal reforms but also a German future. The king gave in to the former and refused the latter. This led to a rebellion in Holstein, and soon the Danish monarchy descended into a civil war fought in Schleswig and parts of Jutland. This civil war was quickly internationalized as German states (and volunteers) joined the rebels and drove back Danish forces. International pressure forced the German states to drop their engagement in the conflict, and in the second phase of the war, Danish military returned to the offensive. Once again, the Great Powers intervened and forced a settlement that confirmed status quo ante. In Denmark, the impact of the war was massive. The new liberal constitution of 1849 was negotiated under the pressure of war, which led to the introduction of a broad male suffrage as a necessary corollary to national conscription. The 1849 constitution did not feature social rights but included a general statement (§89) declaring that ‘[H]e who cannot provide for himself or his family, and who is not to be provided for by somebody else, is entitled to public help, under the conditions stated in the law.’ This not very explicit statement of rights survived later revisions of the constitution and framed subsequent political struggles over social political principles. The war in 1848 resulted in a widespread nationalist enthusiasm in Denmark. Unsurprisingly, the military was placed in the centre of this wave of nationalist fervour, and the common soldiers with rural backgrounds were hailed as the heroes of the day. Even the famous leader of the Royal Danish Ballet, August Bournonville, joined the nationalist chorus advocating targeted policies for war veterans and their families (Fenger 2011, 5). However, the outcome of the war left the basic problems not just unsolved but aggravated. The political divisions within the realm had become sharper, with Denmark proper now a constitutional state, while the duchies remained under quasi-absolutist rule. In the 1850s, the government tried to solve this imbalance by seeking to create an

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overarching constitution for all the parts of the realm, but these attempts were vetoed by the German Confederation of which Holstein was a member. In 1863, the Danish government tried to cut this Gordian knot by promulgating a new constitution for both Denmark and Schleswig, thus incorporating Schleswig into Denmark against international agreements. The German states, led by Prussia and Austria, saw this not just as a provocation but as an outright causus belli leading to the Second Schleswig War of 1864 (Noack 2014). The war proved catastrophic for Denmark (Glenthøj 2014). On the battlefield, the Danish army suffered unequivocal defeat, and in the subsequent peace treaty Denmark had to cede the duchies to Prussia and Austria. The war left Denmark as one of the smallest and weakest states in Europe. At the same time, however, the war resulted in Denmark becoming an ethnically homogeneous nation state. For our purposes here, two other consequences of the war are even more important. First, the war forced the insight on the Danish political establishment that Denmark was too weak to wage revanchist wars and that neutrality was the only feasible option in foreign policy. Second, in the aftermath of the war, the Danish constitution was revised in 1866. The revision secured the hegemony of the social and economic elites within the second chamber of parliament and further granted the government the right to rule by decree, thus enabling governments to override parliamentary majorities. This established the framework for a forty-year-long constitutional struggle, with Conservatives and right-wing Liberals defending this revised political settlement and the Agrarian Party and the rising Social Democrats fighting for a return to the more democratic set-up of the 1849 constitution. It is noteworthy that several of the social reforms mentioned below were legislated in this highly conflictual political setting, and it is clear that the Conservative government wanted to utilize social reforms as one means of building bridges between Conservative and Liberal–Agrarian interests (Levine 1978; Petersen et al. 2010, 574–5). In this way, the nationalist wars of the nineteenth century indirectly influenced the first wave of social legislation from 1891 to 1907.

The Social Policy Effects of the National Wars In the mid-nineteenth century, the existing rudimentary social security system was still based on the 1799 Poor Law, where the receipt of benefits also meant the loss of civic rights (loss of property, the right to marry, etc.) (Kolstrup 2010, 237–47). However, the 1848 war did lead to some of the first exceptions to the draconian consequences of the Poor Law, with the Ministry of Justice decreeing that municipalities could (not should) offer social assistance to families of soldiers in need without this specific help leading to the loss of civic rights. This exception for a special group in need was anticipating the

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discussion on ‘worthy’ and ‘unworthy’ recipients that some decades later would lead to the first wave of modern social legislation in Denmark. Reforms in other areas progressed from the events of 1848 that pointed towards new social policy departures. One example is the introduction of an old-age pension scheme for civil servants (Petersen 2010, 348–9). Another is that the end of absolutism also triggered discussions on labour market regulation. A newly established interest organization for Danish manufacturers (Industriforeningen) advocated a law allowing skilled labourers to be employed outside the guild system (Jacobsen 2011, 23). This request was declined by the government, but pointed towards what was later implemented through the ‘Freedom of Trades’ law passed in 1857. Finally, during the 1840s, discussions on poor working conditions started to take off, especially in Copenhagen, focusing on workplace accidents and the poor health of certain social groups (Jacobsen 2011, 19–41). However, this consideration of the population as a national resource seems to have been driven by economic rather than military considerations. While it was evident that the outcome of the First Schleswig War was unsustainable, there is no evidence that Danish authorities (including the military) contemplated social reforms to improve Denmark’s capacity to wage a coming war. However, as in 1848, the 1864 war did result in a few reforms directly related to the wartime situation. During the course of the war it became the general rule that help for poor families of soldiers should be offered without the harsh conditions of the Poor Law, and in 1876, war invalids were also offered help on a similar basis (Kolstrup 2010, 245–8). Thus, the direct impact of the two wars on social policy development was quite limited. There is also little evidence to suggest that military concerns constituted a clear motive for the social reforms that were introduced in the late nineteenth century, when the transnational social question emerged as a live issue in Denmark. It was rather the combined effects of agenda-setting, national state-building, structural modernization, and state capacity that resulted in a series of social reforms: an old age pension reform act and a new poor law in 1891, sickness insurance in 1892, worker’s accident insurance in 1898, the law on child welfare in 1905, and a national system for unemployment compensation in 1907. Even if these reforms displayed a diversity of social policy principles, the overall key to social rights became national citizenship (Petersen et al. 2010). These reforms, often characterized as the origins of the modern Danish welfare state, were clearly not directly caused by war. It took three decades of social policy debate after 1864 before reforms were implemented, and in the parliamentary debates over the reforms, we find no explicit references to war or military considerations, while Militært Tidsskrift, a journal published by Krigsvidenskabeligt Selskab since 1871, that served as the public voice for the military establishment, simply did not engage in debates on social issues.

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Neither did the navy oriented Tidsskrift for Søvæsen. A reason for this could be that the military, which had suffered severe economic cutbacks after 1864, did not have the capacity to call all potential recruits into military service (in the 1880s, around 50 per cent of a male cohort were called to serve) (Kornerup 1888, 256–7). Under these circumstances, concerns about the physical quality or health of young men from the lower classes might not have seemed a very important issue to address for editors of journals that did not otherwise shy away from addressing political issues, not least when they involved perceived underfunding of the military (for an example, see Lesser 1894, 289–303). While military concerns were conspicuously absent from social debates, the wars and Germany’s subsequent bogeyman status as the national arch enemy did to some extent hover over these debates. While German social political debates were closely followed in Denmark, there was a strong scepticism about German ideas simply because they were German. In the debate on old-age pensions, the prominent Agrarian politician Niels Neergaard clearly illustrated this when he described the German model of mandatory pensions as a construction that ‘only could have been thought out by sick German bureaucratic minds’ (Neergaard 1890, 840). In this way, the Prussian–Danish war had a clear impact on patterns of social policy diffusion. If we turn our attention from social rights to the financing of social rights, there are some traces of wartime experience affecting the formation of the Danish tax system. The government introduced new war-financing taxes in both 1848 and 1864 that triggered discussions among both experts and politicians (Olsen 2000, 612–14; Møller 2009, 71–89, 121–50). Nationalist politicians used the need for military power as an argument in favour of an income tax, whereas liberal anti-militarists criticized income tax as being unsuited to a small neutral state, but rather the tax system of a revanchist warlike country. However, even though debates on income tax initially emerged from discussions on the financing of the national wars, when a general income tax system was introduced much later in 1903, war-related arguments do not seem to have played any significant role as motivation or legitimation for the change of tax system.

The Long-Term Effects of the National Wars The defeat in 1864 and the loss of the duchies resulted in Denmark becoming an extremely homogeneous nation state in ethnic, linguistic, and religious terms (Pedersen 2014). Social cohesiveness was further strengthened by having the new Germany as the relational other to Danish national identity. These were features that can be claimed to have facilitated the early moves towards universal social reforms from the 1890s onwards, but they simultaneously meant that the notion of the military as an important inculcator of national

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Figure 11.1. Military personnel in Denmark, 1841–2007 Source: Correlates of War Project, National Material Capabilities (v4.0): http://www.correlatesofwar.org/datasets/national-material-capabilities.

identity did not have much traction. In the eighteenth and early nineteenth centuries, Denmark was one of the most militarized states in Europe (Lind 1999). This changed dramatically in the decades after the 1864 defeat (Figure 11.1). The military establishment was clearly marginalized in the process that forged the constitutionalist state, and the relative importance of the army declined in terms of both manpower and military spending. Although the main political players agreed that Denmark should pursue a clear neutralist policy, opinions differed strongly on how best to defend neutral Denmark against foreign aggression. The Conservatives and rightwing Liberals that ruled Denmark from 1864 to 1901, and formally merged into the party Højre (The Right) in 1878, were in favour of a defence that concentrated on the capital protected by strong fortifications, while the Agrarians (that from 1870 joined forces in the new Liberal–Agrarian party, Venstre—The Left) argued for a popular army based nationwide. From the early 1880s, the left-wing of Venstre struck a much more radical note, arguing that, as Denmark was indefensible from aggression by a major power, military expenditures were a waste of money. Strongly influenced by the cultural critic Georg Brandes, this argument was developed into what, in Danish politics from the 1890s onwards, was known as the notion of ‘cultural defence’ (Kulturforsvaret). Brandes and his followers argued that public funds should be spent on education rather than guns, because education would help to develop a strong sense of nationhood, enabling the Danish nation to survive even if Denmark were to be temporarily occupied by a foreign power. Kulturforsvaret was thus based on a proto-idealist understanding of international relations, but was also inclusive of an understanding that democratic values were central to Danish national identity. The debate on defence strategies

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became a cornerstone of the constitutional struggle between Højre and Venstre from the 1870s onwards (Dybdahl 1965, 162–221). In the debates on defence, the military establishment clearly supported the government (and supplied a number of arguments for the fortification strategy). Unsurprisingly, we find strong scepticism among liberal–agrarian politicians towards a corps of military officers generally considered as being affiliated with the Conservatives (Lind 1999, 81).

THE HOME F RONT IN A NEUTRAL COUNTRY When the European war broke out in 1914, Denmark was governed by a Social–Liberal minority government based on the support of the Social Democrats. In 1905, the Social Liberals had split from the Venstre, leaving this (larger) party with a clear-cut liberal–agrarian profile and therefore referred to afterwards as the Agrarian Party. For the new Social–Liberal Party adherence to the notion of Kulturforsvaret was a crucial element of the party profile. However, when the European war broke out, the government followed the example of its predecessors and mobilized a neutrality guard and declared Danish neutrality. This policy, which had solid backing throughout the Danish establishment, proved successful, primarily because the warring states believed Danish neutrality to be in their own best interests, a conclusion that Danish diplomats did their utmost to underpin during the war years (Bjørn and Due-Nielsen 2003, 502–7). Neutrality meant that Denmark was spared the human catastrophe of the war. However, the war still impacted heavily on Danish society. The main reason for this was that Denmark had an open economy, deeply integrated into European and global markets and highly dependent on foreign trade. Although Denmark had witnessed impressive industrialization and urbanization since the 1870s, on the eve of World War I, it was still a predominantly agricultural country. In 1913, 90 per cent of Danish exports derived from agriculture—to a high degree processed products (Johansen 1985). A strong shipping sector, with a merchant fleet earning 70 per cent of its income in 1912 from sailing between foreign ports, also signalled the strong internationalization of the economy (Møller et al. 1998, 14, 125). This meant that a major European war was bound to pose massive challenges to the Danish economy and society. This was even more likely as Denmark’s two main trading partners were Great Britain and Germany. Acknowledging this, in early August 1914 the Danish parliament passed sweeping emergency legislation supported by all political parties empowering the government to ban exports, regulate prices, and confiscate food and ‘other goods of social importance’. In other words, the war paved the way for state

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regulation. The stated goal of the legislation was to secure supplies for the population, but the ban on exports could also be used as a crucial instrument in negotiations with the warring countries. The legislation envisioned the establishment of ‘government commissions’ to control prices. The task was administratively placed within the remit of the Ministry of the Interior, and the dynamic minister Ove Rode oversaw the establishment of numerous such commissions. By far the most important of these was the Extraordinary Commission (Den overordentlige Kommission), which monitored supplies and prices and advised on policies. During the course of the war, the commission mushroomed into about forty specialized boards and committees as well as local commissions in all municipalities. The members of the Extraordinary Commission itself were high-profile representatives from the key sectors of economic life. They were handpicked by Rode, who reasoned that this corporatist approach would help secure support for governmental interventions and also help bridge the inevitable conflicts between the interests of producers and consumers (Jørgensen 2005). However, it was evident, as the statistician Einar Cohn was later to put it, that the economy was balanced on a knife edge, and when the USA entered the war and introduced strong restrictions on trade with neutrals, the balancing act collapsed. From the summer of 1917 and well into 1919, with the exception of the other Scandinavian countries and Germany, Denmark was almost entirely cut off from global markets. The result was severe and shortages increased; thus, in the summer of 1917, it was estimated that the grain supply for the coming year would be 40 per cent below normal consumption (Cohn 1928). The growing regulation of the market economy must be understood as being in its significant aspects a social policy. In general, government regulation and price controls met with harsh criticism from business leaders and especially from agriculture, and it is also evident that the policy of the Social– Liberal government favoured consumers’ interests over those of producers (Rasmussen 1965, 132–45). However, price controls and rationing were far from sufficient for insulating Danish consumers from the immediate economic consequences of the war. According to the retail price index calculated by the Statistical Office, retail prices rose by between 16 and 18 per cent annually during the war, and while food prices followed the general trend, fuel prices almost trebled. The government quickly acknowledged that the income of the poorer segments of the population would come under severe pressure. Therefore, legislation was passed in the autumn of 1914 granting extra funding for poverty relief, unemployment benefits, and the families of the almost 60,000 soldiers mobilized to secure Danish neutrality (Kolstrup 2010). From 1915, more sweeping initiatives were launched by the government. A law directed against rising prices (Dyrtidsloven) enabled local authorities to give income support to ‘poor citizens’ with two thirds of their expenses

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refunded by the state. The law, originally passed in December 1915, was revised a year later and the definition of eligible recipients broadened to ‘those put in a difficult position by the rising prices’.¹ The law also gave local authorities the right to subsidize essential foodstuffs and fuel, albeit only with a one third state refund of expenses incurred. When unemployment started to grow from mid-1917 onwards, reforms were introduced to compensate for rising prices and to grant easier access to social benefits. In the cities, housing also became a problem (Bro 2008, 241–4). Migration from the countryside to the cities continued—the population of Copenhagen grew from 498,000 to 552,000 between 1915 and 1919—while the building of new housing came close to a standstill from 1915 on, as investors shied away from real estate because much greater profit could be made elsewhere. Housing shortages led landlords to announce rent rises from the spring of 1916. To counter this, local authorities were granted the right to establish housing boards to control and regulate rents from June 1916. In 1917, new legislation further protected the positions of tenants. As a result, rents increased by only 8 per cent between 1914 and 1918. The government also sought to stimulate the building of new housing units with tax exemptions and government loans to both building societies and local authorities who launched council housing projects. Despite these initiatives, both overcrowding and the number of homeless kept growing.

Social Policy During War During the war years the state became much more active in the social policy arena, but the key actor was still the local authorities, and legislation left ample space for local decision-making and variation (Kolstrup 1996). Thus only one third of Danish cities created a general subsidy on essential food stuffs which the new laws made possible (Hansen and Henriksen 1984, 75). On the other hand, Copenhagen, the country’s largest municipality by far, was highly energetic when it came to relieving the pressures on living conditions. Here, local authorities engaged in the supply of both food and fuel, and from 1916 Copenhagen pioneered council housing projects in Denmark (Jensen 1981). The war years witnessed a dramatic expansion of public intervention to ameliorate the social consequences of the war. While public expenditure on extraordinary social relief in 1916–17 (including subsidies on food and fuel) stood at 26 million krone, by 1918–19 it had risen tenfold to 277 million krone (figures from Statistisk Aarbog 1919–20 [1919]). Overall, social expenditure rose dramatically during the war years (Christensen 1996, 25).

¹ Cf Lovtidende, 1915, Afd. A, 1915, 985; Lovtidende, 1916, Afd. A, 1916, 1534.

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Even for neutral states like Denmark, the war thus became expensive. To the social expenditures, and to subsidies to business to compensate them for loss of income due to the war, should be added steeply rising defence expenditure costs due to the mobilization of the neutrality guard. Between 1914 and 1915, and 1918 and 1919, total government expenditures quadrupled. The government countered this trend by raising existing taxes and duties, and introducing a number of new ones. Early in the war, special taxes on shipping and on stock exchange trading were introduced, but the most important novelty was a war profits tax introduced in 1915. By 1918–19, this tax was generating more than half of government income (Statistisk Aarbog 1919–20 [1920]). The tax regime was clearly progressive and served to counter, at least to some degree, the very strong trend of growing gaps between rich and poor in Denmark during the war years (Sørensen 2014, 302). Furthermore, we find a clear shift in responsibility from municipalities towards the state. In 1914, 70 per cent of social expenditure was financed through local taxes, whereas the central state covered 30 per cent. By 1919 it was the other way around (Johansen 2015, 160). When the war came to an end, Denmark did not face the challenge of largescale demobilization and war-related social needs (e.g. war veterans, disabled, etc.). Compared to other European states, the transition to a peacetime economy was relatively easy and only featured minor challenges. The incorporation for Northern Schleswig in Denmark in 1920 (after a referendum called for by the Versailles Treaty) created the immediate challenge of integrating the social German security system with the Danish system (Schultz 2002). The gradual process turned out to be complicated as the German insurance funds were economically affected by post-war inflation. Furthermore, even though events in Denmark did not turn out as dramatically or as revolutionary as they had in neighbouring Germany, there was a clear political radicalization in the labour movement in the period 1917–22. The number of strikes and lockouts gives a clear indication in this respect. In 1916, sixty-six strikes were reported in Denmark, but in the following years numbers grew significantly, to 215 in 1917, 253 in 1918, 472 in 1919, and 243 in 1920 (Mikkelsen 1992, 293–304).² This wave of political radicalization helped pave the way for the eight-hour working day, which was realized in 1919 (Grelle 2008, 224–40).

The Long Shadows of World War I As this brief outline of the war years demonstrates, even though Denmark managed to stay out of the war, the impact of the hostilities on Danish society was so massive that one might even talk of a Danish home front with strong ² These figures do not include the general strike of 1920.

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parallels to those found in the combatant states. One striking parallel is the dramatic expansion of social welfare during the war years. The parallel should not be overstressed, of course. As neutrals, Danes were not victims of the war’s killing machine. This means that we find no pressure for war-related pension reforms (with the exception of the Northern Schleswig region where the Danish state accepted responsibility for the various war pensions to former German citizens when the region was incorporated in Denmark in 1920) (Mackmann 2005, 10–12). Another key difference from the combatant countries is that the war years did not upset gender relations in Denmark, where service in the neutrality guard only affected a relatively small percentage of the male population. For this reason, the war years did not generate a pressure for gender-related reforms. When Danish women were granted the right to vote in 1915, the reform was unrelated to the war experience, with negotiations for a new constitution well under way when conflict broke out in 1914. Similarly, there is no causal link between the war and the reforms securing women a better social position that were implemented in the early post-war years. From a longer perspective, assessing the impact of the war is complicated. The social initiatives of the war years were clearly linked to wartime conditions, but the legislation was typically temporary and was rolled back in the immediate post-war period, together with most of the regulatory apparatus that had been built up during the war. If we look at the effect of the war on ongoing debates and reform processes, the picture is also somewhat contradictory. While a long-planned reform of the health insurance system was carried through in 1915, and the workers accident insurance scheme underwent significant changes in 1916, reform of the old-age pensions systems was delayed by the war (although a government committee did issue an in-depth analysis and offered plans for revision in 1915) and not even the social pressures of war could pave the way for free school meals, a reform that the Social Democrats had lobbied for continuously since 1902 (Petersen et al. 2011, 251–64, 354–71, 442–60, 734–8). Among the victims of the rollback of the regulation economy in 1920 was the war profits tax, but the progressive character of the income tax system remained in place and, for all talk about rollback and retrenchment, total tax revenue in Denmark in the 1920s stood at 14–15 per cent of GDP compared to 8–9 per cent in the pre-war years (Hansen and Henriksen 1984, 136; Johansen 2007, 38–49). We would argue, however, that the war years left an important legacy for the future development of Danish welfare policies. They served in many ways as a laboratory for state intervention. In a famous speech in the Danish parliament, Minister for the Interior Ove Rode argued that the war experience would, hopefully, lead to a permanent strengthening of the role of the state and offered a vision of the future in which ‘the ideals of the

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community . . . would triumph in the work of reconstruction’.³ For Rode and other Social Liberals, the war led to a shift in favour of the social over the liberal element in their policy outlook. For the Social Democrats, the war experience was also extremely important. The reformist strategy of the party was successfully tested under the harsh conditions of wartime. The party also got its first (and positive) experience in the inner workings of government when party leader Thorvald Stauning joined the government in a junior position in 1916. The war years in many ways laid the foundation for the strong political alliance between the Social Democrats and the Social Liberals, the two parties that became the founding fathers of the modern Danish welfare state from the 1930s. The institutional imprint of these developments was twofold (both based on initiatives by the Social Liberal Minister of Interior, Ove Rode): the first being the establishment of the first Danish Ministry of Social Affairs in 1920 and the second being Rode’s appointment, in the preceding year, of the Social Democrat Karl Kristian Steincke who was charged with the task of reconsidering the basic principles of the existing social security system. A year later, Steincke presented his ideas—as well as the outline for a new set of legislation—based on the principles of social rights elaborated in his book on ‘The Social Security System of the Future’ (Fremtidens Forsørgelsesvæsen) (Steincke 1920–1). Even though the route from idea to implementation proved to take much longer than expected, not least by Steincke himself, this was to a large degree a blueprint for the comprehensive Social Reform Act of 1933 (discussed in the next section) (Petersen et al. 2013).

B U T T E R BE F O R E GU N S : T H E IN T E R W A R P E R I O D 1 9 1 9– 3 9 For the Danish political establishment, the war experience had proved the validity of the neutralist policy line. There was, however, little consensus on how to pursue this line of policy in the future. The military establishment and the Conservatives continued to argue the case for a neutrality guard based on a strong military: ‘If Denmark takes the lead in disarmament, it is likely that other small states will follow, and this will start a process, where great powers will take protectorate over small states, and everybody can see how such a development will inexorably lead to new conflicts and wars’ (Winkel 1928, 14). However, this position was met with scepticism from the military’s natural political ally, the Agrarian Party, while both Social Democrats and Social ³ Rigsdagstidende. Forhandlinger paa Folketinget. 69de ordentlige Samling 1916–17. col. 852ff.

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3.50% 3.00% 2.50% 2.00% 1.50% 1.00%

1951

1944

1937

1930

1923

1916

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1902

1895

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1881

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0.00%

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Figure 11.2. Defence expenditure in Denmark as a percentage of GNP Source: Own calculations based on Hans. Chr. Johansen (1985), Danmarks historie, Vol. 9: Dansk økonomisk statistic 1814–1980, Copenhagen: Gyldendal, 349–59 (tables 9.2g, 9.2.h, and 9.2i), 389–94 (table 10.1).

Liberals shared an anti-militaristic outlook and the perspective that social reforms and progress were integrated elements in the defence of the democratic nation state. The defence reform of 1922 and the austerity budgets from the late 1920s onwards changed the logic of Danish neutrality policy. With the exception of the Conservatives, Danish politicians started to view neutrality as a cost-saving strategy. This was most evident in 1925 when a Social Democrat minority government (based on support from the Social Liberals) proposed cutbacks in military expenditures by almost two thirds. The proposal was framed in terms of a notion of a peace dividend linked to optimistic readings of the roles of the League of Nations and a new, democratic and demilitarized Germany. At the same time, to the Social Democrats and Social Liberals, military cutbacks were also clearly intended as a means of finding the funds for social expenditure and for paving the way for social reforms (Figure 11.2). The government disarmament proposal was rejected by the Conservative– Agrarian majority in the upper house of parliament. It suffered the same fate in 1929 and 1932, but debates and negotiations paved the way for a compromise with the Agrarians. While the compromise reached in 1932 was far less drastic than the 1925 proposal had been, it still resulted in substantial reductions in the military (Lidegaard 2003, 223–9, 256–9). This ‘butter rather than guns’ strategy continued into the 1930s, a period in which politics in Denmark was dominated by the problems created by the Great Depression on the one hand and the attempts to found a modern welfare state on the other. The international economic crisis reached Denmark

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in 1930, primarily through the fall in agricultural prices that hit the exportoriented Danish agriculture very hard. From agriculture, the crisis spread to the urban economy with steeply rising unemployment figures as a result: by 1932 the unemployment rate among insured workers had soared to 32 per cent (Dybdahl and Hyltoft 1975; Hansen and Torpe 1977). When confronted with this deep economic crisis, the political system tended to recycle the type of policies adopted during war: State regulation of trade, state regulation of the labour market, and the state as the lender of last resort. This strategy of ‘butter’ rather than ‘guns’ proved to be successful. The prime example was the socalled Kanslergade Crisis Agreement in January 1933 between the Liberal– Agarians (Venstre), Social Liberals, and Social Democrats (Rasmussen 1965, 416–21). This red–green political compromise included support for agriculture and business, a ban on strikes and lockouts, public work programmes, and the acceptance of Steincke’s comprehensive Social Reform Act. The importance of this reform was threefold: It sanctioned the principle of social rights, it systematized the existing social legislation into four laws, and it reformed financing to secure a greater level of spatial redistribution. The news of the Crisis Agreement was symbolically reported on the front pages of Danish newspapers on 31 January 1933 together with the announcement of Hitler as the new Reichskanzler in Germany. While the overall tenor of the decade was one of economic retrenchment and fluctuations, the decade also witnessed important developments in the field of social policy. An important stepping-stone between the two world wars was the severe economic crisis of the 1930s. The government tried to alleviate unemployment through various employment programmes (with a special focus on the younger generation) as well as major public investments, most spectacularly in infrastructure. Inspired by initiatives in Germany and the USA, politicians advocated the duty to work and established ‘work programmes’ paralleling military service, which ultimately enlisted approximately one third of the male cohort (Sode-Madsen 1984, 59ff.). The underlying motive was to nurture national identity as well as cutting the cost of social assistance. Eventually, when realized, the work camps for young unemployed turned out much less militaristic than the proponents of the German model had advocated in this respect. The huge unemployment problem not only led to improved unemployment insurance, but also to more far-reaching reforms: in 1936 the age requirement for old-age pensions was reduced to 60 years, in 1938 legislation secured a minimum of two weeks’ vacation for all employees, while substantial reforms in the educational system were introduced in the mid-1930s. These reforms are indicators of a notable trend in the 1930s, most clearly articulated in the formulation of family policies—or as it was conceptualized in the 1930’s: ‘population policy’. While this policy was not framed as a defence strategy in military terms, the development of a Danish (and, more broadly, Nordic)

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population policy might be characterized as an extension of the ‘cultural defence’ strategy described above, focusing on the importance of mothers and children. This can be illustrated by one of the key documents in the discussion: Gunnar and Alva Myrdal’s 1934 book on the ‘Crisis in the Population Question’ (Kris i Befolkningsfrågan). The book was originally published in Swedish, but was immediately translated into Danish (Banke 2003). It warned that the declining birth rates constituted a genuine threat to society and that, in order to deal with this threat, the state had to develop a progressive and scientific interventionist family policy. Key concepts were state planning, prevention, and a shift from private to public responsibilities. The book advocated a number of social policy measures, such as housing allowances for families, maternity leave and extended daycare provision, as well more controversial elements, such as social eugenics. The Myrdalian argumentation was picked up by the Population Commission (1935–9), and several pieces of legislation embodying these ideas were introduced in the 1930s (K. Petersen 2012, 561–8). The combination of economic crisis and social reforms made for strong pressures on the public budget. Social expenditure was increasing while the tax base was shrinking. In several ways, the reply to the international crisis was similar to earlier wartime measures: more state regulation and higher taxes. In order to finance the first wave of crisis policies introduced in autumn 1931, the government increased consumption taxes and introduced an extraordinary income tax: 25 per cent additional to the normal tax for the following year (Johansen 2007, 46–9). Such extraordinary taxes (annually between 10 and 25 per cent) were repeated subsequently until 1940. The takeover of the Social Democratic Party as the leading political party occurred at the same time as the situation within and between the nations of Europe was becoming more and more unstable. In the Social Democratic Party’s rhetoric, the party was building a ‘Denmark for the People’ (the title of the 1934 party programme), and to leading Social Democrats, this vision slowly became linked to an understanding that this new Denmark needed a defence plan. This change was closely linked to the rise of Nazism in Germany. Shortly after the Nazi assumption of power, the leading Danish Social Democrat Hartvig Frisch in his book Plague over Europe (Pest over Europa) warned of the threat that authoritarian ideologies on both left and right posed to Nordic welfare democracy (Frisch 1933). The commanding general of the army, Erik With, played on the Social Democratic fear of Nazism to argue for increased military budgets and engaged in debates with the Social Democrats’ Youth Organization, in which he argued that the army should be seen as the ‘Army of the People’, thus placing the army firmly as a key institution of Danish democracy (With 1934; Frantzen and Jespersen 2008, 225–7). This points to the close links between the military and the Social Democrats established after 1945, but in the short-term perspective of the 1930s, this

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reorientation led only to minimal rearmament in military terms. Danish politicians feared that rearmament would be considered provocative by Nazi Germany. At the same time, it was nevertheless clear for the political establishment that Denmark had to prepare for the eventuality of war. This war preparation discussion involved two main elements. First, there was general recognition that modern technological warfare might well endanger the civilian population in unforeseen ways, with military analysts especially underlining the likelihood and consequences of mass aerial bombing (Norup 1938, chs 7, 9, and 11). Based on such analysis, national strategies for protecting the population were developed involving both war and welfare institutions. Second, the military tried to take a more proactive role and make the best of the crisis for the military. The combination of youth unemployment and the threat of war triggered debate, promoted by the military, on how military service might be simultaneously used to fight both unemployment and the political radicalization of youth. This was partly an old discussion about the possibilities of integrating military training with a more general moral and physical education of young people. Such a strategy was especially favoured by educationalists, politicians, and the National Sports Association. The general argument was that both the educational system and the military were to be considered ‘schools of the nation’, sharing the goals of creating a physically strong and morally upright younger generation for the greater good of the nation. The practical results of this debate were, however, extremely limited (With 1934, 12–13).

W O R L D W A R I I: S OC I AL P OLICY DU RING THE PEACEFUL OCCUPATION After only a few hours of resistance, the Danish government accepted the German occupation of Denmark on 9 April 1940. The Germans presented the action as a so-called peaceful occupation and stated, in a document presented to the government, that Germany had no intention ‘now or in the future of interfering with the Kingdom of Denmark’s territorial integrity or political independence’ (Christensen et al. 2005, 97). It was obviously a fiction, and everyday life would soon show the limits that had been placed on Danish sovereignty (including censorship, imprisonment of communists, deportation of Danish Jews, etc.). Nevertheless, Denmark was a special case in Hitler’s Europe, as no other country had chosen to accept the German occupation. As a consequence, the Danish government continued to function until August 1943, when a conflict with the Germans resulted in leading Danish civil servants taking over the responsibility for administration, working as a

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shadow government. This also meant that it was Danish politicians who made decisions on social policy reforms and Danish civil servants who were in control of the administration. In other words, the war did not become a critical juncture in the same way as in many other countries. Instead, we find a high level of continuity.

Occupation and Business as Usual Whereas the German occupation of other European countries led to radical shifts in policy, this was far from the case in Denmark. The concept of ‘peaceful occupation’ meant that the Germans generally interfered as little as possible with existing institutions and Danish social policy legislation. Except for a push for Danes to take up working contracts in Germany (see ‘World War II and the Regulation of the Labour Market . . . ‘below), we find no examples of direct intervention and only a limited interest from the German side in the Danish social security system. This was partly explained by the fact that Denmark, being generally considered a pioneer in social legislation, displayed a mature system of social protection in its own right (Mariager and Petersen forthcoming). Danish experts and civil servants also used this perception as part of their strategy for maintaining the existing Danish model. Plans for a Nazi welfare state, developed around Ley Robert and his Arbeitswissenschaftliches Institut, were studied carefully in Denmark (Drachmann 1941a; 1941b) and a Danish public welfare diplomacy campaign, including publications, films, and lectures on Danish social security must be seen as a pre-emptive response to the challenges these German plans were perceived to pose. However, overall, it is striking that social policy discussions (both in parliament and the public sphere) to a large extent took place without explicit reference to the extraordinary situation caused by war and occupation. In a White Paper published in 1942 by a commission with the mandate of proposing changes in Danish social legislation, the war situation was not mentioned at all (Betænkning fra Udvalget vedrørende Ændringer i den sociale Lovgivning 1942). While not directly influenced by the German occupation power, the combined effects of war and occupation affected the Danish social security system in the short run. Overall, limited resources and war-related inflation had a negative impact on both social services and social benefits. Furthermore, a number of plans for reforms (e.g. on workers’ protection and family policy) were put on hold (K. Petersen 2012, 588–91). In some cases—most notably with respect to old-age and disability pensions—the decline in purchasing power was partly compensated for through a system of extraordinary additional benefits (Friis 1954, 264; J. Petersen 2012, 231–3). For example, the income-tested component of the old-age pensions was improved several times

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and the same goes for other types of benefit, such as sickness insurance and workers accident compensation. Within the unemployment insurance scheme, child allowances were introduced late in 1940 (Christensen 2012, 483–4). This practice of extraordinary benefits continued even after the war-time coalition government resigned in 1943. Furthermore, state intervention in basic food consumption already introduced during the crisis in 1933 was now expanded (Friis 1945). The system of subsidies for butter, meat, milk, and so on, continued during the war and became ever more targeted towards social groups such as the unemployed, pregnant women, family providers, and people with chronic illnesses. In addition, rationing was introduced in order to secure a more socially fair distribution. This system was only gradually abandoned in the post-war years.

World War II and the Regulation of the Labour Market and Unemployment The strongest war-related impact on the Danish welfare system occurred in respect of labour market and activation policies (Christensen 2012, 473–93; Kolstrup 2012, 161–8). The interrelated effects of growing unemployment at the beginning of the war, loss of export markets, and war-related inflation led to a decline in the purchasing power of most wage earners, especially as the indexation of their social benefits was cancelled. Moreover, the self-regulating labour market system was replaced by a closed corporatist system in which decisions on labour conflicts could be solved behind closed doors (Herz 2000, 462–3). The war also influenced the balance of power between labour and capital. With the trade unions back on their heels, the centre-right parties pushed through a new crisis agreement in 1940 that included a ban on price, profits, and wage increases (only the latter being really effective), redistribution of labour through a cut in working hours, and compulsory arbitration in industrial relations, which de facto meant a ban on strikes (Sode-Madsen 1984, 116). As a result of this strict regulation, the Danish labour market was relatively peaceful during the occupation years, at least until summer 1943 (Mikkelsen 1992, 312). This signals that while tripartite labour market corporatism was in operation during the occupation, power relations between the parties had shifted in favour of employers and the state. During the occupation, the trade unions lost influence as the Social Democrats had to secure the broad wartime coalition by giving in to the centre-right parties’ push for cuts in social rights and tougher administrative procedures. The result was a series of changes in employment policies (mainly unemployment insurance and social assistance) introducing stricter control of potential recipients, a stronger emphasis on the duty of

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unemployed to take (almost) any kind of work, as well as the duty of local authorities to enforce this rule (Betænkning fra Udvalget vedrørende Ændringer i den sociale Lovgivning 1942). These changes included the introduction of individual ‘Work Cards’ that the unemployed had to show to the unemployment insurance funds or local authorities in order to receive assistance—and in case of employment, these cards should be in the possession of the employer. The justification—mainly voiced by the centre-right parties—was to fight abuse of the social security system. The wartime government followed a strategy of brinkmanship. It was important to appease German wishes for recruitment of labour in Denmark in order to avoid the occupation regime forcing Danes to work in Germany. This was possible because the Danish government and, from August 1943, the leading civil service, were in control of the major labour market institutions. One element in this strategy was to cover up the real level of unemployment. In 1940, it was decided that certain groups—the short-term and elderly unemployed—would be excluded from the unemployment statistics (Christensen 2012, 480–1). Later this strategy was supplemented by an Employment Plan introducing new public projects and youth camps. Organized around the Centre for Employment (Beskæftigelsescentralen), established in 1937, a comprehensive system of public employment projects was developed. Its policy goals were to secure energy production, food (agriculture) production, and not least to hide unemployed from the Germans. As stated in a declaration by the coalition government in July 1940, this policy initiative was meant to ‘contribute to diminishing the need for social assistance by making the young and able do work that can serve to secure both the unemployed and society’ (quoted in Sode-Madsen 1984, 122; own translation). Underlying these initiatives was not only a genuine concern about growing war-related unemployment but also an anxiety that a visible Danish surplus of labour could result in German moves to exploit this resource in the German war economy, either in Germany or in Denmark (Sode-Madsen 1984, 116). The German occupation regime had already launched such ideas in the spring of 1940, when demanding Danish workers to build military airports in Jutland, and a relatively high number of Danes became employed by German military construction projects in Denmark during the course of the war. Furthermore, it is estimated that around 100,000 people (5 per cent of the total Danish workforce) worked in Germany between 1940 and 1945 (Christensen 2012, 477–80). In part, this was due to the pull of the German labour market that offered an alternative to unemployment, but Danish authorities in some instances also urged unemployed Danes to take jobs in Germany (Stræde 1991). There were even cases where inmates in poorhouses—the last remaining groups under the old Poor Law tradition—were, with the active support of local municipalities, pressured to work in Germany (Rasmussen 2015).

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Other Direct Effects of World War II The basic structure of the Danish social assistance scheme was kept intact during the occupation. The German occupation regime did not interfere in the day-to-day administration of the system. However, special cases demanded administrative innovation and flexibility on part of the Ministry of Social Affairs. One such case was assistance to families where the (male) provider was detained by the German occupation powers, and another was the organization of material support for Danes imprisoned in German concentration camps. When Danish communists were imprisoned in June 1941, it was evident that discretionary help was needed in order not to leave these families at the mercy of the Poor Law system (Koch 1949, 64–71). At the same time, it was clear that help for this specific group would not be accepted by the Germans. Consequently, the Ministry of Social Affairs decided to offer help to the families in question through Section 281 of the social assistance law that allowed for more generous benefits for families where the provider was undertaking military service in times of crisis or war. Contrary to the normal procedures of legislation and communication, this innovative interpretation of the law was circulated from mouth to mouth on a strictly need-to-know basis. During the last years of the occupation, the number of arrested Danes increased, and in order also to assist the families of Danes sentenced for resistance activities, a system of illegal funds was created under the auspices of the Ministry of Social Affairs, while in other cases help was simply hidden within local budgets (and reimbursed by the ministry). Even though some groups of social security recipients experienced a drop in purchasing power, and there was an emphasis on controlling costs, new measures such as price subsidies or extraordinary social benefits grew significantly between 1939 and 1945. A calculation by the Ministry of Social Affairs, after the war, identified net growth of 118 per cent (from index 143 to 313) in total social spending (Friis 1954). This had to be financed. Even though Danish military expenditure during World War II was significantly lower than during World War I, inflation, growing social expenditure and, especially, the German account in the National Bank that footed the costs of the occupation and financed German imports from Denmark, all put pressure on public finances.⁴ The government sought to solve these problems through state loans, consumption taxes, and additional taxes on income (Johansen 2007, 49–54). In the following years this led to a genuine change in the income tax system, introducing a progressive system of tax rates from 2 per cent for the lowest income groups and up to 50 per cent for the highest income groups. ⁴ The German occupation was financed through a set of special accounts in the Danish National Bank allowing the Germans to finance both the construction of military infrastructure in Denmark and food exports from Denmark to Germany—leaving the actual bill to the Danes.

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Furthermore, as during World War I, a special tax on war-related income increases (existing until 1947) was introduced, as well as mandatory savings for those on high incomes.

The End of the War: Planning for the Future and Immediate Problem Solving As German military defeats accumulated, planning for the post-war period began. Civil servants and experts started to plan future reforms; the resistance movement (that had grown ever since 1943) demanded social justice and improvement of social benefits; and in the final phase of the war, the political parties also outlined their post-war programmes. The most comprehensive was the Social Democrat’s ‘Denmark of the Future’ that clearly followed a ‘Nordic route’ to the political left, with advocacy of ideas relating to economic and industrial democracy (Olesen 1998; J. Petersen 2012, 348–56). The programme also included a series of social political demands basically following up on the discussions from the 1930s. The Social Democratic prescription was to get back on track with a turn to the left. The other political parties also seemed to prepare for a left turn in Danish politics. Under the leadership of John Christmas-Møller, who had spent most of the war in exile in London and had been influenced by British ideas of equality of sacrifice and social justice (Christmas-Møller 1993), even the Conservative party flirted with ideas about economic democracy. When Denmark was liberated in 1945, there was widespread consensus that the war experience must lead to a new and different future. The left-wing playwright, Kjeld Abell, hailed the end of the war—The Liberation—as ‘the gate-way to a new era when democracy will not just be spiritual in character but permeate all human relations’ (Kirchhoff 2002, 304). This notion that the harsh experience of the war years (and the crisis years of the 1930s) must lead to substantial reforms was also widespread among political elites. In the immediate post-war period, the warfare–welfare nexus was highly visible in Denmark. Elections in October 1945 and in 1947 confirmed the position of the old parties, and the left-turn petered out to a large degree over the summer of 1945. The main political objective in the postwar years became one of getting back to business as usual. The major shortterm problems facing the Danish government were twofold. The first concerned the restoration of welfare benefits with benefits for various groups of recipients—not least old-age pensions—improved in order to restore their pre-war purchasing power (Petersen 1998, 78–81). Housing was also high on the agenda but turned out to be very difficult to solve in the short-run despite the establishment of a Ministry of Housing in 1947 and the extension of the system of housing benefits and cheap state loans (Bro 2008, 601–7). The second concerned the more than 250,000 German refugees that

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had ended up in Denmark by the end of the war (Christensen et al. 2005, 650–3). The German refugees quickly became a delicate political problem. As a result of the occupation, anti-German attitudes were strong and the cost of hosting the refugees was high at a time of scarce resources. At the same time, it was difficult to return the refugees to Germany and so the chosen strategy of the Danish authorities was to isolate the Germans from the Danish population in ninety-eight camps. Life in the camps was characterized by poor health and living conditions especially in the immediate post-war period. In 1945 alone, 13,000 German refugees died. Only in 1949 were the last German refugees returned to Germany. While the combined effect of these challenges slowed down the development of social rights and social reforms, the long-term effects of World War II were quite limited. From the perspective of the late 1940s, it is clear that the war was more of a parenthesis than a genuine departure from the path set in the pre-war decades. However, for our purposes, it is important to stress that, in at least one area, the war experience turned out to be crucial. The German occupation signalled the failure of Danish neutralism, and while the strategy pursued first by the Danish government and then, from the summer of 1943, by senior civil servants, vindicated the Kulturforsvaret-thinking that had dominated centre-left ideas since the 1880s, in the immediate aftermath of the war a new and very different understanding of the strategy as a cowardly and dishonourable giving in to German pressure emerged. This paved the way not only for Denmark’s hesitant path into the Western alliance after the war but it also created a broader consensus on defence. While the Social Liberals stuck to their fundamentalist anti-militarism, the Social Democrats fully embraced the new consensus, seeing the military as part and parcel of the democratic welfare state that they had been building since the 1930s.

WAR, SOCIAL REFORM, AND THE GOLDEN AGE OF THE DANISH WELFARE S TATE Denmark is very far from the smoking gun example of the impact of war on social policy reforms. Even though our point of departure was that the Danish nation state clearly was a ‘child of war’, our overall conclusion is that war had a limited (but some) impact on the way the welfare state developed in Denmark throughout the long twentieth century. If we take a closer look at the mechanisms outlined in the introduction, we find that some played a role in Denmark, while others did not. In the war preparation phase considerations related to war had almost no impact on Danish social policy debates and reform. This is not very surprising.

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The Schleswig wars of the mid-nineteenth century had left Denmark as a European small state pursuing neutrality and a policy of non-provocation visà-vis their far stronger German neighbour. Related to this, the combined effects of defeat and democratization were that the Danish military lost political influence and manifested little, if any, social policy agency. We do not find examples of educational reforms, population policies, or health initiatives motivated by military concerns. Rather the opposite was the case, at least from the 1910s onwards, when Social Liberals and Social Democrats pursued policies that prioritized social spending over military spending based on the explicit rhetoric of the Kulturforsvaret strategy developed in the late nineteenth century. According to this view, Denmark was indefensible from aggression by a major power and the survival of the Danish nation could best be secured through democratic and social reforms. Under the auspices of this ‘butter rather than guns’ vision, the foundations of the modern Danish welfare state came into being in the interwar period. Danish policymakers were, as in the rest of Europe, clearly aware of the risk of war and acted on this assumption, but favoured a strategy of ‘passive preparation’ in the hope that neutrality would safeguard the country. This strategy was more successful during World War I than during World War II, but even during the German occupation of 1940–5, Danish policymakers remained in control of the Danish social security system. Moving to the war phase itself, the impact of war clearly becomes stronger. Even though Denmark was not directly involved in either of the two world wars, several mechanisms linked the effects of war and welfare state development. During World War I, the Social Liberal government pursued an expansive social policy agenda designed to shield the lower classes from shortages and inflation and also as a means of legitimization. In World War II, we encounter an opposite trend with the Liberal–Agrarian Party using the logic of coalition government as a window of opportunity for enforcing stricter labour market policies. The single strongest impact was related to the growth of the state. Both world wars resulted in increased state regulation of the market, the economy, and society in general. This included a shift of responsibility from municipalities to the state, both in terms of regulation and the financing of social rights (Figure 11.3). The wars led to more centralization motivated by both national and social concerns. The wars also strengthened state capacity. This involved several dimensions, from the learning experience of civil administrations to the growth of the tax state. These had long-term effects. The accumulated learning effect of Danish policymakers from the 1930s and on through World War II can hardly be overemphasized. It created what sociologist Ron Eyerman (1985) has labelled a generation of ‘rationalizing intellectuals’ that, in the 1950s, became midwives of the modern welfare state (see also Petersen 1998, 46–52). In a similar vein, the growth of the tax state was clearly related to

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100 90 80 70

%

60 50 40 30 20 10 0

1891

1898

1905

Municipalities

1912

1919

1926

Inter-Municipal Redistribution

1933

1940

1947

State

Figure 11.3. Municipality and state shares of social spending in Denmark, 1891–1947 Note: Inter-Municipal Redistribution covers two mechanisms (Refusionsforbundet and Udligningsfonden) for redistribution mainly between municipalities with high and low social expenditure and between rich and poor municipalities. Source: based on Hans. Chr. Johansen (2015), ‘Velfærdsstaten i tal’, in Dansk Velfærdshistorie, Vol. 7, Odense: University of Southern Denmark Press, 160–1 (table 4.16).

war. However, Danish state budgets did not grow because of military spending but rather because of expanding social expenditure. This growth was paid by an often dramatic growth in taxes (mainly income taxes) that was only partly reduced after the war. Furthermore, wartime clearly fertilized ideas of ‘equality of sacrifice’ and burden sharing. These changes occurred within the logic of the existing welfare system, fuelled by tendencies already in place, and were rather a pacemaker of change than a game changer. The basic features of the Danish welfare system were—even to a surprisingly high degree—left intact after the impact of two world wars. This was partly due to mechanisms that did not play a role in the Danish case: First, Denmark did not witness largescale destruction nor had generations of Danes suffered on the killing fields of

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war. Second, Denmark was (even if occupied by the Germans in 1940–5) not a victim of coercive policy transfer. The only social policy transfer of significance in the first half of the twentieth century was a Nordic cooperation that was not directly related to war.⁵ Third, the war did not have any significant effect on female labour market participation and gender roles comparable to the impact in countries such as Britain or Germany. The real growth in female labour market participation was a result of a return to normality, the growth of the post-war welfare state (and the continuation of family policy formation) rather than what happened during the war (Åmark 2006, 309). Finally, in the final phases of the war, Denmark was also in a unique situation as demobilization was hardly an issue at all (the influx of German refugees in 1945 being the only exception). In a similar way, in the post-war phase the short-term effects of the war were also limited compared to other countries. In both political and economic terms, the cessation of hostilities was immediately followed by a return to normality. In the welfare arena this manifested in a strong emphasis on also returning to normality by the re-establishment of pre-existing social standards and benefit levels. However, overall, war-related social needs were rather limited. Probably, as a consequence, it is difficult to talk about a genuine popular preference shift beyond the short-lived ecstasy of the liberation. In the long term, the effects on the state with respect to capacity and learning among elite groups were probably the two most important effects of the two wars. These two mechanisms came to have a significant influence on the Danish welfare state into the Golden Age: the shift of initiative and responsibility from the local level to the state level, the shift from private to public, and the growth in the tax financing of welfare were all influenced by the experience of the wars.⁶

REFERENCES Åmark, Klas. 2006. ‘Women’s Labour Force Participation in the Nordic Countries During the Twentieth Century’. In The Nordic Model of Welfare: A Historical Reappraisal, edited by Niels Finn Christensen, Jørn Henrik Petersen, and Klaus Petersen, 299–334. Copenhagen: Museum Tusculanum.

⁵ Even though this cooperation was established in the aftermath of the conflict, it built on established traditions. See Petersen 2006. ⁶ We greatly appreciate Hans Christian Johansen, Niels Clemmesen, and Rasmus Mariager sharing their knowledge on war and welfare. Furthermore, Frederik Ørskov has assisted us in collecting data and sources.

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Banke, Cecilie. 2003. ‘Manden der kom cyklende med velfærdsstaten’. In 13 historier om den danske velfærdsstat, edited by Klaus Petersen, 113–24. Odense: University of Southern Denmark Press. Betænkning fra Udvalget vedrørende Ændringer i den sociale Lovgivning. 1942. Copenhagen: Schultz. Bjørn, Claus and Carsten Due-Nielsen. 2003. Fra helstat til nationalstat 1814–1914. Copenhagen: Danmarks Nationalleksikon. Bro, Henning. 2008. Boligen mellem natvægterstat og velfærdsstat. Bygge- og boligpolitik i København 1850–1930. Copenhagen: Multivers Academic. Butterfield, Herbert. 1965 [1931]. The Whig Interpretation of History. London: W.W. Norton. Christensen, Claus Bundgård, Joachim Lund, Niels Wium Olesen, and Jacob Sørensen. 2005. Danmark besat. Krig og hverdag 1940–45. Copenhagen: Høst og Søn. Christensen, Jacob. 1996. ‘De sociale udgifter 1890–1990’. Arbejderhistorie 4: 22–37. Christensen, Jacob. 2012. ‘Arbejdsløshedsforsikring og arbejdsanvisning’. In Dansk Velfærdshistorie. Vol. 3, Velfærdsstaten i støbeskeen. Perioden 1933–1956, edited by Jørn Henrik Petersen, Klaus Petersen, and Niels Finn Christiansen, 451–516. Odense: University of Southern Denmark Press. Christmas-Møller, Wilhelm. 1993. Christmas-Møller og Det konservative Folkeparti, vol. 2. Copenhagen: Gyldendal. Cohn, Einar. 1928. Danmark under Den store Krig. Copenhagen: Gad. Drachmann, Georg. 1941a. ‘Invalide og Aldersforsikring i Tyskland I’, Socialt Tidsskrift, Section A, 41–9. Drachmann, Georg. 1941b. ‘Invalide og Aldersforsikring i Tyskland II. Dr. Leys Forslag til en tysk Alderdomsforsørgelse’, Socialt Tidsskrift, Section A, 155–61. Dybdahl, Vagn. 1965. De nye klasser. Danmarks historie 1870–1913. Copenhagen: Politiken. Dybdahl, Vagn and Ole Hyltoft. 1975. Krise i Danmark. Strukturændringer of krisepolitik i 1930’erne. Copenhagen: Politiken. Eyerman, Ron. 1985. ‘Rationalizing Intellectuals: Sweden in the 1930s and 1940s’. Theory and Society 14: 777–807. Fenger, Anne Marie. 2011. ‘Veteranpolitik i Danmark’. Unpublished thesis. Copenhagen: Danish Defence Academy. Frantzen, Ole L. and Knud J. V. Jespersen. 2008. Dansk krigshistorie 700–2008, vol. 2. Copenhagen: Gad. Friis, Henning. 1945. Rabatter og prisnedsættende Tilskud i Danmark, Sverige og England. Arbejds- og Socialministeriets økonomisk-statistiske undersøgelser No. 8. Copenhagen: Ministry of Social Affairs. Friis, Henning. 1954. Socialpolitikken i Danmark belyst ved udviklingen i de sociale udgifter. Copenhagen: Ministry of Social Affairs. Frisch, Hartvig. 1933. Pest over Europa: Bolschevisme, Fascisme, Nazisme. Copenhagen: Henrik Koppels Forlag. Glenthøj, Rasmus. 2014. 1864. Copenhagen: Gad. Grelle, Henning. 2008. Thorvald Stauning. Demokrati eller kaos. Copenhagen: Jyllands-Postens Forlag. Hansen, Karin and Lars Torpe. 1977. Socialdemokratiet og krisen i 30’erne. Aarhus: Modtryk.

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Hansen, Svend Aage and Ingrid Henriksen. 1984. Sociale brydninger. Dansk socialhistorie 1914–39. Copenhagen: Gyldendal. Herz, Michael. 2000. ‘Arbejdsmarkedets forvaltning’. In Dansk Forvaltningshistorie II. Folkestyrets forvandling fra 1901 til 1953, edited by Tim Knudsen. Copenhagen: DJØF Forlag. Jacobsen, Kurt. 2011. Velfærdens pris. Arbejderbeskyttelse og arbejdsmiljø gennem 150 år. Copenhagen: Gad. Jensen, Sigurd. 1981. Under fælles ansvar. Københavns historie 1900–1945. Copenhagen: Gyldendal. Johansen, Hans Christian. 1985. Dansk økonomisk statistik 1814–1980. Copenhagen: Gyldendal. Johansen, Hans Christian. 2007. Indkomstskatter og offentlig vækst 1903–2005. Dansk Skattehistorie VI. Copenhagen: Told- og Skattehistorisk Selskab. Johansen, Hans Christian. 2015. Velfærdsstaten i tal. Odense: University of Southern Denmark Press. Jørgensen, Kasper Elmquist. 2005. ‘Studier i samspillet mellem stat og erhvervsliv i Danmark under 1. Verdenskrig’. PhD diss., Copenhagen Business School. Kirchhoff, Hans. 2002. Samarbejde og modstand under besættelsen. Odense: Odense University Press. Koch, Hans Henrik. 1949. ‘Socialministeriet under besættelsen’. In Centraladministrationen 1848–1948, by Ministerialforeningen, 64–71. Copenhagen: Nyt Nordisk Forlag Arnold Busck. Kolstrup, Søren. 1996. Velfærdsstatens rødder. Fra kommune-socialisme til folkepension. Copenhagen: SFAH. Kolstrup, Søren. 2010. ‘Fattiglovgivningen fra 1803 til 1891’. In Dansk Velfærdshistorie. Vol. 1, Frem mod socialhjælpsstaten. Perioden 1536–1898, edited by Jørn Henrik Petersen, Klaus Petersen, and Niels Finn Christiansen, 199–310. Odense: University of Southern Denmark Press. Kolstrup, Søren. 2012. ‘Den offentlige forsorg’. In Dansk Velfærdshistorie, Velfærdsstaten i støbeskeen, Vol. 3. Perioden 1933–1956, edited by Jørn Henrik Petersen, Klaus Petersen, and Niels Finn Christiansen, 153–217. Odense: University of Southern Denmark Press. Kornerup, Thorvald. 1888. ‘Værnepligt og Værneskat’. Militært Tidsskrift 17: 256–7. Lesser, Kaptain. 1894. ‘Til belysning af de saakaldte uproduktive Statsudgifter i Danmark’. Militært Tidsskrift 23: 289–303. Levine, Daniel. 1978. ‘Conservatism and Tradition in Danish Social Welfare Legislation 1890–1933: A Comparative View’, Comparative Studies in Society and History 20(1): 54–69. Lidegaard, Bo. 2003. Overleveren. Dansk Udenrigspolitik 1914–1945. Copenhagen: Gyldendal. Lind, Gunnar. 1999. ‘Den danske hær, den frie forfatning og den forsvundne kontrarevolution 1848–1851’. Den Jyske Historiker 83–4: 60–88. Mackmann, Anton. 2005. Ofrene fra den store krig 1914–1918. Aabenraa: Historisk Samfund for Sønderjylland. Mariager, Rasmus and Klaus Petersen. Forthcoming. ‘Danish Social Policy in the Shadow of Nazi-Germany 1933–1945’. In Sandrine Kott and Kiran Klaus Patel (eds.),

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Brown Internationalism: Negotiating Nazi Social Policies during the 1930s and 1940s. Oxford: Oxford University Press. Mikkelsen, Flemming. 1992. Arbejdskonflikter i Skandinavien 1848–1980. Odense: University of Southern Denmark Press. Møller, Anders Monrad. 2009. Fra skat på hartkorn til indkomstskat 1818–1903. Dansk skattehistorie, bd. V. Copenhagen: Told- og skattehistorisk Selskab. Møller, Anders Monrad, Henrik Dethlefsen, and Hans Christian Johansen. 1998. Sejl og Damp. Dansk Søfarts Historie 1870–1920. Copenhagen: Gyldendal. Neergaard, Niels. 1890. ‘Om Alderdoms- og Invalideforsørgelse’. Tilskueren: 832–46. Noack, Jens Peter. 2014. Da Danmark blev Danmark. Copenhagen: Gyldendal. Norup, P. M. 1938. Hvis krigen kommer: Krigsteknik og magtpolitik i Europa. Copenhagen: Hirtschsprungs Forlag. Olesen, Niels Wium. 1998. ‘Planer for velfærd. Sammenlignende studie af de nordvesteuropæiske socialdemokratiers efterkrigsprogrammer’. Den Jyske Historiker 82: 62–91. Olsen, Poul Erik. 2000, ‘Finansministeriet 1848–1901’. In Dansk Forvaltningshistorie, vol. 1, edited by Tim Knudsen, 576–616. Copenhagen: DJØF Forlag. Pedersen, Ove K. 2014. ‘Nederlagets tid. Krig og velfærd’. In Læren af 1864. Krig, politik og stat i Danmark i 150 år, edited by Lars Struwe and Mikkel Vedby Rasmussen, 15–33. Odense: University of Southern Denmark Press. Petersen, Jørn Henrik. 2010. ‘Debatten om alderdomsforsørgelse frem mod alderdomsforsørgelsesloven af 1891’. In Dansk Velfærdshistorie. Vol. 1, Frem mod socialhjælpsstaten, Perioden 1536–1898, edited by Jørn Henrik Petersen, Klaus Petersen, and Niels Finn Christiansen, 311–91. Odense: University of Southern Denmark Press. Petersen, Jørn Henrik. 2012. ‘Sygesikringen’. In Dansk Velfærdshistorie. Vol. 3, Velfærdsstaten i støbeskeen. Perioden 1933–1956, edited by Jørn Henrik Petersen, Klaus Petersen, and Niels Finn Christiansen, 329–78. Odense: University of Southern Denmark Press. Petersen, Jørn Henrik, Klaus Petersen, and Niels Finn Christiansen, eds. 2010. Dansk Velfærdshistorie. Vol. 1, Frem mod socialhjælpsstaten. Perioden 1536–1898. Odense: University of Southern Denmark Press. Petersen, Jørn Henrik, Klaus Petersen and Niels Finn Christiansen, eds. 2011. Dansk Velfærdshistorie. Vol. 2, Mellem skøn og ret. Perioden 1898–1933. Odense: University of Southern Denmark Press. Petersen, Klaus. 1998. Legitimität und Krise. Die politische Geschichte des dänischen Wohlfahrtsstaates 1945–1973. Berlin: Berlin Verlag. Petersen, Klaus. 2006. ‘Constructing Nordic Welfare? Nordic Social Political Cooperation 1919–1955’. In The Nordic Model of Welfare: A Historical Reappraissal, edited by Niels Finn Christiansen, Klaus Petersen, Nils Edling, and Per Haave, 67–98. Copenhagen: Museum Tusculanum Press. Petersen, Klaus. 2012. ‘Fra befolkningspolitik til familiepolitik’. In Dansk Velfærdshistorie. Vol. 3, Velfærdsstaten i støbeskeen. Perioden 1933–1956, edited by Jørn Henrik Petersen, 549–664. Odense: University of Southern Denmark Press. Petersen, Klaus, Niels Finn Christiansen, and Jørn Henrik Petersen. 2013. ‘The Danish Social Reform of 1933: Social Rights as a New Paradigm by an Accidental Reform?’

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12 Diverging Paths The Impact of the Two World Wars on Welfare State Development in Belgium and the Netherlands Dirk Luyten

INTRODUCTION This chapter assesses the impact of the world wars on welfare state development in Belgium and the Netherlands. Both countries were occupied by Nazi Germany in World War II. Belgium had also been under German rule in World War I, while the Netherlands remained neutral but was indirectly impacted by the war. The following factors are key to understanding the impact of the world wars on welfare state development. War changes the scale on which social protection is organized, basically from the local to the national level. This tendency can, however, be counterbalanced by the opposite movement (from national to local), but the latter was not a significant feature after World War II, when social policy became a mission for the national state. War may lead to more cooperation between social classes, but this is not a general rule: some interest groups may consider the war as a window of opportunity to develop strategies resulting in more social conflict. The question is to what extent these tendencies had a persistent character during and after the war. Class cooperation in itself may be also part of a political strategy to gain control over social groups or to legitimate social reforms. For Belgium and the Netherlands, ‘war’ is a too general concept and needs to be narrowed down to occupation to understand its impact. In the context of an occupation, the relationship between domestic social forces in the occupied territory, on the one hand, and between these groups and the occupier, on the other, are more decisive than the actions of the occupier per se. The situation

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was not one of mere constraint, but allowed at least some room for negotiation between the occupier and domestic social actors. War endings tend to have more lasting effects for welfare state development than the occupation. In certain respects, the two world wars may have had contrasting effects on welfare state development.

SOCIAL POLICY BE FORE 1914

Belgium Given the country’s early industrialization, Belgian social legislation was somewhat lagging in the nineteenth century. After the political upheaval of 1848 the government initiated two social laws. The first offered local mutual societies a legal framework, under the control of the mayor; the second created a state pensions saving bank, through which people could save for their old age on a voluntary basis, with a state guarantee for the deposits (Parmentier, 1986; Pittomvils 1994–5). Thereafter, the state abstained from further social intervention, with the exception of a law of 1866, which ended the ban on trade union activities (Chlepner, 1972, 90). It was only after the massive strike of 1886 that a series of social laws with more far-reaching impact were enacted by parliament. These laws limited working time and put an end to systems of paying wages that discriminated against workers, although wage levels were not themselves the subject of legal intervention. Social legislation developed further in the first years of the twentieth century, with two important steps being a compulsory insurance scheme for work accidents (1903) and a law on the labour contract of manual workers (1900) (Nandrin 1985; Deferme 2001; Van den Eeckhout 2005; Deferme 2007). The socialist and Catholic labour movements, which expanded in the late nineteenth century, favoured social legislation, whereas the Belgian employers were reluctant. A few had developed social protection schemes but on a local scale only, and their number was limited: by the end of the nineteenth century, only thirty-four factories offered welfare provisions, such as housing, schools, mutual societies, and medical care. These were implemented mostly in steel and coalmining industries and had the aim of binding workers to the firm (Van Praet 2015, 154–5). From the early nineteenth century, the coal mining sector provided firm-based and regional welfare funds to cover the cost of industrial accidents, to pay compensation to the widows of deceased miners, and to provide compensation for medical costs (Chlepner 1972, 44). By 1848, these funds had become more centralized and achieved great coverage: in

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mining, about 92 per cent of the workforce was included in such schemes, since membership was a moral obligation. The state limited itself to giving the funds legal personality (Van Praet 2015, 213). Belgian employers did not have a strategy to cover the cost of medical care, as was the case in the Netherlands and Germany; the focus was on industrial accidents, a financial and judicial risk for the employer. In the textile city of Ghent, one of the pioneers of the Industrial Revolution, employers created mutual societies before 1850, but workers themselves established a similar number of mutual societies. After 1850, the creation of new mutual societies by employers nearly came to a standstill (Veraghtert and Widdershoven 2002, 44, 83). With the Catholic Party in office from 1884 to 1914, from the late nineteenth century onwards social policy in Belgium was organized in a manner inspired by Catholic doctrine, with its guiding principle being a so-called subsidized liberty, denoting that the key players in the system of social protection were social organizations and not the state. Membership in social insurance schemes was voluntary and not compulsory. In 1894, a law organized sickness insurance, with access through mutual societies, most of them directly linked to a political party: Catholic, Socialist, or Liberal (Van Meulder 1997; Vanacker 2008). This form of political organization has been described as ‘pillarization’, a system that also existed in the Netherlands, but with somewhat less immediate effects on the organization of social policy as compared to Belgium (Stuurman 1983). The Belgian state limited itself to creating a legal framework and to subsidizing the organizations. The accent was on individual responsibility and precaution: insurance was not compulsory but dependent on an individual choice to pay a contribution to a private mutual society, linked to one of the political families. From 1900, there was a similar voluntary funded system of old-age pensions. This social protection was not organized for all citizens or citizens of a specific social group, as would have been the case with a state-run system, but within one political family and often for a specific social group. While the membership of the socialist organizations consisted of (blue-collar) workers, in Catholic organizations class cooperation was institutionalized by favouring so-called mixed associations (workers and employers in one organization) or, alternatively, by including persons from the higher social classes in the management of the mutual society (Gerard 1991, 74–89). In the 1894 legislation on sickness insurance there were incentives to encourage centralization, but local organizations remained the backbone of the system. Social protection was primarily a local matter. This local focus was even more obvious for the unemployment insurance organized by the trade unions. This insurance was not subsidized by the state, but only by certain local authorities, especially in industrial cities of Ghent and Liège (Vanthemsche 1985). The specific form of social protection—not set up by the state, but based on intermediate organizations—was an ideological choice, which was also

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politically motivated. Since the socialist labour movement strived for universal male suffrage, social legislation was not only aimed at easing social tensions, but it also sought to give the Catholic labour movement instruments with which to compete against the socialists to attract voters for the Catholic Party, of which the Catholic labour movement (social-Catholics) was a part. Since the social insurance schemes were not compulsory, the cost of protection was financed exclusively by the employee. The state subsidy was designed to encourage individual effort and support the development of the organizations. From 1912, parliament debated a compulsory health insurance and old-age pension bill, inspired by the Catholic mutual societies. The central role of the private mutual societies was maintained in this compulsory system. The outbreak of World War I prevented the Senate from voting on the bill (Vanthemsche 1994, 24–5). Housing policy, developing in the late nineteenth century, was also in line with Catholic ideas aimed at turning the workers into home-owners (Van den Eeckhout 1992, 200). Since the 1840s, better housing for the working class had been one aspect of programmes of liberal social reform and some entrepreneurs built houses for their workers, while special saving banks sought to give a workers’ elite the means of acquiring their own homes (Van Praet 2015, 95–168, 241–56). The 1889 law on housing, also an answer to the mass strike of 1886, aimed at promoting the acquisition of houses by manual workers exclusively by means of fiscal stimuli and access to capital at a low interest rate, with patronage committees deciding who could make use of the law enhancing social control (Van den Eeckhout 1992, 200–4). In line with economic liberalism, there was no direct state initiative. The law enhanced the building of individual houses, geographically dispersed, a sign of upward social mobility and a way of avoiding the creation of workers’ districts in the cities. In some big cities, apartment properties were financed on an investment basis for rental to the workers, but with strict regulations for social control (Smets 1977, 46–56). The development of social legislation in Belgium from the late nineteenth century was part of an ideological project to defend Catholicism. This philosophical cleavage also put its mark on military service and schooling. The Belgian Army was composed of volunteers and conscripts recruited via a lottery system. The system discriminated against the lower social classes, since it was possible to pay for a stand-in. The Belgian Army was, as a consequence, a ‘poor men’s army’ (De Mûelenaere 2016, 129). Military service was not popular, especially in the Catholic world. The barracks, far removed from home and family, were regarded as a threat to Catholicism, and priests as well as theology students were excused from service. In general, the army was seen as a pillar of a liberal state by the Belgian anti-statist Catholics. The Catholic Party was therefore opposed to a conscript system. The mass strike of 1886 and growing international tensions transformed the situation and led to

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compulsory personal military service in 1909 (one conscript per family) and in 1913 (all males), a policy shift strongly favoured by the king. While the Catholics (supported by the Pope) remained reluctant, socialists and liberals— as well as army officers, often liberals—supported the idea (personal military service ended the discrimination of the lottery system), which made it possible to overrule Catholic opposition in parliament (De Vos 1993). However, the Socialist Party never voted on the budget for the army nor the military contingent (Liebman 1986, 11). Compulsory elementary school attendance was favoured by radical liberals. There was strong conservative opposition, inspired by economic considerations: compulsory schooling implied regulation and limitation of child labour, which was not compatible with economic liberalism. For the Catholics, moreover, compulsory schooling conflicted with the liberty of the paterfamilias and with the freedom of education, guaranteed in the constitution. Not all municipalities had a Catholic school, necessarily compelling pupils to attend the official school and the political cleavage between Catholics and Liberals was focused on school policy. Liberals favoured the official school, and their policy to have one official school free from religious influence in each municipality was the start of the first ‘school war’ (1879–84). Compulsory school attendance was part of this liberal educational reform agenda, but parliament lacked the time to pass the bill before the new elections were won by the Catholic Party. The growing socialist labour movement favoured compulsory elementary schooling too, as did the social-Catholics. The latter were more reluctant, however, since better financing for Catholic schools was needed to guarantee that Catholic parents could send their children to a Catholic school. Compulsory school attendance was deemed more and more necessary, with the fact that, in 1903, only about 10 per cent of those enlisted for military service were able to read and write; this fact was used by the social-Catholics to argue their case. To the extent that the impact of social-Catholics in the Catholic Party (which was still dominated by the Conservatives) grew, they were able to overrule internal conservative opposition, and compulsory school attendance was linked with better financing for Catholic schools. In 1914, just before the start of World War I, compulsory school attendance until age 14 was introduced, together with an additional law prohibiting access to the labour market for people younger than that. These new regulations only came into effect after World War I (De Vroede 1970; Wynants and Paret 1998, 60–3).

The Netherlands In the Netherlands, the market for sickness insurance was more diverse than in Belgium. While in Belgium, mutual societies linked to a political family had

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been dominant since the late nineteenth century, in the Netherlands there emerged a marketplace with competing private insurances, mutual societies created by employers, philanthropic organizations, medical doctors, and labour movement bodies (Van Gerwen 2000a, 146–60).¹ Of particular importance for assessing the impact of World War I are the mutual societies established by the old economic elite rooted in commercial capitalism, shipping, banking, and the major industries of shipbuilding, textiles, and food refining (cacao, sugar, oil, distilleries). Within this Protestant or liberal elite, there was a consensus that liberalism and international free trade should prevail in economic policy (Hoogenboom 2004, 88). In the 1860–70 period, this economic aristocracy established factory-based mutual schemes of sickness insurance controlled by the employers, with limited participation of the workers in scheme management. These social initiatives continued older patronage policies, starting with the idea of an elite obligation towards the lower social classes as a consequence of a position of political domination or, to put it differently, a society based on class distinction. Financial considerations played only a secondary role. In the 1880s and 1890s, the expansion of social legislation was on the political agenda and the economic elite felt that class distinction should be protected against democratization. New mutual societies were created, opposing the idea of compulsory schemes organized under the aegis of the state. Only a system where the state offered legal protection and supported private initiatives was acceptable to this old economic elite; the extension of mutual societies under its patronage was used against state-organized social policy (Hoogenboom 2004, 103–11). By the end of the nineteenth century, the debate on social protection had entered a new phase, with a plan for compulsory industrial disability insurance and a state insurance bank for its implementation. The old economic aristocracy reacted to what was felt as a threat by demanding the right to establish a private insurance company for the implementation of the new insurance. A new employers’ organization, the Vereeniging van Nederlandsche Werkgevers (Association of Dutch Employers), would defend two basic objectives: ensuring room for private initiative in (social) insurance schemes and free trade. Linking both issues was a reaction against Catholic employers, who tried to use the political debate on social insurance to put protectionism on the political agenda.

¹ The Dutch historiography of the welfare state is well developed since the end of the 1990s. A series of basic studies and a synthesis have been published. Welfare development is looked at from a market perspective: social risks are covered by different (competing) market parties. The wars are seen as an exceptional risk, in a manner analogous to natural disasters (Van Gerwen and Van Leeuwen 1998; Van Gerwen 2000a; 2000b).

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Catholic employers were challenging the dominant economic aristocracy, from which their views differed in three respects. The most obvious distinction was religion, which in the Dutch context of the late nineteenth century also implied a broader sociological difference, the Netherlands being a Protestant nation. Catholics were a minority, often met with distrust and discriminated against (De Rooy 2005, 25–9). Economic activity was a second difference: Catholic entrepreneurs were (petty) industrialists, not commercial capitalists, and were geographically concentrated in the south. They produced consumer goods as well as textiles for the internal market, and import duties would facilitate the development of this emergent industry. Thirdly, the sociological profile of this entrepreneurial group was different: while the Protestant economic elite were long-established families, many of the Catholic entrepreneurs were newcomers, often self-made men and former workers, making them not easily accepted as equals by the Protestant elite. The Catholic entrepreneurs were excluded from the relevant aristocratic economic networks and built their own trade and employers’ organizations, based on a social ideology of class cooperation. The two elites had different economic interests in the field of international trade: while the old economic elite favoured free trade, Catholic entrepreneurs lobbied for economic protection. By interlinking social policy and protectionism, Catholic employers were in a position to make political coalitions with Catholic trade unions and socialists, effectively offering the development of social policy in exchange for import levies. Import levies also took away an argument against social policy, that of its negative impact on the competitive position of Dutch industry. Linking social policy and trade policy was the strategic basis of Protestant minister A. S. Talma, who strove for an extension of social insurance (a free old-age pension for people over 70 and those unable to work). The main innovation of Talma’s plan was in the character of its implementation: not via state instrumentalities but rather through so-called labour councils, where employers and workers were equally represented. This organizational design questioned the policy of the old economic elite to keep organizations under their control or to use private (commercial) insurance as the basis for the implementation of social insurance schemes. Fierce opposition by the old economic elite forced Talma to adapt his plans: the labour councils would no longer have a monopoly on the arrangement of social insurance schemes. The financial basis for Talma’s new social policy was provided by an increased import levy, introduced by the Catholic Minister of Finance in 1911 (Hoogenboom 2004, 108). In 1913, a Liberal government came to power, stopping the proposed increase in the import levy and thereby undermining the economic foundations of Talma’s scheme. A deadlock in respect of the expansion of social legislation resulted, with the main bone of contention being social insurance implementation: whether by joint

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commissions of employers and trade unions, on the one hand, or by a system leaving room for private initiative, on the other. The Dutch trade unions were the pioneers of unemployment insurance, with financial support from the major cities (in this instance, Amsterdam and Utrecht), as was the case in Belgium; the motivation for this was a desire to reduce the appeal to local poor relief. In 1909, a state commission proposed the organization of financial support at the national level in order to provide unemployment insurance with a more solid financial basis and to ensure uniform standards of provision across the country. This proposal was not put into practice, but the idea that unemployment was a specific risk, distinct from poor relief, began to gain traction (Van Gerwen 2000a, 149, 220–1; Kuypers 2002, 277). Housing was, as in Belgium, another aspect of the social reforms of the end of the nineteenth century. Radical liberals played a key role here and linked housing issues to questions of public health: the expansion of big cities in the late nineteenth century was a threat to public hygiene. Whereas in Belgium the focus was on promoting private ownership, the Dutch Housing Act of 1901 imposed on larger towns and cities the duty of planning the building of new houses for rent and creating a system of subsidized, semi-public building societies (Wolffram 2003, 124).

WORLD W AR I: SCALING-UP SOCIAL PROTECTION

Belgium The German army occupied almost the entire Belgian territory in World War I (De Schaepdrijver 2004). The economy was not systematically exploited by making industry work for Germany as later in World War II. Still, the Germans requisitioned food and raw materials and simply transferred machines or factories to Germany, leading to massive unemployment in the industrialized and densely populated country (Scholliers and Daelemans 1988, 147; Scholliers 1994, 40). Since Belgium was not self-sufficient in respect of food supply, the British blockade caused serious shortages. Together with the loss of arable land in the region of the front, the lack of manpower, and German food requisitions, this led to inadequate nutrition and hunger of serious proportions (Scholliers and Daelemans 1988). The survival of the Belgian population was not a real concern for the Germans, using the British blockade as an argument for declining any responsibility. The Belgian government had made no preparations, except the freezing of prices. A few days after the German invasion, the government decided that local authorities were responsible for food supply. This was in line with social policy in the long

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nineteenth century, but was not an answer to the challenge of massive shortages brought about by World War I (Nath 2013, 47). A new actor now entered the scene: the National Committee for Food and Aid (Comité National de Secours et d’Alimentation). It was a private organization, created by the leaders of the Société Générale (the main bank) and E. Solvay (a leading entrepreneur in the chemical industry). The committee started its operation in the capital city of Brussels, but the organization spread throughout the country with the establishment of local and provincial committees (Scholliers 1994, 40). The National Committee shifted social protection from the local to the national level, putting an end to the nineteenth-century paradigm of local social policy. This scaling-up has two explanations: the problems appeared too big to be handled at local level and, since a massive importation of food was necessary, action had to be taken at an international level, needing some kind of aggregation at interstate level. The Belgian state was not able to cope with this task, since it was not organized to provide social protection. Moreover, the Belgian government was in exile in France near Le Havre and lacked the power to deal with the issue of food imports. This role was assumed by businesses through the Commission for Relief, led by the American Herbert Hoover, which provided financial support second only to that of the Belgian and British governments and Belgian banks. The commission collected funding for Belgian food in the United States, acting as an international humanitarian organization, and played a role in the negotiations with Great Britain, which feared that the food would end up subsidizing the Germans, since they controlled the Belgian territory where the food was distributed. The Commission for Relief and the National Committee for Food and Aid were partners, but the relationship was not always free of tensions (Van der Wee and Verbreyt 1997, 149–58). The German occupier tolerated the National Committee, since the organization took over the responsibility for the survival of the population. Contacts between top figures in the National Committee and the government in exile remained possible. The National Committee for Food and Aid assigned itself two major tasks: supplying the Belgian population with food and coping with the problem of unemployment. The committee distributed imported food via local committees; this led to a uniformity of the methods of reaching the population throughout the territory, although differentiated on social lines. Soup distribution was used for the lower social classes, while the middle class was helped in ‘economical restaurants’, where meals were served at a modest price. Social control was tighter for the popular classes than for the middle classes, reflecting nineteenth-century ideas on social policy imbued with paternalism. As far as unemployment was concerned, the National Committee innovated: to answer mass unemployment, a national system of unemployment benefits was introduced, replacing the pre-1914 system limited to industrial cities. The

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pre-1914 system was contribution-based, whereas the National Committee’s scheme was not necessarily dependent on prior contribution. Unemployment benefits were still seen as a threat to the normal functioning of the labour market and were met with scepticism by the employers. However, certain guarantees were built in: the right to unemployment benefit was dependent on need and the unemployed were subject to (moral) control on a daily basis. Another key innovation, initially rejected by the government in exile, was the involvement of the trade unions in the payment of unemployment benefits. Before 1914, the local unemployment insurance system had not been transformed into a national system as the trade unions were seen as a threat to social peace. A national unemployment insurance scheme, with trade union participation, was in line with the political objectives of the National Committee: the political integration of the labour movement in a spirit of national consensus. Trade unions and other organizations of the labour movement, such as the successful consumer cooperatives, could participate in the implementation of the policy of the National Committee, and representatives of the socialist labour movement were incorporated within the management of the National Committee, although not at the highest level (which remained the province of the financial elite). Depending on the local situation and the local balance of power, representatives of the labour movement were also present in the direction of the local committees. This was the case in the city of Ghent, one of the strongholds of organized labour (Nath 2013, 224–7; Loriaux 2015, 75–94). The social consensus-making of the National Committee paralleled the political Union Sacrée. Immediately after the invasion, socialists and liberals were nominated as state ministers and two years later as full ministers in the government in exile. The leader of the Socialist Party, Emile Vandervelde, became Minister of Supply, and the Belgian Socialist Party supported the war effort from the invasion onwards (Liebman 1986, 14). However, this national consensus should be nuanced. At national level, the labour movement was only a junior partner. In smaller towns and villages the local committee remained in the hands of the local elite, while in rural areas the Catholic Church continued to be predominant (Nath 2013, 128–37). In Liège the committee was dominated by liberals, and in more rural areas the socialist labour movement was simply excluded (Liebman 1986, 20). We have already pointed to the social differentiation of food relief, with stricter social control of working-class provision as compared to that of the middle classes. Paternalism was still quite explicit (Nath 2013, 110–11). Even if the National Committee favoured the involvement of the trade unions in unemployment relief, this notion was opposed by employers’ representatives in many of the local committees (Bolle 2015, 175). The National Committee had specific programmes for children, pregnant women, and babies. Soup was distributed in schools, and photographs of

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grateful classes of schoolchildren were used in propaganda abroad to collect money for Belgium’s food supply. A programme was set up to stimulate and finance local offices monitoring pregnant women and babies, and to provide milk and additional food for pregnant women and young mothers. Some of these initiatives were not entirely new and existed before the war in some places and regions, but with the establishment of the National Committee these initiatives were scaled-up and spread over the whole territory, paving the way for state intervention after the war. More than before the war, these interventions reached down to lower social strata and the care was no longer limited to small children (Masuy-Stroobant 2004; Scholliers 2005; Marissal 2014, 109–28). This expansion of services to mothers and children was easily accepted, since it was seen as an investment in the future of the nation. The economic problems of the war, moreover, led to economic decline of the middle classes, who were thrown back on charity. Claudine Marissal identifies this as a social factor making social assistance more acceptable. Public assistance was no longer seen as alms for people lacking the virtue of foresight: everyone was a victim of the war and support was seen as a matter of solidarity. Marissal uses the concept of class ‘confusion’ as an important explanatory factor to describe the effects of the war (Marissal 2014, 121).

Post-War Social Policies in Belgium The main innovations of World War I survived the event. The unemployment system operated until June 1919 and was headed by the socialist J. Wauters, Minister of Labour in the post-war governments. In 1920, a National Crisis Fund replaced the war system. This fund, at the level of the national state, subsidized the unemployment insurance of the trade unions and consolidated the shift from the local to national level of social policy (Vanthemsche 1989b, 23–31). This change in locus of authority occurred in the second half of 1920, at a time when the expansion of the trade union movement was already past its peak and, in consequence, served more as a factor that stabilized rather than increased membership (Bolle 2015, 176). The same tendency can be observed in respect of collective bargaining (Luyten 1995, 15–23). Before the war, wage negotiations occurred at company level, since employers refused to negotiate with external organizations such as trade unions. Hence, the number of collective labour agreements was lower than in neighbouring countries (Bolle 2015, 165). This changed after 1918, when the Belgian economy was confronted with a big wave of strikes: workers and trade unions demanded a wage increase and the eight-hour working day. To put an end to these strikes, from 1919 onwards the Minister of Labour established a system of collective bargaining at sector level in key economic branches, including mining, steel, and engineering. Joint commissions in

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which trade unionists and employers were equally represented negotiated collective labour agreements. These commissions were part of the state administration, and in the key sectors of the economy wage formation now took place at national level under the aegis of the state. Wage regulation also became a national political matter as a consequence of the practice of linking wages to the retail price index as calculated by an official national state commission, comprising representatives of both trade unions and employers (Scholliers 1985). Special care for pregnant women, babies, and children continued after the war. A national office for infant welfare work was established in September 1919 (Scholliers 1994, 49). There was a consensus that the National Committee’s initiatives in the field of childcare had to be continued: the National Committee was credited for the fact that infant mortality had not increased during the war and that care initiatives were now operating nationwide. Organizing continuity was seen as a task for the state. The modalities of state intervention remained as a consequence of Catholic political pressure in line with the principle of ‘subsidized liberty’ governing social policy since the late nineteenth century. The initiatives in respect of the care of children were not organized by public offices but by private organizations with ideological affiliations, subsidized and supervised by the National Office. Women had an important role in the management of the National Office: because of the involvement of women in the National Committee, 25 per cent of the members of the board of the new National Office were female. At an operational level, trained nurses, all of them women, visited families with babies to monitor young mothers and ‘educate’ their families (Marissal 2014, 129–48). Daughters from middle-class families were trained to become nurses or social workers, the latter a new job created after the war. Paid work for women was seen as a protection against social decline of the kind the middle class had experienced during the conflict (Gubin 1998, 253, 265). Some employers started to pay child benefits during the war, and after the war, child benefits were organized by employers at the regional sector level. The system was made compulsory for wage earners in 1930. Child benefits could pre-empt a general wage increase, bind workers to a factory, increase social control over the workers, and favour social peace. Moreover, it was seen as part of the answer to the growth of the trade union movement (De Koster 2001, 63–6). The demographic decline during the war—in 1918 the number of children born was only half the average of those born between 1911 and 1913— was not used as an argument, as one might have expected, since fertility recovered relatively quickly, although not sufficiently according to some (Catholic) pronatalists and authorities (Scholliers and Daelemans 1988, 143, 149–51; Gubin 1995, 43; De Koster 2001, 114). War casualties and war victims made pensions an issue in social policy. War and unemployment made it impossible for most people to continue to pay

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contributions to their old-age pensions and after the war many were unable to find jobs. Therefore, a temporary law gave people older than 65, who were in need, an old-age pension. State pensions were introduced for military men, war victims, and their relatives. In 1924, a compulsory pension scheme was legislated for blue-collar workers and a year later for white-collar workers (Vanthemsche 1994, 32–5; Gottschalk 1926, 360). This pension system was a new departure, since the employers and not just those in need of protection (that is, the employees), contributed financially (as did the state), with the only precedent in the mining industry from 1911 onwards (Velge 1933, 214). Unlike other social insurance schemes, which were organized according to the principle of ‘subsidized liberty’, the pensions of blue-collar workers were paid by a state office. Old-age pensions for wage earners were seen as a responsibility of the state and were the first general social insurance programme with a compulsory character and thus covered the whole group. The war was a key factor in this new evolution. Belgium had been engaged directly in fighting and was confronted with a situation in which many people were unable to continue their pre-war professional activities and had been unable to pay for their (voluntary) pensions during the war since they were either mobilized in the army or unemployed. Soldiers who had lost their lives and deceased forced labourers in Germany left women without a household breadwinner and with orphaned children (Gottschalk 1926, 360). World War I strongly impacted housing policy in Belgium. Material destruction was considerable, with about 84,000 houses damaged or destroyed (Van den Eeckhout 1992, 204). Building had nearly come to a standstill, leading to a shortage of 200,000 homes. Already in 1915, the government in exile had passed a law to facilitate reconstruction, giving a central role to local authorities and stimulating town planning. Modernist reformers saw an opportunity for innovation in the provision of housing for workers, promoting garden cities as the new ideal. In practice, the priority was not housing for workers, but rather the reconstruction of restaurants, office buildings, supermarkets, and houses of the middle and upper classes, which commenced immediately after the war. Individual owners were compensated by the state for rebuilding their houses on a pre-war basis, giving priority to individual over planned reconstruction of the kind outlined in the 1915 legislation. In October 1919, a National Company was established to promote the building of cheap housing. This company provided loans at a low interest rate to local building societies to construct houses, both for private occupation and for rental. This law gave an indirect role to public housing, favoured by the socialists before the war as an alternative to the 1889 law encouraging private ownership. However, the 1919 law was not a major innovation, since it was a copy of a proposal dating back to May 1914. New ideas emerging during the war were not integrated into the legislation and financing had not changed compared to 1914, although it was now clearly insufficient to meet needs that

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had increased with the war. As a result, most of the new houses were for rent and no longer for private owners, a shift in emphasis that was a direct consequence of the conflict. The socialist Minister of Justice used rent control in 1919 to protect tenants from inflation and expected rent increases as a consequence of the housing shortage. Protection of tenants was not typical of the post-war period, although controls had been imposed by the German administration in Belgium in World War I with the introduction of special courts to deal with conflicts between tenants and owners, many tenants not being able to pay the rent. The National Company opted, where possible, for the model of small garden cities, on the outskirts of the main cities (Smets 1977, 90–114; Van den Eeckhout 1992, 208; Bost 2013, 204–43). The scope of the 1919 law was broader than that of the 1889 law: other than manual workers, all people with a modest income (e.g. clerks) could seek support for their housing reconstruction needs. The shift from promoting ownership to rental ended in 1921, when the Socialist Party left the government coalition; the finances of the National Company were cut and the priority again became the promotion of private ownership (Van den Eeckhout 1992, 206). Apart from legal and institutional innovations, World War I brought about a political shift with a profound and long-lasting impact on social policymaking. The participation of the labour movement in the National Committee for Food and Aid, heralded what amounted to a new post-war political system. In 1919–21 universal male suffrage was introduced, putting an end to majority governments (liberal or Catholic) and requiring constant coalition governments. During the immediate post-war years, in the spirit of the Union Sacrée, governments of national unity, including representatives of all three political families, were in power. Socialists held the Ministry of Labour and were able, with the support of the Catholic labour movement, to expand social legislation, of which the law enacting an eight-hour working day (forty-eight-hour week) was the most tangible. This post-1918 social democratization had a durable effect on social policymaking: strikes were no longer an offence and the freedom of trade union organizations was legally recognized. A tendency emerged whereby the two big union confederations (the socialist and the Catholic) acquired the monopoly of workers’ representation, implying that they could play a structural role in social policy. Of key importance were the already mentioned joint commissions: they not only determined wages and working conditions but were also in charge of the implementation of the eighthour working day. These quasi-corporatist tendencies were further developed in the crisis of the 1930s. With the aim of ending the general strike of 1936, the government convened a tripartite (government, trade unions, and employers) national labour conference, which took decisions for all the workers in the private sector (e.g. a national minimum wage and higher child allowances) (Luyten 1995, 74–6). The labour movement was integrated into the national state and economy after World War I. In return, organized labour supported

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the efforts of business to rationalize the labour process, deemed necessary to finance the new social laws (Nauwelaerts 1973; Geerkens 2004).

The Netherlands: The Ambiguous Integration of Labour The neutrality of the Netherlands did not mean that the Dutch economy was immune from the impact of World War I: from 1912 onwards, the army (mainly composed of conscripts) was mobilized, and the population had to endure unemployment and food shortages, leading to social protest. In 1914, as a consequence of a steep increase in unemployment, the financial situation of many trade union unemployment funds had become critical. The government decided to implement the suggestions of the 1909 commission: the trade union funds received financial support from the state and the right to an unemployment benefit was no longer limited to a short period as it had been before the war. The unemployed were also required to accept a job, even if it was located somewhere other than where they lived. These reforms, already prepared before 1914 but made possible by the sense of urgency caused by the war, gave trade union membership a boost. The trade union unemployment insurance schemes were centralized at national level and, hence, contributed to the centralization and enhancement of the organizational strength of the trade unions (Knippenberg and De Pater 1990, 142; Kuypers 2002, 277). In 1917, and again in 1919, the system was fine-tuned and continued basically in the same form until 1942. Unemployment insurance covered blue- as well as white-collar workers and the state subsidy strengthened the funds financially. At the same time, the administration of the funds enabled the authorities to register and monitor unemployment. The unemployed had an obligation to register with the local labour office, controlled by a national body of unemployment inspectors, scaling-up an initiative started at the local level in the early twentieth century (Van Gerwen 2000a, 209, 227). Unemployment insurance was dependent on the payment of a contribution and therefore excluded some of the unemployed. These latter were helped by a new organization, the Koninklijk Nationaal Steuncomité (KNS), the Royal National Aid Committee. This private charity organization was supported by the state, since it contributed to maintaining social peace. From the late nineteenth century, some employers had docked the wages of their employees with the aim of being in a position to maintain the labour contract of especially skilled workers in case of unemployment by paying them a part of their salary for a short period. These quasi-insurance systems, which obviously only worked within the aegis of individual firms, began to be subsidized by the KNS from 1917 onwards (Van Gerwen 2000a, 235). In this way, the activities of the committee counterbalanced the unemployment schemes offered by the trade unions.

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The KNS cemented a notion that had emerged before the war: that the poor and the unemployed were two distinct groups and that, therefore, a specific system of social protection was required for the second group so that they were not forced to rely on poor relief (Van Gerwen 2000a, 220, 234). The unemployment insurance schemes organized by the trade unions were the first implementation of this idea. The work of the KNS was a second and less strict implementation of this idea, since it also supported those unemployed workers who had not had the initiative or means to take out insurance with a trade union. Arguably, the war accelerated the implementation of new ideas on social policy, since the scale of the problem to be addressed (unemployment) grew rapidly over a rather short time span. However, a contrary view is also possible when we consider developments in this area post-war. The KNS ceased its activities in 1919, although in certain sectors a temporary system for the support for unemployed, non-trade union members continued until 1921. The decline in unemployment in the 1920s put an end to these schemes, but with the Great Depression, the system was revived in 1931–2, although on a less generous and more selective basis (Van Gerwen 2000a, 234). The Netherlands did not have to face the same level of material destruction as Belgium, but the building industry was, nevertheless, confronted with the economic fallout of the war, resulting in a shortage of houses: between 100,000 and 250,000, depending on the estimates. Already during the war, the Dutch Government had given building societies greater financial support, encouraging municipalities and building societies to construct more houses and giving financial support to rural workers to build their own homes. New building societies were created, during and immediately after the war. With its increased level of financial support, the state reinforced its control over these societies, leading to more professional management. The building societies were also permitted to offer houses to those members of the middle classes hit financially by the war. This policy of enhanced financial investment in housing was facilitated by the revolutionary climate at the end of the war, but this was short-lived. The level of state debt increased, and when political tensions decreased, lesser need was felt to continue the more generous financial support given to the building societies; they became politically more marginalized as their longstanding partners, the left-wing liberals, lost political influence, while the socialists were excluded from political power. The confessional and liberal parties did not want to make economic intervention by the state permanent and structural (Prak and Priemus 1992, 177; Beekers 2012, 135–45). The focus of Dutch housing policy hence remained on building houses for rent to the working classes (Prak and Priemus 1992, 180). With wartime restrictions, the threat of food scarcity, and rising prices, it was accepted that the central state should play a role in taking care of the social needs of workers and the broader population by regulating prices and food supply (Kuypers 2002, 60–3). This was different from Belgium, where the

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government had frozen prices one day before the outbreak of the war but left the regulation of shortages to local authorities (Scholliers and Daelemans 1988, 140). In Belgium, the organization of the conditions of social protection at national level was not in the hands of the state, but was rather the preserve of the private National Committee for Food and Aid. This substitution represented a privatization of the responsibilities of the state. The situation was clearly ambivalent, as appears from the debate among Belgian magistrates— the only state body still in office in occupied Belgium—when they were confronted with the question of whether the judiciary could be asked to enforce regulations on food distribution issued by the National Committee, a private organization taking a public role (Bost 2013, 174–91). The private sector was able to play this role as a consequence of the occupation, the fact that the formal government was in exile, as well as the decision of the government at the beginning of the war to make local authorities responsible for the survival of the population. The gap was filled by the private sector, creating through the institution of the National Committee for Food and Aid what amounted to an alternative, parallel social state or, as Peter Scholliers put it: ‘The committee had taken over a specific, traditional role of the state’ (1994, 40). After the war the idea that the state had to play a role in social protection was accepted and confirmed, as appears from unemployment insurance, collective bargaining, and the 1924 pension system, which also extended the scope of responsibility for social protection to employers. An enhanced role for the state was demanded by the labour movement, which was in a stronger political position after the introduction of universal male suffrage.

The Political Effects of the War in the Netherlands The political fallout of the war was felt in the Netherlands with somewhat different effects. Fear of political radicalization explains the introduction of universal male suffrage in 1917, a central demand of the Socialist Party, but in contrast to Belgium, socialists did not participate in government, with electoral reform benefiting the confessional parties, Protestant and Catholic (in particular, the latter). A representative of the Catholic labour movement became Minister of Social Affairs and was in a key position to improve social legislation. Another factor facilitating social reform was the revolutionary climate at the end of the war. Inspired by what was happening in Germany, the socialist leader Pieter Jelles Troelstra proclaimed the revolution. Even if this revolution did not take place (‘Troelstra’s mistake’), the threat made the conservative elite more open to social reform. New social laws were introduced after 1918 including the eight-hour working day (until 1918, ten hours had been the aim of the labour movement)

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(Heerma Van Voss 1994). In 1919, an Unemployment Emergency Act was passed, against a background of social unrest and ‘Troelstra’s mistake’. This act was the final confirmation of the distinction between the poor and the unemployed in establishing a system to support the second group through the trade unions. A more generous state subsidy put them into a position to pay benefits for a longer period of time, in line with the rising cost of living. The state took over the reduced pay provisions from employers (Van Gerwen 2000a, 227, 235). The project dating back to 1913 to introduce a workers’ pension was enacted by parliament in 1919. Old-age pensions, introduced with the Invalidity Act (Invaliditeitswet), were seen as compensation for incapacity to work. Workers with an income below a certain limit were entitled to an old-age pension at the age of 65. This social insurance scheme was compulsory, with the premium paid exclusively by the employer. The fact that the state, together with councils of workers and employers, played a key role in the implementation of the scheme via the Rijksverzekeringsbank (the public social insurance bank) shows that the war had shifted the political balance of power between the private and public spheres. This bank was also in charge of the voluntary pension law, which made it possible for other categories of wage earners with low incomes to contribute voluntarily to an old-age pension (Noordam 1998, 586–8). This system, comparable to that which had existed in Belgium since 1850, was an innovation in the Netherlands, since it gave a role to a public bank in a market that had hitherto been the exclusive domain of private insurance companies. On the other hand, the pensions’ legislation also opened up a market for complementary pensions: since the public pension provided a minimum, the financial risk was lower for private pensions. Complementary pensions were provided by employers or were part of post-1918 collective labour agreements (Van Genabeek 1998, 894). As in Belgium, wage determination was handled increasingly at national level: a National Labour Council was established and the (more centralized) trade unions were recognized as the spokesmen of the workers (Kuypers 2002, 282–3). This resulted in more collective labour agreements, frequently used to improve social protection in fields such as old-age pensions, sickness, and child benefits (Van Gerwen 2000a, 35, 63). Since the Socialist Party did not participate in government, the integration of the socialist movement did not occur through political channels, but rather via corporative channels (National Labour Council, collective bargaining, and the apparatus of implementation for the social insurance schemes). The Dutch Socialist Party was weaker than its Belgian counterpart, and it was only in 1939 that the party first achieved office. After World War I, the Dutch socialists obtained just 25 per cent of the vote as against 37 per cent for the Belgian Workers Party (Van Zanden 1997, 81; Witte et al. 2005, 528). Universal male suffrage in the Netherlands was the outcome of a political compromise, with the confessional

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parties obtaining financing of confessional schools on an equal footing with state schools in return for electoral concessions (Stuurman 1983, 186). Compulsory elementary schooling up to the age of 13 had already been introduced in 1901 (Van Gerwen 2000a, 46).

T H E I N T E RW A R P E R I O D The economic impact of World War I put its mark on the development of social legislation in the Netherlands after 1918. The economic changes brought about by the war shifted the balance of power between the old economic elite, on the one hand, and the Catholic employers with their specific model of social policy, on the other. The war did not signal a breakthrough for either model but deepened their opposition, since the labour movement now had a stronger political position. Catholic employers could take advantage of this constellation since the integration of the labour movement was a component of their social policy model, and they successfully opposed the further implementation of the ideas of the old economic elite. In Belgium, the new arrangements in social policy resulting from World War I were based on cooperation between employers and workers, under the control of the economic elite, aimed at the integration of the labour movement. In the Netherlands, World War I widened the social distance between the two groups. While the trade unions bettered their position in the unemployment insurance arena and at the organizational level, the old economic elite maintained its autonomy in the field of social protection. In 1915, the government introduced an industrial disability insurance scheme for seamen, who faced increased risks during wartime. The organization of this scheme was exclusively in the hands of private insurance companies, following the model of the old economic elite. State support of trade union and KNS unemployment insurance was met with distrust by the old economic elite, since it could lead to the idea that access to an unemployment benefit was a right. Room was left for private initiative, therefore, with big private companies offering financial compensation to their unemployed workers themselves. To the economic elite, cost was a lesser consideration than political and ideological impact, which also explains the participation of members of the economic aristocracy in the local committees of the KNS, facilitating the continuation of control by the economic aristocracy over local relief (Hoogenboom 2004, 165–79). Both the trade unions and the old economic elite enhanced their role in social policy as a consequence of World War I, but with the difference that the trade unions gained power while the economic aristocracy’s influence was defensive, serving only to prevent unwanted reforms. In contrast to Belgium, both groups operated separately

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in the field of social policy and there was no move towards greater cooperation between them. In the Netherlands (as in Belgium), post-war settlements must be taken into consideration in addition to the war itself, in order to assess the impact of the latter. Economic developments are key and the international consequences of the war were decisive, since international economic conditions influenced the national balance of power in the Netherlands. The fiscal and political dominance of the economic aristocracy came to an end with World War I. The revolutions in Eastern Europe affected the interests of this financial and business elite, which had considerable investments in these territories: capital was lost as a consequence of state takeovers, international traders were hit by declining demand in Middle-Europe, and Dutch banks with investments in Germany lost money as a result of German hyperinflation. Catholic industrialists were in a more favourable economic position as a consequence of the war: their market shares increased as a result of the decline in German and British competition. Profits were invested in mechanization, modernization, and expansion. This gave Catholic employers in the Netherlands a stronger position than that of the economic aristocracy in the conflict over the organization of social protection in the 1920s. While the economic aristocracy wanted to monopolize this field with its institutions, this was seen as hindering the development of Catholic initiatives, which were articulated on a different basis and designed to serve other purposes. While, for the old economic elite, control over workers on the shop floor was the crucial desideratum, with cost a subsidiary factor, financial considerations prevailed for Catholic employers. The latter had taken fewer initiatives serving financial purposes: containing the cost of insurance schemes by including representatives of labour. The idea that high social status led to social obligations played no decisive role for these self-made men. This left room for the growth of the Catholic labour movement in the 1920s, leading initially to conflicts with employers. The employers reacted by establishing social funds in the factories, but in contrast to the realm of economic aristocracy, the labour movement welcomed such departures, and whilst cost-efficiency remained an important consideration, workers now played a role in management (the employer typically acting as president). Catholic employers favoured this system, which they did not dominate exclusively, since it was cheaper to organize in cooperation with labour organizations, and the involvement of trade-unionists could limit fraud by the workers (e.g. the simulation of sickness). As a consequence, two competing models of social protection coexisted in the early 1920s, favoured by the economic aristocracy and Catholic employers respectively. Both groups tried to make their model the basis of the planned reorganization of social protection during the course of the next decade. The Catholic employers were in a good political position: the Catholic party was the biggest

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party in parliament and had adapted itself to the democratization of politics since it was based on organizations of workers, civil servants, and teachers. In 1925, the Catholic Party supported reform of the sickness insurance system and succeeded in imposing its model of joint organizations of employers and workers in 1928 (Hoogenboom 2004, 181–211). This sounded the death knell for the aristocratic model of direct and local control of employers over workers: contact between workers and employers was now regulated at a national level and institutionalized. This shift was in line with the ‘nationalization’ of social policy that began in World War I. As a reaction to Troelstra’s attempt to bring about ‘revolution’, pillarization was enhanced: each political family built an organizational complex to protect and guard its own group (Kuypers 2002, 231). This also contributed to the nationalization of social policy, since the organizations of each pillar were centralized at a national level and were the (exclusive) mouthpieces of the major religious groupings in Dutch society (Stuurman 1983). While, in the Netherlands, the economic elite lost its leading political position in the social field, the Belgian financial elite was actually more engaged in social policy than it was in the nineteenth century. This was part of the ‘national turn’ made by the Belgian financial elite, following international economic shifts brought on by the war. As a reaction against the relative deterioration of their position in the international economy as a consequence of the war, financial groups such as the Société Générale focused more on the Belgian economy and politics (Kurgan Van Hentenrijck 1997, 223). They were actively involved in the transition to post-war democratization and were in a position to serve as a countervailing power against the effects of the new social policy. Parity in decision-making on wages and working conditions gave the employers a veto, since joint commission decisions were taken on the basis of unanimity. In contrast to parliamentary procedure, employers could not be overruled by a majority of the workers, a potential danger of universal male suffrage from an economic elite viewpoint. Social policy implied financial involvement by the state, financed by a more redistributive fiscal policy and by state loans. The latter offered support for Belgian financial groups to increase their political leverage in the wake of World War I. Part of the post-war social recasting was a new, more redistributive fiscal system. By the end of the nineteenth century, the Belgian fiscal system had become obsolete. Taxes were low, they did not reflect economic reality, and income redistribution had no role in the fiscal system (Hardewyn 2003, 67–8). World War I brought about a first change. In 1917, the Germans wanted to make the occupied country contribute financially to the war effort, demanding that tax income should be increased by means of a capital levy. This involved the fiscal administration playing a more active role in its dealings with taxpayers and financial institutions. More than its financial impact, this measure changed the relationship between the administration

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and the citizen: each taxpayer had to declare his income and was, therefore, subject to administrative control (Hardewyn 1999; 2003, 70–1). Shortly after World War I, but before universal male suffrage produced its effects in parliament, the fiscal system was changed at certain key points. This swift action was inspired by the need to finance post-war reconstruction. Next to a tax on war profits, the inheritance tax was reformed by including capital and by making the taxation progressive. This was also one of the principles (albeit in a moderate and ambivalent way) of the new income tax, including immoveable property, capital, and income, with a different tax percentage for different income categories and a degressive ‘supertax’ on the total sum. The ‘supertax’ reinforced the notions of solidarity and redistribution and there was a direct link with the innovations in social policy introduced after the war. The new tax system was contested by those with higher incomes, with the ‘supertax’ subject to particular criticism. A commission with representatives of the contesting groups and the fiscal administration was set up to amend the ‘supertax’ and the taxation of all sources of income. On that occasion, a highranking civil servant pointed to the link between the new taxation system and post-war social policy: the returns of the ‘supertax’ were needed to finance pensions and education (Hardewyn 2003, 99). A property tax was favoured by the Socialist Party, but was not a realistic political option. Employers even contested the (limited) redistributive character of the new tax system and campaigned against aspects of it (Hardewyn 2003, 105–8). The redistributive character of the new tax system was counterbalanced by new indirect taxes, which impacted the lower social classes relatively more than those better off. The labour movement favoured the compromise, since it was seen as a necessity in order to pay for the new social policy, while the labour movement organizations, especially the consumer cooperatives, could also profit from the new fiscal rules for industry and commerce, and the new legal status for nonprofit organizations (Hardewyn 2003, 124). In the second half of the 1920s, when the effects of post-war democratization had somewhat diminished, the new fiscal policy was amended following pressure from financial and economic elites in coalition with other groups whose tax burden had increased: in particular, the self-employed and farmers. Apart from the direct impact of the tax regulations, they targeted the redistributive character of the tax system and the new role of the state. A pivotal moment was the financial stabilization of 1926, which occurred under the auspices of a government of national unity, in which the representatives of the big private financial groups held a key position. The stabilization was based on a mixture of measures, including an increase in indirect taxes, amending the redistributive character of the post-war fiscal settlement (Hardewyn 2003, 156). The influence of the representatives of the private financial sector in postwar politics was enhanced by the need to finance the state loans necessary to

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cover increased state spending and post-war reconstruction. These loans were placed by a consortium of Belgian private banks. Under the influence of the Société Générale, the financial policy of the state was reformed: a committee, headed by one of the leading executives of the Société Générale, was installed to monitor public expenditure. Bankers from the big private institutions played a key role in the post-war monetary reconstruction which was finalized in 1926: the socialist Christian Democratic coalition cabinet of Poullet– Vandervelde, did not succeed in the financial stabilization and was followed by a cabinet of national unity dominated by the big private banks (Vanthemsche 1978). One way of reducing state debt was the conversion of state bonds to shares of a new railway company, which would take over the state railways and had to be organized on a modern industrial basis, including management oversight by a joint commission in which a leading role was played by a director of the Société Générale, Alexandre Galopin. Galopin favoured social consultation but used his position in the commission to develop a rationalization of work processes (Luyten 2001). Rationalization was Belgian industry’s answer to the limits imposed by the system of joint commissions which deliberated on employers’ autonomy to determine wages (Geerkens 2004). The active involvement of the Belgian economic elite in post-1918 social policy does not imply that they, as a general rule, favoured better social protection. With the adoption of a compulsory child benefit system in 1930, the expansion of social protection came to an end. In contrast to the trade unions, for whom the joint commissions became the core of their strategy, employers accepted the system of collective bargaining only half-heartedly. In the commissions, employers tried to limit new concessions to workers (Luyten 1995, 23–42), while adopting a more aggressive strategy to compete against organized labour, by offering similar provisions to those secured by the labour movement and bind workers to their factories. As part of this strategy, employers established mutual societies and offered unemployment benefits (Vanthemsche 1989b, 86–87; Geerkens 2002). The economic crisis of the 1930s again made social policy prominent on the political agenda (Vanthemsche 1993). The labour movement demanded a generalization of the system of social consultation and, in the wake of the debate on corporatism (which was promoted by Belgian Catholics in the 1930s as an answer to the economic crisis), favoured an institutionalization of the system that would make collective labour agreements legally binding, covering all the enterprises in one sector (Luyten 1993). A second labour movement demand, directly linked to the dramatic increase of unemployment resulting from the Great Depression, was for a compulsory unemployment insurance system. This proposed insurance scheme was to be financed by contributions of both workers and employers (Vanthemsche 1989b, 159–75).

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Employers opposed both reforms, with the argument that the power of the trade unions would grow. A compulsory unemployment insurance scheme, implemented through the trade unions, would serve as an instrument to increase membership, while the possibility of making collective labour agreements legally binding would give the trade unions an instrument through which to extend their impact beyond the firms in which they were already well represented. The cost argument was also used: for unemployment insurance directly (employers had to contribute) and for institutionalized collective bargaining indirectly. Making collective labour agreements legally binding had the potential to increase production prices in the labour-intensive Belgian economy, whereas the competitive strategy of Belgian industry was based on low prices and wages. The government continued to stimulate informal social consultation at national inter-sector level, by convening national labour conferences in 1939 and 1940. Issues relating to war preparation were on the agenda of these conferences. Questions of war readiness coincided with a liberal turn in economic policy, focusing on monetary policy and budget restrictions. The 1939 national labour conference agreed to attenuate the effects of the mechanism linking wages to the retail price index (limiting wage increases of civil servants within the state budget), but a government proposal to cut state subsidies to the unemployment benefit system was not accepted. In the government of national unity, in which the socialists participated after the invasion of Poland, consensus was also only partial. A proposal to introduce taxation of extraordinary profits was opposed by businesses and the rightwing members of parliament who formed the majority of the government’s support base (Crombois 1998, 192–204).

THE OCCUPATION IN WORLD WAR II AND I T S I M P A C T O N W E L FARE DE V E LOP M E NT In Belgium, the nature of the second occupation was different from the first, with the German occupier intervening far more actively with a view to changing social and economic organization in line with Nazi ideology. Food production, processing, and distribution were all centralized through an official corporatist organization and a rationing system was set up by the state. In the field of labour relations, the intervention was directed against trade unions. Trade unions had to cease their activities, including their role in the unemployment insurance system, which was taken over by the local administration. In November 1940, a new single trade union was established, increasingly dominated by the Germans. Joint commissions had to cease their

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activities and prices and wages were frozen. Employers’ organizations were, however, allowed to continue their activities. Before leaving the capital of Brussels for exile, the government had asked representatives of the big banks to finance the wages of civil servants and social spending in the absence of the government and the public financial institutions (which had left for the coast and later went on to London). This gave the financial elite a say in the organization of social protection. Bankers, leaders of holding companies, and key industrialists formed the Galopin Committee, named after Alexandre Galopin, the governor of the Société Générale, the biggest Belgian holding company. The committee acted as a shadow government for economic, financial and, to a lesser extent, social affairs in occupied Belgium. In contrast to World War I, social policy shifted back from the national to the local level and, in particular, the factory level. Organized businesses attempted to take advantage of the German occupier’s measures against the trade unions and joint commissions to cut wages, and proposed a suspension of existing social legislation. These plans were opposed by the Belgian political authorities (the committee of secretaries-general, the top civil servants of the ministries) as well as by German authorities. More successful was the project of the central employers’ organization (Comité Central Industriel) of developing a systematic, firm-based social policy with factory councils and social services as an alternative to existing forms involving trade union participation (Luyten 1997, 36–9). Wage formation, in contrast to the interwar period, again occurred primarily at factory level, and workers used strikes to voice their demands for wage increases. For the left-wing illegal trade unions that emerged after the major strike of May 1941, the wages struggle was a core activity (Luyten 2005). (Illegal) wage increases, monetary or in kind, were given by individual employers (Scholliers 1993). The Belgian social insurance system was less developed than in Germany: only child benefits and old-age pension were compulsory. The German administration wanted to change the system of sickness insurance schemes, but met with opposition from the Belgian Ministry of Labour, many of whose civil servants were Catholics, who wanted to continue the role of private organizations in the social field, which would be abolished under the German reform proposal (Van Acker 2010). Legislation on social insurance (other than unemployment) did not change under the occupation. For the Germans, this was not the first priority: economic exploitation was their main objective. Catholic politicians and organizations had projects for far-reaching authoritarian corporatist reform in 1940–1, which would have impacted social policy and social insurance schemes, but these projects again produced no concrete results (Luyten 1997, 30–4, 40–79; Van Acker 2010). In the Netherlands, ruled by a German civilian administration (Belgium was governed by a military administration), the occupation brought changes in the social insurance system. In 1941, sickness insurance was made compulsory

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for wage earners with a limited income, via the mutual societies. This reform was initiated by the Germans, but the Dutch domestic administration for social affairs was in a position to modify the plans and avoid the adoption of a mere copy of what existed in Germany by bringing the mutual aid societies under an umbrella organization, putting them in a position to continue their pre-war role in the reimbursement of medical costs (Companje 2008, 477–535). Their position changed, however. While, before 1941, they were responsible for the financial equilibrium between premiums and expenses, they now became executive agents of a public insurance system and lost their financial responsibility (and as a consequence were no longer exposed to financial risk). Decision-making regarding fees for medical treatment shifted from local to national level, leading to greater uniformity. Two further changes brought about by the 1941 regulation were that employers also had to contribute and hospital care was covered. With the new law on mutual societies, a larger number of people had sickness insurance coverage, both as a consequence of its compulsory character and the higher wage limit. This led to a shift in the Dutch fragmented sickness insurance market, which can be classified as a public–private system after 1941 (Vonk 2011). Modest wage earners were covered by a public system, with the mutual societies as the executive branch. Others were left to a market comprising different players: non-profit mutual societies of different types (philanthropic, linked with the labour movement, created by employers or by medical professionals) and purely commercial insurance companies that had entered the market by the turn of the century. The latter were the losers in the 1941 legislation, with a part of their market share shifting to the mutual societies as a consequence of the higher income limit. On the other hand, the private insurance companies did acquire a new middle-class clientele, impoverished as a consequence of the war and more inclined to take out insurance fearing that they would not have the financial means to cover the cost of medical care if it was necessary. An insurance contract was, for some, an alternative way of investing money that could no longer be used for consumption purposes as a consequence of the general shortage of consumer products due to the war and occupation (Vonk 2013, 119). From the perspective of the market for care, the German intervention brought about a major shift: the Dutch national state entered a market in which it had been absent before 1941. The mutual societies were now regulated by the state and private insurance schemes were subject to price control (Vonk 2013, 113). The market for care was split into sub-markets: poor relief, organized by local authorities provided free care; wage earners with a modest income were in the compulsory mutual societies system; the self-employed could participate on a voluntary basis; and for those with high incomes there were commercial alternatives. Since the state did not monopolize sickness insurance, room was left for other players. Seen from a long-term perspective, the

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1941 law was not a fundamental rupture with Dutch tradition. From the late nineteenth century onwards, it was widely accepted that a compulsory system was required for the lower strata of wage earners and this idea was implemented with the establishment of a maximum wage limit (Van Gerwen 2000a, 146–52, 177–81.) The occupation also brought about change in the unemployment insurance system. In 1942, with the creation of a single trade union, the National Labour Front (NAF), the voluntary unemployment insurance system based on trade union funds ceased to exist. Responsibility for unemployment insurance was shifted to the NAF, leading to a single national system. However, this broke down after a year and the unemployed were supported by local administrations, using a regulation from 1932 introduced in the context of the economic crisis. Employers extended the reduced pay provisions, existing since the late nineteenth century (Roebroek and Hertogh 1998, 186; Van Gerwen 2000b, 208). During World War II, an occupier inspired by Nazi-ideology sought to interfere more directly in the domestic social protection system. The longterm effects of these interventions were limited: reforms focused on specific parts of welfare (mutual societies in the Netherlands) and did not succeed in effecting systemic change. The occupation also changed power relations between domestic social groups involved in social policy, giving them the opportunity to modify existing practices of social protection. This is obvious in Belgium, where employers attempted to subvert social protection organized at national level, favouring local initiatives in factories. This was a strategy to gain ground on the labour movement, which had played a central role in social protection since the end of World War I. It is difficult to label this strategic opportunism as an instance of social consensus-making, which is often seen as a typical response by domestic actors to wartime situations. Indeed the opposite was true, since the occupation fired social antagonism. In the Netherlands, in contrast, continuity prevailed.

Towards Social Pacts More important for the long-term development of the welfare state than the measures of the occupier, were preparations made by local actors to redesign the post-war social system in prospect of a restoration of democracy after the defeat of Nazi Germany. At an international level, the Atlantic Charter (1941) put social reform on the peacetime agenda as a general principle, while detailed proposals for a ‘welfare state’ were elaborated in the Beveridge Report (1942) (Van Gerwen 2000b, 359). The social reform ideas discussed in the occupied territories were not always a copy of these Anglo-American ideas but were, nevertheless, aimed at a far-reaching reform of pre-war social policies.

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In Belgium, these negotiations started in the autumn of 1941 as part of renewed contacts between employers and pre-war trade unions, with a key role for civil servants. The most important was the high-ranking civil servant Henri Fuss, an international expert on unemployment who had drafted the Belgian compulsory unemployment insurance scheme before the war and who had been sacked by Germans in 1940 because of his socialist affiliation. The result was the Social Pact of April 1944, a document in which a post-war social system based on national solidarity organized by the state was outlined. The Social Pact proposed a system of collective bargaining ranging from factoryfloor level to sectoral and national inter-sectoral levels, and described in great detail a compulsory social security system financed primarily by contributions from workers and employers. The Social Pact broke the deadlock over the compulsory character of unemployment insurance that had dominated debate since the late 1930s. This was an important innovation, as too was the concept of a social security system replacing disparate social insurance schemes, implying that the aim was to offer a compulsory and comprehensive public system rather than a partial model of social protection (Luyten and Vanthemsche 1995). Discussing similar ideas in wartime France, Colette Bec has argued recently that the main innovation was not in the compulsory character of social security but in the idea that solidarity, organized and institutionalized at state level, was necessary to guarantee security for all citizens, putting them in a position to realize personal freedom: the novelty of social security was a redefinition of the relation between freedom and equality (Bec 2014). In the Belgian Social Pact, the idea of the need for solidarity to be organized by the state was also of key importance, not least in the name of the document, entitled a ‘Project of agreement on social solidarity’. The document itself was written as a series of requests and concrete proposals by organized labour and employers to the state, which was required to enact the necessary legislation. Another key feature was the codification of the concept of ‘representative organization’. In the post-war social system, the monopoly of representation of workers and employers would be granted to a limited number of organizations answering to three criteria: a minimum number of members or employees, the existence of a national organization covering the whole country (or alternatively a large part of its territory) and, finally, the acceptance of the idea of class cooperation. These criteria matched the ideals of the pre-war national employers’ organization and both the Catholic and socialist trade unions, but could serve as a mechanism of exclusion of the left-wing trade unions that had emerged during the war. The Social Pact concluded the parenthesis of the shift from national to local level during the occupation: social protection had to be organized at national level by the state and concerned all employees. The Social Pact can serve as a case study for testing the hypothesis that war enhances national solidarity. At first sight, this seems to be the case: the Social

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Pact stressed national solidarity and was a common initiative of employers and trade unions, who decided to cooperate in an institutionalized way after the war. Some qualifications are necessary, however. It may be true that the Social Pact demonstrates solidarity between workers and employers, but this phase followed a period of confrontation initiated by employers after the invasion. This implies that the degree of solidarity under occupation conditions depends on the balance of power between, and the strategies of, different groups and may evolve with the changing fortunes of war. Moreover, the Social Pact was not just a shift from confrontation to cooperation: those negotiating the Social Pact for employers were not the same people as those favouring a factory-based social policy excluding trade unions. The negotiators of the Social Pact were representatives of the modernist fraction of employers, while the traditionalist fraction did not accept the Social Pact. The traditionalists could be found in the coalmining sector and within the Société Générale, controlling 40 per cent of Belgian industry. This group had put its mark on economic policy under occupation. As already indicated, the Social Pact served as a mechanism for excluding left-wing trade union movements. In the group that negotiated for workers, socialists were overrepresented and Catholics under-represented, and the latter had other plans for the post-war period, inspired by 1930s corporatism. There were also other relevant groupings with their own projects, not least those who were part of the London government in exile, showing that the Social Pact did not mirror any general national consensus (Luyten 1997, 261–77). The implementation of the social security plan after the war is another indication that consensus was relative. The decree law introducing a compulsory social security system was passed in December 1944, but was not debated in parliament since the government had plenary powers. Achille van Acker, the socialist Minister of Labour who had participated in Social Pact negotiations, was in a position to pass the decree law quickly, since the head of the ministry was H. Fuss, one of the pact’s initiators. This unorthodox decisionmaking process enabled Van Acker to overrule possible opposition easily. The section of the Social Pact on social consultation proved to be more difficult to implement and only became fully operational in 1952. Traditionalist employers were opposed to the economic power conferred on works councils and to the monopoly of representation for trade unions at shop floor level. Despite these difficulties, negotiations between employers and trade unions had already commenced ten days after the Liberation with a National Labour Conference, the beginning of a process designed to involve employers and trade unions in social policymaking. As far as social security was concerned, the key role of the social organizations in policy implementation was maintained: benefits continued to be paid by the organizations, as had been the tradition since the end of the nineteenth century (Luyten with the cooperation of Hemmerijkcx 2000).

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A Shift in the Political Strategy of Employers The question of consensus can be looked at from another perspective, putting the accent more on political–ideological shifts of which documents such as the Social Pacts are a reflection. The ideological framework for social policymaking had changed: the aim of social policy was now seen as the provision of a higher level of protection and security. This protection was the responsibility of employers, employees, and the state, with a large degree of participation by (organized) labour. This is the direction in which social policy was moving by the end of World War II, and this trend could no longer be questioned politically by limiting political discussions to modalities. The new ideas on social policy became the framework within which each group could position itself to defend its own interests, without questioning the new principles for social policy as such. This strategic shift appears in a policy document produced by the Commission for Social Questions of the employers’ confederation, the Comité Central Industriel (CCI), in August 1944.² The document is a detailed commentary on the Social Pact of April 1944 and was written after it was discovered that top members of the CCI were internally divided on the Social Pact and were not prepared to sign the document. Behind a detailed, nuanced, and (at first sight) technical criticism appears a political response and strategy for responding to the new social policy as laid out in the Social Pact. Except for the payment of unemployment benefits by trade unions, no element of the Social Pact was rejected as such. Comments went in the same direction: some points were accepted but criticized in respect of specific details, which became the starting point for an employers’ strategy aimed at amending or weakening reforms or opposing alternative solutions that could be the beginning of a political debate. The cumulative effect of these minor criticisms and alternatives could in the end have potentially undermined the basic principles of the Social Pact, especially the overarching system of social solidarity organized by the state. Revealing in this respect were the proposals for sickness insurance. Whereas, in respect of unemployment benefits, the role of trade unions as an interface with the unemployed was questioned, there was no contesting that the mutual societies could continue to pay allocations in respect of sickness insurance. The reason was that, even though many mutual societies were part of, or closely linked to, the labour movement, employers had in the interwar period built their own network of mutual societies in order to challenge the labour movement. Thus employers had an interest in maintaining a central role for the mutual societies in the sickness branch of social security. Apart from this

² CCI, Projet d’accord de solidarité sociale. Tableau synoptique. 31 August 1944. Algemeen Rijksarchief 2. Depot Cuvelier, Archief FEB-VBO, 1394.

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organizational motive, there was also an ideological reason for favouring the inclusion of mutual societies. On the condition that they obtained financial autonomy, the mutual societies could show that private organizations were operated in a more efficient and economical way than a public social security system. Profits could be used to enhance coverage for specific groups, enabling mutual societies dominated by employers to favour better-paid (white-collar) workers and to mitigate the overall solidarity of the social security system. The document at no point opposed the principles of the Social Pact directly. Some statements were even welcomed, in particular parity and the cooperation between social classes. The document was a guideline for a repositioning of employers in the new political–ideological framework for social policy outlined in the Social Pact. The subtext of this (at first sight) technical document was that it was no use to openly oppose the Social Pact on ideological or economic grounds in the manner of traditionalist employers, but that it was more sensible to look for leads in the Social Pact that could serve as a starting point for the defence of employers’ interests in the new socio-political context announced in the Social Pact or, to put it differently, the way to use the document was as a roadmap for internal opposition to a complete implementation of the proposed post-war social policy settlement. This internal opposition followed three paths: temporization, a questioning of some of the principles, and an indication of points of departure for developing a strategy for the employers to promote their interests within the framework of the Social Pact. Temporization was applied in the field of industrial relations: whereas, in the Social Pact, representation of the workers was foreseen in firms with twenty employees or more, the commission felt that this should not be an obligation but only a recommendation. The miners would have a specific scheme in the new social security system at an extra financial cost: in the Social Pact suggestions were made for financing, but these were rejected since all of them had some drawbacks. A more far-reaching proposal for temporization was to postpone the central repartition fund suggested in the Social Pact. This fund (the actual National Office for Social Security) would collect via the employer the social security contributions of employers and employees and distribute them between the different branches of social security. It was argued that this reform was too important to be implemented immediately after Liberation: rather it would be better to continue the existing social insurance schemes whilst the reform was prepared. Minor changes to the legislation would suffice to implement the proposed reforms and would leave time to prepare the centralized fund mentioned in the Social Pact. This proposal went further than mere temporization, but had a more principled scope, as appears from the construction of the concept ‘social security’ in the text of the Social Pact. Social security was constructed starting from existing social insurance schemes, with proposals for their separate

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reform and the determination of the percentage of employer and employee contributions. The term social security only appeared at the end of the text and was made concrete by the National Fund, a public institution centralizing the collection of contributions. By seeking to postpone this fund, the CCI put into question social security itself. Together with the suggestion of using some of the social insurance schemes as a starting point for internal opposition against the principles of the Social Pact, it becomes clear that the CCI had not interiorized the new social security, which was in a prudent way introduced in the text of the Social Pact. As already noted, this also appears at a semantic level: the commission always talked about social insurance schemes, never ‘social security’ as such. The commission also found a way to overcome internal conflict in the CCI over the Social Pact: some of the top-level officials of the CCI had participated in negotiations on the Social Pact and representatives of sectors such as the chemical industry and engineering accepted the reform, while others rejected it. The commission proposed a compromise strategy that amounted to an acceptance of the new social model with the maximum of opposition. This is what eventually happened after the war. At the National Labour Conference of September 1944, the president of the CCI revealed the Social Pact, but declared that employers were only prepared to implement the direct reforms mentioned in the pact, namely those relating to wages and purchasing power.³ This was in line with the philosophy of the CCI: the Social Pact was in the first instance more a set of urgent measures to be implemented immediately after the war to ease social tensions and less a blueprint for a new social model. The National Labour Conference decided to raise wages by 60 per cent, a spectacular gesture at first sight, but in fact, this did no more than make official (and generalize) legal and illegal wage increases conceded by employers during the occupation and, therefore, was not a real structural shift of social policy as visualized in the Social Pact (Scholliers 1993). Shortly after passing the decree law of December 1944, the text of the Social Pact was published in the official journal of the Ministry of Labour, indicating that the text had inspired the social security legislation and expressing the hope that the pact would also serve as a point of reference for further social reform. In introducing the text, the journal was prudent enough to present it not as the result of a consensus between organizations, but as the outcome of a series of discussions by personalities from employers’ organizations and the labour movement.⁴ The accent was on the technicalities of the calculation of contributions and benefits. This was designed to give legitimacy to the reform, ³ Conférence Nationale du Travail. Séance du samedi 16.IX.1944 CEGESOMA, Papieren L. E. Troclet, nr. 7. Délcaration patronale 16.IX.1944, Rijksarchief Brugge, Archief Achille Van Acker, nr. 476. ⁴ ‘Un projet d’accord de Solidarité sociale’. 1945. Revue du Travail, LXVI, 10–21.

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which lacked parliamentary support. The publication of a text dividing the employers’ organization was, as such, a political act: it could give some backing to the labour movement, which favoured the new social security. Once the new social security system had been introduced, it became a political fact with which the employers had to come to terms. Internal tensions remained, but were mitigated when, in 1946, the CCI was renamed the Federation of Belgian Industries, providing an opportunity to put aside part of the conservative leadership (Vanthemsche 1989a). This created the conditions for a shift from a rejection of the new social model outlined in the Social Pact to strategic opposition in order to compromise with the still powerful traditionalist employers. There was a fundamental difference in the position of the Belgian business sector after 1918 and after 1944. In both periods, the ideological–political framework for social policy was shifting towards improved social protection that was partly seen as a compensation for the suffering endured by the lower social classes during wartime. In 1918, Belgian business was, as a consequence of its central role as the architect of a national system of social aid, in a position to become a central player in post-war social reform, while after 1944, the initiative was with government and organized labour, and employers responded to these initiatives. This was to a large extent the consequence of the retreat from national social protection in favour of factory-based social policy under the occupation. The Social Pact, in which the state was made responsible for social solidarity, put an end to attempts to return to a decentralized nineteenthcentury concept of social protection, which had already been put into question by World War I. What, in a long-term perspective, was a four-year parenthesis (1940–4), ended with the Social Pact. The political challenge for employers was to develop a strategy for defence of their interests in a new national framework for social policy.

The Foundation of Labour In the Netherlands, leaders of employers’ organizations and trade unionists started negotiations in 1942, leading to the ‘Foundation of Labour’ manifesto. Once again, this was a move demonstrating that the thesis that war fosters social solidarity needs qualification. In contrast to Belgium, the aim of the Foundation of Labour was not to define a new role for the state in social policy, but rather to limit its direct involvement: the Foundation of Labour positioned itself as giving employers and trade unions a central role in social policy as an alternative to the state. For employers, this foundation was an answer to those in the Socialist Party promulgating the ‘Plan Socialism’, which sought to give the state a central position in social and economic policymaking. Instead, employers and labour movement organizations should remain the central

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players for the implementation of social policy and wage policy, as had become the rule since the end of World War I. The main negotiator for employers even lobbied the leaders of Dutch churches to prevent confessional unions from merging with the socialist union: from the employers’ viewpoint, confessional unions could be a countervailing power to socialist influence (Luyten 2003). The position of Dutch employers was in line with the aristocratic economic elite’s policy of opposing a dominant role for the state in social policy, but since the balance of power had shifted with World War I and post-1918 arrangements, a coalition with the labour movement was now necessary. This was facilitated by the fact that the integration of the Dutch labour movement into the state had occurred via the corporate and not via the political channel. The Foundation of Labour was less a blueprint for social reform making concessions to the labour movement than was the Social Pact: the Dutch trade unions even explicitly dropped any ambition to share economic power. These differences, and the fact that the Foundation of Labour responded more to the aspirations of employers, can be explained by the evolution of the relation between employers and trade unions under the occupation. In contrast to Belgium, social consultation within the framework of the Dutch pre-war system remained possible until 1942 and Dutch employers were prepared to negotiate and to increase wages. There was not a rupture between the two groups as there was in Belgium: strike activity was much lower and radical trade unions did not have the same impact. As a consequence, employers were less challenged to make concessions to organized labour (Luyten 2005).

A People’s Insurance Whereas social security was a key component of the Social Pact, it was not part of the manifesto of the Foundation of Labour, where the main emphasis was on full employment. Reform of existing social insurance schemes into a social security system proper was put on the agenda by the Dutch government in exile in London, which installed a special commission composed of civil servants, the Van Rhijn Commission, to design revisions to social insurance after the publication of the Beveridge Report (Kappelhof 2004). The aim was to create a so-called people’s insurance, covering the whole population and not merely wage earners. Social solidarity should clearly be organized within this framework and at the level of the national state (Van Gerwen 2000b, 358). The impact of the Van Rhijn Commission on post-1945 social reform was limited. One of the reasons was that the Foundation of Labour, which had become a permanent private organization for social consultation between employers and trade unions, rejected the proposed notion of a ‘people’s insurance’.

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In the foundation’s view, the system that existed in 1945 should be continued. The current set-up was focused primarily on the lower social classes, and consequently had a less redistributive character than a social security system based on social solidarity. The preservation of the existing arrangements also meant that the role of employers’ and employees’ organizations in implementation was maintained. The Foundation of Labour won this political battle: the mixed commission (Foundation of Labour/civil servants) distanced itself from a Beveridge-like solution, favouring a continuation of the system built after 1918 (Kappelhof 2004). In contrast to Belgium, where the social security system was introduced through a single legal act as a comprehensive system in 1944, reforms in the Netherlands were more fragmented and more gradual, occurring piecemeal between 1946 and 1949. The first problem on the political agenda was old-age pensions. After 1945, it appeared that only 23 per cent of people over the age of 65 were entitled to some kind of pension. These pensions were low (12 per cent of the income of the average industrial worker) and many people older than 65 still needed a small extra job. In 1946, the socialist minister Willem Drees promulgated a so-called emergency act to provide a pension to all persons over 65 and those below a certain income-level. The first of these were paid in December 1947. This pension did not depend on the payment of a contribution and was not very generous, but far more people were covered and they no longer had to make an appeal to local poor relief. In 1956, the system was reformed and with legislation on general old-age insurance Algemene ouderdomswet (AOW), the first people’s insurance became a reality: the whole population was covered (not just wage earners) since it was compulsory based on payment of a personal premium. The AOW can be seen as an implementation of social solidarity, since the premium was calculated on income levels but the pension was the same for everyone, so those with higher incomes profited relatively less than those with lower incomes. Moreover, financing of the system was on a pay-as-you-earn basis rather than funded, an element of national solidarity that made it possible to start payment of the pensions immediately. As noted, the payment level was not high and extra provision, work-related or private, was thereby encouraged. Consequently, the AOW did not supersede the systems that had developed after World War I (Van Gerwen 2000b, 60–3; Oude Nijhuis 2013, 63–101). The unemployment insurance system was only reformed in 1949. The German decision to remove unemployment insurance from trade union control was not immediately undone after the war. The unemployed could make an appeal to the reduced pay scheme, but this provision was not compulsory. Apart from this aid, temporary arrangements were made, providing support to the unemployed by the state. However, in line with the ideas of the Foundation of Labour, the main priority was employment. In 1945, a special service for unemployment relief work was created, emigration was

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encouraged and, since the population was expected to grow faster than the Dutch economy, a policy of industrialization was adopted to create more jobs (Van Gerwen 2000b, 195–7). In fact, unemployment did not increase but actually declined, and in 1948, Drees grasped this opportunity to initiate a compulsory unemployment insurance scheme. One of his arguments was that a new period of high unemployment would create a major financial problem for the state. An unemployment insurance system would diminish the cost for the state and its compulsory character would lead to a better spread of the risk. Employers should contribute, since their commercial policies had a direct effect on the level of unemployment (Van Gerwen 2000b, 209). Drees’s argument was technical and financial, not political. Unemployment insurance was not presented as a step in building a social security system: in the explanatory memorandum of the proposition, the law was referred to along with other social insurance schemes and not social security. The limited ambition of the unemployment insurance scheme also appears from the concrete details of the system. In contrast to Belgium, but in line with sickness insurance, there was a wage limit: only wage earners with an income lower than 6,000 guilders were subject to the insurance. A distinction was made between the reduced pay scheme and unemployment benefits. The first was meant for employees linked to a specific sector: they were seen as the labour reserve of the branch. For the other workers, and those entitled to the reduced pay scheme after a certain period of time, there were unemployment benefits. The reduced pay scheme was determined by employers and trade unions and could differ from one sector to another, while unemployment benefits were uniform for the whole country and were determined by the state. These differences were a consequence of modes of financing: the reduced pay scheme was exclusively paid for by employers and employees, while, for unemployment insurance, the state paid 50 per cent and employers and employees 25 per cent each (Van Gerwen 2000b, 210). Compared to Belgium, there was a difference in the scale of the organization of solidarity. While, in Belgium, the state organized solidarity for all wage earners, in the Netherlands, solidarity was organized first by the industrial sector and only at a secondary level by the state (so for the whole economy). As in Belgium, trade unions were permitted to preside over unemployment benefits payments as before the war (Roebroek and Hertogh 1998, 186). Dutch trade unions had a weaker institutional position, which explains their acceptance of wage moderation between 1945 and 1963. In return, they were given stronger negotiating powers: collective labour agreements could be made generally binding (Van Gerwen 2000b, 219). Sickness insurance basically remained as it was after the 1941 reform. The mixed public–private system was maintained, leaving room for private insurance companies to operate. As had also been the case in respect of the Belgian Social Pact, the political–ideological context had changed. Even if there was no

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political majority for a ‘people’s insurance’, ideas on how to cover medical costs were evolving. The mutual societies worked according to a logic of care: the cost of a medical treatment was paid back. The private insurance schemes followed an insurance logic: medical costs were seen as a financial risk that could be covered by insurance up to a certain maximum sum and people who had a high-risk profile could be excluded (or even not accepted) (Vonk 2013, 23–4). After World War II, the balance shifted from a logic of insurance to a logic of care. This became clear in the criticism of profitmaking by the private insurance companies and their exclusion from the new regulatory body for sickness insurance. Price control introduced during the war was, on the contrary, maintained. Changing views on access to medical care were revealed by the price control authority in 1947, demanding a lower premium not on economic grounds but using the argument that this corresponded to the new social developments of the time and in the hope that the private companies understood this shift. The pricing policies of private insurance companies were no longer in line with the new political and social ideas on healthcare and the companies responded by abandoning elements of the insurance logic, including the possibility of ending a contract if the risk became too high. This at least guaranteed continuity of insurance for all who had been accepted by the company. The mutual societies now also offered the opportunity to people whose income was higher than the wage limit to continue their insurance with a special company with close ties to the mutual societies. This conflicted with the new rules for mutual societies limiting their clientele to people with a low income. Complaints by private insurance companies to the authorities had no effect, but they refrained from initiating legal proceedings since they felt that the political and societal context had changed to their disadvantage and they were not sure that they would win the case. On the other hand, the activities of the special companies linked with the mutual societies confirmed the right of private insurance schemes to exist in the new system of healthcare. Private insurance companies therefore adopted a new strategy— that of obtaining equal competitive conditions with the special companies linked to the mutual societies for the better-off segment of the population. To defend this position, private insurance companies created an interest organization (Vonk 2013, 151–5). As in Belgium, the war had an ideological effect: underlying ideas on social protection changed, forcing more conservative players to adapt their strategies and schemes to the new ideas on social policy. The outcome of social insurance reform after 1945 in the Netherlands points to the key role played by local actors in the occupied territory in the making of post-war social policy. The Van Rhijn Commission, an official governmental commission with specialists, was easily overruled after the

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war. The same goes for the proposals for social reforms elaborated under the auspices of the Belgian government in London, which were more far-reaching than the Social Pact (Vanthemsche 1994, 49–51). Governments in exile had less legitimacy than the groups who remained in the occupied territory. This was not only a matter of physical distance but also an organizational issue. While those who elaborated plans in London were specialists, civil servants, or leaders cut off from their organizations, those in the occupied territories had remained with their organizations, using the margin of manoeuvre left by the Germans to seek arrangements with domestic political authorities. Domestic institutions continued to play a role in social policy in World War II and the occupier relied on them instead of building completely new ones. If new organizations were created, domestic structures or leaders were often integrated within them. Leaders remaining in occupied territory were eyewitnesses of and actors in the development of social protection during the war, and they continued to be integrated in the relevant networks. These leaders also had legitimacy as the representatives of social groups and could speak for them, especially when they were involved in clandestine activities or brushed aside by the Germans, enhancing their legitimacy after Liberation. The returning exile governments had considerable difficulties in winning back their legitimacy as appears from the experience of the Pierlot government in Belgium and the internal struggle in the Socialist Party between the Londoners and those who had remained in Belgium (Conway 2012, 58–124). It is no coincidence that Van Acker, who had never left Belgium and was involved in the negotiations on the Social Pact, played a key role in the implementation of post-war social policy.

CONC LUDING REMARKS The two world wars had a considerable impact on welfare development in the Low Countries. The basic tendencies were scaling-up (from the local to the national level) and the growing involvement of workers’ and employers’ organizations in the implementation of social policy. These evolutions were triggered by shortages and unemployment, the consequences of the war, and by the occupation experienced by both countries. Although the occupier took initiatives in the social field, especially in World War II, local actors remained key players. Next to occupation itself, the economic shifts brought about by the world wars have to be taken into account, especially in respect of World War I, since they impacted the political power of business and labour. In Belgium this led to an increased involvement of the economic elite in social policy, while in the Netherlands the balance of power between the old

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economic elite and Catholic challengers changed, leading to a shift in the way that social insurance schemes were organized in the interwar period. The wars enhanced the impact of the labour movement, especially in and after World War I: universal male suffrage was introduced, giving direct and/or indirect political power to the labour movement. Social insurance schemes created by the labour movement (such as unemployment insurance), which were limited to the local level before 1914, were scaled-up to national level by the state (the Netherlands) or the parallel social state of the economic elite (Belgium). In World War II, organized labour felt the backlash of Nazi occupation, but was reinforced at Liberation and, in the case of Belgium, was able to obtain a social security system. In Belgium and the Netherlands, organized labour became structurally integrated in decision-making on social and economic policy after World War I via social consultation. To assess the impact of the occupation on the development of social policy, not only must the war experience itself be taken into consideration, but also the immediate post-war period: in the latter phase, changes were the most important and persistent. Local actors, those who had not left the country, prepared these changes and were able to impose their ideas. The impact of the two wars cannot be understood in a linear way (always more and better welfare provisions), as the Belgian example shows: Belgian employers tried to profit from the changing balance of power with organized labour (which was a consequence of the second occupation) and to question the shift from local to national level for social protection (which had been the outcome of World War I), but from a long-term perspective wars led to improvements and the institutionalization of social protection. War and occupation do not automatically produce social consensus: social policy remained a matter of shifting power relations between social groups and consensus-making came to the fore in preparation for the post-war period. The content of social consensus was again the outcome of a negotiation process between social groups. War tends to impact on the ideas and ideology informing social welfare provision; therefore actors less inclined to adopt new ideas are in a defensive position and forced to reconsider their political strategies. Ideas on social protection evolved also with the wars. World War I broke with the idea of non-interventionism by the national state, since large-scale intervention was necessary for the survival of the population. World War II highlighted the idea that social protection was a right to be guaranteed by the state, which had to organize social solidarity and develop the necessary mechanisms. This idea was put into practice more easily in Belgium than in the Netherlands, where private arrangements were more persistent, even if, as far as implementation was concerned, new ideas on social protection needed to be integrated there as well.

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Roebroek, J. M. and M. Hertogh. 1998. De beschavende invloed des tijds. Twee eeuwen sociale politiek, verzorgingsstaat en sociale zekerheid in Nederland. The Hague: Vuga. Scholliers, Peter. 1985. Loonindexering en sociale vrede. Koopkracht en klassenstrijd in België tijdens het interbellum. Brussels: VUB Press. Scholliers, Peter. 1993. ‘Strijd rond de koopkracht, 1939–1945’. In België, een maatschappij in crisis en oorlog, 1940 [Belgique, une société en crise, un pays en guerre, 1940], 245–76. Brussels: NCWO II/CREHSGM. Scholliers, Peter. 1994. ‘The Policy of Survival: Food, the State and Social Relations in Belgium, 1914–1921’. In The Origins and Development of Food Policies in Europe, edited by John Burnett and Derk J. Oddy, 39–53. Leicester, London, & New York: Leicester University Press. Scholliers, Peter. 2005. ‘La faim à Bruxelles en 14–18. Soupe populaire et restaurants économiques’. In Les Cahiers de la Fonderie 32: 34–40. Scholliers, Peter and Frank Daelemans. 1988. ‘Standard of Living and Standards of Health in Wartime Belgium’. In The Upheavel of War: War and Welfare in Europe, 1914–1918, edited by Richard Wall and Jay Winter, 139–58. Cambridge: Cambridge University Press. Smets, Marcel. 1977. L’avènement de la cité-jardin en Belgique: Histoire de l’habitat social en Belgique de 1830–1930. Liège: Mardaga. Stuurman, Siep. 1983. Verzuiling, kapitalisme en patriarchaa. Aspecten van de ontwikkeling van de moderne staat in Nederland. Nijmegen: SUN. Vanacker, Daniel. 2008. Een averechtse liberaal. Leo Augusteyns en de liberale arbeidersbeweging. Gent: Academia Press/Liberaal Archief. Van Acker, Karel. 2010. Kroniek van een overleving. De Belgische ziekenfondsen tijdens de Tweede Wereldoorlog. Ghent: AMSAB. Van den Eeckhout, Patricia. 1992. ‘Belgium’. In Housing Strategies in Europe 1880–1930, edited by Colin C. Pooley, 190–220. Leicester, London, & New York: Leicester University Press. Van den Eeckhout, Patricia. 2005. ‘Van werkboekje tot arbeidscontract. De negentiende-eeuwse arbeidsrelaties “revisited” ’. Revue belge d’histoire contemporaine 35: 153–200. Van der Wee, Herman and Monique Verbreyt. 1997. De Generale Bank 1822–1997. Een permanente uitdaging. Tielt: Lannoo. Van Genabeek, Joost. 1998. ‘Collectieve pensioenregelingen, 1800–2000’. In Studies over zekerheidsarrangementen. Risico’s, risicobestrijding en verzekering in Nederland vanaf de Middeleeuwen, edited by Jacques van Gerwen and Marco H. D. van Leeuwen, 883–905. Amsterdam and The Hague: NEHA. Van Gerwen, Jacques. 2000a. ‘De ontluikende verzorgingsstaat. Overheid, vakbonden, werkgevers, ziekenfondsen en verzekeringsmaatschappijen, 1890–1945’. In Zoeken naar zekerheid. Risico’s, preventie, verzekeringen en andere zeherheidsregellingen in Nederland, 1500–2000, vol. 3, edited by Jacques van Gerwen and Marco H. D. van Leeuwen. Amsterdam and The Hague: NEHA. Van Gerwen, Jacques. 2000b. ‘De welvaartsstaat. Volksverzekeringen, verzekeringsconcerns, financiële dienstverleners en institutionele beleggers, 1945–2000’. In Zoeken naar zekerheid. Risico’s, preventie, verzekeringen en andere zekerheidsregellingen in

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Nederland, 1500–2000, vol. 4, edited by Jacques van Gerwen and Marco H. D. van Leeuwen. Amsterdam and The Hague: NEHA. Van Gerwen, Jacques, and Marco, H. D. van Leeuwen, eds. 1998. Studies over zekerheidsarrangementen. Risico’s, risicobestrijding en verzekering in Nederland vanaf de Middeleeuwen. Amsterdam and The Hague: NEHA. Van Meulder, Griet. 1997. ‘Mutualiteiten en ziekteverzekering in België 1886–1914’. Revue belge d’Histoire Contemporaine 27: 83–134. Van Praet, Carmen. 2015. ‘Liberale homes-orchestres en de sociale kwestie in de negentiende eeuw. Tussen lokaal en internationaal’. PhD diss., Ghent University. Vanthemsche, Guy. 1978. ‘De val van de regering Poullet-Vandervelde. Een “samenzwering der bankiers”?’ Revue belge d’histoire contemporaine 9: 165–214. Vanthemsche, Guy. 1985. ‘De oorsprong van de werkloosheidsverzekering in België. Vakbondskassen en gemeentelijke fondsen (1890–1914)’. Tijdschrift voor Sociale Geschiedenis 11: 130–60. Vanthemsche, Guy. 1989a. ‘De reorganisatie van het Belgisch patronaat. Van Centraal Nijverheidscomité naar Verbond der Belgische Nijverheid (1946)’. In Tussen restauratie en vernieuwing. Aspecten van de naoorlogse Belgische politiek (1944–1950), edited by E. Witte, J. C. Burgelman, and P. Stouthuysen, 109–47. Brussels: VUB Press. Vanthemsche, Guy. 1989b. De werkloosheid in België 1929–1940. Berchem: EPO. Vanthemsche, Guy. 1993. ‘De Belgische arbeidersbeweging tijdens de crisis van de jaren 1930’. In België, een maatschappij in crisis en oorlog, 1940 [Belgique, une société en crise, un pays en guerre, 1940], 203–25. Brussels: NCWO II/CREHSGM. Vanthemsche, Guy. 1994. De beginjaren van de sociale zekerheid in België, 1944–1963. Brussels: VUB Press. Van Zanden, Jan Luiten. 1997. Een klein land in de twintigste eeuw. Economische geschiedenis van Nederland 1914–1995. Utrecht: Het Spectrum. Velge, Henri. 1933. Les lois belges d’assurance et de prévoyance sociales. Brussels: L’Edition universelle. Veraghtert, Karel and Brigitte Widdershoven. 2002. Twee eeuwen solidariteit. De Nederlandse, Belgische en Duitse ziekenfondsen tijdens de negentiende en twintigste eeuw. Amsterdam and Zeist: Aksant/HiZ. Vonk, Robert. 2011. ‘Een taak voor de staat? De Duitse bezetting en de invoering van de verplichte ziekenfondsverzekering in Nederland, 1939–1949’. BMGN–Low Countries Historical Review 127: 3–28. Vonk, Robert. 2013. Recht of schade. Een geschiedenis van particuliere ziektekostenverzekeraars en hun positie in het Nederlandse zorgverzekeringsbestel, 1900–2006. Amsterdam: AUP. Witte, Els Jan Craeybeckx and Alain Meynen. 2005. Politieke geschiedenis van 1830 tot heden. Antwerp: Standaard Uitgeverij. Wolffram, Dirk Jan. 2003. Vrij van wat neerdrukt en beklemt. Staat, gemeenschap, sociale politiek, 1870–1918. Amsterdam: Wereldbibliotheek. Wynants, Paul and Martine Paret. 1998. ‘Ecole et clivages au XIXe et XXe siècles’. In Histoire de l’enseignement en Belgique, edited by Dominique Grootaers, 13–85. Brussels: CRISP.

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13 War and Social Policy Development in Switzerland, 1870–1990 Matthieu Leimgruber

INTRODUCTION At first glance, the Swiss case seems an outlier in a comparative inquiry of the warfare–welfare nexus. Despite its location at the very centre of Western Europe, Switzerland has largely remained, for over 150 years, on the sidelines of all wars that have engulfed the European continent. Following a doctrine of military neutrality, the country has neither participated in armed conflict nor been occupied by belligerents since the Napoleonic Wars (a fate endured by neutral Belgium in World War I and by neutral Norway during World War II). Yet, at the same time, and as a consequence of this neutrality doctrine, Switzerland has harboured, in proportion to the size of its population, one of the world’s largest armies throughout the second half of the twentieth century, right behind Israel. And its militia-based army has played a key role in the shaping of citizenship rights and elite networks. In terms of social policy development, Switzerland also occupies a peculiar position. In contrast to its immediate neighbours (France, Germany, Italy, and Austria), the Swiss welfare system has remained based on an extensive mix of public and private providers (notably in the key domains of health and old-age insurance), with private social spending reaching levels comparable to those attained in countries such as the Netherlands, the UK, or the USA. In short, the Swiss case might be summarily described as sharing military traits with the Swedish case, another prosperous neutral country, while having maintained—in contrast to social-democratic Sweden—a US-style ‘divided welfare state’ (Hacker 2002) with strong private (and market-friendly) social institutions in the heartland of the European social model. It might then be tempting to link this configuration with the fact that Switzerland experienced neither the devastation of war nor the social and political upheavals that impacted its neighbours during the twentieth century. This chapter aims to disentangle this peculiar trajectory and claims that the

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warfare–welfare nexus was in the end crucial for explaining the consolidation of both state and private social policy institutions. The argument developed in this chapter builds on two analytical threads that have contributed to our understanding of Swiss social policy development:¹ on the one hand, studies underscoring the importance of institutional contexts (notably federalism and direct democracy mechanisms) in the protracted emergence of the Swiss welfare state (Obinger et al. 2005), and on the other hand, analyses of the role of business interests as providers of non-state social benefits (Leimgruber 2008). This chapter discusses the relationship between these two narratives and focuses in particular on their respective importance during the century of total war in Western Europe, from the Franco-Prussian War of the early 1870s to the end of the Cold War in 1990. The first section of this paper discusses the interactions between statebuilding, military preparation, and early debates on social insurance in the decades preceding 1900 and leading up to the outbreak of World War I. During this period, interactions between military preparation and social policy remained limited and Switzerland reached 1914 with a relatively underdeveloped welfare state. The next two sections present the evolution of social policy development in the context of the ‘Age of Catastrophe’ of the twentieth century, namely the period of total war that shook the European Continent between 1914 and 1945. These sections underscore the fact that both world wars had an important, although at the same time quite different, impact on the shaping of the Swiss welfare system. During World War I, state intervention remained limited and mostly reactive, with much social policy activity being at first either developed through emergency measures or through favourable tax treatment of corporate social institutions. Repeated improvisation and half-measures magnified demands for action at the war’s end. Yet, two decades later, social policy debates ended up with few concrete outcomes, a situation that consolidated the position of existing non-state solutions. If social policy had been reactive during World War I, it was much more proactive from the onset of World War II. Improvisation was then replaced by decisive policy innovation, with soldiers’ benefits introduced in 1939 serving as a blueprint for the cornerstone of the post-war welfare state, namely federal old-age pensions. At the same time, non-state social policy remained central to the structuring of the post-war welfare system. The fourth and final section of this chapter briefly discusses how the Swiss welfare system during the Cold War period remained largely centred around the social policy framework forged during and immediately after World War II.

¹ For a review of historical research, see Leimgruber 2011 and Studer 2012. The website www. geschichtedersozialensicherheit.ch (also available in English, French, and Italian) offers a century-long overview of Swiss social security development, as well as additional literature and statistical data.

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STATE-BUILDING, THE MILITARY, AND SOCIAL POLICY DEVELOPMEN T, 1870–1 9 1 4 The modern Swiss Confederation was founded in 1848 in the aftermath of a civil war (the Special Alliance War, Sonderbundskrieg), which pitted the partisans of the creation of a renovated federal state, regrouped under the political leadership of the Freisinn (or Radical) movement against the Special Alliance (Sonderbund) of rural Catholic–Conservative cantons. If the rifts that led to the Sonderbundskrieg have an echo in the ‘sectional politics’ that precipitated the US Civil War of the 1860s, the human toll of war on both federations was without comparison. The Sonderbundskrieg was much shorter (it lasted only twenty-one days) and led to only around 200 deaths (yet 3,000 soldiers remained incapacitated after being wounded). Given the overwhelming military superiority of the Freisinn, the dominant political force in the economically strong and industrializing cantons of Switzerland, the Sonderbundskrieg resembled more a police action than a full-blown military campaign. Consequently, while the political impact of the civil war reverberated throughout the nineteenth century (and beyond), it had limited influence on social policy development. For example, the Swiss equivalent of the US civil war veterans’ pensions—a measure used by the Republican Party to extend its patronage networks and reintegrate the Southern Democratic (white) male citizenry into the political fabric of the Union (Skocpol 1992)—remained modest (Osterwalder 1999). At the same time, and although the Freisinn dominated the political system until the introduction of proportional representation in 1919, the introduction of direct democracy mechanisms (1874 for referenda, 1891 for popular initiatives) offered opportunities to anticentralizing Catholic Conservatives to oppose and delay social policy programmes at the federal level. As discussed later in this chapter, by 1900, the emerging alliance between both bourgeois parties against the new Socialist Party also reinforced anti-statist forces that were reluctant about the introduction of social insurance. The Sonderbundskrieg was the last time that war made a direct incursion on Swiss territory. The old tradition of Swiss mercenary regiments (which, as of 2018, only persists in the Vatican City Pontifical Swiss Guard, established 1506) lasted until 1859 in the Kingdom of Naples, and Swiss citizens also served in the French Foreign legion throughout the nineteenth and twentieth centuries.² But since 1848, Swiss military forces have not fought against other standing armies within or beyond their national borders.

² Around 800 Swiss citizens enlisted in the Spanish International Brigades during the Spanish Civil War. A similar number fought alongside the German Waffen SS during World War II.

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Yet Swiss social policy development did not remain fully insulated from military conflict. During the second half of the nineteenth century, the country also had to deal with central issues of the warfare–welfare nexus, such as how to nurture a fit and ready-to-serve citizenry as well as set up a modern and efficient army. This was all the more important as Switzerland’s neighbours remained embroiled in military hostilities (such as the Italian Unification wars, the AustroPrussian War of 1866, and the Franco-Prussian War of 1870–2). Military fitness was a concern, especially as the ‘quality’ (measured in terms of height) of Swiss military recruits c.1880 was more similar to that of southern European countries (Italy and Spain) than that of the more industrialized countries such as Belgium and France. Rapid economic growth, as well as social and educational reform, soon enabled Switzerland to close this gap (Staub et al. 2015). With the introduction of the 1877 Factory Act (Fabrikgesetz), Switzerland was an early mover in the realm of labour protection laws and the establishment of an industrial inspectorate. Moreover, Swiss elites played a role in the transnational movement for better workers’ protection, with the aim of avoiding competitive disadvantage with trade partners (Wecker et al. 2001; Huberman and Meissner 2010). These measures were important for buttressing the efficiency of the emerging industrial workforce of a fastdeveloping, small export-based economy that already, by 1890, enjoyed one of the highest per capita incomes in Western Europe (Halbeisen et al. 2012). Early debates about social insurance were also influenced by the neighbouring German and Austrian examples, two pioneers in this domain (Lengwiler 2007). However, from the 1880s onwards, the growing use of referenda by Catholic Conservative opponents of increased federal state intervention negatively impacted developments in the realm of social insurance (on these institutional patterns, see Obinger 1998; Obinger et al. 2005). Uneasiness among trade unions about state-led schemes that might have competed with union-managed mutual funds and friendly societies also fuelled opposition to social policy development (Trampusch 2010). This configuration of forces led to the defeat of the 1900 Lex Forrer, which would have introduced a fairly comprehensive health and accident insurance system. The second— and weakened—version of the law, passed in 1912, introduced only a federal industrial accident insurance scheme (which began its operations in 1918) and, from 1914 onwards, subsidies to existing sickness plans, which now covered around 10 per cent of the overall population (Immergut 1992; Muheim 2000). This combination of dispersed and incremental introduction of social insurance programmes as well as the strengthening of existing nonstate providers would provide a recurrent pattern for subsequent social policy development. The modernization of the Swiss Army in the wake of the Franco-Prussian War also suffered from the same institutional roadblocks. From the late 1870s onwards, decisive military preparation measures included the introduction of a

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military exemption tax to enforce mandatory conscription.³ the standardization of recruitment tests (a key measure to both enhance the quality of conscription and standardize cantonal education systems), as well as the introduction in 1874 of mandatory gymnastics training for boys over 10 years old in local schools (Hartmann 2011). Moreover, some proponents of labour regulation and protective measures for women and children also explicitly linked such developments to the strengthening of future military capacity (Rutishauser 1935). However, the centralization of the federal army, which was conducted by an army command inspired by the Prussian example, was at first defeated by a conservative referendum in 1895 before being accepted in 1907 (Gruner 1988; Jaun 1999). Despite these constraints, the militia system that made the Swiss Army quite singular among European nations during the twentieth century was already beginning to emerge. The militia system meant that the army structure was deeply embedded in society. For example, officers did not constitute a separate caste. On the contrary, attaining officer rank in the army was an important marker for joining the political and social elite at the national level. By 1914, two thirds of bourgeois parliamentarians (up from around 35 per cent in the 1870s), as well as around two fifths of their socialist colleagues had served as officers in the federal army (Table 13.1). Table 13.1. Army, society, and social security in Switzerland, 1874–2014 Army strength —in 1000 soldiers (a) —as a % of Swiss men over 14 (b) Army officers as a % of members of the Federal Assembly (c) —centre-right parties (average) —Socialist party Expenditure as a % of GDP —national defence (d) —social security (e)

1874 215 26.0

35.0

1914 250 25.7

1939 630 42.4

1962 880 52.3

1995 400 19.3

2014 220 10.4

(1910)

(1937)

(1957)

(2000)

(2010)

59.0 37.5

41.1 7.5

44.4 15.5

41.3 12.1

32.9 1.9

(1913) 1.3 2.0 (1925)

(1938) 2.4 4.1

(1960) 2.2 8.1

1.7 22.4

0.9 27.1

Sources: (a) Senn 2008; for 2014, see DDPS 2014, 3. (b) Swiss Historical Statistics (https://hsso.ch/), tables B13 and B22. For 2014, see Federal Statistical Office, STAT-TAB online database, https://www.bfs.admin.ch/bfs/de/home.html. (c) Elected members of both the National Council (lower house) and the Council of States (upper house). For 1874, see Frei 1966; for 1914–2014, see Pilotti 2017. (d) Swiss Historical Statistics (https://hsso.ch/), table U44 (state expenditures at the federal, cantonal, and local levels by function), Q16a and Q16b (GDP data). (e) Federal Statistical Office (https://www.bfs.admin.ch/bfs/de/home.html), Total Social Security Accounts (TSSA), tables 13.3.1.1 (1925, 1938) and 13.2.1.1.

³ Formally introduced in 1848, conscription was at first patchily enforced because army regiments were still primarily organized by cantons.

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By 1914, social policy development and war preparation were not mutually strengthening elements. The coverage of accident and sickness risks during military service (Militärversicherung) was a notable, though rather marginal, exception. At first envisioned as part of the 1900 Lex Forrer, the Militärversicherung was implemented in June 1901 by an emergency decree of the Federal Council (executive branch) and thus avoided the 1900 roadblock mentioned above (Morgenthaler 1939). In brief, before 1914, social insurance programmes for the general population remained at the drafting stage, but soldiers’ benefits financed through the military budget just scraped through. In early 1913, immediately before the outbreak of World War I, a new Federal Social Insurance Office (Bundesamt für Sozialversicherungen) had begun operations. However, its prerogatives remained at first limited to the surveillance of existing sickness plans and the implementation of accident insurance, a task that was delayed by the outbreak of war in Europe. As a multicultural country sharing languages with three belligerents (Italy, France, and Germany) and deeply economically embedded in Western Europe through trade, manufacturing, and investment, Switzerland would almost certainly have risked its national existence by siding with one of the two alliances pitted against each other. In this context, neutrality was a strategic choice to maintain national integrity and protect Swiss economic and financial interests beyond its frontiers (Jost 2004; Tanner 2015).

SOCIAL POLICY IMPROVIZATION? WORLD W A R I A N D IT S A F T E R M A T H , 1 9 1 4–1 9 3 8 Although Switzerland neither participated in military operations nor suffered foreign occupation or war destruction during World War I, its political system, its economy, and its social fabric endured considerable wartime stress. The unanticipated extent and duration of the war meant that state activity was characterized by unpreparedness and improvisation, a situation that contributed to increased demands for social reform as the war dragged on. As within neighbouring countries, social and political tensions flared up at the end of the war and made any return to normalcy a challenge (Maier 2015 [1975]). New equilibriums had to be secured in an atmosphere of heightened class conflict, and stabilization remained at first elusive for the bourgeois political majority. As we shall see in this section, World War I had a contradictory impact on social policy development: if the war context at first raised the pressure for social policy reform, it contributed at the same time to the emergence and consolidation of non-state forms of social provision. On the social policy front, the emergence of a welfare system was one of the key outcomes of war,

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in which state social insurance came, both in terms of timing and size, second only to non-state alternatives. This pattern would characterize the entire interwar period and last until the outbreak of World War II. On the political level, the combined effect of the emergency powers granted in August 1914 by the Federal Assembly to the Federal Council, and the strong pressure exerted by Entente and Central powers to monitor Swiss trade to their respective enemies through special surveillance institutions, meant a partial surrender of both democratic checks and balances, and national sovereignty. Foreign controls and executive power implied a greater regulation of economic activities, which was generally implemented through increased collaboration between the administration and business interests (Rossfeld and Straumann 2008). As the Confederation faced both a sharp decline in its main revenue base, substantially reliant on trade tariffs, and growing military and general expenses, the war led to the introduction of new income taxes. However, the special war tax levied in 1915 and 1920 as well as a special tax on war profits (1916) were always considered to be temporary measures. They were partly discontinued after the war and did not lead to a genuine consolidation of the fiscal capacity of the Federal State to, for example, finance new social policy programmes (Guex 1993). The ambivalence of this partial fiscal mobilization is best exemplified in the case of the federal tax on war profits. Part of these tax revenues were devoted to a small federal fund to help the unemployed during and after the war, but the law also offered partial tax relief to employers who introduced new welfare measures to help their employees. From 1917 onwards, these tax expenditures spurred the foundation of many occupational pension plans, a key domain of private social provision (Figure 13.1; see also Leimgruber 2008). In contrast, as will be discussed shortly, the setting up of new tax resources to finance state social insurance programmes remained mired in post-war political controversies, which greatly hampered their development. During the war, Swiss society experienced ‘rampant social disintegration’ (Rossfeld and Straumann 2008). As hostilities dragged on, long periods of mobilization destabilized family incomes while mounting inflation eroded wage revenues. The pay and allowances available to soldiers who were mobilized at the borders remained insufficient to provide a stable source of income to most families. In the absence of federal capacity in this domain, social assistance remained delegated to local authorities and to private charitable organizations such as the Schweizer Verband Soldatenwohl (Swiss Association for Soldiers’ Welfare, SVS), which provided canteens and assistance for mobilized soldiers and their families. With the full support of military and political authorities, the SVS operated as a quasi-state institution, a classical example of subsidiarity principles and delegation of competences to civil society organizations (Tanner 1999). The creation in 1917 of the charitable foundation Pro Senectute, which distributed some much needed old-age relief

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900 800 700 600 500 T5

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new ‘welfare institutions’ (wohlfahrtseinrichtungen) in the private sector tax expenditure for pension plans overhead numbers = pension coverage in per cent of the private workforce

Figure 13.1. Tax expenditure and corporate ‘welfare institutions’ in Switzerland, 1913–55 Source: Leimgruber (2008). Tax laws incorporating tax expenditures for ‘welfare institutions’: (T1–T2) special war tax (1915, 1919) and tax on war profits (1916, 1921); (T3) emergency crisis tax (1934); (T4–T5) tax on war profits (1940–1) and sacrifice for national defence (1940–1).

in the absence of state pensions, constituted another example of voluntary assistance with government support.⁴ Combined with the selective expansion of welfare measures at corporate level, the wartime surge in social voluntarism among bourgeois circles was an attempt to mitigate escalating social conflict and, as already mentioned in the case of occupational pension plans, benefited from favourable tax incentives (Ruoss 2015). Yet voluntarism could not keep up with increasing wartime social emergencies. If farmers benefited from the rising prices of food products, supply shortages hit the wage-earning urban population, which fed growing social and political discontent (Auderset and Moser 2012; Krämer et al. 2016). Political and social unrest culminated in the November 1918 National Strike (Landesstreik). The strike organizers, known as the Olten Committee, composed of the Socialist Party and the Trade Union Federation (Gewerkschaftsbund), ⁴ These two World War I initiatives remain in existence. The Soldatenwohl, renamed as the Swiss Association for People’s Service (Schweizer Verband Volksdienst), extended its activities by setting up workers’ canteens in industrial firms and then became a catering firm (http:// www.sv-group.ch/de). Pro Senectute still provides counselling services to retired persons (https://www.prosenectute.ch).

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demanded new proportional elections in the Federal Assembly, women suffrage, right to work measures, the introduction of the eight-hour day, the democratization of the army, measures to ensure access to food products and strict regulation of foreign trade, the payment of war debts by wealthy citizens, as well as the introduction of old-age pensions. With over a quarter million workers laying down their tools, the Landesstreik represented an unprecedented climax of working-class mobilization, never to be repeated in the century that followed. The Federal Council mobilized over 90,000 troops to maintain order and after three tense days the Olten Committee called off the strike (Gautschi 1988 [1968]; Koller 2015). Whereas isolated clashes with the army led to three deaths among striking workers, mobilized soldiers had already paid a heavier toll. Faced with deficient housing and sanitary conditions, the troop concentrations hastily deployed to quell labour unrest had been particularly hard hit by the influenza epidemic that reached its peak in the summer and autumn of 1918. The epidemic killed 24,449 people, or 0.62 per cent of the population; of these, 3,000 were mobilized soldiers. It remains the most severe demographic catastrophe in modern Swiss history (Kury 2015; Sonderegger and Tscherrig 2016). In the aftermath of the Landesstreik, social policy ranked high on the political agenda, but genuine progress remained elusive. If female suffrage would linger in political limbo for another half century, the immediate introduction of proportional representation led to a major political realignment. As a result of the 1919 federal elections, the ruling Radical Party (Freisinn) lost ground, while the Socialists obtained around 25 per cent of the vote and thus became the second party in the National Council (lower house of the Federal Assembly). However, new formations representing conservative middle-class constituencies and farmers (Bauern-, Gewerbe- und Bürgerpartei, or BGB, the ancestor of today’s populist Swiss People’s Party) also profited from the demise of the Freisinn. Thus, the left was not in a strong position to push for new social measures without arduous negotiations, a factor that reinforced the obstacles facing social insurance. In tune with international trends, Switzerland introduced the eighthour day in 1919, although industrial firms successfully lobbied to obtain exemptions during the 1921–2 economic crisis (Degen 1991). A proposed reform of the Labour Law, an ‘offspring of the Landesstreik’ (Schmid 1983), also proved controversial. Supported by some major employers’ federations, the proposal was vehemently opposed by others. If it had passed, the reform would have profoundly transformed labour market regulations by allowing federal authorities to intervene in wage negotiations as well as to declare mandatory collective agreements between employers’ organizations and trade unions. However, the proposal was defeated by a hairbreadth in a referendum vote in March 1920. This post-war vote was a critical juncture as it enabled the continuation and consolidation of liberal labour market regulation in Switzerland during the remainder of the twentieth century.

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As previously mentioned, the implementation of accident insurance had been delayed by the beginning of the war; it was only in 1918 that the Swiss Accident Insurance Institute (Schweizerisches Unfallversicherungsanstalt, SUVA) a tripartite insurance institution, began its operations, covering at first only a minority of workers in the most dangerous occupations (Lengwiler 2006). From 1914 onwards, existing sickness plans also received federal subsidies, but the spread of coverage was delegated to communal and cantonal authorities; by 1930, 30 per cent of the Swiss population was thus affiliated to a sickness plan, up from 10 per cent in 1914. During World War I, several cities had introduced mandatory sickness coverage. By the late 1920s, six cantons had followed suit (Lengwiler 2009). This pattern of incremental affiliation relying on state subsidies would remain unchanged throughout the interwar period and well beyond World War II. The post-war trajectory of unemployment benefits also followed a pattern of moderate state involvement. From 1919 onwards, the Confederation had developed and coordinated relief measures for the unemployed. The issue of unemployment flared up in the context of the severe economic crisis of 1921–2. Coverage was then mostly ensured through trade unions, which jealously defended their unemployment plans as a way of attracting and retaining members. On the other side of the political spectrum, employers and bourgeois politicians supported the extension of subsidies to joint employer–worker and local (communal or cantonal) unemployment schemes in order to compete with trade union schemes. This Swiss version of the Ghent System was at the heart of the federal unemployment law enacted in 1924 and was to experience no substantial change until the crisis of the 1970s (Tabin and Togni 2013). The obstacle-ridden path of old-age and disability insurance underscored the ambivalence of a period that witnessed both a post-war reformist drive, inaugurated by the simultaneous introduction of proportional representation and the eight-hour day, as well as a conservative political backlash. As a conciliatory gesture towards the Landesstreik, the Federal Council published a first draft law on old-age and disability benefits in 1919 (AHIV, Alters-, Hinterlassenen und Invalidenversicherung, soon reduced to AHV), but the proposal was quickly downsized when bourgeois political forces regrouped and enforced a conservative re-stabilization of the political system. As Swiss citizens and soldiers had not been exposed to war destruction, the issue of disability could be more easily sidelined than in neighbouring countries that had to deal with scores of war wounded and invalids. The idea of a simultaneous introduction of benefits for old age and disability was thus turned down, and disability coverage remained the prerogative of scattered charity measures (Fracheboud 2015). In the domain of old-age provision, conservative bourgeois fractions at first resisted the introduction of new financing sources for social insurance, contributing to the rejection of both a socialist popular initiative for a special wealth tax (in 1922) and another initiative proposing

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the use of the proceeds of the taxation of war profits to finance old-age pensions (in 1924). By 1925, the only progress in this field had been the adoption of a constitutional article opening the way for the introduction of old-age pensions, as well as the promise that revenues from alcohol and tobacco taxes could be used to partly finance any future scheme. The first AHV law proposal was ready in 1929, but was challenged by referendum. Despite the fact that the law had been steered by Edmund Schulthess, a Freisinn Federal Councillor, bourgeois support crumbled in face of the deteriorating economic situation. The AHV finally floundered after a referendum campaign in 1931, in the wake of the Depression (Leimgruber 2008). Echoing the manner in which sickness plans had been buttressed by the 1900 defeat of social insurance, occupational pension plans had become a force to be reckoned with. The largest among them, joined by life insurance companies offering group plans to employers, gathered in 1924 to set up their own lobby group and monitor any state-led old-age insurance project (Leimgruber 2008). Old-age provision remained the preserve of occupational pension plans, which covered about 18 per cent of the workforce in 1930 (up from 11 per cent in 1920 and 5 per cent in 1910). Because of the stalling of the AHV project, private welfare schemes had ample room to manoeuvre and time to consolidate their positions. They also benefited from a stable currency and the absence of post-war runaway inflation, which destabilized early funded pension schemes in neighbouring countries. To sum up, the turbulent aftermath of World War I represented a fragile window of opportunity for social policy development, but did not fundamentally disturb the decentralized and non-state forms of social protection that had emerged before, during, and after World War I. This outcome was no doubt facilitated by the fact that, despite the introduction of proportional representation, left-wing reform demands were held back by the ‘bourgeois bloc’ composed of the Radical, Catholic–Conservative, and BGB parties. The traditional choke points allowed by direct democracy—and especially conservative referenda against new social programmes—also contributed to the unravelling of post-war social initiatives. New schemes, such as industrial accident insurance (SUVA), were leftovers from previous decades, while sickness and unemployment insurance remained firmly based on delegation of competence to non-state actors. And as old-age insurance (AHV) failed at the federal level, non-state providers further consolidated their positions. By the late 1920s, reforms envisioned in 1918 had either failed or been turned down. The upcoming economic crisis did not alter this trend. On the contrary, after the 1931 failure of the AHV, social policy development stalled for good. Even if unemployment hit record highs in certain regions, the existing system of subsidized unemployment funds held the line. Fighting budget deficits and preserving low taxation levels, a key advantage for maintaining the attractiveness of Swiss banking for offshore financial flows, remained a priority during the Depression years (Müller 2010; Farquet 2016).

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As the international political situation deteriorated at the end of the 1930s and Switzerland found itself sandwiched between Fascist Italy and Nazi Germany, moderate Socialists began to press for the abandonment of their party’s hostility to the army and national defence spending, a legacy of the Landesstreik. In parallel, the Metalworkers’ and Watchmakers’ Union (Schweizerischer Metall- und Uhrenarbeiter Verband) and the Federation of Machine Manufacturers and Metal Producers (Arbeitgeberverband schweizerischer Maschinen- und Metall-Industrieller) signed a two-year Peace Agreement (Friedensabkommen) in 1937 that curtailed both strikes and lockouts and bolstered social partnership in key export branches. This political moderation of the left, in parallel to the outlawing of the small Communist Party (first in several cantons in 1938, than nationwide in 1940), prepared the ground for the increased cooperation between political parties from the 1940s onwards (Degen 2012). Despite these developments, much remained to be done on the social policy front. For example, even if the militia army was now embedded in the social fabric, attempts to solve the long-lasting issue of properly compensating soldiers during regular militia duties remained buried in the sand because of concern about costs and disagreement among industrial branches (Eichenberger 2015). By the end of the decade, the social policy backlog was significant. A new phase of dynamic development was about to unfold.

SOCIAL POLICY BREAKTHROUGH DURING THE ‘ WAR D ECA DE ’, 1 93 8 – 4 8 After decades of false starts and policy stalemate, World War II opened a new chapter in Swiss social policy development. In stark contrast to the shortcomings and improvisation that had characterized World War I, policy innovation was evident from the very outset, as political elites entered the war with the firm intention not to repeat past errors. At the same time, the war also entrenched structures that had emerged at the beginning of the interwar period, such as tax expenditure for private welfare solutions and the delegation of social coverage to non-state actors and institutions. But in the end, the cursor of social policy development definitely moved forward, and these developments did not occur in isolation. Social reforms enacted during and immediately after the war echoed international advances in the domain of social security. As we will see in this section, the ‘war decade’ (Jost 1998) or the period commencing in 1938, when the Federal Council implemented plans to establish the apparatus of a war economy, and ending in 1948, when Switzerland joined the Marshall Plan and participated in the new equilibrium of post-war Western Europe, represented a significant juncture in the century-long trajectory of the Swiss welfare state (Table 13.2).

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Table 13.2. Overview of social policy development in Switzerland, 1918–60 The ´war decade´ 1918–38 SUVA (accident Consolidation insurance) of the 1918 institution

1938–44

1944–8

1948–60

Institutional continuity. Wartime mobilization disrupts accident prevention; increased number of work accidents

Institutional continuity

Unemployment Economic insurance crisis puts the subsidies system under strain

Financial adjustment (helped by full employment and military mobilization)

Institutional continuity

EO (soldiers’ benefits)

Failed introduction

Major social EO structures are policy innovation used to jumpstart the AHV.

New Cold War EO (1955) restates military social citizenship

Family allowances

Very modest development

Family allowances Family support supplement EO enters the federal benefits. constitution (1945) but no First nationwide implementation family allowances (until 2006). in the machine Failed introduction industry (1941). of maternity benefits (until First cantonal law 2004) on mandatory allowances (1943)

Family support remains decentralized (1952 federal law covers only alpine farmers).

Social insurance breakthrough but also consolidation of occupational solutions

Continuation of the Ghent System: no mandatory affiliation

(until 1984)

(until 1977)

Expansion through employer and cantonal schemes

AHV (old-age and survivors’ insurance)

Failed introduction (1931)

Ambivalent period: new plans, but also rejection of cantonal solutions

Occupational pensions

Decentralized expansion

Consolidation of occupational provision: expansion through tax expenditures and corporate welfare

Health insurance

Decentralized expansion of sickness plans

Missed opportunities: EO and AHV have precedence over sickness insurance

Defeat of the 1949 Decentralized law on tuberculosis expansion through prevention as a private providers negative signal against health insurance

Disability insurance

Voluntary and charity-based solutions

No development

No war invalids; no Belated public support breakthrough of disability insurance

Source: compiled by the author.

Foundation of the AHV as cornerstone of post-war social policy (1947)

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Throughout this section, we must bear in mind that Switzerland occupied a very privileged situation in war-torn Europe. First, the country remained neutral and suffered neither military occupation nor war destruction, as during World War I. Second, standards of living remained high, inflation was kept in check, and the Swiss franc remained the only fully convertible currency besides the US dollar. Last but not least, the political system remained exceptionally stable, with elections bringing no fundamental change in the balance of power between parties: from the 1930s onwards the Socialist Party never garnered more than 25 per cent of seats in the Federal Assembly and faced a strong ‘bourgeois block’ composed of the three centre-right parties (Freisinn, Catholics, and BGB). In a sense neutral, prosperous, and stable, Switzerland much resembled wartime Sweden, but without its socialdemocratic profile. All in all, economic liberalism and capitalist structures remained in place before, during, and after the war (Tanner 2015). In 1938, in a context of heightened international tensions, the Swiss Government drew up extensive contingency plans in case of a new war at its borders. The apparatus of a war economy was operational at the outbreak of the conflict, but it was much less statist than in many neighbouring countries that had to mobilize for an extensive war effort. Relying extensively on collaboration between the federal administration and business federations, the war effort thus consolidated both the federal state and private actors (Tanner 1986). Political and societal elites had upsetting memories of both the improvisation that had characterized the outset of World War I, as well as the flaring up of social conflict that had culminated in the 1918 Landesstreik. Supply shortages, runaway inflation, and general social disorganization thus had to be avoided at all costs. For these reasons, devising a way to compensate soldiers for lost wages or revenues during their regular militia duties became, by 1939, a most pressing issue on the social agenda. The solution that was found, the establishment in autumn and winter of 1939/40 of a national scheme to make up for income lost during periods of military duties, known as the Erwerbsersatzordnung (EO), represented a key step towards the foundation of universal social insurance (Leimgruber 2009, 2010; Eichenberger 2016). The foundation of the EO was both a bottom drawer project that got fast-tracked at a time of national emergency, as well as a striking symbol of the policy lessons that had been learned the hard way during World War I. Nevertheless, it was also a genuine breakthrough. The EO was organized through branch-wide equalization funds (Ausgleichskassen) set up by employers in the tense summer and fall of 1939. The scheme itself, which started paying benefits in early 1940, was financed by a new payroll levy (4 per cent of wages) to which federal and cantonal contributions were added. This social policy breakthrough was made possible by the political configuration that characterized the outbreak of World War II. Emergency executive powers granted to the Federal Council by the Federal Assembly

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allowed the EO to bypass the direct democracy hurdles that had blocked social policy development during the 1920s. Moreover, the Swiss Employers Federation (Arbeitgeberverband), the peak employer organization, shaped the whole EO architecture. Business interests favoured the equalization funds’ structure in order to avoid either the introduction of a state-led alternative or to have to cooperate with trade unions, which were keen to set up soldiers’ benefits through their own unemployment schemes. The payroll levy to finance the EO, managed through employer organizations, also avoided overburdening the new federal taxes that were introduced early on by the government to cover mobilization costs (see Figure 13.1). Consequently, once EO equalization funds were up and running, they became indispensable (Eichenberger 2016). And as we will later, employers made sure they defended their prerogatives in this domain. The EO equalization funds were partly based on family allowance schemes set up during the interwar period by French and Belgian employers (Pedersen 1993). Knowledge of these schemes had been obtained by Swiss employers’ representatives involved in the activities of the International Organisation of Industrial Employers representing business interests within the International Labour Organization (Eichenberger 2016). However, foreign models and transnational transfers were never prominent in public opinion debates about the EO scheme. On the contrary, its alleged ‘Swissness’ was always reaffirmed. The EO was hugely popular among generations that remembered the uncertainties of World War I and had experienced the Great Depression of the 1930s. By linking mobilization at the borders with income stability for families, the EO firmly anchored the militia army at the pinnacle of national consciousness and thus contributed to mitigating wartime political and social tensions. In the words of the historian Roland Ruffieux (1974), the EO was ‘the military equivalent of the [1937] Labour Peace Agreement’, which was renewed for a five-year period in 1939. At a deeper societal level, the EO also initiated a very masculine form of social citizenship and had a conservative influence on traditional gender roles. Male workers, citizens, and soldiers— and in particular mobilized fathers who received more benefits than single or childless militiamen—were designated as the worthiest recipients of national solidarity. Mobilized men also assumed their military duties knowing that recourse to female replacements remained temporary and their roles as family heads and breadwinners was maintained (Stämpfli 2002; Dejung 2010). As we will see in the concluding section of this chapter, this masculine social citizenship forged at the outset of World War II had a lasting impact on the gender imbalance of the post-war Swiss welfare system. In financial terms, the introduction of the EO led to a trebling of social expenditure in the federal budget, dwarfing expenditure for military health and accident insurance schemes and subsidies to the Pro Senectute foundation

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1953

0 1952

0 1951

2

1950

20

1949

4

1948

40

1947

6

1946

60

1945

8

1944

80

1943

10

1942

100

1941

12

1940

120

1939

14

Percentage of total federal expenditures

379

140

1938

Millions of Swiss francs (1953 prices)

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Social expenditures as a percentage of total federal expenditures Old age provision: 1938–1946 assistance measures; 1946 transitory AHV benefits and AHV pensions (in 1953 Swiss francs) EO income loss compensation benefits (in 1953 Swiss francs) Military, health, and accident insurance benefits (in 1953 Swiss francs)

Figure 13.2. Social expenditure of the Swiss Confederation, 1938–53 Sources: Tanner (1986); Swiss Historical Statistics (https://hsso.ch/), table U8b. 9 8 7

Percentage of GDP

6 unemployment insurance

5

AHV soldiers’ income support (EO)

4 3

occupational pensions

2 1

disability insurance (IV)

sickness insurance

military, health, and sickness benefits

industrial accident insurance (SUVA) 0 1930

1932

1934

1936

1938

1940

1942

1944

1946

1948

1950

1952

1954

1956

1958

1960

Figure 13.3. Social insurance expenditure, 1930–60, as a percentage of GDP Source: Leimgruber and Lengwiler (2009).

(Figure 13.2). By 1944, the EO represented around two fifths of social expenditure (Figure 13.3). The EO was also a product of the particularly close collaboration between state and private actors. Indeed, compensation for wages lost during military service was frequent among both belligerent and neutral countries during World War II (Sakmann 1941; Björck 1943). But it is

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only in Switzerland that business interests played such a prominent role in the shaping and management of these schemes. Employers’ oversight of EO equalization funds underscored the structural strength of organized business interests in policymaking. It was also rooted in the fact that EO funds had key functions that went well beyond the channelling of social benefits. In the tense year that followed the outbreak of war, EO equalization funds ensured the orderly ebb and flow of manpower between militia duties and the labour market. As EO benefits were often coupled (in particular in large industrial firms) with occupational pensions, cost of living, as well as family allowances, they had a pacifying impact on industrial relations. Echoing its contribution to forging a democratic version of the ‘people’s community’ (Volksgemeinschaft), the EO thus contributed to forging a less confrontational ‘corporate community’ (Betriebsgemeinschaft). Employer control over EO equalization funds also shielded the private sector from state or trade union interference in wage matters: information about payroll flows was kept strictly within business ranks. Similarly important was the fact that EO funds reinforced the cohesiveness and strength of employer organizations (Attinger 1946; Eichenberger 2016). In the same way that trade unions used unemployment funds to secure the loyalty of their members, employer organizations strictly enforced the rule of mandatory affiliation to a branch-wide EO equalization fund. Joining such a fund was often followed by the adhesion of individual firms to a branch-wide organization. This dual affiliation bolstered employer organizations as well as their internal discipline and finally their policy capacity towards the state and trade unions. The foundation of the EO underscored the immediate impact of the war context on social policy development. It also had lasting impacts, first in the domain of family policy and then, most prominently, in the field of old-age provision. In parallel to EO equalization funds, employers’ associations created their own funds (the first was created in 1941 in the machine industry) in order to distribute supplementary family allowances to their workforce. From 1943 onwards, several cantons followed suit and passed legislation that either regulated the provision of family allowances, while leaving ample autonomy to existing schemes, or created additional family allowances funds. By 1945, several hundred occupational and cantonal schemes were in operation, and these stakeholders resisted all attempts to centralize or homogenize allowances at the national level (Eichenberger 2016). Indeed, with the exception of a federal law regulating family allowances for alpine farmers (in 1952), it was only in 2006 that the Confederation passed a law that introduced national standards for cantonal family allowances. In short, the Swiss family allowances system of the twenty-first century was forged in World War II as a by-product of the EO. But given the peripheral importance of family support policy in the Swiss welfare state, the EO impact was much more important in the domain of old-age provision.

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Indeed, the system of EO payroll levies and equalization funds were seamlessly transferred to the federal old-age and survivor’s insurance scheme (Alters- und Hinterlassenenversicherung, AHV), the cornerstone of the postwar welfare state. The promise of old-age pensions, the elaboration of which took place between January 1944 (when the Federal Council announced publicly that the AHV would constitute a key item on the post-war agenda) and January 1948 (when the first benefits were sent to their recipients), was a key component of the post-war social and political settlement. During this period, which witnessed a new surge of labour militancy on the domestic front, as well as tense diplomatic negotiations with the Allies to settle Swiss economic and financial contacts with the Axis, the transposition of social solidarity from the EO towards the AHV helped to maintain political and social peace (Jost 1998). The AHV success depended in no small part on the wartime cross-class political alliance that brought together the Socialist Party (which was allotted one seat on the Federal Council by the bourgeois parliamentary majority in December 1943) and the centrist wing of the Freisinn (Ischer 2002). But it would be erroneous to consider the introduction of the AHV as a sign of a wartime left-turn in Swiss politics. Significantly, the ‘father of the AHV’, Federal Councillor Walter Stampfli, was a prominent member of the business wing of the Freisinn. After acting as a negotiator during the 1918 Landesstreik for a local Chamber of Commerce, Stampfli had climbed the corporate ladder at the Von Roll foundry, where his mentor, industrialist Ernst Dübi, was the signatory of the 1937 Labour Peace Agreement. By the time of his election to the Federal Council in July 1940 he was already a seasoned member of the National Council (lower house of the Federal Assembly) and had occupied numerous political positions at the local and cantonal level. Stampfli’s business credentials were decisive in his election. On the social policy front, he was determined to avoid the AHV hindering the development of occupational pensions’ schemes that were expanding by leaps and bounds alongside the EO (see Figure 13.1). As an industry representative, Stampfli had occupied a seat on the board of the main lobby group for private pension plans during the 1930s. His firm handling of the AHV law reassured the business community and moderated their potential opposition towards social insurance (Leimgruber 2008). As the Federal Councillor famously declared in front of the Federal Assembly, the AHV would be ‘no monster like the Beveridge Plan’, but a carefully delineated, business-friendly system of old-age benefits (Hafner 1986). This broadside against the Beveridge Plan signalled that foreign experiences were discussed in Switzerland. Indeed, exiled intellectuals played an important role in the diffusion of the Beveridge Report itself by publishing it in Switzerland in French and German translations of Social Insurance and Allied Services in 1943. Yet, most Swiss commentators criticized the incompatibility of the

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Figure 13.4. The 1947 referendum against old-age and survivors’ insurance (AHV) Note: During the 1947 referendum campaign that preceded the introduction of old-age pensions (AHV), freemarket and conservative groups opposed to social insurance transformed the celebrated promise of the British Beveridge Report to cover social risks from ‘cradle to grave’ into an ominous critique of state intervention. The drawing on the left depicts an unfortunate Alpine herdsman stumbling from ‘cradle to stretcher’, beaten up by a gauntlet of menacing puppets representing various bureaucratic evils (left side, bottom to top: ‘recourses’, ‘tax snooping’, and ‘administrative instances’; right side, bottom to top: ‘formalities syndrome’, ‘counter quibbling’, and ‘fines’). The drawing on the right depicts social insurance as an octopus choking a soldier in its bureaucratic tentacles. Source: Aktion für eine AHV freier Eidgenossen, Zur Abstimmung vom 6. Juli 1947. Was jeder Bürger von der AHV auch wissen muss, s.d., c.June 1947, Archiv für Zeitgeschichte (Zürich), Historisches Archiv Redressement National/Aktion Nationaler Wiederaufbau, file 5.3.5, AHV Abstimmungskampf (1947).

British blueprint with the federal structure of the country. Only marginal political forces, such as the centrist League of Independents (Landesring der Unabhängigen), advocated a Swiss version of a social security plan (Monachon 2002). Opponents of social insurance were more outspoken and depicted the British ‘cradle to grave’ approach as a statist nightmare incompatible with Swiss freedom (Figure 13.4). But if we leave political rhetoric aside, the fabric of Swiss social policy programmes was clearly embedded in transnational expertise networks. In addition to the French and Belgian inspiration for the EO scheme, the planned pay-as-you-earn financing system for the AHV, based on EO payroll levies, was elaborated by Ernst Kaiser, a Swiss actuary who had learned state-of-the-art social insurance mathematics at the International Labour Organization in Geneva (Leimgruber 2008).

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In contrast to the EO scheme, which had been rushed through by business and political elites with very restricted input from either parliamentary debates or direct democracy, the AHV project had to clear both these traditional political stages. However, in comparison to the bitter controversies that had led to the defeat of old-age pensions in 1931, and thanks in particular to the dynamic created by the EO breakthrough, the stakes were now clearly tilted in favour of social insurance. The EO scheme itself was drawn on as an argument by both the pro- and anti-AHV camps. Whereas opponents of federal pensions depicted the project as detrimental to national defence (Figure 13.4) and criticized in particular the fact that EO reserves would be used to jumpstart the AHV, their proponents underscored the necessity of extending the solidarity offered to mobilized soldiers (who had stood on national borders) to older wageworkers who had contributed to build Swiss prosperity. Underscoring this cross-class alliance for the AHV, a propaganda film sponsored by the Trade Unions Federation, entitled Let us begin bravely! (Lasst uns tapfer beginnen!), was shown in more than half of the movie theatres of the country in the spring of 1947 (Leimgruber 2013). In an opening scene, depicting the mobilized men who had stood at the borders, the film extolled the EO equalization funds as ‘one of the greatest social institutions of our [national] history’. The film ended with a sequence showing crowds cheering the hugely popular Commander-in-Chief of the army, General Henri Guisan, a conservative man with little sympathy for the left. Guisan’s own voice could be heard, his closing comment resounding like a summons not to take arms but to march to the voting booth: Switzerland was born from a yearning for collective security and from the necessity of mutual assistance. We must now maintain this spirit of solidarity which links together all the citizens of a free country, be they tall or small, be they young or old. And acting like this is nothing less than thinking Swiss, which means not to forget the worries of others. Acting Swiss, in other words, to practice mutual assistance. Living Swiss, which means to live for our grand Swiss community.

Opposed by a referendum led by diehard conservatives, the AHV law was accepted in July 1947 by an overwhelming margin of 80 per cent of voters. This plebiscite was a strong symbol of the people’s community forged during the war and struck the popular imagination. As a 1980 poll underscored decades after the war, the 1947 AHV was still considered as the ‘event of the century’ among all age groups, and even among persons born after 1945 ([RCS] 1980). To sum up, World War II undoubtedly produced major innovations on the social policy front, notably in the form of the EO–AHV pair, which both opened and closed the 1938–48 ‘war decade’. However, and despite their novelty and scope, neither programme represented a clear-cut shift towards state social protection. As I have underscored above, EO (and then AHV) equalization funds remained in the hands of employer organizations. Moreover, the AHV

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did not compete against existing occupational pension plans. On the contrary, federal pensions served as a stepping stone for supplementary occupational benefits. One should also keep in mind that, in spite of the AHV plebiscite, new social insurance programmes or reforms of existing schemes still faced considerable hurdles in the immediate post-war era. Outside of the EO– AHV express road, many reform projects lingered on slow lanes or remained sidetracked. This situation could partially be explained by the specific context in which Switzerland found itself. In contrast to its neighbours, which had suffered war destruction and had to deal with the chaotic aftermath of the conflict, notably in terms of refugees or displaced persons, Switzerland did not face an emergency situation. And unlike countries such as the UK, it did not experience major upheavals around 1945, with new political majorities pushing for major socio-economic reforms. Even in comparison with the USA, which exited the war as a prosperous hegemon, Switzerland did not have to deal with the issue of reintegrating huge numbers of army veterans into the labour market. Indeed, the EO–AHV story arc does not cover the whole picture of wartime social policy development (see Table 13.2). In the domain of industrial accident insurance (SUVA) and unemployment benefits, little changed during or after World War II. The army mobilization and an early spike in occupational accidents, due to longer hours worked during the war, temporarily caused stress for the SUVA system. However, these disturbances were rapidly overcome and the institution exited World War II without undergoing major reforms prior to the 1980s (Lengwiler 2006). In the case of unemployment benefits, the wartime mobilization and drying up of remaining pockets of unemployment actually facilitated the continuity of the Ghent System formalized during the interwar period. Post-war growth also postponed any serious discussion of a revision of the unemployment benefits system, which was maintained in its decentralized and hybrid form until the economic crisis of the 1970s (Tabin and Togni 2013). In the absence of war destruction, war wounded, and maimed veterans and civilians, the health system largely escaped unscathed and, as had been the case during the interwar period, disability insurance was left out of AHV debates (Fracheboud 2015). In 1949, an attempt to reform the tuberculosis prevention law, a small step towards a more interventionist stance in the regulation of existing sickness plans, was stopped short by a referendum organized by medical associations and conservative groups denouncing ‘socialized medicine’ (Lengwiler 2009). This vote had a debilitating impact on reform proposals for health insurance that had been floated during the war. This outcome echoed in a sense the contradictory situation that prevailed in the USA during the same period, when the 1949 Social Security Amendments consolidated old-age pensions, while projects for a national health insurance scheme were battered by conservative opposition (see Chapter 7, this volume).

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T H E S W I S S W E LFARE STATE I N THE COLD WAR CONTEXT, 1950 – 90 By 1950, Swiss social policy development was firmly based on decentralized and hybrid forms of risk coverage, with extensive social policy competence delegated to private providers. With the exception of disability insurance, which would be introduced in 1960, the main structures of the post-war welfare state were in place and change remained incremental until the crisis of the 1970s. This decentralized architecture meant in particular that, with the major exception of the AHV, ‘universalist’ coverage remained limited and existing social insurance and occupational schemes favoured above all male breadwinners employed in leading private firms and in the public sector. By 1955, for example, while over 90 per cent of male public sector workers and 30 per cent of their private sector counterparts were affiliated to occupational pension plans, corresponding figures for women were only 27 per cent and 12 per cent respectively (Leimgruber 2008). Similar gender asymmetries were the rule for unemployment funds (Togni 2015) and even in the functioning of the AHV, where women received pensions through their husbands and not on an individual basis (Luchsinger 1995). During the 1950s, social policy development lagged behind defence spending and the structuration of a very large peacetime army: by 1962 the federal army could theoretically field over 800,000 men or around half of the male adult population. Militia officers were also strongly represented in the Federal Assembly, notably among bourgeois parties (see Table 13.1). Switzerland was a nation at arms during the Cold War, a situation that echoed the Israeli case.⁵ But of course the crucial difference remained that the Confederation faced neither direct military threats nor open warfare. The central place of the militia army in the national imagination was then very much a product of the Cold War, which consolidated in peacetime the ethos of World War II mobilization and armed neutrality. The military build-up was accompanied by a relaunch of the EO as the social facet of national defence efforts. Ensuring the payment of soldiers’ benefits was indeed necessary to enable a smooth functioning of the biennial militia training courses in which Swiss men were compelled to enlist. In 1958, the EO scheme was granted a solid financing base in the form of earmarked payroll contributions. Socialist proposals to finance soldiers’ benefits through the military budget were vetoed by the fiscal conservative bourgeois majority keen on maintaining taxation at a lower level than in neighbouring European countries. This low-tax strategy, a key outcome of post-war fiscal debates, constrained social insurance expansion and

⁵ Cf. Chapter 14 in this volume, Michael Shalev and John Gal, ‘Bullets and Benefits in the Israeli Welfare State’.

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again consolidated the role of non-state providers in the overall social security system (Longchamp 2014). This configuration echoed the situation that had already prevailed during the 1920s and was undoubtedly facilitated by the fact that Switzerland had escaped the Age of Catastrophe unharmed. If the rise of social spending began to accelerate after 1960, the genuine consolidation of the Swiss welfare state only really took place from the 1970s and 1980s onwards. However, even this phase did not fundamentally alter the dense mix of public and private solutions established during the first half of the twentieth century (Moser 2008; Obinger 2010). The economic crisis of the 1970s triggered an urgent reform of unemployment benefits as well as introducing mandatory coverage (1976–82). This major upgrade relied on existing unemployment schemes, many of them managed by trade unions. Workers’ organizations were then co-opted in the management of federal unemployment insurance but at the cost of a lesser autonomy of their plans (Tabin and Togni 2013). In the key domain of old-age provision, the division of tasks between basic state coverage (AHV) and occupational provision was finally anchored through the victory of the ‘three-pillar’ doctrine between 1972 (constitutional principle) and 1985 (enactment of corresponding law). This doctrine introduced mandatory affiliation to existing funded pension plans (the ‘second pillar’), froze payroll contributions and benefits of the pay-as-you-earn AHV (the ‘first pillar’), and finally encouraged individual retirement savings schemes (the ‘third pillar’). All in all, this major reform anchored funded pension plans controlled by employers and life insurers at the core of old-age provision (Leimgruber 2008). Accident insurance was also extended to remaining uncovered workers in 1985, but on condition that the SUVA abandoned its monopoly on basic coverage, thus reopening a market lost to private providers in 1912. In the domain of health coverage, medical and insurance interests blockaded all attempts to introduce health insurance financed by payroll contributions. Instead, in contrast to most other European countries, individual affiliation to existing health plans and a complex system of financing through per capita premiums remained the norm, even after the final introduction of mandatory affiliation in 1996. By the early 2000s, comparative social spending statistics pointed to the convergence of the Swiss welfare state. Yet at around 20–25 per cent of GDP, Swiss spending levels remained inferior to those of other Western European countries such as France, Italy, Germany, and the UK.⁶ As I have underscored in the preceding section, the male citizen-soldier outlook of Swiss social citizenship forged during World War II long permeated social policy structures. But this situation was profoundly transformed by the end of the Cold War, and by the subsequent demobilization of the militia army. After the fall of the Berlin War and German reunification, the Swiss ⁶ For data, see Federal Statistical Office, https://www.bfs.admin.ch/bfs/de/home.html, Total Social Security Accounts (TSSA), table je-f-13.02.02.01.

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army underwent several downsizing rounds. The roll call of the militia dropped precipitously, from around 600,000 in 1990 to below 200,000 by the mid-2010s (see Table 13.1). Not without irony, this sidelining of the militia army had a positive collateral impact on maternity benefits. Despite the fact that a constitutional principle of a national paid maternity leave had been introduced in the federal constitution in 1945, its practical implementation had long been delayed. Blockaded by direct democracy referenda (notably in 1987 and 1999) paid maternity leave remained the preserve of employers’ schemes covering only a minority of women. A federal scheme was finally accepted in 2004. The pragmatic solution found to finance it, namely to extend the EO system to maternity leave, represented quite a startling development. Swiss women had indeed paid payroll contributions since 1940 to finance EO benefits for their husbands, brothers, and sons, but had never (or very rarely, as only a few hundred women volunteered annually to serve in the militia army) received EO benefits. During a successful 2004 political campaign to overcome a conservative referendum against national paid maternity leave, the Swiss Trade Union Federation encouraged voters to offer income compensation not only to men serving in the militia but also to women attempting to reconcile maternity obligations and labour market participation (Figure 13.5).

Figure 13.5. From soldiers’ benefits to maternity insurance, 2004 Source: File, ‘Erwerbersatzordunng’, 61.8 QS, Sozialarchiv, Zürich.

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Forged at the outset of World War II, the male-centred EO had been a major innovation and served as a blueprint for the institutional and financing architecture of the AHV, the post-war keystone of the Swiss welfare system. Six decades later, the renovated EO, at this point a marginal programme in terms of expenditures, was extended to make possible a new, women-centred, social insurance branch. And by 2010, EO expenditures for maternity benefits had already overtaken EO benefits paid to militia soldiers. In other words, a key World War II legacy had ushered in a key post-Cold War social policy development.

REFERENCES Attinger, Karl. 1946. Les caisses de compensation militaires. Le régime des allocations pour perte de salaire institué par l’Arrêté du Conseil Fédéral du 20 décembre 1939 et ses répercussions. Zürich: Sihl. Auderset, Juri and Peter Moser. 2012. ‘Krisenerfahrungen, Lernprozesse und Bewältigungsstrategien. Die Ernährungskrise von 1917/18 als agrarpolitische “Lehrmeisterin” ’. In Krisen. Ursachen, Deutungen und Folgen [Crises: causes, interprétations et conséquences], edited by T. David, J. Mathieu, J. M. Schaufelbuehl, and T. Straumann, 133–49. Zürich: Chronos. Björck, G. 1943. ‘Social Welfare Work for the Soldiers’. In Sweden: A Wartime Survey, 43–9. New York, NY: American–Swedish News Exchange. DDPS [Département fédéral de la défense, de la protection de la population et des sports]. 2014. ‘Recensement de l’armée en 2014’. Version abrégée. Berne: Confédération suisse. Degen, Bernard. 1991. Abschied vom Klassenkampf. Die Partielle Integration der schweizerischen Gewerkschaftsbewegung zwischen Landesstreik und Weltwirtschaftskrise (1918–1929). Basel and Frankfurt a.M.: Helbing & Lichtenhahn. Degen, Bernard. 2012. ‘Arbeit und Kapital’. In Wirtschaftsgeschichte der Schweiz im 20. Jahrhundert, edited by P. Halbeisen, M. Müller, and B. Veyrassat, 873–922. Basel: Schwabe. Dejung, Cristof. 2010. ‘ “Switzerland Must be a Special Democracy”: Sociopolitical Compromise, Military Comradeship, and the Gender Order in 1930s and 1940s Switzerland’. Journal of Modern History 82: 101–26. Eichenberger, Pierre. 2015. ‘Les caisses de compensation en Suisse. Des tentatives corporatistes au centralisme patronal, 1929–1938’. Schweizerisches Jahrbuch für Wirtschafts- und Sozialgeschichte 30: 143–58. Eichenberger, Pierre. 2016. Mainmise sur l’Etat social. Mobilisation patronale et caisses de compensation en Suisse (1908–1960). Neuchâtel: Éditions Alphil. Farquet, Christophe. 2016. La défense du paradis fiscal suisse avant la Seconde Guerre mondiale. Une histoire internationale. Neuchâtel: Éditions Alphil. Fracheboud, Virginie. 2015. L’introduction de l’assurance invalidité en Suisse. Tensions au coeur de l’Etat social, 1944–1960. Lausanne: Antipodes.

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Frei, Karl. 1966. Die schweizerische Bundesversammlung 1848–1920 statistischsoziologische Untersuchung. Winterthur: Ziegler. Gautschi, Willi. 1988 [1968]. Der Landesstreik 1918. Zürich: Chronos. Gruner, Erich. 1988. Arbeiterschaft und Wirtschaft in der Schweiz 1880–1914. Zürich: Chronos. Guex, Sébastien. 1993. La politique monétaire et financière de la Confédération suisse 1900–1920. Lausanne: Payot. Hacker, Jacob S. 2002. The Divided Welfare State: The Battle over Public and Private Social Benefits in the United States. Cambridge: Cambridge University Press. Hafner, Georg. 1986. Bundesrat Walther Stampfli (1884–1965). Leiter der Kriegswirtschaft im Zweiten Weltkrieg, bundesrätlicher Vater der AHV. Olten: Dietschi Verlag. Halbeisen, Patrick, Margrit Müller, and Béatrice Veyrassat. 2012. Wirtschaftsgeschichte der Schweiz im 20. Jahrhundert. Basel: Schwabe. Hartmann, Heinrich. 2011. Der Volkskörper bei der Musterung. Militärstatistik und Demographie in Europa vor dem Ersten Weltkrieg. Göttingen: Wallstein. Huberman, Michael and Christopher M. Meissner. 2010. ‘Riding the Wave of Trade: The Rise of Labor Regulation in the Golden Age of Globalization’. Journal of Economic History 70: 657–85. Immergut, Ellen M. 1992. Health Politics: Interests and Institutions in Western Europe. Cambridge: Cambridge University Press. Ischer, Philipp. 2002. ‘Die AHV-Diskussion in der FDP. Die Genese des Sozialliberalismus und die Bemühung des Freisinns um Orientierung in den 1940er Jahren’. In Von der Barmherzigkeit, edited by H. J. Gilomen, S. Guex, and B. Studer, 331–43. Zürich: Chronos. Jaun, Rudolf. 1999. Preussen vor Augen. Das schweizerische Offizierskorps im militärischen und gesellschaftlichen Wandel des Fin de siècle. Zürich: Chronos. Jost, Hans Ulrich. 1998. Politik und Wirtschaft im Krieg. Die Schweiz 1938–1948. Zürich: Chronos. Jost, Hans Ulrich. 2004. ‘La Suisse, un pays neutre en guerre’. In Le XXe siècle des guerres, edited by P. Causarono and V. Galimi, 150–7. Paris: Editions de l’Atelier. Koller, Christian. 2015. ‘Labour, Labour Movements, Trade Unions and Strikes (Switzerland)’. In 1914–1918 Online: International Encyclopedia of the First World War, edited by U. Daniel, P. Gatrell, O. Janz, H. Jones, J. Keene, A. Kramer, and B. Nasson. Berlin: Freie Universität Berlin: http://www.1914-1918-online.net, accessed 25 April 2017. Krämer, Daniel, Christian Pfister, and Daniel M. Segesser, eds. 2016. ‘Woche für Woche neue Preisaufschläge’. Nahrungsmittel-, Energie- und Ressourcenkonflikte in der Schweiz des Ersten Weltkrieges. Basel: Schwabe. Kury, Patrick. 2015. ‘Influenza Pandemic (Switzerland)’. In 1914–1918 Online: International Encyclopedia of the First World War, edited by U. Daniel, P. Gatrell, O. Janz, H. Jones, J. Keene, A. Kramer, and B. Nasson. Berlin: Freie Universität Berlin: http://www.1914-1918-online.net, accessed 25 April 2017. Leimgruber, Matthieu. 2008. Solidarity without the State? Business and the Shaping of the Swiss Welfare State, 1890–2000. Cambridge: Cambridge University Press. Leimgruber, Matthieu. 2009. ‘Schutz für Soldaten nicht für Mütter. Lohnausfallentschädigung für Dienstleitende und Sozialversicherungen in der Schweiz’. In

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Umbruch an der ‘inneren Front’. Krieg und Sozialpolitik in der Schweiz 1938–1948, edited by M. Leimgruber and M. Lengwiler, 75–100. Zürich: Chronos. Leimgruber, Matthieu. 2010. ‘Protecting Soldiers, not Mothers: Soldiers’ Income Compensation in Switzerland during World War II’. Social Politics 17: 53–79. Leimgruber, Matthieu. 2011. ‘Etat fédéral, Etat social? L’historiographie de la protection sociale en Suisse’. Traverse, n° spécial ‘histoire sociale’ 18: 217–37. Leimgruber, Matthieu. 2013. ‘“Lasst uns tapfer beginnen!” Die AHV als (trans)nationales Ereignis um 1947’. Paper presented at the Schweizerisches Sozialarchiv, Zürich. Leimgruber, Matthieu and Martin Lengwiler, eds. 2009. Umbruch an der ‘inneren Front’. Krieg und Sozialpolitik in der Schweiz 1938–1948. Zürich: Chronos. Lengwiler, Martin. 2006. Risikopolitik im Sozialstaat. Die schweizerische Unfallversicherung (1870–1970). Cologne: Böhlau. Lengwiler, Martin. 2007. ‘Transfer mit Grenzen. Das “Modell Deutschland” in der schweizerischen Sozialstaatsgeschichte 1880–1950’. In Deutsche und Deutschland aus Schweizer Perspektiven, edited by G. Kreis and R. Wecker, 47–66. Basel: Schwabe. Lengwiler, Martin. 2009. ‘Das verpasste Jahrzehnt. Krankenversicherung und Gesundheitspolitik (1938–1949)’. In Umbruch an der ‘inneren Front’. Krieg und Sozialpolitik in der Schweiz 1938–1948, edited by M. Leimgruber and M. Lengwiler, 165–84. Zürich: Chronos. Longchamp, Olivier. 2014. La politique financière fédérale, 1945–1958. Lausanne: Antipodes. Luchsinger, Christine. 1995. Solidarität, Selbständigkeit, Bedürftigkeit. Der schwierige Weg zu einer Gleichberechtigung der Geschlechter in der AHV: 1939–1980. Zürich: Chronos. Maier, Charles S. 2015 [1975]. Recasting Bourgeois Europe: Stabilization in France, Germany and Italy in the Decade after World War I. Princeton, NJ: Princeton University Press. Monachon, Jean-Jacques. 2002. ‘Le Plan Beveridge et les débats sur la sécurité sociale en Suisse entre 1942 et 1945’. In Von der Barmherzigkeit zur Sozialversicherung, edited by H. J. Gilomen, S. Guex, and B. Studer, 312–31. Zürich: Chronos. Morgenthaler, W. 1939. ‘Militärversicherung’. Handbuch der schweizerischen Volkswirtschaft. Berne: Benteli. Moser, Josef. 2008. Der schweizerische Wohlfahrtsstaat. Zum Ausbau des sozialen Sicherungssystems 1975–2005. Frankfurt a.M.: Campus. Muheim, Daniel. 2000. ‘Mutualisme et assurance maladie (1893–1912). Une adaptation ambigue’. Traverse 2: 79–93. Müller, Philipp. 2010. La Suisse en crise (1929–1936). Les politiques monétaire, financière, économique et sociale de la Confédération helvétique. Section d’histoire: Université de Lausanne. Obinger, Herbert. 1998. ‘Federalism, Direct Democracy, and Welfare State Development in Switzerland’. Journal of Public Policy 18: 241–63. Obinger, Herbert. 2010. ‘Switzerland: From Liberal to Conservative Welfare State—a Pattern of Late Maturation?’ In Transformations of the Welfare State: Small Countries, Big Lessons, edited by H. Obinger, P. Starke, J. Moser, C. Bogedan, E. Obinger-Gindulis, and S. Leibfried, 191–244. Oxford: Oxford University Press.

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Obinger, Herbert, Klaus Armingeon, Giuliano Bonoli, and Fabio Bertozzi. 2005. ‘Switzerland: The Marriage of Direct Democracy and Federalism’. In Federalism and the Welfare State: New World and European Experiences, edited by H. Obinger, S. Leibfried, and F. G. Castles, 263–306. New York, NY: Cambridge University Press. Osterwalder, Daniel. 1999. ‘Tote im Bundesarchiv. Die vergessenen Gefallen und Verwundeten des Bürgerkrieges von 1847 in der Schweiz’. Traverse 6: 59–66. Pedersen, Susan. 1993. Family, Dependence, and the Origins of the Welfare State: Britain and France, 1914–1945. Cambridge: Cambridge University Press. Pilotti, Andrea. 2017. Entre démocratisation et professionnalisation. Le Parlement suisse et ses membres de 1910 à 2016. Zürich/Geneva: Seismo. [RCS]. 1980. ‘La création de l’AVS. L’événement du siècle.’ Revue des caisses de compensation 18: 181–3. Rossfeld, Roman and Tobias Straumann, eds. 2008. Der vergessene Wirtschaftskrieg. Schweizer Unternehmen im Ersten Weltkrieg. Zürich: Chronos. Ruffieux, Roland. 1974. La Suisse de l’Entre-Deux-Guerres. Lausanne: Payot. Ruoss, Matthias. 2015. Fürsprecherin des Alters. Geschichte der Stiftung Pro Senectute im entstehenden Schweizer Sozialstaat (1917–1967). Zurich: Chronos. Rutishauser, Hans. 1935. Liberalismus und Sozialpolitik in der Schweiz. Lachen: Gutenberg. Sakmann, Marianne. 1941. ‘Foreign Provisions for the Dependents of Mobilized Men’. Social Security Bulletin 4: 11–28. Schmid, Hanspeter. 1983. Wirtschaft, Staat und Macht. Die Politik der schweizerischen Exportindustrie im Zeichen von Staats- und Wirtschaftskrise (1918–1929). Zürich: Limmat Verlag. Senn, Hans. 2008. ‘Armée’. In Historisches Lexicon der Schweiz [Dictionnaire historique de la Suisse]: http://www.hls-dhs-dss.ch/textes/f/F8683.php, accessed 25 April 2017. Skocpol, Theda. 1992. Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States. Cambridge, MA: Harvard University Press. Sonderegger, Christian and Adrian Tscherrig. 2016. ‘Die Grippepandemie 1918–1919 in der Schweiz’. In ‘Woche für Woche neue Preisaufschläge’. Nahrungsmittel-, Energie- und Ressourcenkonflikte in der Schweiz des Ersten Weltkrieges, edited by D. Krämer, C. Pfister, and D. M. Segesser, 259–84. Basel: Schwabe. Stämpfli, Regula. 2002. ‘Von der Grenzbesetzung zum Aktivdienst. Geschlechterpolitische Lösungsmuster in der schweizerischen Sozialpolitik (1914–1945)’. In Von der Barmherzigkeit zur Sozialversicherung, edited by H. J. Gilomen, S. Guex, and B. Studer, 373–86. Zürich: Chronos. Staub, Kaspar, Joël Floris, Ulrich Woitek, and Frank Rühli. 2015. ‘From Left-Skewness to Symmetry: How Body-Height Distribution among Swiss Conscripts has Changed Shape since the Late 19th Century’. Annals of Human Biology 42: 262–9. Studer, Brigitte. 2012. ‘Ökonomien der sozialen Sicherheit’. In Wirtschaftsgeschichte der Schweiz im 20. Jahrhundert, edited by P. Halbeisen, M. Müller, and B. Veyrassat, 923–76. Basel: Schwabe. Tabin, Jean Pierre and Carola Togni. 2013. L’assurance chômage en Suisse. Une sociohistoire (1924–1982). Lausanne: Antipodes. Tanner, Jakob. 1986. Bundeshaushalt, Währung und Kriegswirtschaft. Eine finanzsoziologische Analyse der Schweiz zwischen 1938 und 1953. Zürich: Limmat Verlag.

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Tanner, Jakob. 1999. Fabrikmahlzeit. Ernährungswissenschaft, Industriearbeit und Volksernährung in der Schweiz. Zürich: Chronos. Tanner, Jakob. 2015. Geschichte der Schweiz im 20. Jahrhundert. Munich: C. H. Beck. Togni, Carola. 2015. Le genre du chômage. Assurance chômage et division sexuée du travail en Suisse. Lausanne: Antipodes. Trampusch, Christine. 2010. ‘The Welfare State and Trade Unions in Switzerland: An Historical Reconstruction of the Shift from a Liberal to a Post-Liberal Welfare Regime’. Journal of European Social Policy 20: 58–73. Wecker, Regina, Brigitte Studer, and Gaby Sutter. 2001. Die ‘schutzbedürftige Frau’. Zur Konstruktion von Geschlecht durch Mutterschaftsversicherung, Nachtarbeitsverbot und Sonderschutzgesetzgebung. Zürich: Chronos.

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14 Bullets and Benefits in the Israeli Welfare State Michael Shalev and John Gal

Classic studies of the relationship between war and welfare—such as Titmuss’s essay on the impact of World War II on British social policy (1958) and Skocpol’s influential study of the widows’ pensions introduced following the US Civil War (1992)—concern the impact on social policy of a protracted war. In this context the United States and the United Kingdom represent two very different paths, which can be defined respectively as targeted compensation and social citizenship. In the USA, the social policy response to the Civil War, and later to World War II (Campbell 2004), followed a targeted model aimed at compensating soldiers and their families for their military contribution and sacrifice. The result was a segmented system of ‘military social welfare benefits’ with its own social insurance and social assistance programmes (Gifford 2006a, 392). In the UK, on the other hand, it has been claimed that the war (which inflicted civilian as well as military casualties) gave added moral and political force to pre-war initiatives aimed at introducing social rights of citizenship via a comprehensive and universal welfare state (Marshall 1950; Titmuss 1958). The ten-month Arab–Israeli war that followed Israel’s unilateral declaration of independence in May 1948 was the first and only time that Israel experienced protracted full-scale warfare. In its aftermath, welfare state development followed the US model rather than the UK one. Policies were invented de novo for compensating war widows, disabled servicemen, and the parents of fallen soldiers (Naor 2010). At the time the state was faced with a massive influx of immigrants and was severely short of funds, and the tasks of populating, defending, and developing the country were considered much higher priorities than social citizenship, for which no prior institutional or discursive foundations had been laid. On the contrary, sovereignty only accentuated the segmented policy paradigm inherited from the pre-state period (Rosenhek 2003), with veterans’ benefits overlaid onto a mosaic of social protection that included

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separate and very different systems for organized workers, recent Jewish immigrants, and the indigenous Arab population. It was not inevitable that the initial creation of a dedicated system for veterans’ benefits would predetermine future policy development. In Canada, for instance, World War II was followed by ‘generalization of military welfare practices’ to civilian sectors (Cowen 2005, 675). In Israel, however, militaryrelated benefits had a crowding-out effect. The generous treatment of those disabled in war and the survivors of those killed in military conflicts made it harder (rather than easier) for non-military disabled and survivors to win the right to similar treatment. Instead of diffusing functionally to other citizens sharing the same plight, the military model of targeted compensation spread sectorally throughout the military and paramilitary sphere. Over time, the new beneficiaries included members of the police force and civilian victims of terror attacks. Within the armed forces, non-combatant soldiers and even soldiers injured in car accidents while on leave came to enjoy access to the same generous compensation for injury or death originally intended for combatants. Both the demand and supply of military-related benefits was continuously refuelled in Israel because, as a nation-in-arms engaged in a permanent and often violent territorial conflict, the relationship between war and social policy became an ongoing one. Israel’s continuing military conflict and the short outbreaks of war that have characterized its history make it distinctive among welfare states. As such, the analysis of the link between war and social politics in this case requires a partly different approach to that adopted in the other case studies included in this volume. Following the historical experience of the past century in Europe and the rest of the developed world, the rest of this book is framed around major episodes of military conflict and their accompanying phases of war preparation, war itself, and the aftermath of war. In Israel, the founding conflict was a bloody one, but its scale and duration were of a far lesser order than those experienced by combatants in the global wars of 1914–18 and 1939–45. At the same time, Israel is unique among developed democracies in experiencing a state of continuous war preparation and violence that few expect to end in the near future. This blurring of war preparation, a mobilization period, and a post-war period during most of Israel’s history make the analysis of the causal links between war and social politics complex. Yet, the direct links between war and social policy, at least with regard to the establishment and growth of a system of social rights linked to war, offer an interesting perspective on the subject of this volume. In view of the distinctive policy regime that developed in Israel, the focus is on documenting the dualistic character of social rights and explaining the institutional and political dynamics that have driven the evolution of militaryrelated benefits. The chapter is structured as follows: The first section sets the scene by providing an overview of key features of both welfare and warfare in

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the Israeli context, and their main implications for military-related benefits. The second section introduces programmes linked to war and the military that have been established since the founding of the state and then analyses their growth over time, describing changes in both costs and conditions. In addition, the generosity of benefits intended to compensate the injury or death of combat soldiers is compared to parallel civilian programmes. The third section discusses two salient dimensions of the politics of military-related benefits in Israel: public opinion regarding benefit deservingness, and descriptions of recent initiatives to either expand or contract benefits. The chapter ends with some brief concluding observations.

S E T TI N G TH E S C E N E : W E L F A R E A N D WA R F A R E I N I S R A E L

The Welfare State A Mediterranean welfare state incorporating elements of all three of the welfare regimes identified by Esping-Andersen (1990), the Israeli welfare state offers a relatively wide-ranging set of services and benefits to the country’s citizens. However, low levels of social spending (placing it near the bottom among Organisation for Economic Co-operation and Development (OECD) countries—see OECD 2017), limited access and generosity in various programmes, and unequal benefits for similar risks, undermine the capacity of social policy to deal effectively with poverty and inequality in Israeli society. Initial efforts to establish social protection institutions in Israel were undertaken immediately after independence in 1948, with the establishment of the foundations of a national social security infrastructure. However, social policy continued to bear the imprint of the pre-state era, when Jewish institutions created a highly uneven welfare mix based on multiple and segmented providers and recipient groups. This configuration, similar in some ways to the conservative welfare regime historically promoted by authoritarian regimes in Continental Europe, was intended to serve the goals of Jewish immigration and settlement under conditions in which the Jews were a minority and lacked sovereign powers (Rosenhek 2003). Roughly two decades after the state was established, following mass immigration and rapid economic development, and in the wake of unrest among the subordinate Jewish ethno-class, the early 1970s saw major expansion of social programmes (Doron and Kramer 1991). These included the introduction of unemployment and disability insurance and the universalization of child benefits. In addition, state-funded childcare and public housing were significantly expanded. In the 1980s, two additional planks of social protection

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were introduced: a nationally administered social assistance scheme and a long-term care benefit programme. In more recent decades, healthcare has become fully universalized, occupational pensions have been mandated, and specific benefit programmes for single parents have been adopted. To a large degree the Beveridge approach, with its emphasis on universal social insurancebased benefits, served as the model for this expansion (Doron 1994). Nevertheless, categorical non-contributory universal benefits have always played a major role in the Israeli welfare state, notably in serving as a means of compensating victims of the Arab–Israeli conflict and of dealing with the needs of Jewish immigrants and their integration into society (Gal 2008). The Israeli welfare state thus combines segmented social provision with a more universal system covering those citizens not included in these categorical programmes. Initially, the Israeli welfare state appeared to be moving towards a more social democratic model as the result of more universal services, greater state involvement in welfare, wider coverage of needs, and the introduction of more wage-related and better-indexed benefits. However, from the 1980s onwards, efforts to privatize social services, to target benefits, to move benefit recipients into work, and to cut social spending have been common (Doron 2001; 2007). These efforts peaked during a period of recession and neo-liberal political dominance in the initial years of the new millennium. At the same time, even before this era of restraint and retrenchment, social spending in Israel was comparatively low and lacking in some crucial social democratic hallmarks (Shalev 1989). Seen as a whole, the Israeli welfare state is a relatively comprehensive system which offers benefits and services that provide the support and resources for dealing with a wide range of needs and contingencies. However, the generosity of the benefits (particularly for the poor), the quality of the services, and access to them, are often limited. As is the case in other Mediterranean welfare states, the family remains a major source of welfare provision in Israel, while clientelism that is linked to continuing segmentation and differentiation between recipient groups still plays a major role in the social welfare system (Gal 2010). The Israeli welfare state has been relatively unsuccessful in overcoming income inequalities created within an ever more polarized labour market, in reducing differential access to social services (exacerbated by rapid privatization and commercialization), and in dealing with poverty. Inequalities and social exclusion are aggravated by specific demographic, ethnic, and political characteristics of Israeli society (Hemmings 2010). These include large families among the Arab and the orthodox Jewish communities, the low level of labour market participation among members of these communities, and the reluctance of many Israeli citizens and elites to channel state support to these two vulnerable populations. As a result, poverty levels in Israel remain high, with nearly a fifth of all families and a third of all children living below the poverty line.

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Guns or Butter? A detailed study comparing Israel with five OECD member countries, based on data for 2007 from the Social Expenditure Database, has shown that, relative to GDP, both overall expenditure (public and private) and welfare state spending in specific functional domains are markedly lower in Israel than in other affluent democracies (Shalev et al. 2012). Could Israel’s modest social spending be the result of its massive military burden? World Bank estimates for twenty-one high-income OECD countries, including Israel, indicate that in recent years (2011–14) Israel devoted 5.7 per cent of its GDP to military spending, compared with only 1.3 per cent in the median country and 4 per cent in the USA, the other exceptional case.¹ Long-term trends in the principal components of public spending in Israel show that while the defence burden has contracted dramatically since the mid-1980s, as have domestic expenditures unconnected to the welfare state, social spending has been remarkably stable.² Except for a bubble in the early 1990s due to the influx of one million immigrants from the former Soviet Union, since 1981 transfer payments have been valued at between 11 and 13 per cent of GDP. Civilian public services, a category dominated by education, health, and other social services, have also accounted for a stable share of GDP, typically around 17 per cent. In contrast, in the years 1981–92, the defence share fell from 20 per cent to 10 per cent and has declined further since then, albeit more gradually. These aggregate trends clearly suggest that the military burden and the cost of the welfare state are governed by quite different institutional and political forces. While several sophisticated quantitative studies have addressed the economic effects of defence spending in Israel (e.g. Mintz and Ward 1989; Cohen et al. 1996), none have probed the question of whether Israel has experienced short- or long-term trade-offs between guns and butter. Another plausible linkage between welfare and warfare is that wars stimulate later social spending, as Titmuss (1958) famously suggested was the case in Britain following World War II. However, an attempt to identify changes in social spending in the wake of major episodes of military conflict found no indications of this effect in Israel (Gal 2007). Bivariate correlations over time offered little evidence for either a positive or negative relationship between annual changes in social and military spending.

¹ World Bank (n.d.). ² Bank of Israel Annual Report 2014: table 6.A.2 general government expenditure. http:// www.boi.org.il/en/NewsAndPublications/RegularPublications/Pages/DochBankIsrael2014.aspx.

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War, Militarism, and Benefits As noted at the outset of this chapter, the nature of war and the role of the military in Israel differ substantially from the recent experience of Western countries. Figure 14.1 demonstrates that, since the first substantial war sparked by the foundation of the State of Israel, the evolution of the IsraeliPalestinian and Israeli-Arab conflict has been marked by a series of conflicts that entailed fewer Israeli casualties and were generally quite brief.³ In the interim, Israel has experienced persistent violence in the form of border conflicts, violence by and against Palestinians in the occupied territories, terrorist actions against Israeli civilians, and small- and large-scale Israeli military activity in the occupied Palestinian territories. The number of Israeli victims of terrorist actions has varied substantially over time. A peak was reached during the Second Palestinian Intifada, when the number of fatalities exceeded 450 in one year (2002), but according to official sources even in relatively quiescent periods the annual number of killed and wounded has rarely been less than 300.⁴ Even in the absence of either low- or high-intensity warfare, in Israel war preparation is a central feature of the routines of individual citizens and society as a whole (Kimmerling 1985). To create the capacity to mobilize a 7,000

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Figure 14.1. Timeline of Israel’s wars showing the official number of military casualties Sources: Lorch (n.d.); Jewish Virtual Library (n.d.).

³ Two exceptions are the ‘War of Attrition’ between Israel and Egypt that persisted for three years at the end of the 1960s, and the First Lebanon War. However, while the latter officially lasted three years (1982–5), most of the fighting occurred in the first two months. ⁴ Data from Jewish Virtual Library (n.d.) and Israel Ministry of Foreign Affairs (n.d.).

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large military force, compulsory universal conscription was instituted for Jewish citizens from the outset, followed by decades of annual reserve duty for many, which added an additional rationale for military-related entitlements. Israel’s military is based on a conscript army alongside a much smaller permanent force made up of career commanders, experts, and support staff (Cohen 2010). Military service is, in principle, compulsory for both men and women, but some segments of society are exempted, including Arab citizens,⁵ married women, ultra-orthodox men engaged in religious studies, and all ultra-orthodox women. After completing two to three years of compulsory service beginning at the age of 18, most male conscripts and some female soldiers become part of a reserve force that typically requires of them roughly one month of service annually until they reach middle age. Against this background, war and war preparation play a central role in both public affairs and the everyday lives of Israelis. The military chain of command and the Ministry of Defence, which is responsible for the military budget, enjoy immense autonomy and access to resources in comparison to civilian authorities. War preparation, security concerns, and the military are focal preoccupations of both politics and everyday life in Israel. Not only does the military sphere pervade the personal and collective lives of Israelis, but they honour and elevate it above other spheres of public life. For example, a 2014 survey found that 88 per cent of Jews in Israel express trust in the Israel Defence Forces (IDF), above the proportion that trust the country’s highly regarded president (71 per cent) and far higher than the figures for the police (45 per cent) or the Knesset (the Israeli parliament, only trusted by 25 per cent).⁶ Given that military values and perspectives are internalized in both individual citizens and social institutions, a sizeable literature has developed on the topic of militarism in Israeli society and politics (recent collections include Lomsky-Feder and Ben-Ari 1999 and Sheffer and Barak 2010). Militarism in Israel has been variously described as ‘cognitive’ (Kimmerling 1993), ‘cultural’ (Ben-Eliezer 1998), and ‘contractual’ (Levy et al. 2007). In our view, all three adjectives are accurate. The military sphere and military considerations enjoy unrivalled prestige and primacy amongst Jewish Israelis. At the same time, and hardly unique to Israel, relationships between citizens and the state are permeated by notions of exchange, including the exchange of military service for material and symbolic benefits (Levy 2013). A republican interpretation of citizen rights and obligations provides the cultural glue that binds bullets and benefits together, elevating the exchange relationship to a higher plane. In the Israeli context, republicanism is closely linked to nationalism. ⁵ Some minority sectors of the Arab population, primarily the Druze (population: 120,000), have historically allied themselves with the Jewish community and participate in military service. ⁶ Hermann et al. (2014), fig. 2.5.

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Zionism, the Israeli state ideology, is the aspiration for a national home for Jews in which they enjoy demographic, territorial, and political dominance. This places the Arab citizens of Israel—one fifth of the total—in a highly anomalous position.⁷ But as a self-styled liberal democracy, Israel cannot legally or morally earmark social entitlements solely for Jews. This dilemma has been resolved by a widely accepted republican discourse, according to which special treatment is justified by the contribution of individuals or whole sectors of society to the common good, as the state defines it (Peled 1992; Shafir and Peled 2002). This discourse originated during the half century of Jewish settlement of Palestine that predated Israeli sovereignty. Thus, after statehood, compensation for military sacrifice joined and reinforced an earlier tradition of glorifying and reserving privileges for national heroes—pioneers, emissaries, and watchmen. The sovereign state of Israel, equipped with unprecedented capacities for redistribution through taxes and transfers, has made use of these capacities to institute an array of ‘loyalty benefits’ that target not only soldiers but also Jewish immigrants, ultraorthodox Jewish men engaged in religious studies, and other categories of citizen (Friedman and Shalev 2010; Shalev 2010). The resulting inequalities of social rights distinguish first and foremost between Arab and Jewish citizens, but also differentiate among Jews. In the military sphere, Arab exclusion from entitlements is total and almost universal, since the vast majority of Palestinian citizens of Israel are exempted from compulsory military service. Among Jewish citizens, inequality is a matter of degree. Benefits are stratified between individuals sharing identical circumstances (such as the physically disabled, widows, and orphans), depending on whether military service was the source of their misfortune. The scope and continuity of military efforts have generated a dynamic of continuous expansion of compensatory benefits that governments have great difficulty in restraining. Deeply embedded republican norms, linked as they are to individual and collective existential anxieties, are reflected in public opinion and legitimate the efforts of organized lobbies of beneficiaries. These political forces exert compelling influence on state actors, both political and bureaucratic. As a result, military-republican entitlements enjoy a high degree of immunity from the application of economistic criteria, such as efficiency or affordability. As we shall see, this has been consequential at three different policymaking moments: pressure to introduce new benefits; benefit expansion over time via new categories of eligibility, softer qualifying rules, and rising generosity; and the resistance of benefits to retrenchment. ⁷ Arab citizens are Palestinians who remained inside the borders established by the armistice that ended the 1948–9 war, and their descendants. They are distinct from Palestinians living in the territories occupied by Israel since the 1967 war. Residents of East Jerusalem constitute a third category: they are governed by Israel and have the legal status of permanent residents.

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WAR-RELATED BENEFITS

Compensatory Benefit Schemes Since gaining statehood, Israel has adopted a number of diverse programmes intended to offer compensation to participants in, or the victims of, military actions.⁸ More specifically, six major compensatory benefit programmes linked to military conflict have been introduced in the Israeli welfare state. Three of these derive directly from warfare: benefits for disabled veterans, for the widows of fallen soldiers, and for the parents of fallen soldiers. The other three programmes are designed as compensation to soldiers performing compulsory and reserve service or civilian victims of terrorism.⁹ Before briefly describing these schemes, we note that other forms of preferential policies intended to compensate for military service and its consequences have also been adopted over time in Israel. A vast array of benefits is offered to bereaved family members (Israel Ministry of Defence n.d.). The Ministry of Defence makes a major effort to integrate disabled veterans into the labour market and into higher education. They have been eligible for preference in receiving civil administration positions and in a number of other specific sectors of the economy. In addition, disabled veterans are eligible for diverse in-kind benefits, such as access to better health and fitness services, housing, and transportation. Military service per se grants veterans points for access to state financial support for housing and education, as well as tax exemptions.¹⁰ As with other benefits linked to military conflict, these have tended to expand and become more generous and accessible in the wake of outbreaks of war and the inevitable increase in the number of victims. The Disabled Veterans programme was introduced shortly after the establishment of Israel in 1948, as the country’s first social welfare law (Gal and Bar 2000). The legislation came in the wake of the bitter War of Independence that led to the deaths and injury of thousands of Israelis. From the outset the law ⁸ This section of the paper is based in part on Gal (2007). ⁹ In addition to these programmes, there are others that offer compensation to Holocaust victims residing in Israel. Of particular relevance to this article is the Victims of the War Against the Nazis Act, which was adopted in 1954 after a struggle by soldiers who fought against the Nazis during World War II and were injured. The legislation provides compensation to the veterans, though, in contrast to the programmes intended for veterans of the Israeli military, this programme is administered by the Ministry of Finance rather than the Ministry of Defence (Yablonka 1997). As the act relates to victims of war injured prior to Israel’s establishment, it is beyond the purview of this chapter. ¹⁰ As noted earlier, as a result of being exempted from military service, Arab citizens are not entitled to its corollary benefits. In some cases, this republican logic has been invoked with the express (though not necessarily publicly stated) purpose of disentitling Arab citizens. For more than two decades, this was true of a substantial portion of the child allowance in Israel (Rosenhek and Shalev 2000). However, attempts since the mid-1990s to reinstitute this arrangement were blocked by political opposition and/or disqualification by the Supreme Court.

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was intended, in the words of the first prime minister, David Ben Gurion, to fulfil ‘part of the debt that we owe those who with their bodies helped liberate the nation and the homeland’ (Knesset minutes, 5 Sept. 1949, 1572).¹¹ To compensate for disabilities incurred as a result of military service, the law granted a basic cash benefit, calculated on the basis of medical disability and a civil service wage. Means-testing mechanisms were not employed in this programme. Nevertheless, special assistance was provided to disabled veterans with no additional sources of income, and in the initial years benefit levels were reduced in accordance with earnings if the veteran returned to work. Disabled veterans are also eligible for a variety of medical and occupational rehabilitation services, business and home loans, and access to personal social services. Under the 1949 legislation, a special department within the Ministry of Defence administers both cash and in-kind benefits. The law also granted official recognition to the representative organization of disabled veterans, and within a short time, this institution became a particularly powerful and wellorganized voice for disabled veterans (Nacht and Kleyff 1955). Programmes for the dependants of fallen soldiers were adopted as part of a single piece of legislation in 1950, the year following the passage of the programme for disabled soldiers. The law offered war widows universal benefits, primarily according to the number and age of their children. The age of the widow, and initially the level of any additional sources of income, also affected the benefit level (Danziger 1978). In addition to widows and orphans, the law also sought to provide benefits for other dependants of fallen soldiers in those cases in which concrete economic need could be proven. Thus, the (primarily elderly) parents of fallen soldiers were eligible for benefits, but these were initially contingent on proven need (through means testing) and on the lack of additional siblings able to offer financial support. The programmes for disabled veterans and for bereaved families served as the basis for the Victims of Hostile Action programme, which was adopted in 1970 (Yanay 1994) and was intended to replace existing programmes that offered assistance to civilian victims of military conflict as integral parts of the local welfare services. The 1970 law provided financial compensation and rehabilitation services to civilian victims of terrorist attacks in Israel proper or against Israeli targets abroad. Individuals injured, or the families of those killed as a result of hostile actions, were granted benefits and services that, on the whole, mirrored those provided to disabled veterans and the families of the fallen. However, unlike these programmes, this law is administered by the civilian National Insurance Institute, Israel’s social security agency. For citizens inducted into the army as conscripts, both initial compulsory service and reserve duty after its completion are compensated by cash benefits. ¹¹ The Knesset Archives are available at https://www.knesset.gov.il/archive/eng/ ArchiveCollections_eng.htm.

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In the former case, this is a relatively recent innovation, consisting of a discharge benefit (dependent on time served and the type of service) granted following the completion of a full term of duty. The programme directed at reservists is designed to deal with absence from work and consequential loss of earnings. Financial compensation for individuals serving in the military reserves was first introduced in 1952 (Nitzan 1975). Funded through employer contributions, it initially provided wage earners with partial compensation for work days lost due to reserve duty.

The Evolution of Cash Benefits The link between war and welfare in Israel is reflected not only in the number of diverse programmes adopted in order to provide financial compensation for war victims and participants in military service, but also in the extent of the resources devoted to them. Together, all six war-related compensatory cash benefit programmes have accounted for a significant (although varying) proportion of total spending on transfer payments in the Israeli welfare state. Figure 14.2 offers quantitative evidence of this role over a period of nearly four decades. While at the beginning of the period these benefits together comprised nearly one quarter of all spending on cash benefits, between the mid-1970s and the mid-1990s this proportion fell dramatically. 25%

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Figure 14.2. Main war-related cash benefits as a proportion of total transfer payments Sources: National Insurance Institute, Statistical Quarterly, various years; Ministry of Defence, Annual Report of the Rehabilitation Division, various years.

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Yet even following this decline, benefits linked to war and military service continued to account for about one tenth of all social security spending in Israel. To put this figure in perspective, in 2007 (the latest year for which we have full data) it was equivalent to the amount spent on universal child benefits (in a country with an exceptionally high fertility rate), and twice the government’s expenditure on Income Support (social assistance). When attention is paid to the individual components of total expenditure, a different picture emerges. The three programmes that compensate injury or death in battle (grouped under the heading ‘Disability/death’ in Figure 14.2) temporarily peaked in the wake of the October 1973 war. Subsequently, the share of this category in total transfers remained stable throughout the 1980s and 1990s, and in the 2000s it rose, a reflection of the robustness of these benefits at a time when many non-military cash benefits were cut. In contrast, the budgetary significance of wage replacement for reservists has declined dramatically over the years, which is the sole reason for the overall decline in the economic significance of war-related benefits. At the beginning of the period, the Israeli–Egyptian ‘War of Attrition’ was in full swing, while non-military cash transfers were stagnant (although poised to enter a period of rapid expansion). As a result of this combination of circumstances, in 1970 benefits for reservists accounted for an astonishing 17.4 per cent of all transfer payments. By the late 2000s this proportion had shrunk to only 1.6 per cent. The key transition was made during the 1990s, the result not of changes in the security situation but of a change in the financing of benefits for reserve soldiers that incentivized savings in this area of military spending. The last noteworthy trend documented in Figure 14.2 is the emergence in the new millennium of an additional type of reward for compulsory service. Conscripts have long been paid a tiny symbolic salary, but in response to the growing magnitude and political salience of ‘draft dodging’, cash grants (as well as in-kind benefits not measured here) have been granted to those who complete their service. By the mid-2000s, this component accounted for nearly 3 per cent of all transfer payments. The most recently available data, from the budget for 2014, indicate that allocations to the Ministry of Defence for ‘commemoration’ (predominantly cash benefits for bereaved parents and widows) and ‘rehabilitation’ (predominantly cash benefits for the militarily disabled) reached 1.6 billion and 3.4 billion shekels respectively, together representing 9 per cent of the Ministry of Defence’s budget. This figure probably understates the true scale of these programmes, especially for the bereaved, since the Ministry of Finance claims that, in recent years, actual expenditure on commemoration has exceeded the budget by as much as one billion shekels.¹² ¹² http://www.themarker.com/news/1.2473565; http://www.themarker.com/news/1.2158503, accessed 25 April 2017.

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Dynamics of Programme Evolution The development of the programmatic characteristics of the various warrelated programmes over time reveals the path-dependent effects of benefits for the disabled.¹³ The large constituency of disabled veterans and their wellmanaged and influential representative organization have typically taken the lead, with beneficiaries of the other programmes following in their footsteps. The direction of change has been overwhelmingly towards more liberal definitions of the categories determining access to the programmes and the rising generosity of benefits and related services. The eruption of large-scale military action has often influenced the timing of major change in programmes. Thus, even if demands for cutbacks in benefit levels or accessibility were tabled prior to the outbreak of wars, the public sympathy galvanized immediately afterwards tended to enable organisations representing war victims to overcome efforts by public officials, fearful of increased public outlay, to limit or defer these demands. In the years since its adoption, the disabled veterans programme has been the subject of numerous amendments. The original law covered only individuals injured during active military duty in Israel’s first war (1948–9). However, coverage gradually grew to include soldiers injured or taken ill in the course of (and not necessarily due to) military service any time after that war, and also those injured in military action by Jewish underground forces during the British mandate prior to statehood. In the wake of the June 1967 war, coverage was further widened to include soldiers injured in car accidents on the way to, and returning from, military service, be they conscripts or reservists. Definitions of disability have been broadened over time to include additional injuries as well as illness. Basic benefit levels have been constantly raised, additional benefits for diverse special needs have been introduced, and as noted earlier, a variety of in-kind services and tax breaks are now offered to disabled veterans. Moreover, while, in the original legislation benefit levels were tapered according to income from work, in 1955 the link between benefit levels and earned income was severed, thereby enabling disabled veterans to integrate into the labour market without suffering any loss of benefits (Gal 2001). Benefits for the wives and parents of fallen soldiers have undergone a similar process, albeit at a delayed pace. While initially benefits were limited primarily to widows with children, and were tapered according to income level, these limitations were removed over time so that monthly benefits are now paid to all war widows, rising with the number of dependant children under the age of 21. Benefit levels have also risen significantly over time. An

¹³ This section of the paper is based in part on Gal (2007).

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outburst of public activism on the part of war widows in the wake of the 1967 war led to the establishment of a representative organization of war widows, to intense public pressure on decision-makers and, consequently, to major increases in benefit levels and accessibility in the years immediately following that war (Shamgar-Handleman 1986). Unlike widows, the parents of fallen soldiers were the subject of primarily symbolic recognition by the state until after the 1973 October War. Cash benefits, instituted in the early 1950s, were reserved for those parents who could prove economic dependency on the fallen soldier and a lack of additional sources of support, primarily from other adult children. During the first three decades following adoption of this law, limitations on access by bereaved families to benefits were liberalized, but it was only in the wake of the October War that these were finally dropped. In contrast to the Arab–Israeli wars of 1956 and 1967, which were carefully planned, militarily successful, and popular, the 1973 conflict took Israel by surprise, was more prolonged, gave rise to many more casualties (see Figure 14.1), and was followed by significant public criticism (Lebel and Leṿin 2015). Legislation introduced in 1976 determined that neither the age and income level of the bereaved parents nor the existence of additional siblings would be taken into account in determining access to benefits. As a result a unique system emerged, under which all bereaved parents were eligible for monthly benefits. Receipt of a universal minimum benefit was justified as covering costs related to commemoration of the victim (travel to and from the grave, participation in memorial ceremonies, and personal commemoration), while higher, means-tested benefits were targeted at low-income bereaved parents. The employment of a means test and the differentiation between parents led to much bitterness among the bereaved parents and their organization. As a result of their growing activism, the means test was later liberalized and benefit levels were also raised significantly (see Laron 2003 and ‘Benefit Generosity’ below). In 2008, the means test was abolished (Israel Ministry of Defence, n.d.). State support for civilian terror victims is formally based upon the programmes for disabled veterans and bereaved families. Consequently, changes in these two laws have also led automatically to improvement in the Victims of Hostile Action programme. Finally, coverage of the programme for compensation of reservists has also gradually been expanded over time and now includes the self-employed, as well as unemployed reservists and even individuals not in the formal workforce, such as students. Compensation levels have increased to 100 per cent of normal earnings, and cover any reserve service in excess of one day per year. These brief descriptions make it clear that, over the years, war-related benefits in Israel have experienced both eligibility creep and benefit creep. The following ‘Benefit Generosity’ section provides indications of benefit creep for two key programmes. Regarding expansion of eligibility, several

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indirect indications are noteworthy. Based on detailed analyses of official statistics on military casualties in recent years, an Israeli blogger claims that only a tiny fraction of those officially recognized as ‘fallen soldiers’ met their deaths in battle. The leading causes of soldiers’ mortality are road accidents, suicides, and (until 2014) disabled veterans who died of natural causes long after sustaining their injuries.¹⁴ Similarly, a public commission of inquiry into benefits for the military disabled (the Goren Committee (2010)), reported that, as of 2009, the Rehabilitation Division of the Ministry of Defence had more than 58,000 active clients with at least 10 per cent disability, of whom only 35 per cent were injured in the course of ‘operational activities’ (including training accidents). The most common causes of disability were illness, car accidents, and work accidents (Goren Committee 2010, 83, 93).

Benefit Generosity Not surprisingly, the most publicly sensitive war-related benefits are those designed to compensate soldiers or their families for injury or death. Since each of the relevant risks—disability, widowhood, and parental bereavement— has a counterpart in civilian life, it is possible to compare the generosity of military and non-military benefits. While it has already been pointed out that the former are more generous than the latter, the gap varies across different risks. It is also of interest to establish the extent to which military benefits have grown over time relative to their civilian counterparts. Differential growth may have caused the gap between military and civilian welfare provisions to widen. To assess these questions, Figure 14.3 presents data on maximum benefit levels for civilian and military recipients at two points in time: the first being the earliest year for which data is available (1970, except in the case of disability for which there is data for 1955) and the second being a more recent year (2004).¹⁵ To ensure comparability, all figures have been calculated relative to the average wage in the relevant year, which is also a convenient standard for assessing the adequacy of benefits. Several findings are evident: First, regardless of either the risk or the period, military beneficiaries receive far more generous compensation than their civilian counterparts. (Comparison is not possible in the case of bereaved parents, since there is no comparable programme for civilians.) Second, over the years both civilian and military benefits have become markedly more ¹⁴ Blog: https://eishton.wordpress.com/heroes_are_born_in_their_death, accessed 25 April 2017. Official commemoration site: http://www.izkor.gov.il, accessed 25 April 2017. ¹⁵ The rates for the disabled are for those having 100 per cent disability; widows’ benefits assume dependant children; and none of the recipient groups are assumed to have other sources of income.

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300%

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Disabled

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Figure 14.3. Comparative generosity of civilian and military benefits relative to average wage Sources: https://eishton.wordpress.com/heroes_are_born_in_their_death; official commemoration site: http://www.izkor.gov.il.

generous, but without any trend towards equalization. Third, the growth of benefits for the militarily disabled is especially noteworthy. In the mid-1950s militarily disabled beneficiaries received exactly the same amount as war widows. By the mid-2000s both groups had experienced substantial improvements, but benefits for the former category grew more than twice as fast as those for the latter. Fourth, the parents of fallen soldiers were always the least compensated category relative to other war-related entitlements, and their benefits grew less rapidly. Finally, it is important to note that with the ending of means testing for both widows and bereaved parents over the course of the period studied here, the maximum benefits shown in the charts have been generalized to all beneficiaries. This has greatly amplified the fiscal impact of rising benefit rates. We turn now to the evolution of each benefit category, beginning with disability. In 1955 an individual fully disabled for non-military reasons was eligible for means-tested social assistance equivalent to a mere 6.7 per cent of the average wage, much less than the 85 per cent provided to disabled veterans with similar needs. A universal disability programme was finally adopted in 1974, and the result was growth in access and benefit levels for the regular disabled. However, while the disabled clearly benefited from welfare state expansion in the 1970s across the board, the gaps have remained between individuals with similar needs that are a consequence of different

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circumstances. While a fully disabled and totally dependent individual in Israel is eligible for a basic cash benefit and allowances for assistance and travel that constitutes 115 per cent of the average wage, a disabled veteran in a similar situation receives benefits equalling well over four times the average wage. Moreover, while disabled veterans suffering medical disabilities of 20 per cent and over are eligible for monthly benefits, a threshold of 40 per cent disability is demanded of those individuals with non-military linked disabilities. Finally, while income from work is not deducted from the benefits paid to disabled veterans, this type of income can limit or even deny benefits to other disabled individuals. Similar gaps can be discerned in the case of widows. While war widows are eligible for universal benefits, other widows are only eligible for survivor benefits which have strings attached (the spouse must have worked and paid into the social security fund for a minimum qualification period of twelve months, and part of the benefit is means tested). Both receive additional amounts for children under the age of 21. A typical example is the benefit provided to a 40-year-old widow with two dependant children and no additional sources of income. While the gap between the benefits provided to war widows and other widows was relatively small in 1970 (81 per cent and 41 per cent of the average wage, respectively), this gap grew significantly by the beginning of the 2000s, with war widows receiving benefits equivalent to double the average wage and other widows with dependant children having to make do with 67 per cent of the average wage, an income level just above the poverty line (53.7 per cent of the average wage). No similar comparison is possible between bereaved families of fallen soldiers and those in which the offspring died under other circumstances, as there are no programmes intended specifically for the latter families. Nevertheless, in order to illustrate the difference between the circumstances of bereaved families of fallen soldiers and others, it is worth noting that, in comparison to the 98 per cent of the average wage for which the bereaved parents of a fallen soldier with no additional sources of income or dependent children are eligible, other bereaved couples lacking any income are eligible for Income Support (the general social assistance programme) equivalent to 27 per cent of the average wage. Moreover, eligibility for Income Support is dependent upon stringent means and work tests. Clearly the Israeli welfare state offers generous and easily accessible compensatory benefits to the victims of, and participants in, military activity and devotes a significant chunk of its social security budget to this purpose. At the same time, individuals suffering from similar needs but as the result of different circumstances are faced with much tougher eligibility conditions and much less generous benefit levels. Though expansion of the welfare state has led to greater expenditure on non-military-linked programmes and to more generous benefits, the gaps between the different types of programmes remain very stark.

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UNDERSTANDING BENEFIT SPIRALS

Loyalty Benefits and their Logics Joseph Trumpeldor, a Zionist hero mortally injured while defending the settlement of Tel Hai in 1920, is believed to have said as he died, ‘It is nothing, it is good to die for our country’ (Zertal 2005, 14). In August 2014, shortly after the cessation of Israel’s invasion of Gaza (which enjoyed strong public support), a public opinion poll asked Israeli teenagers on the eve of being drafted to what extent they agreed with this sentiment. One quarter strongly agreed, another quarter disagreed, and the remainder were supportive of it (Channel 2 News 2014). For a citizens’ army to avoid the problem of free-riders, soldiers and their families must not only believe that the military performs an essential function, but they must also be motivated and proud to serve their country. The other side of the coin is the obligation that their readiness to contribute imposes on the state; the duty to underwrite the welfare of soldiers and their families. This is the republican logic of exchange inherent in all loyalty benefits, defined as transfer payments granted to those who serve the symbolic or substantive interests of states (Shalev 2010). Their cash component is combined with glorification of the recipients’ contribution to the common good. In effect, the welfare state becomes an instrument for laundering what is objectively an exchange relationship. Concern for the welfare of those who serve, rather than outright payment for services rendered, allows recognition to camouflage redistribution (cf. Fraser 1995). For their part, the recipients of loyalty benefits are expected to respect the myth that they are motivated by loyalty rather than self-interest. As disabled veterans and the survivors of fallen soldiers have done in Israel, they may serve as emissaries of the state, encouraging loyalty and sacrifice by setting an example for others. As noted earlier, the political culture surrounding Jewish settlement and statebuilding in pre-state Palestine, which continued to flourish after sovereignty, was heavily impregnated with republican expectations of individual sacrifice for the sake of collective goals and needs. Specifically, Israeli conditions also shaped the way in which the new state interpreted its obligations to soldiers and their dependants. Prior to sovereignty and the ensuing war, the Jews were a minority in Palestine. Expanding their presence by immigration and settlement depended on maximal participation in economic activity. Consequently it was believed that limited collective resources would be better spent on creating the infrastructure for more employment than on handouts to the needy. Ideologically, this became an important element of the politically dominant labour movement’s ideology of ‘constructive socialism’ (Shalev 1992). Respecting the centrality of employment as the appropriate path to a socially acceptable standard of living, the war-related cash benefit programmes

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created soon after statehood aimed primarily to make up for the absence of breadwinning capacities. The rhetoric surrounding the disability allowance for permanently injured soldiers was unique in that it included an explicit element of compensation for loss. Nevertheless, the official justification was the goal of replacing earnings that would have been available to the war-disabled had they not suffered injury. Similarly, cash benefits were initially awarded to the parents of a fallen soldier if it could be shown, which was often the case, that he had (or would have) supported them financially and that they lacked any other means of support. The same logic was applied to war widows, underlined by a provision that in the event of remarriage (and hence the presence of a new male breadwinner in their lives) they would forfeit their benefit. Finally, when income maintenance for reserve soldiers on active duty was partially converted to a social security programme in 1951, the amount of compensation was dependent on whether they were married and had children. Reviewing this early history in retrospect it is not difficult to see why, in a context in which the state’s need for a nation in arms was continuously reaffirmed, the initial system of military loyalty benefits gave rise in the longer term to an expansionary dynamic. Because benefits were both defined and rationalized in order to fulfil the state’s paternalistic obligation to prevent unjust economic distress, rather than to compensate soldiers for services rendered, inequalities were created within the beneficiary group between those with full entitlements and those with lesser needs. Yet in every case the sacrifice made by the recipients, and the honour conferred on them by the state, were identical. Moreover, this honour could be converted into a political resource. So, too, could the solidarity and collective identity granted by their membership in a distinct and prestigious social category. In the case of the bereaved parents and the militarily disabled, this cultural capital was buttressed by the organizational and political capacities gained through official membership associations founded with the support and encouragement of the state. While the organization of bereaved parents in particular fulfilled its designated role of promoting republican sacrifice, like other such bodies it was also an effective platform for interest group activity. In summary, the foundational practices and discourses initiated by the state invited a dialectic of escalating demands, at the same time awarding capacities that rendered those demands effective. The next two sections add empirical substance to this interpretive framework. ‘Public Opinion’ offers analyses on social justice in Israel. A significant body of research exists on this topic (e.g. Lewin-Epstein et al. 2003; Sabbagh and Vanhuysse 2006; Shalev 2007), but no published study has directly measured the republican principle of deservingness, or explored the hierarchy of deservingness by measuring gaps in support for military and civilian social protection. ‘Dynamics of Expansion and Contraction’ provides some concrete glimpses of the political dynamics underlying

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successful bids to improve military loyalty benefits, and the very limited conditions under which retrenchment has proven possible.

Public Opinion An important underpinning of the generous benefits secured by war-related beneficiary groups is the broad consensus among Jewish Israelis to hold the soldiers of Israel’s citizen army in high regard, believe that a strong military is essential to Israel’s survival, and subscribe to the republican notion that citizens’ readiness to make sacrifices for the state should be matched by the state’s readiness to safeguard their welfare and compensate them for personal costs. These beliefs, expectations, and values tend to peak during and after wars and periods when perceived security threats are high. They provide powerful public legitimacy for military-based loyalty benefits, and make it difficult for public figures—whether elected politicians, appointed officials, experts, or commentators—to oppose demands for improvement. Unfortunately, while researchers have drawn on public opinion polls to document the strong degree of support in Israel for an active role for the state in combating poverty and inequality and providing public services (e.g. Peres and Yuchtman-Yaar 1992; Shalev 2007; Cohen et al. 2008), little evidence is available on public attitudes to war-related benefits or loyalty benefits more generally. However, a small survey was carried out in 1995 with the aim of evaluating public perceptions of the adequacy of cash benefits and services for different types of bereavement in Israel (Florian et al. 1999). The results suggested that the Jewish public is both aware of, and approves of, the advantageous cash benefits and support services to which families who experience bereavement due to either military service or terrorism are entitled. More recent and richer evidence is available from unpublished studies directed by Michael Shalev. One of these studies analyses a large nationally representative survey conducted in 2011, which examined support for both the liberal and republican principles of deservingness in relation to social transfers and services as a whole. The results are of interest in the present context because of the centrality of the republican principle to the legitimation of loyalty benefits in general, and war-related benefits specifically. Table 14.1 shows that roughly half of the entire sample expressed strong support for each of the two deservingness principles. However, opinions varied along the major social and political cleavages that divide Israeli citizens—nationality (Jews vs. Arabs), religiosity, and origin (here represented by immigrants from the Former Soviet Union who arrived in Israel after 1989). Observant Jews and Russian immigrants stand out for their lesser readiness to embrace the liberal principle, while Arab citizens were understandably in favour of equal treatment but reluctant to strongly endorse the

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Table 14.1. Rates of strong support for liberal and republican principles of deservingness, by social sector

Non-religious Observant Ultra-orthodox FSU* immigrant Arab Total

Formal liberalism

Republicanism

47% 27% 49% 30% 65% 45%

58% 63% 42% 47% 28% 51%

* Former Soviet Union Note: After being given a broad definition of social rights, respondents were asked about the extent to which they agreed (measured on a 5-point scale) with the following statements: ‘Israel should award equal social rights to all citizens’ (formal liberalism) and ‘Israel should award additional social rights to people who have contributed to the state, such as discharged soldiers, participants in national service, and residents of confrontation areas’ (republicanism). Source: National sample survey (n = 1,000) conducted in October 2011 under the auspices of the Taub Center for Social Policy Studies in Israel.

republican principle (although a surprisingly large minority did). Results not shown here indicate that when both strong and weak supporters are combined, the combination of liberal and republican principles won the support of between 60 per cent and 70 per cent of respondents from all five social sectors. In other words, regardless of their differences, Israelis see no contradiction between equality of social rights and differential benefits for those who serve the collective interest represented by the state. A more detailed investigation, albeit one based on a smaller and less representative sample, provides enlightening comparisons between attitudes to entitlements linked to military service and non-military benefits.¹⁶ Table 14.2 indicates that the two groups of military beneficiaries have very similar profiles: a large majority of respondents favoured rewarding them by redistribution through the tax and transfer system, and a large minority supported granting them recognition in the form of national honour days. Of the three non-military groups, only Holocaust survivors enjoy the same profile; in fact they garnered even more support for symbolic recognition.

¹⁶ The survey was implemented via the Internet in the summer of 2010. It was conducted by a small group of students at the Hebrew University who drew primarily on their personal networks to create a convenience sample that provides at least 400 Jewish respondents (the precise number varies depending on the question). The sample incorporates significant variation in background factors likely to be of relevance to the attitudes of interest, but its composition is far from representative. Respondents tend to be young (70 per cent are under 35), Israeli-born (82 per cent), and highly educated (nearly two thirds have fifteen years or more of education). They are also disproportionately secular and centre-left in their political orientation. Nevertheless, 21 per cent described themselves as either observant or very observant, and nearly one fifth said they support religious parties or those to the right of the Likud.

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Michael Shalev and John Gal Table 14.2. Support for granting material and symbolic benefits to military and non-military beneficiaries

Yeshiva students New immigrants Holocaust survivors Reservists Military disabled

Cash benefits or tax concessions

Days of honour

Neither money nor honour

13% 78% 86% 82% 87%

4% 14% 60% 48% 42%

84% 19% 8% 10% 8%

Sources: see footnote 16.

Table 14.3. Readiness to grant preferential treatment to different beneficiaries

Large families Solo mothers Young couples General disabled Accident disabled Military disabled

Strongly deserve preferential treatment

Means testing in case of preferential treatment

17% 34% 37% 34% 32% 49%

49% 69% 55% 48% 49% 33%

Sources: see footnote 16.

In contrast, while financial assistance for Jewish newcomers to Israel is widely sanctioned, not many respondents saw a need to publicly honour them. Finally—and not unexpectedly given the sample’s bias in favour of educated and non-orthodox Israelis—a very high proportion (84 per cent) did not approve of either recognition or redistribution in favour of ultra-orthodox Yeshiva students. Table 14.3 compares attitudes towards the three categories of disabled persons that receive differential benefits, and three civilian groups often seen as deserving of government assistance (large families, solo mothers, and young couples who don’t yet own their own home). The first column summarizes responses to a question asking whether each of these groups ought to receive preferential access to social transfers and services if it was not feasible to provide them universally. About one third were strongly supportive of preferential treatment for four of the six categories of beneficiaries. Military disabled, on the other hand, were far more likely to be seen as deserving preferential treatment (half of the respondents). In instances where respondents said they favoured preferential treatment, they were asked whether it should be conditional on a means test. The second column of the table shows

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that this was much less likely in the case of the military disabled than any other category of beneficiaries.

Dynamics of Expansion and Contraction Earlier in this chapter we referred to two different conceptions of the state’s obligation: compensation and paternalism. If the role of loyalty benefits is to compensate citizens for the burdens they shoulder in its name, the right to benefits should be universal and unrelated to the economic situation of recipients. If, on the other hand, the benefit springs from the state’s responsibility for the welfare of those who contribute to collective projects, benefits should be selective and contingent on need. At the time of their establishment some military-related benefit programmes were compensatory (e.g. disability), while others were paternalistic (e.g. war widows and reservists). In the course of time, pressures emerged on the part of actual or potential beneficiaries to either introduce or reinforce the logic of compensation. According to Lebel (2009, 17): ‘For years, Israel’s bereaved families had acted as those responsible for imparting general values, shapers of the publicsymbolic discourse who could promote collective values and influence the “general good”. As the 21st century began, they started organising as a private interest group focused on particularist–personal interests.’ But self-interest is always part and parcel of the republican logic of exchange, along with loyalty and solidarity. The parents and the widows of soldiers who lost their lives in military service indeed took advantage of their hallowed status by converting it to pecuniary gain. At the same time, they risked placing the legitimacy of their struggle in danger if they unduly exposed its rent-seeking, exchange-oriented face. The two groups of beneficiaries dealt with this dilemma differently. Beginning in 1998, bereaved parents waged a successful struggle to receive a generous flat-rate benefit that would end means testing and do away with burdensome procedures for reimbursement of recognized expenses. Given the high status and institutionalized public role of the parents in legitimating military sacrifice, behaving purely as a pressure-group would have undermined their status and influence and questioned the private meaningfulness of their bereavement. Accordingly, as shown by Laron (2005), the parents embraced the traditional glorification of military sacrifice to frame their struggle, without questioning in any way the duty of citizens to pay a personal price for national security. Their criticism was directed at the state for inadequately fulfilling its obligations. Moreover ‘the state’ as such was not the object of their critique, but only the Rehabilitation Division of the Ministry of Defence, the body responsible for implementing and justifying the existing needs-based benefit.

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Rather than demanding outright replacement of the principle of need by the principle of compensation, the parents sought to redefine the notion of need as loss of potential income, instead of low income. They claimed that bereaved parents suffer economically irrespective of whether their son was the breadwinner or not, because bereavement has detrimental psychological effects on their earnings capacity. Furthermore, they insisted that the resulting economic burden afflicts all bereaved parents, regardless of their levels of poverty or affluence. Eventually this revised reading of the parents’ needs morphed into official embrace of the compensatory principle. In November 2007, the prime minister announced that ‘from now on families of the fallen in the wars of Israel will receive equal compensation, reflecting the state’s attitude to the fact that the unbearably heavy price they paid cannot be a function of their economic situation’ (quoted in Lebel 2009, 26). In the case of military widows, the struggle to transform their benefit from a paternalistic to a compensatory one focused on the matter of eligibility rather than generosity. The aim of the pension was to make up for the loss of a breadwinner, so that widows who subsequently remarried forfeited their entitlement.¹⁷ Most women who found a new partner avoided disqualification by cohabiting without remarrying, risking disqualification if their status was discovered. In 2007, when a committee of inquiry recommended enforcing the disqualification of cohabiting widows as a cost-cutting measure (Brodet 2007), the response was ‘an extensive public campaign by IDF widows, assisted by PR agencies, political lobbyists, and legal and media consultants’ (Lebel 2009, 28). Ministry of Defence officials argued that on remarriage or re-partnering, widows were no longer in need of the income provided by their pension, and that the formation of a new union was a sign of their ‘rehabilitation’. In response, the leader of the widows’ organization insisted that the function of the pension is compensation. Explicitly invoking the logic of republican exchange, she described the benefit as ‘the nation’s appreciation of our loss’ and warned that, if it was rescinded, soldiers would lose the incentive to contribute and Israel’s security would be compromised.¹⁸ In mid-2008, legislation was passed annulling the provision to revoke pensions on remarriage. An important difference between these two campaigns is the extent to which the complainant groups were committed to, and actively engaged in, the legitimation of military sacrifice. While, as noted, bereaved parents were heavily involved in glorification, war widows were engaged in a more individualistic project of recovery from trauma. This difference helps explain why

¹⁷ This arrangement is not unique to Israel. For example, in the UK the disqualification of widows’ pensions for those remarrying or in new partnerships was not lifted until 2015 (see Lamiat Sabin, The Independent, 8 November 2014). ¹⁸ Quotations from the widows’ organization’s website (cited by Lebel 2009, 29) and the protocol of the Knesset Labour, Welfare, and Health Committee meeting of 29 July 2008.

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both the discourse and the tactics of the parents’ struggle were more reserved than those of the widows. However, since both groups receive loyalty benefits in return for symbolic rather than substantive services, discourse is their primary weapon and their repertoire of political action is limited. A third illustration of the politics of military benefit expansion is the case of reserve soldiers, who are engaged in substantive exchange. As indicated earlier in the chapter, compensation for reserve duty in Israel has long been carried out through the social insurance system and takes the form of wage replacement. From the mid-1990s until the passage of legislation in 2008 introducing an expanded benefit package, reservists were engaged in a protracted, explicitly materialist, and sometimes heavy-handed struggle for improved benefits (Yakter 2011). They complained that the true extent of their sacrifice merits more than simply wage replacement, which in any case tends to be incomplete. Their sense of injustice has been amplified because the burden of combat duty in the reserves has become concentrated on an increasingly selective segment of those nominally eligible. Activist reservists contend that the myth of equality of sacrifice of the nation in arms is a sham. Instead of being treated as ‘suckers’ they demand ‘fair exchange’, claiming that only those who give should get. Their means of struggle was also different from that of the other groups, most closely resembling self-interested material conflicts in the civilian sphere. This included the use of striking as a weapon to capitalize on the army’s need for their services. Nevertheless, reservists had to fight longer and harder to receive less substantial concessions than bereaved parents or war widows. The sacrifice of life creates a claim that is harder to resist, and the military has room for reducing its dependence on the soldiering of reservists by relying more on conscripts engaged in compulsory service, who are younger and more obedient. Reserve duty is also an interesting case from the viewpoint of cost control, a primary concern of the Ministry of Finance. Treasury officials have succeeded in constructing a variety of sturdy institutional barriers that constrain both the budgetary autonomy of operational ministries and the decision-making powers of elected officials, except in the area of defence (Lifshitz 2000; Ben-Bassat and Dahan 2006). During the late 1970s and early 1980s, a period of growing macro-economic and fiscal crisis, the military’s reliance on reservists—and consequently the economic burden on employers and the state budget—grew immensely (Levy 2007). In 1985, when an ambitious economic plan was introduced to combat hyperinflation, the Ministry of Finance quietly introduced a provision incentivizing the military to economize on reservists by permitting savings from unutilized days of reserve duty to be transferred to other budget lines. A decade later the old system of financing, based on a payroll tax levied by the social insurance institution, was cancelled altogether. Under the new law, the financing of wage compensation for reservists became part and parcel of the annual defence budget, financed by

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the state’s general revenues. Since the cost of reservists’ compensation was now fully born by the Ministry of Defence, it responded by voluntarily reining in the use of reservists. Budgetary self-discipline achieved by changing the institutional rules by which benefits are financed, thereby creating incentives to economize, proved to be an effective alternative to a frontal attack on the rights of beneficiaries in this instance. Since this approach is apparently not feasible in relation to other types of military-related benefits, the Treasury has made repeated attempts to directly rein in benefit eligibility and generosity. Its preferred instrument—but one that has so far achieved few concrete victories— is the establishment of expert committees that are insulated from the pressures faced by elected officials. The most prominent example of this is the Goren Committee, which was established by the government in November 2009 to submit recommendations regarding the criteria for determining eligibility for disabled veterans. In its recommendations, submitted at the end of 2010, the committee suggested that the eligibility threshold for benefits for disabled veterans be raised and that soldiers injured while on leave not be granted benefits. Similarly, it distinguished between career soldiers and conscripts and reservists, limiting benefits for career soldiers only to cases in which the injury or illness could be directly related to their military service (Goren Committee 2010). After drawn-out negotiations with the representative organization of disabled veterans, the government formally decided to adopt the recommendations and to introduce legislation based on the recommendations in July 2013.¹⁹ However, efforts to push the piece of legislation through the Knesset stalled. A committee established by the prime minister in 2013 to restructure the entire defence budget supported the adoption of the Goren Committee’s recommendations.²⁰ At the time of writing, five years after the recommendations were submitted, it is still not clear whether this will indeed occur.

C ONCLUDING REMARKS Israel is a relatively new state, established after World War II. Clearly the Holocaust was not only a major factor in the justification of the establishment of a Jewish nation, but the influx of Holocaust survivors from post-war Europe had a marked impact on the country during its initial decades of existence. Nevertheless, apart from a number of specific social programmes aimed at compensating victims of the Nazis, Israeli social policies were not affected ¹⁹ See a press release by the Prime Minister’s Office on this: http://www.pmo.gov.il/English/ MediaCenter/Spokesman/Pages/spokegoren010113.aspx, accessed 25 April 2017. ²⁰ http://www.haaretz.com/israel-news/.premium-1.666935, accessed 25 April 2017.

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directly by the world wars. In that sense, Israel is a distinctive case among the welfare states discussed in this volume. It also differs from the other cases examined here in that, throughout its seven decades of existence, war (or the threat of war) has remained an integral part of Israeli political and social life. The country has been in a constant state of war preparation, which has been punctuated by short outbreaks of violent conflict. Given the specific form that war and military readiness have taken in the Israeli case, the distinction between three stages of war—preparation, mobilization, and aftermath—are blurred. However, the need to maintain war readiness and to ensure mass support for this effort make it possible to identify the direct impact of war upon social policies and, in particular, the effort to achieve legitimacy through social policy (see the Introduction to this volume). This chapter has discussed the impact of a variety of causal factors linking war to the social policies adopted in Israel. They include economic resources and hegemonic ideas, alongside the major role of interest groups and pathdependent institutional legacies. The analysis in this chapter indicates that in Israel, war and warfare did not shape ‘national’ social policy so much as create a distinct system of redistribution and services for military service and the risks associated with the Israeli–Palestinian conflict. From the outset, this system was deeply intertwined with a ‘republican bargain’, under which citizens trade sacrifice for both monetary and symbolic compensation. The path was set in the early years following Independence, but not only because the new state had to deal with the technical and political consequences of a costly state-making war. It also reflected severe resource constraints, and two path-dependent legacies of the state-building era: a tradition of rewarding voluntary sacrifice, and the institutionalization of multiple segmented systems of social protection differing in their financing, administration, clientele, and logics of entitlement. From the cross-national perspective provided by the case studies in this volume, it appears that when states respond to protracted mass warfare by creating benefits targeted at war victims of one kind or another, they face one of two choices. The first is whether to channel these responsibilities primarily into universal programmes (‘topped up’ no doubt by categorical benefits expressing the nation’s gratitude), or alternatively to establish an independent system of social welfare for soldiers and their families. Israel, like the USA, chose the second of these paths. Having done so, as in any social policy decision, choices were made between providing unconditional benefits or conditional entitlements that depend on need. The first approach implies compensating all those who pay a price, irrespective of need. The second involves only a paternalistic welfare obligation to replace lost income or meet the collateral needs of dependant family members. The choice between these two models appears to be contingent on how the respective obligations of citizens and states are defined in a given national and

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historical context, a function of both culture and politics. After World War II, and the political lessons learned from the backlash that followed the government’s miserly treatment of veterans of the previous war, the USA—a rich country positioned to dominate international economics and politics— adopted a generous and universalistic approach to veterans’ benefits. Facing very different circumstances, the Israeli government largely opted for paternalistic, needs-based benefits. Yet the continuing centrality of violence and war preparation, and the political dialectics immanent in a republican bargain, rendered Israel’s system of war-related benefits increasingly accessible, generous, and universal, while preserving its segregation and institutionalizing deep—and, in many cases, growing—inequalities between beneficiaries with identical needs who are covered by different systems. Underlying these horizontal inequalities are what may be termed the positive externalities of war for those eligible for special-purpose categorical programmes, and its negative externalities for those who are not. As Gifford observed in a study of the analogous case of the USA, ‘As both potent political symbols and members of a well-positioned interest group, armed forces not only absorb finite resources, but also create discursive obstacles to other groups seeking benefits from the state’ (Gifford 2006b, 478–9). We would add that these obstacles are not only discursive, but also political and institutional. Finally, an issue of central importance in evaluating the impact of war on welfare is its effects on gender inequality and gender roles. The content of the republican obligations of Jewish citizens typecasts the national mission of men as warriors and women as their mothers and wives (Berkovitch 1997). It follows that many of the compensatory benefit schemes discussed above are inherently gendered, most obviously in the case of programmes for war widows and the war-disabled. Research has documented maternalist and patriarchal biases in Israeli social policy generally, biases that were particularly marked in the early years of the state (Ajzenstadt and Gal 2001). It might appear at first glance that military-related benefits would be less gendered than others, since conscription is compulsory in Israel for women as well as men. For two reasons this is not the case. First, in practice, due to a variety of exemptions (including for all married women) female conscription is substantially less universal than for men. Second, and more importantly, men and women generally perform distinct roles in the military, and traditionally women have been further devalued and subordinated by its blatantly masculine culture (Izraeli 1997). While gender segregation of military roles and duties is no longer as complete as it was in the past, only a very small minority of women are given combat duties, and, in a more subtle variation on traditional gender roles, increasing numbers of women train and support male combat soldiers (Sasson-Levy 2003). Moreover, it has been shown that, if anything, there is ‘continuity and intensification of gender inequality during war operations’ (Dlugosz 2014, 2).

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As extensive scholarship has demonstrated (Sasson-Levy 2011), the implications of war and war preparation for gender relations in Israel are far more extensive than differences in entitlement to loyalty benefits. On the one hand, the national conflict and its associated risks and obligations shape childhood and adult socialization of both women and men, in turn defining parental and spousal roles that perpetuate gender divisions between the private and public spheres. On the other hand, gender relations in the context of military service have fateful implications later in life, affecting both lifestyles (sexual relations and marriage patterns) and work roles and attainments (choice of professions and wage inequality). It is well established that men are far more likely to acquire social, military, and human capital in the military that is convertible to economic and status rewards after completing their compulsory service and is nurtured by their continuing obligation to perform reserve duty, an obligation from which most women are exempt (Izraeli 1999). It has become increasingly evident, however, that the gendered implications of military service are sharply differentiated by ethnic and class divisions, such that women from more privileged backgrounds are increasingly able to obtain advantages (see, for example, Lomsky-Feder and Sasson-Levy 2015).

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Cohen, Stuart. 2010. The New Citizen Armies: Israel’s Armed Forces in Comparative Perspective. Abingdon: Routledge. Cowen, Deborah. 2005. ‘Welfare Warriors: Towards a Genealogy of the Soldier Citizen in Canada’. Antipode 37: 654–78. Danziger, Gilad. 1978. A Review of Concepts in Rehabilitation Law [in Hebrew]. Jerusalem: The Hebrew University. Dlugosz, Idalia. 2014. ‘Mothers or Warriors? Women Combat Soldiers in the Face of Gender Stereotypes in the Idf ’. BA diss., Leiden University. Doron, Abraham. 1994. ‘The Effectiveness of the Beveridge Model at Different Stages of Socio-Economic Development the Israeli Experience’. In Beveridge and Social Security: An International Retrospective, edited by J. Hills, J. Ditch, and H. Glennerster, 189–200. Oxford: Oxford University Press. Doron, Abraham. 2001. ‘Social Welfare Policy in Israel: Developments in the 1980s and 1990s’. Israel Affairs 7: 153–80. Doron, Abraham. 2007. ‘The Shaping of Social Policy in Israel, 2000–2005’ [in Hebrew]. In Formulating Social Policy in Israel: Trends and Issues, edited by U. Aviram, J. Gal, and J. Katan, 33–57. Jerusalem: Taub Center for Social Policy Studies in Israel. Doron, Abraham and Ralph M. Kramer. 1991. The Welfare State in Israel—the Evolution of Social Security Policy and Practice. Boulder, CO: Westview Press. Esping-Andersen, Gosta. 1990. The Three Worlds of Welfare Capitalism. Cambridge: Polity Press. Florian, Victor, Ruth Malkinson, and Assa Kasher. 1999. ‘Social Rights and Services to Breaved Families in Israel: A National Survey’ [in Hebrew]. Society and Welfare 19: 1–12. Fraser, Nancy. 1995. ‘From Redistribution to Recognition? Dilemmas of Justice in A “Post-Socialist” Age’. New Left Review 1: 68–93. Friedman, Eyal and Michael Shalev. 2010. ‘Loyalty Benefits’ [in Hebrew]. In Caring State—Neglectful State, edited by H. Katz and E. Tzfadia, 55–75. Tel Aviv: Resling. Gal, John. 2001. ‘The Perils of Compensation in Social Welfare Policy: Disability Policy in Israel’. Social Service Review 75: 225–44. Gal, John. 2007. ‘The Puzzling Warfare–Welfare Nexus’. War & Society 26: 99–118. Gal, John. 2008. ‘Immigration and the Categorical Welfare State in Israel’. Social Service Review 82: 639–61. Gal, John. 2010. ‘Is There an Extended Family of Mediterranean Welfare States?’ Journal of European Social Policy 20: 283–300. Gal, John and Michael Bar. 2000. ‘The Needed and the Needy: The Policy Legacies of Benefits for Disabled War Veterans in Israel’. Journal of Social Policy 29: 577–98. Gifford, Brian. 2006a. ‘The Camouflaged Safety Net: The US Armed Forces as Welfare State Institution’. Social Politics 13: 372–99. Gifford, Brian. 2006b. ‘Why No Trade-Off between “Guns and Butter”? Armed Forces and Social Spending in the Advanced Industrial Democracies, 1960–1993’. American Journal of Sociolgy 112: 473–509. Goren Committee. 2010. The Public Committee of Inquiry into Eligibility for Assistance from Rehabilitation Departments—Goren Committee [in Hebrew]. Tel Aviv: http:// www.vaadatgoren.gov.il, accessed 19 November 2014.

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Hemmings, Philip. 2010. ‘Policy Options for Reducing Poverty and Raising Employment Rates in Israel’: http://www.oecd-ilibrary.org/economics/policy-options-for-reducingpoverty-and-raising-employment-rates-in-israel_5kmd3kgqqmhl-en, accessed 25 April 2017. Hermann, Tamar, Ella Heller, Chanan Cohen, Gilad Be’ery, and Yuval Lebel. 2014. The Israeli Democracy Index 2014. Jerusalem: The Israel Democracy Institute. Israel Ministry of Defence. n.d. ‘Brochure about mishpahot-hantzaha for English speakers’: https://www.mishpahot-hantzaha.mod.gov.il/mhn/documents/english% 20version.pdf, accessed 25 April 2017. Israel Ministry of Defence. n.d. ‘Monthly Benefits’ [in Hebrew]: https://www.mishpahothantzaha.mod.gov.il/mhn/parents/BENEFITS/Pages/tagmool_hodsi.aspx, accessed 25 April 2017. Israel Ministry of Foreign Affairs. n.d. ‘Victims of Palestinian Violence and Terrorism since September 2000’: http://www.mfa.gov.il/MFA/Terrorism-+Obstacle+to+Peace/ Palestinian+terror+since+2000/Victims+of+Palestinian+Violence+and+Terrorism +sinc.htm, accessed 4 September 2015. Izraeli, Dafna N. 1997. ‘Gendering Military Service in the Israeli Defense Forces’. Israel Social Science Research 12: 129–66. Izraeli, Dafna N. 1999. ‘Gender and Military Service in the IDF’ [in Hebrew]. Teoria Ubikoret 14: 85–109. Jewish Virtual Library. n.d. ‘Israel Defense Forces: Israeli Casualties in Battle’: http:// www.jewishvirtuallibrary.org/jsource/History/casualty_table.html, accessed 20 November 2014. Jewish Virtual Library. n.d. ‘Terrorism Against Israel: Number of Fatalities’: http:// www.jewishvirtuallibrary.org/jsource/Peace/osloterr.html, accessed 20 November 2014. Kimmerling, Baruch (with Irit Backer). 1985. The Interrupted System: Israeli Civilians in War and Routine Times. New Brunswick, NJ: Transaction. Kimmerling, Baruch. 1993. ‘Patterns of Militarism in Israel’. Archives Europeennes de Sociologie 34: 196–223 [published in Hebrew in Teoria ve-Bikoret]. Laron, Michal. 2003. ‘Dear Families: The Struggle of the Bereaved Parents to Alter the System of Compensation in Israel’ [in Hebrew]. Research Paper No. 8. Jerusalem: Shaine Center for Social Science Research, Hebrew University. Laron, Michal. 2005. ‘Change and Reproduction: The Struggle of Bereaved Parents over the Benefit System’ [in Hebrew]. Soziologia Yisraelit 7: 45–70. Lebel, Udi. 2009. ‘The Glocalization of Bereavement: Bereaved Families, Economic Discourse and the Hierarchy of Israeli Casualties’. In Advances in Military Sociology: Essays in Honor of Charles C. Moskos, Part A, edited by G. Caforio, 11–40. Bingley: Emerald. Lebel, Udi and Eyal Leṿin. 2015. The 1973 Yom Kippur War and the Reshaping of Israeli Civil-Military Relations. Lanham, MD: Lexington Books. Levy, Yagil. 2007. Israel’s Materialist Militarism. Lanham, MD: Lexington Books. Levy, Yagil. 2013. ‘Convertible Sacrifice—A Conceptual Proposition’. Sociological Perspectives 56: 439–63. Levy, Yagil, Edna Lomsky-Feder, and Noa Harel. 2007. ‘From “Obligatory Militarism” to “Contractual Militarism”: Competing Models of Citizenship’. Israel Studies 12: 127–48. Lewin-Epstein, Noah, Amit Kaplan, and Asaf Levanon. 2003. ‘Distributive Justice and Attitudes toward the Welfare State’. Social Justice Research 16: 1–27.

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Lifshitz, Yaacov. 2000. Defence Economics: General Theory and the Israeli Case [in Hebrew]. Jerusalem: Jerusalem Institute for Israel Studies and Ministry of Defence. Lomsky-Feder, Edna and Eyal Ben-Ari. 1999. The Military and Militarism in Israeli Society. Albany, NY: State University of New York Press. Lomsky-Feder, Edna and Orna Sasson-Levy. 2015. ‘Serving the Army as Secretaries: Intersectionality, Multi-Level Contract and Subjective Experience of Citizenship’. The British Journal of Sociology 66: 173–92. Lorch, Netanel. n.d. ‘The Arab–Israeli Wars’: http://www.mfa.gov.il/mfa/aboutisrael/ history/pages/the%20arab-israeli%20wars.aspx, accessed 20 November 2014. Marshall, Thomas H. 1950. ‘Citizenship and Social Class’. In Citizenship and Social Class and Other Essays, edited by T. H. Marshall, 1–85. Cambridge: Cambridge University Press. Mintz, Alex and Michael D. Ward. 1989. ‘The Political Economy of Military Spending in Israel’. American Political Science Review 83: 521–33. Nacht, Moshe and Meir Kleyff. 1955. Rehabilitation Laws [in Hebrew]. Tel Aviv: Israel Society for the Publication of Law Books. Naor, Moshe. 2010. ‘The 1948 War Veterans and Postwar Reconstruction in Israel’. The Journal of Israeli History 29: 47–59. Nitzan, Arie. 1975. Twenty Years of National Insurance. Jerusalem: National Insurance Institute. OECD. 2017. ‘Social Expenditure Update’: http://www.oecd.org/els/soc/expenditure. htm, accessed 20 October 2017. Peled, Yoav. 1992. ‘Ethnic Democracy and the Legal Construction of Citizenship— Arab Citizens of the Jewish State’. American Political Science Review 86: 432–43. Peres, Yochanan and Ephraim Yuchtman-Yaar. 1992. Trends in Israeli Democracy: The Public’s View. Boulder, CO: Lynne Rienner. Rosenhek, Zeev. 2003. ‘Social Policy and Nationbuilding: The Dynamics of the Israeli Welfare State’. Journal of Societal and Social Policy 1: 19–38. Rosenhek, Zeev and Michael Shalev. 2000. ‘The Contradictions of Palestinian Citizenship in Israel: Inclusion and Exclusion in the Israeli Welfare State’. In Citizenship and the State in the Middle East, edited by N. A. Butenschon, U. Davis, and M. Hassassian, 288–315. Syracuse, NY: Syracuse University Press. Sabbagh, Clara and Pieter Vanhuysse. 2006. ‘Exploring Attitudes Towards the Welfare State: Students’ Views in Eight Democracies’. Journal of Social Policy 35: 607–28. Sasson-Levy, Orna. 2003. ‘Feminism and Military Gender Practices: Israeli Women Soldiers in “Masculine” Roles’. Sociological Inquiry 73: 440–65. Sasson-Levy, Orna. 2011. ‘Research on Gender and the Military in Israel: From a Gendered Organization to Inequality Regimes’. Israel Studies Review 26: 73–98. Shafir, Gershon and Yoav Peled. 2002. Being Israeli: The Dynamics of Multiple Citizenship. Cambridge: Cambridge University Press. Shalev, Michael. 1989. ‘Israel’s Domestic Policy Regime: Zionism, Dualism, and the Rise of Capital’. In The Comparative History of Public Policy, edited by F. G. Castles, 100–48. Cambridge: Polity Press. Shalev, Michael. 1992. Labour and the Political Economy in Israel. Oxford: Oxford University Press. Shalev, Michael. 2007. ‘The Welfare State Consensus in Israel: Placing Class Politics in Context’. In The Welfare State, Legitimacy and Social Justice, edited by S. Mau and B. Veghte, 193–213. Aldershot: Ashgate.

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Shalev, Michael. 2010. ‘ “Loyalty Benefits” and the Welfare State’. Foundation for Law, Justice and Society/University of Oxford: http://www.fljs.org/sites/www.fljs.org/ files/publications/Shalev.pdf, accessed 25 April 2017. Shalev, Michael, John Gal, and Sagit Azary-Viesel. 2012. ‘The Cost of Social Welfare: Israel in Comparative Perspective’. In State of the Nation Report: Society, Economy and Policy in Israel 2011–2012, edited by D. Ben-David, 367–426. Jerusalem: Taub Center for Social Policy Studies in Israel. Shamgar-Handleman, Lea. 1986. Israeli War Widows: Beyond the Glory of Heroism. South Hadley, MA: Bergin & Garvey. Sheffer, Gabriel and Oren Barak. 2010. Militarism and Israeli Society. Bloomington, IN: Indiana University Press. Skocpol, Theda. 1992. Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States. Cambridge, MA: Harvard University Press. Titmuss, Richard. 1958. ‘War and Social Policy’. In Essays on ‘the Welfare State’, edited by R. Titmuss, 75–87. London: Allen and Unwin. World Bank. n.d. ‘Military expenditure tables’: http://data.worldbank.org/indicator/ MS.MIL.XPND.GD.ZS, accessed 4 November 2015. Yablonka, H. 1997. The History of the Organization of Partisans and Soldiers Injured in the War against the Nazis. Jerusalem: Yad Vashem. Yakter, Alon. 2011. ‘Membership, Contribution, and Politics: Republican-Nationalist Benefits in the Israeli Welfare State’. MA diss., The Hebrew University of Jerusalem. Yanay, Uri. 1994. ‘Assistance to Civilian Casualties of Hostile Actions’ [in Hebrew]. Bitachon Soziali 3: 37–63. Zertal, Idith. 2005. Israel’s Holocaust and the Politics of Nationhood. Cambridge: Cambridge University Press.

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15 War and Welfare States Before and After 1945 Conclusions and Perspectives Herbert Obinger, Klaus Petersen, Carina Schmitt, and Peter Starke

The formation and expansion of Western welfare states took place in the age of mass warfare. This book began with the question of whether, how, and to what extent these developments are also causally interrelated. Beginning with Richard Titmuss in the late 1950s, several scholars have made a strong claim for particular countries that such a causal relationship does exist, while others have been much more sceptical. However, a systematic comparative analysis of the warfare–welfare nexus has hitherto been lacking. This is quite astonishing given the widespread consensus in comparative welfare state research, which sees both world wars as temporal watersheds demarcating different phases of welfare state development (Flora and Alber 1981). Drawing on theoretical considerations and the existing empirical literature from different disciplines, we commenced our analysis with a discussion of possible mechanisms linking mass warfare and the welfare state. To study the impact of war on welfare state development with more analytical rigour, we distinguished between three chronological phases of military conflict: war preparation, mobilization, and the post-war period. Based on this heuristic framework we argued that war unfolded its impact on the welfare state mainly via two channels. The first refers to war impacts on the demand-side of the political system. In a functionalist fashion, to use the vocabulary of welfare state theory, the cruelties of mass warfare generated a huge demand for social protection that needed to be addressed by policymakers. The second channel includes a variety of war impacts on the supply-side of the political system. It was hypothesized that war was a trigger of enhanced state capacities, which furnished governments with new policy jurisdictions and propelled

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democratization and centralization. Based on these considerations, the bulk of the volume consists of case studies offering in-depth analyses of the warfare– welfare nexus in fourteen countries, selected on the basis of their markedly different war experiences. This concluding chapter is divided into three sections. First, we briefly report major findings of the individual country chapters and discuss possible cross-country patterns. We show that war’s impact on welfare state development can be differentiated into several distinct conclusions, each highlighting specific effects or causal mechanisms. Next, we examine the long-term effects of military conflict on post-war welfare state development with quantitative data. We show, for a sample of eighteen countries (thirteen of which have been presented in detail in this volume), that war is an important explanatory factor that contributes to a better understanding of several of the phenomena lying at the heart of comparative welfare state research (i.e. cross-national patterns in social expenditure, benefit generosity, the public–private mix in welfare provision, and the timing of welfare legislation). We then briefly discuss the impact of war on welfare outcomes, such as income inequality. The final section offers a brief discussion of the impact of the Cold War (1947–89) on welfare state development, highlights the contemporary relationship between warfare and welfare, and sketches promising avenues for future research.

CASE S TUDY EVIDENCE: M AJOR FINDINGS A N D S O M E GE N E R A L I Z A T I O N S The general conclusion from the fourteen national case studies in this volume is that war is a relevant factor for understanding the development and crossnational variation between advanced welfare states. Mass wars waged between economically developed countries, such as the two world wars, are not only chronological markers for demarcating different phases of welfare state development but also important causal factors alongside, and in close interaction, with the traditional political, institutional, and socio-economic explanations of welfare state development. However, the national case studies provide multifaceted findings on how and to what extent war has affected welfare state development. What these inquiries make very clear is that the impact of war on social policy has been crucially shaped by nationally distinct political and socio-economic contexts and different national war experiences. We abstain here from summarizing the case study evidence in detail as the country studies, with all their nuanced and context-sensitive findings, stand on their own. It is, however, worthwhile and essential to look for cross-national patterns. Several conclusions stand out: First, the repercussions of war on the

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welfare state vary strongly with war intensity. The impact of war on the welfare state was, not surprisingly, most pronounced in belligerent countries. However, it is important to differentiate between countries mainly fighting in war theatres overseas and those suffering from destruction on their home territories and resulting economic decline. War impacts, albeit to lesser extent, can also be observed in several occupied countries and, perhaps more surprisingly, even in countries that were not involved in military conflict, such as neutral Switzerland or Sweden.¹ This latter finding demonstrates the enormous magnitude and transnational nature of the two world wars. Second, not all of the mechanisms linking warfare and welfare discussed in the Introduction were of relevance in all national settings. Once more, much depends on national contexts. For example, the mechanisms related to the war preparation period only played a role in the Great Powers and/or in militarily aggressive nations. Pronatalism related to war-planning, for instance, informed social and public policies in Fascist Italy, Japan, and Nazi Germany during the run-up to World War II. However, the first country to pursue pronatalist policies was France. Its intentions were not aggressive, but military rivalry with Germany was a key impetus for state interference. Military defeat in the Franco-Prussian War and comparatively low birth rates, related to the country’s unusual pattern of demographic transition in the late nineteenth century, prompted early state intervention in this field and made France a pioneer of state-organized family policy. By contrast, population size played less of a role in Britain. For geopolitical reasons, Britain’s defence strategy relied on a powerful navy and the country could, if needed, draw on the vast human resources provided by its colonies and allied nations. In a similar vein, the quality of the ‘human material’ was mainly an issue in powerful nations. In expansionist Japan, military concerns about the fitness of soldiers motivated healthcare reforms on the eve of the Pacific War. It is striking that these reforms were implemented by the military itself, which controlled the welfare ¹ Sweden is not included as a case study in this volume. However, preliminary evidence clearly indicates that several mechanisms discussed in this volume are also valid for the Swedish case. Both world wars led in Sweden, as elsewhere, to the growth of the regulatory state (Friberg 1973; Hirdman et al. 2012, 28–30, 343–73) as well as the tax state (Rietz et al. 2013). Moreover, war changed the public–private mix in favour of public solutions. This was also paralleled with respect to welfare policies: in 1920, Sweden, like many other countries, established a Ministry of Social Affairs in the aftermath of the Great War. Hatje (1974) shows how Gunnar and Alva Myrdal’s analysis of the ‘Crisis in the Population Question’ (1934) hijacked a traditional Conservative agenda based on concerns for military survival of the Swedish nation and successfully turned it into a social democratic reform agenda. Furthermore, Sweden in 1940 introduced special allowances (krigsfamiljebidrag) for families of mobilized soldiers in order to secure their material living standards (Hirdman et al. 2012, 350–1). These were war experiences that paved the way for, and served as, a platform for post-war planning and the expansion of the welfare state (Hirdman et al. 2012, 415–17). The extent to which war had an impact on Swedish welfare state development, however, may have been smaller than in other countries (see Therborn 1989, 220–1).

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bureaucracy. Prior to World War II, worries about the physical strength of young men influenced labour protection legislation in the Austrian Empire and (very early on) in Prussia, where a military report complaining about a shortfall of recruits in industrialized regions because of widespread child labour was the trigger for the first labour legislation in 1839. Similar concerns gave rise to the national efficiency movement in Britain in the wake of the Anglo-Boer War disaster. Third, we find remarkable cross-national commonalities for the war mobilisation period in terms of supply-side effects. Everywhere, but again contingent on war intensity, war emergencies gave rise to an expansion of state capacities. This included a centralization of government (e.g. a transfer of policy jurisdictions to the central government), enhanced fiscal powers, and the establishment of a powerful state apparatus that also included the build-up of a welfare bureaucracy (or at least the professionalization and systematic involvement of civil society actors). The main determinant of this growth of big government was the huge challenge of effectively steering the war economy and the overall war effort. Fourth, this tremendous endeavour altered politics in many ways as waging total war necessitated a closing of ranks, a concentration of power, and the generation of mass loyalty. Examples include markedly changed state– business relations in wartime or closer cooperation between government and opposition in several democracies. Moreover, war contributed to a shift of power resources in society. Most importantly, war strengthened the power resources of labour in the spheres of politics and industrial relations during and after war. The bargaining power of unions increased due to labour shortages, unions were accepted as partners in industrial relations, and their political allies entered the executive branch of government. Even in neutral Switzerland, the Social Democrats were incorporated into the federal government in 1943 when the country was encircled by Nazi Germany and its allies. While labour’s empowerment was long-lasting, war also enhanced, at least temporarily, the status of previously marginalized groups in society, notably women and racial minorities (e.g. in the USA). By contrast, formerly socially privileged strata, such as the middle classes, witnessed social deprivation in war-torn economies. Fifth, and in line with the extant literature, military defeat, mobilization for mass warfare, and the aforementioned war-induced recalibration of power resources were triggers of democratization and electoral reform in many countries. The logic of equal sacrifice did not only materialize in enhanced tax powers and tax progressivity as clearly demonstrated in almost all case studies (cf. Scheve and Stasavage 2010; 2012; 2016), but also buttressed the extension of suffrage to larger segments of the population on a quid pro quo basis. A case in point is female suffrage, which could be seen as compensating for the manifold contributions of women to the maintenance of the war

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machinery on the home front. It is symptomatic that neutral Switzerland is an extreme latecomer in this respect. While these supply-side effects changed state capacities and the political rules of the game in a way that facilitated welfare state expansion in the postwar period, the demand-side mechanisms, that is, the need to accommodate war-induced social needs, forced countries to do so. However, and this is our sixth conclusion, the magnitude of these demand-side effects is driven by the intensity of war, notably the mobilization rate and war-induced destructions and human losses. For obvious reasons, the pressure to respond to the fallout of war was more or less lacking in neutral countries like Switzerland, but also in occupied Denmark. Other occupied countries, such as the Netherlands and Belgium, however, suffered from a large number of (mostly civilian) casualties. Without a doubt, however, the impact of war on social needs was of greatest relevance in belligerent countries, which were forced to set up social protection for demobilized soldiers and the military as well as civilian casualties of warfare. Nevertheless, an important qualification is in order: the need for social compensation was most pressing in Continental Europe and Japan. Confronted with acts of war on their national territory, military conflict caused higher numbers of military and civilian casualties, the massive destruction of housing and infrastructure and, in consequence, a massive economic decline with far-reaching social implications such as famine, homelessness, and unemployment. By contrast, the English-speaking countries, with the notable exception of Britain, fought overseas and therefore had no civilian war casualties at home. Rather than economic decline, many of these countries witnessed an economic boom in wartime. In consequence, war-induced social needs were largely restricted to soldiers and their dependants. What, in consequence, emerged was a sort of parallel veterans’ welfare state providing income support, (re)integration programmes, and various compensatory rewards (e.g. cheap housing loans (Australia and the USA) and education (the USA)) to former soldiers and their families. Spending devoted to this group was enormous, especially compared to the small civilian welfare states of the time. In Australia, for example, the veterans’ and the civilian welfare state were of equal size in spending terms in the aftermath of the Great War. In the USA, both the Civil War’s veterans’ pensions and the GI Bill were huge and costly federal programmes, and this military welfare state was further extended after World War II and the Vietnam War (Gifford 2006; Mittelstadt 2015). Another example is Israel where a series of minor wars, in combination with a situation of permanent military and terrorist threat, has given rise to very generous benefit schemes honouring the service and loyalty of former and active soldiers. Overall, social protection schemes for the military and/or civilian victims of war that were established in belligerent nations added a new layer to the welfare state with important implications for post-war social spending.

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Moreover, in several countries these programmes entailed innovative elements and a new logic of entitlement that tied social protection to citizenship and related duties mandated by the state. Only a few countries (e.g. Japan and Australia) adopted major reforms for civilians during wartime itself. In many other belligerent countries the exorbitantly high levels of military spending crowded out the establishment of costly new social programmes in wartime or even led to welfare retrenchment in mature welfare states. In virtually all nations involved in war or under occupation, however, post-war planning for a new welfare state started before the fighting had stopped. This was clearly an attempt to generate mass loyalty in a period of danger and austerity, a problem that confronted democracies and authoritarian regimes alike. Post-war planning and wartime welfare state promises sometimes crystallized into key documents. The 1942 Beveridge Report— although its influence on policy change may have been overstated—is only the most prominent of such blueprints that informed post-war social and public policy. Finally, war was a trigger of the development of social legislation related to the welfare state proper. Apart from categorical benefits for war victims and veterans, the case studies have clearly shown that the immediate post-war period was a phase of intense welfare legislation. It seems that war piled up the pressure of social problems on a massive scale that eventually led to a burst of legislative activity once the guns had fallen silent. Moreover, the end of war opened a new Pandora’s box of political and social problems related to the transition from war to peace. However, the maturity of the existing welfare state is important for understanding cross-national differences in legislative activities. All else being equal, war had more of a programmatic impact in less mature welfare states and the ‘innovative’ effects of war were more likely to be experienced in areas not previously subject to state interference. Areas in which government intervention was almost everywhere rudimentary or absent were unemployment compensation, housing (prior to World War I), and family policy (prior to World War II). Most case studies have demonstrated that both world wars prompted state intervention in these fields. Military demobilization, lay-offs in the munitions industry, and economic crises paved the way for unemployment insurance in the aftermath of the Great War. In a similar vein, housing was subject to growing public intrusion. During and after World War II, family policy became an everincreasing field of state intervention. The consolidation and expansion of family policies are not only related to the war-induced social needs of families but also to the imprint of war on demographics. This shows that pronatalism is not only restricted to the war preparation phase. With the exception of the nationalization of healthcare in Britain, longestablished welfare systems, however, tended to remain relatively unchanged. In other words, we see a significant degree of path dependence in more mature systems—both cross-nationally and across programmes—despite a

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large exogenous shock. In Germany, Italy, and Austria, for instance, neither of the world wars led to a shift in the structural make-up of the welfare state. That this is the case casts considerable doubt on the proposition that war will invariably act as a critical juncture of institutional development (Capoccia and Kelemen 2007; see also Starke et al. 2013), even ‘clearing the slate’ for post-war socio-economic development (Olson 1982). War’s capacity for ‘creative destruction’ in terms of long-term institutional development—irrespective of the horrific physical destruction this always implies—is perhaps more conditional than is often assumed.

THE L ONG-TERM E FFECTS OF WAR: Q U A N T I T A T I V E E V I D E NC E The case studies have provided compelling evidence that war has affected welfare state development in manifold ways. Building on these findings and using quantitative methods we now offer a statistical test of the ‘war matters thesis’. Specifically, we examine whether and to what extent mass warfare contributes to the explanation of cross-national variation in terms of key dependent variables studied by comparative welfare state research. Relying on a sample of eighteen Western countries, we analyse the impact of war on five core dimensions of the welfare state.² In what follows, we investigate the impact of war on (i) post-war social spending, (ii) the temporal adoption and reform of welfare programmes, (iii) benefit generosity and programme coverage, (iv) the public–private mix in welfare provision, and (v) taxation. Due to data availability the analysis mainly focuses on the impact of World War II. To measure the impact of World War II, we use an index of war intensity developed by Obinger and Schmitt (2017). This index is the unweighted sum of four standardized indicators that capture different aspects of mass warfare, namely (i) the duration of war, (ii) military and civilian casualties as a percentage of the pre-war population, (iii) the change of GDP between the onset and the end of the war, and (iv) the presence of combat activities in, and/ or the forcible occupation of, the home territory. The overall index is shown in Figure 15.1; it indicates significant variations in the extent to which the nations examined (plus five other countries not included in this volume) were affected ² Almost all quantitative studies and data sets on the development of Western welfare states rely on this sample. The countries included are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Ireland, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States of America. The reader should note that Figures 15.1, 15.4, and 15.8 contain data for Canada, Ireland, New Zealand, Norway, and Sweden although case studies for those nations are not included in this volume. Israel is excluded, however.

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Index of war intensity

4

3

2

Switzerland

Sweden

Ireland

United States

Denmark

Canada

Australia

New Zealand

Belgium

Norway

United Kingdom

Finland

France

Netherlands

Italy

Japan

Austria

0

Germany

1

Figure 15.1. Index of war intensity Source: Obinger and Schmitt (2017).

by World War II. We use this index of war intensity to test whether and to what extent war has influenced key welfare state indicators.

War and Social Spending In all belligerent countries the cruelties of war created substantial social needs and new welfare constituencies, albeit to varying degrees.³ It is therefore very likely that war influenced the development of social expenditure. Whereas Dryzek and Goodin (1986) have demonstrated that the increase in social expenditure between 1933 and 1949 was significantly shaped by World War II, we are interested in the long-term effects of war on post-war spending. The International Labour Organization (ILO) has compiled comparative social spending data that dates back to the late 1940s. According to the ILO classification of social spending, total public social expenditure also includes spending on welfare provision for the victims of war. Figure 15.2 shows that spending on this item in 1950 amounted to up to 35 per cent in war-waging nations and only declined slowly over time. Given this magnitude of war-related spending, a neglect of war as an explanatory variable almost certainly generates ³ This section is based on Obinger and Schmitt (2017).

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% of social spending on war victims

40

30

20

10

0 1950

1960

1970

1980

Year

Figure 15.2. Social spending on war victims, 1949–80 Source: ILO: The Cost of Social Security (various issues).

an omitted variable bias. It is therefore striking that no empirical studies of postwar social spending have controlled for war incidence (cf. Castles 1998, ch. 5; Obinger and Schmitt 2017). In light of the millions of war victims, we hypothesize that World War II had a substantial long-term impact on social spending trajectories in the golden age of the welfare state. For testing the impact of war on social spending, we first ran repeated crosssectional regressions for all years over the period 1950–80 with total social spending as a percentage of GDP as the dependent variable and our war intensity index as the main independent variable. The cross-sectional analyses show that the coefficient of the war index is statistically significant until 1968 but becomes insignificant thereafter and eventually disappears in 1980. Based on this finding, we estimated random effects GLS (Generalized Least Squares) models (Table 15.1) and divided the entire period (1950–80) into two subperiods, with 1968 as the cut-off year. Columns one and three report a baseline model that includes a set of control variables taken from the main theories in comparative welfare state research.⁴ ⁴ Elderly is measured by the share of population aged 65+, Left government by the share of left cabinet seats, Political institutions by the index of political constraints (Henisz 2002; 2010) and Path dependency by the average year when the classical five social security programmes were introduced. For details, see Obinger and Schmitt (2017).

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Table 15.1. Impact of World War II on social spending, 1951–80 First Period (1951–68)

Second Period (1969–80)

(1) (2) (3) (4) Baseline Model Extended Model Baseline Model Extended Model War GDP per capita (log.) t−1 Elderly t−1 Left government t−1 Political institutions Path dependency

1.148*** (0.432) 0.777 (0.739) 1.777*** (0.238) 0.000301 (0.00168) 0.582 (0.467) 0.0174 (0.0541)

Electoral system Regional authority index GDP growth Trade openness Observations Wald Chi2

316 158.34***

1.145*** (0.385) 3.183*** (0.703) 1.397*** (0.157)

0.216 (0.172) −0.116*** (0.0371) −3.909*** (0.832) −0.0171** (0.00821) 297 235.01***

−0.173 (0.439) 1.193 (1.386) 1.820*** (0.227) 0.00158 (0.00197) −0.748 (0.982) −0.0248 (0.0563)

204 186.80***

0.460 (0.300) 6.293*** (1.425) 1.061*** (0.130)

1.752*** (0.356) −0.0285 (0.0260) −7.416*** (1.857) 0.0445*** (0.0117) 202 414.08***

Note: Robust standard errors in parentheses ***p < 0.01, **p < 0.05, *p < 0.1.

In columns two and four, we estimate an extended model that consists of those variables that have turned out to be statistically significant in the baseline model as well as four variables that control for possible supply-side effects of war, that is, effects on the electoral system, economic development, and the degree of centralization and trade openness.⁵ Table 15.1 unequivocally demonstrates that World War II strongly influenced social spending in the two decades after the war. The coefficient of the index of war intensity is positive and highly statistically significant. An increase in the overall index of war intensity by one unit leads to an increase in the social spending/GDP ratio of 1.14 percentage points. Given that the ⁵ The electoral system is captured with a categorical variable measuring the existence of proportional representation (Bormann and Golder 2013). The Regional Authority Index measures the decentralization of policy responsibilities with high values indicating high levels of regional policy authority (Hooghe et al. 2016). Economic growth is measured by the annual change in GDP per capita and trade openness by the sum of exports and imports as a percentage of GDP (Armingeon et al. 2016). See Obinger and Schmitt (2017) for details.

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average level of social expenditure in our sample amounted to 8.5 per cent of GDP in 1951, a rise of 1.14 percentage points is a substantially strong effect. The size of the coefficient of the index is almost identical in the baseline and the extended model (Models 1 and 2). Since the latter controls for possible supply-side effects of war, we conclude that it was mainly the demand-side effects of war, that is, the social needs generated by war, that are of key relevance for understanding post-war social spending trajectories. The picture looks different for the period from 1969 onwards. The coefficients of the war index (Models 3 and 4) are now statistically insignificant and substantially irrelevant in size which suggests that the impact of World War II on social expenditure in the immediate post-war period disappeared in the 1970s. In a third step, we briefly examine the impact of World War I on post-war social spending. Unfortunately, the very limited data availability precludes a sophisticated analysis. Since only ILO social spending data for 1933 is available, we ran a simple cross-sectional regression. To measure the war intensity of World War I we used the number of military and civilian war casualties as a percentage of the pre-war population. Data is taken from Ellis and Cox (1993). We use welfare state maturity as a control variable, which is measured by the average year when five welfare programmes (sickness, work injury, unemployment, old-age schemes, and family allowances) were adopted. The findings are reported in Table 15.2. As expected, World War I had a strong impact on social spending levels in 1933. This long-term war impact on social spending is corroborated by national data. Germany, for example, spent 2.7 per cent of national income (equivalent to 15 per cent of total social expenditure) on the social protection of war victims in 1933 (Zöllner 1964, 43). The variable capturing welfare state maturity is also statistically significant and shows the expected sign as social spending in 1933 is higher in countries in which welfare state formation took place early. Table 15.2. Impact of World War I on social spending in 1933 Social spending as percentage of GDP in 1933 WW I casualties Programme adoption

Observations R-squared

128.16** (57.05) −0.1367** (0.0565) 18 0.54

Note: Robust standard errors in parentheses ***p < 0.01, **p < 0.05, *p < 0.1. Sources: Social spending data is taken from Dryzek and Goodin (1986). Programme adoption is based on Schmidt (2005).

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In sum, we can conclude that both world wars had a strong long-term impact on post-war social spending, thus confirming the findings of many of our case studies. War is therefore important for understanding crossnational differences in post-war welfare efforts. According to our estimations, World War II shaped social spending for a period of around twenty-five years. The impact of war became weaker thereafter as more and more war victims died with the passage of time or, like war orphans, lost their welfare entitlements. In the years to come, spending on this item will likely disappear completely from governmental budgets with the demise of the wartime generations.

War and Welfare Programme Adoption Did war catalyse the adoption and reform of welfare programmes? Several of the case studies in this volume have provided evidence that unemployment insurance and family benefits were introduced or extended during and after war and that these legislative activities were causally related to warfare. Figure 15.3 illustrates the timing of welfare reforms for four social security programmes in fifteen countries. Data is taken from Hicks et al. (1995) and refers to programme introduction and two major programme extensions (i.e. making a programme mandatory or more inclusive). Work injury is excluded as this programme was enacted before World War I in the majority of the countries discussed here. In line with the case study evidence and the observation by Abbott and DeViney (1992, 268–9), Figure 15.3 shows a clustering of reform activities related to family benefits and unemployment compensation during and immediately after both world wars. In terms of family benefits, there is a cumulation of legislation during and after World War II. A similar agglomeration of reform activities, albeit on a smaller scale, can be seen for unemployment compensation at the end of World War I. By contrast, there is no significant reform jump in this area after World War II. The reason is simply that some kind of unemployment benefit was in place in virtually all countries by the 1940s. Overall, these findings corroborate the case study evidence presented in this volume. The picture for the two remaining programmes is less clear-cut. In contrast to unemployment and family benefits, several nations had already introduced sickness or old-age pensions before the outbreak of war. In terms of pensions, there is no pronounced reform activity during either of the world wars, but we can see an increase in legislative activities immediately after the end of World War II when welfare state laggards, such as Switzerland, introduced a public pension scheme. No war-related pattern can be detected for sickness insurance.

30

30

No. of reforms

No. of reforms

40

20

20 10

10 0

0 1930

1940

1950

1960

1970

1900

Introduction of family allowances

40

40

30

30

No. of reforms

No. of reforms

1920

1940

1960

1980

Introduction of unemployment scheme

20 10

20 10 0

0 1880

1900 1920 1940 Introduction of retirement scheme

1960

1880

1920 1940 1960 1900 Introduction of sickness scheme

Figure 15.3. Programme adoption and major reforms in four welfare state branches Source: Own compilation based on data from Hicks et al. (1995).

1980

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War, Benefit Generosity, and Programme Coverage While the strong impact of both world wars on social spending and welfare legislation in some areas is not really surprising in light of the millions of war victims, it is theoretically much more unclear whether war affected the benefit generosity of those welfare programmes that were already in place before the war. Positive as well as negative effects of warfare are conceivable. To begin with, the post-war economic situation was shaky in many countries and in some places even disastrous. Under these conditions, there was not much financial leeway for increasing welfare benefits or the coverage of welfare programmes in the immediate post-war period. Additional constraints were imposed by the fact that governments in war-torn countries had to provide social protection to war victims. Since spending on this group of beneficiaries enjoyed priority and absorbed large amounts of public money as shown in the previous section, it is possible that civilian programmes were subject to cutbacks. While this substitution effect suggests a negative impact of war on benefit generosity, a positive impact is also conceivable as several war cabinets of the belligerent democracies announced, or drafted, comprehensive welfare state reforms for the post-war period. Finally, it is also possible that the positive and negative influences cancel each other out. Overall, no unambiguous hypothesis can be derived. Thanks to the Social Citizenship Indicator Program database (Korpi and Palme 2007), which provides information on replacement rates (coverage and generosity) of four social security programmes since 1930 for eighteen countries, we can examine this empirically. First, we test the influence of war on the generosity, and second, we test its influence on the inclusiveness of social security schemes. Table 15.3 reports simple cross-section regressions in which the change of the replacement rate of four core welfare programmes between 1939 and 1950 is regressed on the war index. All models control for the pre-war replacement rate. The coefficients of the war index are positive but mostly statistically insignificant. The only exception is sickness insurance, where we find a positive and statistically significant impact of war. This effect remains stable if we control for GDP per capita in 1938 (not shown). A possible, but nevertheless speculative, explanation is that war and wartime emergency powers of government removed the resistance of vested interest groups such as doctors and private insurers to health insurance. Likewise, it is conceivable that sickness benefits were expanded to improve the health status of soldiers, as argued by Kasza in this volume.⁶ A consistent finding across all programmes is a negative and statistically significant effect of the pre-war replacement rate on the change in

⁶ See Chapter 6, Gregory J. Kasza, ‘Welfare Policy and War in Japan’.

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Table 15.3. Impact of war on the replacement rate of four welfare programmes Change of replacement rate 1939–50 Pension

Sickness

Standard Single

Work injury

Family Single

Family

Unemployment Single

Family

Constant

0.19 0.0269 0.0538 0.3601* 0.5089*** 0.2714** 0.3297** (2.89) (0.35) (0.73) (1.96) (3.29) (2.48) (2.89) Replacement Rate 1939 −0.61*** −0.408** −0.300* −0.532** −0.723*** −0.881*** −0.781*** (3.09) (2.21) (1.76) (2.19) (3.66) (3.04) (3.12) War Index 0.031 0.101** 0.078* 0.014 0.0007 0.0108 0.0095 (1.32) (2.53) (2.12) (0.37) (0.02) (0.31) (0.25) R2 0.43 0.35 0.27 0.30 0.50 0.41 0.40 Observations 18 18 18 18 18 18 18 Note: Robust standard errors in parentheses ***p < 0.01, **p < 0.05, *p < 0.1. Source: Replacement rates reflect the average of short-term and long-term benefits and are taken from Korpi and Palme (2007).

Table 15.4. Impact of war on the coverage of four social security programmes Change of coverage rates 1939–55

Coverage Rate 1939 War Index R2 N

Pension

Sickness

Accident

Unemployment

−0.399* (0.221) −0.097* (0.051) 0.26 18

0.012 (0.142) −0.025 (0.038) 0.03 18

−0.249* (0.131) −0.030 (0.027) 0.29 18

−0.220 (0.192) 0.010 (0.035) 0.06 18

Note: Robust standard errors in parentheses ***p < 0.01, **p < 0.05, *p < 0.1. Source: Coverage data is taken from Korpi and Palme (2007).

benefit generosity. This is indicative of a catch-up by nations with initially low replacement rates or, more technically speaking, beta convergence. In the next step, we analyse empirically whether or not the coverage of social security programmes was influenced by the extent to which a country was affected by World War II. We regress the change in coverage rates from 1939 to 1955 on the war index as well as on the coverage rate in 1939. The results are summarized in Table 15.4. The war index is statistically insignificant in three out of four models. However, in the case of pension schemes, the war coefficient is negative and statistically significant at the 10 per cent level. Hence, we find here a negative impact of war on the welfare state. One reason might be that extending pension coverage absorbs substantial financial resources, which were lacking in countries heavily affected by war. Moreover, we only find a catch-up effect with regard to pension and accident schemes, but not for sickness and unemployment schemes.

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War Impact on the Public–Private Mix Beyond social spending and benefit generosity, war may have influenced welfare state patterns, notably the public–private mix in benefit provision, which is ‘the principal analytical axis that underpinned the “three worlds” typology’ (Esping-Andersen 1999, 74). In fact, it is plausible to argue that war, at least in war-torn economies, has crowded out markets from social provision in the aftermath of war. The underlying mechanism is that war led to severe market distortions in countries suffering from economic decline and massive destruction on their home territories. Under conditions of uncertainty and hyperinflation, private alternatives to publicly provided social security, such as financial markets or private insurance, become ineffective or simply collapse (Overbye 1997) so that often ‘the state alone is capable of filling this gap’ (Dryzek and Goodin 1986, 9). The situation should be very different in nations that were not struck by acts of war on their own territory and/or by severe macro-economic turbulences such as hyperinflation. Hence, we hypothesize that the importance of private welfare provision decreases with war intensity. Examining this thesis is again difficult as comparative data on private welfare benefits or private spending is lacking for the immediate post-war decades. We therefore focus on old-age security as the biggest programme of the welfare state and use the volume of life insurance premiums as a percentage of GDP as a proxy for private provision. The first year for which data is available is 1960. Unfortunately, however, data for only fifteen countries is reported for this year. Figure 15.4 shows a scatter plot for the take-up of life insurance in 1960 and the war intensity index. As expected, the correlation is negative and quite strong (−0.53). Simple cross-section regressions reveal that the war intensity index is a significant predictor of the prevalence of life insurance, and it remains so if the generosity and the age of the national pension system are included as control variables (Table 15.5, Models 1–3).⁷ Fully in line with the previous findings related to social expenditure, the effect of war disappears with the passage of time, as the impact of war on the volume of life insurance premiums is no longer significant in 1979 (Model 4). Model 5 shows why: it is the catch-up by war-torn countries in the take-up rate, that is, a rapid growth of life insurance in countries with a high war intensity index that explains this finding. However, this increase in the significance of life insurance was moderated by a mature pension system. We have also tested the impact of the war index on private social spending and the difference between total net and gross public social expenditure in 2001;

⁷ Note that we did not control for GDP per capita since economic performance is one component of the war intensity index.

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3

Life insurance 1960

United States Canada Switzerland 2 Australia Sweden

Japan Norway

Denmark

Germany

Belgium

1 Finland France

Italy

Austria

0 0

1

2 Index of war intensity

3

4

Figure 15.4. Relevance of life insurance in 1960 and war intensity Note: Life Insurance Premium Volume as a percentage of GDP. Source: DICE Database, Ifo Institute, Munich. 2017: http://www.cesifo-group.de/DICE/fb/3Z6vjz3q7, accessed 19 May 2017.

Table 15.5. Life insurance premium volume as a percentage of GDP, 1960 and 1979

Constant War Index Pension Replacement Rate 1939 Age pension system R2 N

Life Insurance 1960 (1)

Life Insurance 1960 (2)

Life Insurance 1960 (3)

Life Insurance 1979 (4)

1960–79 (5)

2.1461 (6.02) −0.3759** (2.27) —

2.122*** (4.54) −0.3774** (2.18) 0.1257

2.2736*** (4.32) −0.3539* (1.93) —

2.0955*** (5.43) −0.1116 (0.60) —

0.4352 (0.95) 0.4015** (2.51) —

—

(0.08) —

—

0.28 15

0.28 15

−0.00397 (0.34) 0.29 15

−0.01849* (1.81) 0.38 15

0.02 18

Change

Note: Robust standard errors in parentheses ***p < 0.01, **p < 0.05, *p < 0.1. Source: DICE Database, Ifo Institute, Munich. 2017: http://www.cesifo-group.de/DICE/fb/3Z6vjz3q7 accessed 19 May 2017.

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the latter is a measure for the hidden welfare state (Castles and Obinger 2007). There is, however, no relationship whatsoever between these variables (not shown). Overall, and much in line with the previous analysis of social spending, these findings suggest that the impact of war on the public–private mix petered out roughly one generation after World War II.

War and Tax Policy The impact of war is not only discussed with regard to the spending side of the welfare state but also features prominently in the literature on the history of taxation (e.g. Tilly 1985, 1992; Kiser and Lington 2001). Tilly (1992, 74–5), for example, argues that when a number of wars broke out during the sixteenth century, expenditure rose dramatically and European states had to find new means of financing such as taxes (see also Tilly 1985, 78). War is not only assumed to put pressure on countries to introduce new taxes (e.g. Berry and Berry 1992; Aidt and Jensen 2009; Seelkopf et al. 2016) but also to influence the progressivity of tax rates. ‘[M]obilization for mass warfare led to demands for increased taxation of the wealthy to more fairly distribute the burden of war effort’ (Scheve and Stasavage 2010, 529). To illustrate the relationship between war and tax progressivity, we plot the average top rate of income tax as a proxy for the progressivity of taxes from 1910 to 1970 across our sample of eighteen countries.⁸ Figure 15.5 indicates that on average countries raised the level of top tax rates quite significantly during and shortly after both world wars. World War I, in particular, seems to have been a turning point in the taxation of top incomes. In 1913, countries on average taxed the wealthy by 8.9 per cent compared to a tax rate of 37 per cent in 1920. A similar development, albeit to a weaker extent, can be observed with regard to World War II. Since the argument that countries increase the top tax rate in order to distribute the burden of warfare more equally across the population does not apply for all countries in the same way, we additionally show the development of top tax rates separated by three country groups. We divide our sample into countries that have been neutral or were occupied (group 1), those that were involved in combat activities overseas (group 2), and the belligerent countries that suffered from war activities on their home territory (group 3). Figures 15.6 and 15.7 show impressively that both groups 2 and 3 raised the top tax rates during and immediately after both world wars, while the increase

⁸ The top rate in per cent is the marginal rate of direct tax that an independent government levies yearly on comprehensive and directly assessed forms of personal income tax for the highest income category (Genovese et al. 2016).

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Average top rate of income tax (%)

80

60

40

20

0 1920

1960

1940

Figure 15.5. Average top rate of income tax from 1910 until 1970 Note: Period from the beginning of World War I and II until shortly after. Source: Data on tax rates is taken from Genovese et al. (2016).

Average top rate of income tax

60

50 Countries fought overseas

40

Belligerent countries

30 Neutral/occupied countries

20

10 1915

1920

1925

Figure 15.6. Development of top tax rate around World War I Source: Data on tax rates is taken from Genovese et al. (2016).

1930

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Average top rate of income tax

100

80 Countries fought overseas Belligerent Countries

60 Neutral/Occupied Nations

40

20 1930

1940

1950

1960

1970

Figure 15.7. Development of top tax rate around World War II Source: Data on tax rates is taken from Genovese et al. (2016).

in the tax burden was much weaker in neutral or occupied countries. In addition, in all country groups, tax rates never returned to their pre-war level.

War and Social Outcomes: Inequality That war has a devastating immediate effect on human welfare is a sad truism. The effects of war on individual well-being, for example, are manifold, strong, and enduring (see, for example, Murray et al. 2002 and Levy and Sidel 2007 on the effect of war on public health). War destroys lives and makes the lives of many survivors miserable. Civilians are further affected by the destruction of public infrastructure and private assets, forced migration, and environmental damage. Much less attention has traditionally been paid to the systematic distributive effects of war, however. Pioneering research on inequality noted the equalizing trend after World War I, especially in European countries (Kuznets 1955), but war as an independent cause of distribution and redistribution was not examined for decades. Only quite recently, partly driven by better data availability, has the impact of war received more attention from scholars of inequality (Piketty 2003, 2014; Atkinson 2015; Milanovic 2016; Scheidel 2017). Defying popular notions of generalized ‘war profiteering’ by the rich, the best available evidence on income and wealth inequality shows that the two

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25%

20%

15%

10%

5%

0% 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 Denmark Japan

France Sweden

Germany

Figure 15.8. Top 1% pre-tax income share in per cent in selected countries, 1900–2013 Sources: Alvaredo et al. (2017); World Wealth and Income Database: http://wid.world/, accessed 29 March 2017.

world wars, in particular, had massive levelling effects.⁹ Figures 15.8 and 15.9 display the share of fiscal income held by the top 1 per cent of earners in nine of the countries examined in this book, plus Sweden. In Germany, for example, that share decreased from 17.8 per cent in 1914 to 11.3 per cent in 1925, after World War I and the hyperinflation of 1923, before rising again in the 1930s.¹⁰ Between 1938 and 1950, the drop was comparable: from a share of 16.3 per cent to 11.8 per cent (Alvaredo et al. 2017). Similar tendencies can be shown for Britain and France and, to a lesser extent, the USA. The only event in pre-modern Europe that had a comparable impact on inequality was the ‘Black Death’ in the late Middle Ages, thereby joining warfare in the group of what Milanovic (2016, 56) describes as the ‘malign forces’ of inequality reduction and what Scheidel (2017) calls the ‘Four Horsemen’ of income levelling, namely: mass-mobilization warfare, revolutions, state collapse, and pandemics. ⁹ This does not diminish the fact that certain companies, sectors, or individual ‘masters of war’ have benefited greatly from war and arms races throughout history. Indeed, the first years of World War I show an increase in the top shares in many countries. ¹⁰ German top incomes reached their all-time high of 22.4 per cent as a share of total incomes in 1917, which may be due to the absence of physical destruction on German soil and direct benefits of war for German heavy industry, evidently a source of top incomes at the time (Dell 2007).

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30%

25%

20%

15%

10%

5%

0% 1913 1923 1933 1943 1953 1963 1973 1983 1993 2003 2013 Australia Netherlands

Switzerland United Kingdom

USA

Figure 15.9. Top 1% pre-tax income share in per cent in selected countries, 1913–2015 Sources: Alvaredo et al. (2017); World Wealth and Income Database: http://wid.world/, accessed 29 March 2017.

The reasons why war should have this effect are complex. The destruction of physical assets and inflation contributed to the reversal of historically lopsided wealth–income ratios, especially in Germany and France (Piketty and Zucman 2014), and also presumably in other countries that score high on our index of war intensity. It was, however, far from the only equalizing force. Other mostly economic mechanisms, such as shifts in demand due to the war economy, the disruption of global trade, and labour scarcity (driving up wage incomes) also need to be taken into account, especially when it comes to income inequality. Last, but not least, stronger market regulation and redistribution via progressive taxation (Scheve and Stasavage 2010; 2016) as well as cash transfers and in-kind benefits should be taken into account. Gauging the exact contribution of taxing and spending changes due to war— the veterans’ pensions, unemployment and family benefits described in the chapters of this book—to the ‘Great Levelling’ of 1914–45 presents formidable methodological problems. Much of the comparative historical data that has become available over past years, most notably via the World Wealth and Income Database, measures inequality at the top of the distribution of income or wealth. Internationally comparable Gini coefficients are also becoming available, but tend to have considerably fewer data points for that very period (see Milanovic 2016, ch. 2). So far, we lack good historical data on redistribution. For pre-1950, the few data sources tend to track market incomes or taxable income of the rich, as well as wealth shares. These measures, however, do not include

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state transfers (or the value of publicly provided goods and services) like some datasets covering recent times do (e.g. the Luxembourg Income Study). We can only speculate that the wartime compression of disposable income inequality is, if anything, understated by comparative inequality research. If we were to include the welfare state expansion via special programmes and augmentation of schemes more generally, we would most likely see that the gap between rich and poor narrowed even more strongly between 1914 and 1945. We are therefore confident that future research on the determinants of the Great Levelling will give welfare benefits a prominent place.

AFTER MASS WARFARE: THE COLD WAR AND THE CONTEMPORARY WARFARE– WELFARE NEXUS

The Cold War and the Welfare State The year 1945 is often discussed as if it were a new beginning. The combined experiences of the two world wars and the massive loss in terms of lives and material welfare triggered a strong emphasis on securing peace and progress, and in this way helped pave the way for the expansion of welfare states. Still, the golden age of the welfare state coincided with a rivalry between the East and the West in what was labelled a cold war. The Cold War differed from the experience of mass war as discussed in this volume. Starting in the late 1940s, the Cold War covered more than four decades.¹¹ It was at certain times more heated than at others (Lundestad 1999), but within the Western world, the geographical space covered in this volume, it remained ‘cold’.¹² Consequently, it was a different type of war; it was an ideological struggle between two rival superpowers representing two different political and economic systems: socialism and planned economy on the one side, and liberal democracy and market economy on the other (Cronin 2000, 78; Westad 2010, 13). Furthermore, the post-1945 period also changed the nature of war, gradually shifting the balance from mass war, as in the two world wars, towards a growing emphasis on technology and nuclear arms. The change from mass war to more technical warfare put education and knowledge production at the forefront. A prominent example of this was the so-called Sputnik crisis in the USA, ¹¹ Churchill’s speech at Fulton University declaring that Europe was being divided by an Iron Curtain is often seen as the starting point, and the fall of the Berlin Wall in 1989 and the breakdown of the Soviet Empire its conclusion. ¹² This was of course not the case on the global scale and several of the countries discussed in this volume—most notably the USA and France, but also Britain and Australia—were involved in warfare in Korea, Vietnam, and other places. See Chapter 7 in this volume, Robert P. Saldin, ‘Foreign Policy on the Home Front’, for a discussion of the impact of the Korean War.

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where concerns that America was lagging behind the Soviet Union with respect to technological innovation nurtured demands from the military and policymakers that the US educational system should step up its game (Herold 1974). Even though the Cold War and the expansion of the welfare state developed in parallel throughout most of the post-war era, the links between these two ‘master narratives’ of the last half of the twentieth century have not been systemically analysed by comparative welfare state research. This could reflect the fact that, in the decades after 1945, the expansion of social rights took absolute first place on the political agenda. Insofar as the Cold War has been mentioned in such research, it has mainly been as a relevant political context, or in general terms pointing to the massive expansion of the welfare state in the post-war period as a byproduct of the Cold War (see, for example, Gough 1979, 128; Hobsbawm 1990; Mishra 1993). In the words of British historian Eric Hobsbawm (1990, 21): ‘Whatever Stalin did to the Russians, he was good for the common people in the West.’ Consequently, it seems plausible to ask whether the mechanisms linking war and social reform discussed and examined in this volume are also relevant for understanding the impact of the Cold War on welfare state development from the late 1940s until the end of the twentieth century. Did the ideological rivalry between the two superpowers and their respective blocs influence the expansion of the welfare state? A recent study by Obinger and Schmitt (2011) has put this question to an empirical test, finding that overall regime competition during the Cold War clearly stimulated social spending on both sides of the Iron Curtain— at its most pronounced in the 1970s. But how do we explain this finding? In what follows, we offer some preliminary reflections with respect to Western welfare states (for a discussion on ‘socialist welfare states’, see Inglot 2013). Arguably, the single most discussed mechanism relating war to social reform is the ‘guns and butter’ trade-off. In his pioneering work on comparative welfare state research, American sociologist Harold Wilensky devotes a full chapter to discussing the relationship between war, military spending, and the welfare state (1975, 70–85). According to Wilensky, In those years of 1950–1952, the superpowers launched a nuclear arms race, developed rigid doctrines of international conspiracy and enemy encirclement, and demonstrated their willingness to be tough and take risks in such crises as Berlin and Korea. The resulting swift increase in military spending from 1950–1952 cast the die for a poor welfare performance for those countries most swept up in the crisis atmosphere. Thus, for sixteen countries, great increases in military spending in 1950–1952…are associated with small increases in social security spending for the whole period 1950–1966. (1975, 77–9)

Wilensky (1975, 79) underlined that ‘[o]f course welfare states march on through thick and thin; while acceleration of military spending can retard

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welfare spending, it does not stop it.’ US political scientists from the late 1960s and 1970s onwards have been engaged in a debate about the possible trade-off between public spending for social welfare and rearmament. The first generation of writers argued that rising defence expenditures had a clear negative effect on welfare spending (see, for example, Russett 1969; Edwards et al. 1972; Hartman 1973). Other more recent writers have argued that the evidence is mixed and does not lead to any clear conclusion about the correlation between the two key elements of public budgets (see, for example, Caputo 1975; Clayton 1976; Domke et al. 1983). In their 1983 comparative study, Domke et al. do not find any systematic long- or short-term trade-offs between military and welfare spending but they acknowledge that there might be specific historical and national contexts, periods with wars or ‘discrete decision-point trade-offs’ (Domke et al. 1983, 21), where decision makers spend more on defence at the expense of social welfare (or vice versa). It is, however, unreasonable only to discuss the relationship between the Cold War and the welfare state as a zero-sum game in economic terms. It is clear that, especially during the early years of the Cold War, the need to increase military spending made the ‘guns and butter’ trade-off seem very real for many policymakers (Petersen 2013). ‘Will it be Welfare or Weapons’, asked the Los Angeles Times in 1950, commenting on the American political debate (LA Times, 14 December 1950). Peace movements and other groups resisting the arms race explicitly used the expenditure trade-off as part of their political repertoire, and conservative groups resisting social reform used the ‘military defence first’ argument against increasing social expenditure. This was most pronounced in the USA (Petersen 2013, 229–32), where the Cold War easily served as a very negative framing of comprehensive social reforms as a form of socialism or communism. In an analysis for the Library of Congress in 1950 on the concept ‘welfare state’, the author summarized the discussion as follows: ‘The more extreme opponents of the “welfare state” describe it as “socialism”, and the more moderate refer to it as the halfway house to Socialism’ (Achinstein 1950, 61). The black-and-white logic of the Cold War fuelled already existing political conflicts within the left, between Communists and Social Democratic reformists, as well as between communism and the political establishments struggling for social stability. This had an important impact on political coalition patterns by integrating de-radicalized Social Democrats and reformist labour movements as part of the political establishment. For Conservative and Liberal parties, coalition-building and (to some degree) welfare reforms were considered an insurance against the larger evil of communism. Anti-communism, both in terms of foreign policy and domestically, served as a uniting factor bridging other societal cleavages. However, the specific forms and levels of consensus-building and cross-class alliances varied between countries depending on electoral systems, electoral outcomes, and the threat level confronted.

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In some cases, this resulted in bans on communist parties or ‘Red Scares’. Storrs (2012), for example, has shown how McCarthyism in the USA resulted in the exclusion of numerous New Dealers from the US administration. In a similar vein, the Italian Communist Party, despite being the largest communist party in the West, was excluded from government throughout the post-war period, with important consequences for welfare state development during the so-called golden age.¹³ However, in most cases the domestic struggle between communism and the political establishment was a battle over the ‘hearts and minds’ of the population, and in these confrontations, social policy played an important role as a vehicle for increasing the legitimacy of governments. Systemic competition did not only take place between nation states or blocs on the international scene. The international rivalry between liberal democratic states and socialist states was also a lived reality in domestic politics and even at a local level. In some cases, this was very explicit in national political debates, as illustrated by the rivalry between the two Germanys (Hockerts 2009; Obinger and Lee 2013). Divided Germany was by most standards a special case, but systemic competition and legitimacy claiming through social policymaking was a more widespread phenomenon. The ability of the Western European democracies to develop various ideological forms of social capitalism created room for the expansion of social security. In Germany, the Soziale Marktwirtschaft (social market economy) tried to balance the two sides of the coin, and the Nordic countries went even further, launching the Nordic welfare state as a ‘middle way’ between capitalism and socialism (Nelson 1953). According to contemporary observer and international relations scholar Klaus Knorr, the welfare state could be considered the ‘most constructive defense of the free world against Communism’ (Knorr 1951, 448). Two years later, German Social Democrat Ludwig Preller noted that ‘[e]specially in the Cold War it is welfare state generosity that marshals the biggest battalions’.¹⁴ This comes close to what we, in the Introduction to this volume, discussed as generating ‘regime loyalty through social policy’. Thus, there are good arguments that several of the mechanisms discussed in this book (see the overview in the Introduction) also hold for the Cold War era. However, some mechanisms clearly played a more limited role in the Cold War context. First, the strong links in several countries between mass conscription and social citizenship in the age of nation-building (late nineteenth and early twentieth centuries) was less of an issue after 1945. Young males were still drafted, but on a lesser scale. In the nuclear era with more developed social security programmes and established nation states, this became less ¹³ See Chapter 4 in this volume, Maurizio Ferrera, ‘Italy: Wars, Political Extremism, and the Constraints to Welfare Reform’. ¹⁴ Quoted in Schmähl (2006, 383).

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important, except in countries directly involved in military conflict, such as the USA and Israel. In these countries, we see the development of parallel military welfare states (discussed further in the following section). Second, it is also debatable whether the continued growth of the tax state after 1945 can be attributed to military conflicts and concerns. Clearly, taxes continued to grow after 1945 (OECD 1982), but this was largely a consequence of the golden age of the welfare state and the political and economic forces underpinning it. Social spending, not the arms race, fuelled the growth of taxation and public spending during that period, as the ratio of military to social spending decreased from 0.40 to 0.13 in the core OECD countries between 1960 and 1990 (Castles 2006). Still, several of the mechanisms discussed in this volume also seem to have relevance in the Cold War era and, consequently, have to be taken into account when explaining the post-1945 developments of the welfare state. As we already have touched upon in the Introduction, the two world wars restructured the international circulation and diffusion of social policy ideas and cross-national learning in important ways. The ILO was established as part of the Versailles Peace Treaty in 1919, and in the aftermath of World War II a set of new institutions was established that not only cemented the East–West divide but also became important arenas for policy diffusion. The ILO also continued to play an important role after 1945 as a meeting ground for both the Eastern and the Western blocs (Kettunen 2009; Kott 2011), whereas a new set of institutions created a Western room for policy diffusion linked to the Pax Americana. These included the Bretton Woods institutions (the International Monetary Fund and the World Bank), inter- and supranational institutions such as the OEEC/OECD and the EEC/EU, as well as regional cooperation arrangements, such as that between the Benelux and the Nordic states. It also included a number of more specific institutions and programmes that facilitated transfer of knowledge from the USA to Europe, such as the Marshall Plan (especially the technical programmes), American foundations such as the Rockefeller Foundation and the Fulbright Program, and a large number of bilateral programmes (Rausch 2007; Petersen et al. 2013). To sum up, there are good reasons for considering the Cold War as equivalent to ‘hot’ wars with respect to its impact on welfare state development. Several of the mechanisms discussed in this volume can also be applied to the post-1945 era. However, disentangling the impact of the world wars (and other ‘hot’ wars) from the impact of the Cold War is a difficult endeavour demanding in-depth, systematic, comparative research, and it is likely that we will find variation between different national contexts and over time. We do not argue in favour of any ‘one-size-fits-all’ pattern explaining the links between the Cold War and the welfare state. What we do argue is that the Cold War—as well as mass warfare in general—needs to be taken more seriously by welfare state

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scholars. The brief discussion here provides nothing but a starting point for a more systematic inquiry.

The Warfare–Welfare Nexus after the Cold War The end of the Cold War in 1989/90 heralded the transition to a new period, marked not least by much lower levels of military spending (see Figure 15.10). The chart reflects a sharp decrease in levels of militarization across all Western countries, even in the USA and Israel. The relevant question for this book, however, is whether war, military rivalry, and the role of military institutions are still among the causal factors affecting social policy. Our tentative answer is no. The situation might be different in countries outside of what today is the core-OECD group and the situation might also change. After all, a more aggressive Russian foreign policy, continuing instability in the Middle East, and the election of Donald Trump in 2016 have already, at the time of writing (spring 2017), led to debates and cautious reassessments of foreign and security policy by NATO members. Germany is set to boost military spending and Sweden has even reintroduced conscription. Despite these most recent developments, it would be unwise to try to predict future developments. What can be said, however, is that in rich countries, the warfare–welfare nexus has been weakened, and perhaps has even disappeared, since the end of the Cold War for two main reasons: first, because the nature of war and military service have changed significantly, and second, because the welfare state has 18 16

% of GDP

14 12 10 8 6 4 2 U SA Fr an c U ni Aus e te t ra d Ki lia ng do Fi m nl an d Ita D en ly m G ark er N ma et he ny rla n Be ds lg iu m Ja pa Au n st Sw ria itz er la nd

Is

ra el

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Figure 15.10. Military expenditure as a percentage of GDP, 1988 and 2015 Source: Stockholm International Peace Research Institute (SIPRI), Yearbook: Armaments, Disarmament and International Security, retrieved from World Bank Open Data, 2017: https://data.worldbank.org/, accessed 29 March 2017.

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undergone a massive transformation. Several of the causal mechanisms underlying the warfare–welfare nexus as described in the chapters of this book thus rest on much weaker foundations than in the first half of the twentieth century. Regarding the first element, the most important change is that the mass army, which drove the developments we described for the twentieth century, has become less important in recent years. Arguably the main background to this is peace among the Great Powers and the end of the Cold War, because the single most important determinant of army size, after all, is military threat and war. The other main reason, however, is technological change. How a war is waged shapes the size and composition of armies. In a large-N study of the determinants of army size since 1600, Onorato et al. show that the use of railways and the spread of cruise missile technology had a strong impact on army size—positive for the former, negative for the latter technology (Onorato et al. 2014). Just as the railway allowed unprecedented mass mobilization by permitting the movement of large numbers of men and arms over long distances, so more recent inventions have had the opposite effect. Nuclear weapons, cruise missiles and, more recently, drones, have changed the parameters of conflict significantly, as they allow the infliction of damage from a distance and require far fewer soldiers for military operations. From a technological point of view, there is no reason to expect a reversal of this trend. According to research in this field: ‘As the information revolution continues to transform the battlefield over the coming decades, sheer numbers, never the sole determinant of war’s outcome, will in all likelihood continue to decrease in importance’ (Krebs and Levy 2001, 67). By contrast, skills and technological capacities (as captured, for example, in R&D spending) are becoming more important with technological upgrading. The kinds of wars the countries in our book have been involved in since 1990 are different, too. They are usually fought against nominally much weaker enemies (in terms of level of economic development, population size, state capacity, technological level, or nuclear threat). And these asymmetric wars are fought in significantly different ways. ‘No boots on the ground’ is the order of the day for belligerent rich democracies, showing that, while using ground troops often cannot be avoided, there is a strong reluctance to send large armies into the battlefield. Citizens now have more to lose in economic terms and, through the greater institutionalization of democratic norms, a greater say in being used as ‘cannon fodder’ on the battlefield. Wars are also increasingly intrastate rather than interstate conflicts, suggesting that many of the theoretical expectations from this book, building upon national, crossclass solidarity, state capacity and so on cannot be taken as a starting point. As a consequence of these changes, industrial countries are reducing the size of their military and, more importantly, have been moving towards all-volunteer forces (Haltiner 1998; 2006). All large OECD countries have

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abolished or suspended military conscription, although it is more widespread in smaller countries, for example, in Denmark, Finland, Austria, Switzerland and, now again, Sweden. It is fair to say that even in these latter countries the share of conscripts amongst the total military personnel has been reduced significantly over the years (Cusack 2007). Apparently the clearest exception to this rule of the retreat of the mass army, however, is Israel, where the military to civilian ratio is among the highest worldwide and conscription for both genders is still in place. This is by no means a very recent development, but the consequences for welfare state development have so far not been spelled out. If only a small share of the population serves in the military, the powerful effects military conscription used to have on social policy development—such as better education and public health to improve the quality of recruits, compensating soldiers and their families for risking their lives, or enhanced solidarity among those being bound together by military service—are likely to be much more limited also. An all-volunteer force tends to use social policy, but mainly with the aim of recruiting more (and the right kind of) soldiers. As the military has been transformed ‘from institution to occupation’ in many countries (Moskos 1977), fringe benefits have become more important for recruitment. The parallel welfare state catering to members of the military and their families described also for earlier periods is still highly important, especially in less generous welfare states. This is why the bifurcation between a civil and a military welfare state is particularly evident in societies such as the USA and Israel, which combine small welfare states with relatively high levels of military mobilization.¹⁵ The design of these benefits can thereby diverge quite significantly from the civilian welfare state, usually by being more generous and ‘universal’ (Gifford 2006). In her seminal monograph on the military welfare state in the USA, Jennifer Mittelstadt presents a table summarizing the most important military social welfare programmes that stretches over five whole pages (2015, 232–6). Mittelstadt also shows, however, how contested the military welfare state has always been within an organization grounded in the idea of ‘service’. We can also find similar attempts in other countries to use social benefits and services as a recruitment strategy, offering special benefits or compensation for the more specific negative consequences of military service for soldiers and their families. Here again, we can see that the military tries to address the gaps left by the civilian welfare state. Against the background of widespread undersupply of family services, the German armed forces, for example, have started to put more emphasis on reconciling work and family life by providing their own family counselling services, day care at ¹⁵ See Robert P. Saldin, ‘Foreign Policy on the Home Front: War and the Development of the American Welfare State’, and Michael Shalev and John Gal, ‘Bullets and Benefits in the Israeli Welfare State’, Chapters 7 and 14, respectively, in this volume.

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the workplace, and the development of services that take the particular situation of military families (e.g. high mobility and foreign deployment) into account (Bundesministerium der Verteidigung 2010). These benefits, however, should be seen as a kind of occupational welfare rather than an aspect of the welfare state, because they tend to reach a relatively small share of the population. Second, even if a major war were to break out involving some of the countries featuring in this volume, an extensive welfare state apparatus—in terms of fiscal resources, a bureaucracy, large numbers of professional care staff—would already be in place. The context is just massively different from what it was a hundred years ago. While social spending at the onset of World War I was typically well below 5 per cent of GDP, it is now over 20 per cent of GDP in an average OECD country. The extractive capacity of the state thus stands at levels never seen before in human history, despite tax competition and tax evasion. Thus there is reason to believe that what we have termed ‘supply-side effects’ of war, the effect on state capacities and state structures, might be much weaker now compared to the first half of the twentieth century.

Q U E S T I O N S FO R FU TU RE RE S E ARC H Some questions remain open, mostly because of the geographical and temporal limitations of this book, but also because we have focused on a specific kind of war, namely industrial mass-mobilization interstate conflict. At the end of this volume we therefore would like to highlight two research areas that particularly merit further attention. First, future research should examine the impact of intrastate war—after all, the most common form of war today—on welfare state building. The general literature on civil war and state capacity gives some hints as to what role intrastate conflict might potentially play in the development of welfare states. According to this literature, civil war has a clear negative effect on state capacity, usually measured in terms of fiscal capacity (Thies 2010; Lu and Thies 2013). The reason for this is almost trivial. Besley and Persson develop a theoretical model based on the idea that ‘external war tends to generate common interests across groups in society, whereas internal, civil war entails deep conflicting interests across groups’ (2008, 522). In the latter situation, it simply does not make sense for those loyal to the challengers of power holders to support building up state capacity, as it may be used against them. According to Blattman and Miguel, the same holds for the post-civil war situation: ‘In civil war, government may lose legitimacy, while victors and vanquished (and victims) are condemned to coexist in the same society, potentially exacerbating political and social divisions’ (2010, 43). The relationship may,

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however, be highly contingent and more complex, depending on the reasons for and the context of conflict, its length and outcome, and so on. Moreover, from a long-term perspective civil war has often been a byproduct of statebuilding processes. In any case, the substantive link with the topic of this book is, of course, the centrality of fiscal and administrative capacities for welfare state development. Empirically, however, we know very little about whether there is a more general link between civil war and welfare states. There are some indications that the relationship may indeed be a negative one. The irony of Theda Skocpol’s path-breaking book on Civil War pensions in the USA (1995) remains that, while war led to a range of new welfare benefits and even the emergence of early ‘maternalist’ schemes, the net effect of the Civil War on welfare state building was essentially negative. The available welfare state for ‘soldiers and mothers’ effectively crowded out more conventional Europeanstyle welfare state development for decades—until the world wars and the Great Depression prompted a more activist role for the federal state. The second major research question not answered in this book is not entirely unrelated to the first and concerns the applicability of our conclusions to countries outside of our immediate analytic scope. One omission is Central and Eastern Europe, which was strongly affected by the same conflicts this book has focused on. During World War II, Poland and the Soviet Union, for example, suffered from extreme casualties and enormous destruction and had, in the case of the Soviet Union, very high levels of mobilization. That war mattered for social policy development in Eastern Europe is beyond question, but the mechanisms might be different from those of Western Europe. The spread of the Soviet model of social protection throughout Eastern Europe is clearly related to the military success of the Red Army and the subsequent takeover of communist governments. Coercive policy transfer was therefore of much greater importance compared to Western Europe. Other mechanisms were of relevance on both sides of the Iron Curtain. In addition to warinduced social needs, there are frequent mentions of special military or veterans’ benefits in Inglot’s historical comparative analysis of welfare state development in East Central Europe (Inglot 2008). However, a comprehensive in-depth study of the impact of war on social policy in these countries is, to our knowledge at least, still lacking and has not received the attention from comparative welfare state research it deserves. Another group of countries that has recently been getting more attention from welfare state researchers is the Global South. Given the prevalence of armed conflict—often civil war—in many parts of the non-OECD world today and in the past (see Wimmer 2014), it is high time to investigate whether and to what extent this has had an impact on attempts to build modern welfare states. Importantly, the value of the ‘bellicist’ model of state development remains more contested for non-European countries than for Europe (Centeno 2003; Thies 2005; Taylor and Botea 2008; Schwarz 2011) and it

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might therefore be premature to assume that the impact of war on welfare state development is universal or straightforward. In any case, the study of the issue in the countries of the Global South is a highly promising field of future research.

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Lundestad, Geir. 1999. East, West, North, South: Major Developments in International Politics since 1945. Oxford: Oxford University Press. Milanovic, Branko. 2016. Global Inequality: A New Approach for the Age of Globalization. Cambridge, MA: Harvard University Press. Mishra, Ramesh. 1993. ‘Social Policy in the Postmodern World: The Welfare State in Europe by Comparison with North America’. In Perspectives on the Welfare State in Europe, edited by Catherine Jones, 18–40. London: Routledge. Mittelstadt, Jennifer. 2015. The Rise of the Military Welfare State. Cambridge, MA: Harvard University Press. Moskos, Charles C. 1977. ‘From Institution to Occupation: Trends in Military Organization’. Armed Forces & Society 4: 41–50. Murray, C. J. L., G. King, A. D. Lopez, N. Tomijima, and E. G. Krug. 2002. ‘Armed Conflict as a Public Health Problem’. BMJ 324: 346–9. Nelson, Georg, ed. 1953. Freedom and Welfare. Copenhagen: Ministries of Social Affairs of Denmark, Finland, Iceland, Norway and Sweden. Obinger, Herbert and Carina Schmitt. 2011. ‘Guns and Butter? Regime Competition and the Welfare State During the Cold War’. World Politics 63: 246–70. Obinger, Herbert and Carina Schmitt. 2017. ‘World War II and its Impact on Social Spending’. European Journal of Political Research, Early View. doi: 10.1111/1475-6765.12236. Obinger, Herbert and Shinyong Lee. 2013. ‘The Cold War and the Welfare State in Divided Korea and Germany’. Journal of International and Comparative Social Policy 29: 256–75. OECD. 1982. Economic Outlook No. 32. Paris: Organisation for Economic Co-operation and Development. Olson, Mancur. 1982. The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities. New Haven, CT: Yale University Press. Onorato, Massimiliano Gaetano, Kenneth Scheve, and David Stasavage. 2014. ‘Technology and the Era of the Mass Army’. The Journal of Economic History 74: 449–81. Overbye, Einar. 1997. ‘Mainstream Pattern, Deviant Cases: The New Zealand and Danish Pension Systems in an International Context’. Journal of European Social Policy 7: 101–17. Petersen, Klaus. 2013. ‘The Early Cold War and the Western Welfare State’. Journal of International and Comparative Social Policy 29: 226–40. Piketty, Thomas. 2003. ‘Income Inequality in France, 1901–1998’. Journal of Political Economy 111: 1004–42. Piketty, Thomas. 2014. Capital in the 21st Century. Cambridge, MA: Harvard University Press. Piketty, Thomas and Gabriel Zucman. 2014. ‘Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010’. The Quarterly Journal of Economics 129: 1255–310. Rietz, Gunner Du, Dan Johansson, and Mikael Stenkula. 2013. ‘Marginal Taxation of Labor Income in Sweden from 1862 to 2010’. IFN Working Paper, No. 977, Stockholm: Research Institute of Industrial Economics (IFN). Russett, B. M. 1969. ‘Who Pays for Defense?’ American Political Science Review 63: 412–26. Scheidel, Walter. 2017. The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century. Princeton, NJ: Princeton University Press.

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Index Tables, figures, and notes are indicated by an italic t, f, and n Abbott, Andrew 7, 437 Abell, Kjeld 311 Abelshauser, Werner 51 accident insurance analysis of impact of war 440t Austria 69–70, 74, 80, 85, 86, 91, 94 Belgium 321–2 Denmark 294, 301 Finland 265, 269 France 129 Germany 37, 49 Switzerland 367, 369, 373, 374, 376t, 378, 379f, 384, 386 Achinstein, Asher 450 Adenauer, Konrad 36, 55 African Americans 177, 188–92, 194–5 ‘Age of Catastrophe’ 365, 386 agriculture/agricultural sector Austrian social protection measures 70, 73, 74, 84, 85, 89, 94 female workers 90, 104, 110, 244 impact of industrialization on 13, 71–2 Italian social protection measures 106, 109, 114, 121t labour unrest 111 land purchase subsidies 104 land reform 268 loan subsidies 110 municipal farms 43 pension and unemployment insurance 110 protection from taxation 58 public employment projects 309 rural economies 277, 297, 304 subsidies 145 subsistence farming 45 Swiss social protection measures 376t, 380 traditional source of military conscripts 13–14, 71–2, 104 Alapuro, Risto 266, 284 Alber, Jens 6 Alexander II, Emperor of Russia 262 Allardt, Erik 284 Aly, Götz 4, 54, 62, 89 American Civil War (1861–5) 13, 177–8, 366, 393, 430, 457 Andrzejewski, Stanislaw 14

Anglo-Boer War (1899–1902) 3, 14, 200, 203, 206, 222, 429 Arab–Israeli War (1948–9) 393–4, 398f Arab–Israeli War (1967, Six-Day War) 398f arms race 449, 450, 452 Arnhem, J. C. M. van 238 Atlantic Charter (1941) 17, 346 Australia Aboriginal welfare measures 249, 253 ANZAC (Australia and New Zealand Army Corps) forces 233n2, 241 Army Education Service (AES) 251–2 Australian Labor Party (ALP) 231, 232, 233–4, 238, 240, 247, 248, 251, 252–3, 256 banks/banking sector 231, 242 child benefit/allowance 243, 246, 250, 252 childcare provision 237 Cold War impact on Labor Party 240 colonial socialism 232 Communist Party of Australia (CPA) 251–3 constitutional referenda (1944, 1946, 1948) 253–4 constitutional structure 233–5 Court of Arbitration 231, 245n18, 246 Dardanelles Campaign (1915) 231 demobilization 252 Democratic Labor Party (DLP) 240, 252 democratic liberalism 230 economic depression 232, 237–8, 239, 247 economic development 231 enemy aliens 244 ethnic politics 232 federal government 230, 232, 233, 234n6, 235, 236, 242 female agricultural workers 244 Gallipoli Campaign (1915) 241 gender relations 244 health/sickness insurance 231, 235, 237, 246, 249 housing provision 231, 237, 239, 254–5 immigration policy 232, 236n7 income inequality 447f industrial relations 234–5, 236–7, 238 Irish-Catholic population 232, 234

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464

Index

Australia (cont.) Joint Parliamentary Committee on Social Security (1941) 250–1, 254 Keynesian economic policy 238 labour movement 231, 232, 246 labour protectionist welfare 231, 233, 235, 237 labour regulation 249 living wage principle 246, 247 masculine solidarity 230 maternity benefit/allowance 236t, 243, 249 military conscription 13f, 231, 232, 242, 253 military financing and expenditure 242, 245 military repatriation 233, 242–3 national insurance 245–8 National Welfare Fund (1943) 249 Nationalist Party 242, 247 neo-liberalism 238 new social movements 240 old-age pensions/insurance 231, 235, 247–8, 249 pensions provision 234n6, 235, 236t, 243, 244, 249 proportional representation 233 reconstruction period (post-World War II) 248–9, 253–4, 255–6 social security measures (1901–12) 236t state capacity 257 state interventionism 232, 234 suffrage and voting rights 234n5 taxation 234, 238n11, 239–40, 242, 246, 249 total war economy (World War II) 248 trade unions 231, 234n5, 236–7, 246, 256 unemployment 247, 250n21, 251 United Australia Party 247 veterans assistance 232–3, 236, 243–5, 430 volunteer army (Australian Imperial Force, AIF) 231, 233n2, 241, 248 wage earners’ welfare state 231, 234, 235, 236–9, 245, 246, 247, 255, 256 war incidence, intensity, and casualties 26t, 231, 233, 239, 241–2, 248 war intensity index 433f warfare–welfare nexus 239–40, 250, 255–7 welfare legacies of World War I 240, 241–8, 255 welfare legacies of World War II 240, 248–56 welfare state development (World War II) 249–51 White Australia policy 232, 236n7, 244 widows pension 243, 244, 249 women’s labour participation 244

Austria/Austria-Hungary accident insurance 69–70, 74, 80, 85, 86, 91, 94 Austro-fascism (1933/4–38) 86–7 banks/banking sector 85, 87, 95 child benefit/allowance 87–8, 94 child labour protection 83, 88, 429 child welfare provision 72 childcare provision 90 Christian Social Party 68n2, 74, 84, 86 Congress of Vienna (1814–15) 15 Creditanstalt (bank) collapse 85 December Constitution (1867) 67, 68 demobilization 79, 82, 83 democratization (post-World War I) 81, 95 democratization (post-World War II) 68, 91, 95–6 eugenics policies 90 female agricultural workers 90 food shortages (World War I) 77, 78f, 79 forced labour 91, 92n62 health/sickness insurance 69–70, 73, 74, 80, 84, 87, 90 Hitler Youth 88 hyperinflation 77, 82, 85, 95 industrialization and urbanization 68, 71–2, 154n4 Iron Ring coalition government (1879–93) 69 Kriegsleistungsgesetz (War Requirements Act 1912) 74, 76, 77, 84 labour militarization 76, 77 labour regulation 69–70, 73, 75–7, 79–81, 82–3, 87, 88, 89, 93 labour shortages (World War I) 77 labour strikes (World War I) 78t, 79 maternity benefit/allowance 90 military conscription 13f, 14, 67, 70–2, 71f military financing and expenditure (1913–17) 75, 76f military interests and welfare policies 70–4 munitions industry 80, 82 Nazi rule (1939–45) 87–91 pronatalism 87–8, 90, 94 proportional representation 81, 95 Republican period (1918–34) 81–5 social partnership 91 social protection in agricultural sector 70, 73, 74, 84, 85, 89, 94 social welfare policy 68–70, 72–3, 75–6, 79–80, 82–5, 87–91, 92–4, 93f suffrage and voting rights 68, 81 trade union activity (World War I) 76, 79, 80 Triple Alliance 103 veterans assistance 79, 80, 83–4, 92–3

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

Index war incidence, intensity, and casualties 26t, 77n15 war intensity index 433f war mobilization (World War I) 74–81 war mobilization (World War II) 90–1 war preparation (World War I) 68–74, 76f war preparation (World War II) 87–9 war victims assistance 92–3, 95 warfare–welfare nexus 94–6 Wartime Economy Authority Law (1917) 82, 86 welfare legacies of World War I 82–5 welfare legacies of World War II 91–6 women’s labour participation 77, 90, 91 Austro-Hungarian Compromise (1867) 67 Austro-Marxism 82 Austro-Prussian War (1866) 39, 67, 367 Badoglio, Pietro 117, 119 Baldwin, Peter 110, 143 Bank, Steven A. 18 banks/banking sector Australia 231, 242 Austria 85, 87, 95 Belgium 321, 323, 327, 328, 340, 342, 344, 348 Denmark 310 France 145 Nazi Germany 58 Netherlands 325, 337, 339 Switzerland 374 United States 184 Bauer, Gustav 47 Bäumer, Gertrud 43 Bec, Colette 347 Belgium accident insurance 321–2 banks/banking sector 321, 323, 327, 328, 340, 342, 344, 348 Belgian Army 323–4 birth rate 331 British blockade (World War I) 327 Catholic Party 322, 323–4, 340 child benefit/allowance 331, 333, 342, 344 child labour protection 324 child welfare provision 329–30, 331 coal mining industry 321–2, 332 Comité Central Industriel (CCI) 349, 351–2 Commission for Relief 328 compulsory schooling 324 democratization 340, 341 economic depression 342 employers’ organizations 344, 349, 351–2 financial elites 340, 342, 344 fiscal reform 341

465

food shortages 327–8 German occupation (World War I) 320, 327–30 health/sickness insurance 322, 323, 344, 349–50 housing provision 323, 327, 332–3 industrialization 321–2 labour movement (Catholic) 321, 323, 333–4 labour movement (Socialist) 321, 323, 329, 333–4 labour regulation 321, 330–1, 333, 342–4, 347–51 localized welfare 322, 328 military conscription 13f, 323–4 mutual societies 321, 322, 323, 342, 349–50 National Committee for Food and Aid 328–30, 331, 333, 336 National Crisis Fund 330 national labour conferences 342, 344 national social security system 347–52 Nazi occupation 320, 343–52 old-age pensions/insurance 322, 332, 344 pensions provision 331–2 pillarization 322 politicized social protection 322–3 pronatalism 331 rationing 343 reconstruction (post-World War I) 341–2 Social Pact (1944) 347–52 Socialist Party 324, 329, 333, 341, 357 Société Générale (bank) 328, 340, 342, 344, 348 state pensions savings bank 321 subsidized liberty principle 322, 331, 332 suffrage and voting rights 323, 333, 341 taxation 340–1 trade unions 321, 329, 330, 343, 348 unemployment 327, 328 unemployment insurance/benefits 328–9, 330, 342–3, 347–8, 349 Union Sacrée 329, 333 war incidence and intensity 26t war intensity index 433f war preparation (World War II) 342 warfare–welfare nexus 357–8 welfare legacies of World War I 330–4, 338, 340–1 welfare legacies of World War II 347–8 welfare provision under Nazi occupation 343–52 women’s labour participation 331 Ben Gurion, David 401 Bendix, Reinhard 15 Benedict XV, Pope 112n4 Bennett, Andrew 7

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466

Index

Berlin, Irving 187 Besley, Timothy 456 Bevan, Aneurin 220 Beveridge, William 55, 143, 201, 213, 217 Beveridge Report (1942) 17, 54n13, 59, 143, 202, 217–19, 221, 224, 346, 353, 381, 431 Bevin, Ernest 212, 217, 218 ‘big government’ 3, 185, 429 Bismarck, Otto von 36, 37, 127, 151 Blattman, Christopher 456 Blum, Léon 139 Bordiga, Amadeo 113 Bournonville, August 292 Bradley, Omar 194 Brandes, Georg 296 Bretton Woods 452 Briggs, Asa 3 Britain/United Kingdom Anglo-Boer War (1899–1902) 3, 14, 200, 203, 206, 222, 429 armed forces vs. civilian welfare inequality 202, 207, 214–15, 223, 224, 226 Beveridge Report (1942) 17, 54n13, 59, 143, 202, 217–19, 221, 224, 346, 353, 381, 431 Blitz (1940–1) 215 child benefit/allowance 206, 217, 218, 219, 221, 223 child labour protection 205 child welfare provision 3, 200, 205, 212, 215 coal miners 203, 205, 212–13 Coal Mines Regulation Act (1908) 205 collective welfare societies 203 Conservative Party 209, 212, 217 democratization 225t Dunkirk evacuation 200, 215 Edwardian welfare regime 203–6 flat-rate insurance principle 201, 205, 211, 217, 219, 226 free trade 203 gender relations 201, 211 General Strike (1926) 212 healthcare 204–5, 206, 210t, 212, 214–15, 220 health/sickness insurance 204–5, 208t, 210t, 219, 220 housing provision 208t, 210t, 212, 220, 225t impact of WWII on gender relations 5 impact of WWII on labour market 5 income inequality 213, 447f industrialization 3 labour disputes/strikes 154, 205, 209, 212

Labour Party 205, 207, 209, 212, 216–17, 219 labour regulation 205, 212 Liberal Party 205, 209 local government welfare 201, 205, 208t, 211–12 Mass Observation 214 military conscription 12, 13f, 14, 200, 203, 206, 207, 214, 225t military expenditure 222 military volunteers 206 munitions industry 207, 209, 214, 223, 224 National Assistance Act (1948) 219 National Health Insurance 208t, 210t National Health Service (NHS) 203, 214, 219, 220, 221, 222 National Health Service Act (1946) 220 National Insurance Act (1911) 204, 205 National Insurance Act (1920) 209 National Insurance Act (1946) 219 naval forces 12 ‘New Jerusalem’ 17, 222 New Liberalism 201 Old-Age Pensions Act (1908) 204 old-age pensions/insurance 204, 207, 208t, 210 Old-Age and Widow’s Pension Act (1940) 216 ‘on the strength’ military wives 206 pensions policy 200, 201, 208t, 209, 210t, 216, 218, 220–1 People’s Budget (1909) 206 people’s war 213–14 political consensus 5 Poor Laws 203–4, 205, 207, 210, 211–12, 220, 262 Post Office 204 professional armed forces 203, 206 pronatalism 215, 218 rationing 207, 214, 223, 224 separation allowances 206, 211 social democracy 201 social welfare expenditure 208t, 221–2 state capacity 224, 225t suffrage and voting rights 207, 209, 223 taxation 203, 206, 209 trade unions 203, 205, 207, 212, 216–17 unemployment 209, 211, 212, 217 unemployment insurance/benefits 205, 207, 208t, 209–10, 210t, 211, 212, 217, 218 urbanization 3, 203 veterans assistance 207, 209, 224, 225t war incidence, intensity, and casualties 26t, 214 war intensity index 433f

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Index war mobilization (World War I) 206 war mobilization (World War II) 213–14 warfare–welfare nexus 222–6, 225t warfare–welfare spending ratio 201, 206, 222 wartime social solidarity 3 Washington Hours Convention (1919) 212 welfare expenditure and contributions (1920s) 210t welfare legacies of World War I 209–13, 224 welfare legacies of World War II 219–22, 224 welfare state development 2, 3, 5 widows pension 200, 206–7, 210, 214, 416n17 women’s labour participation 207, 214, 225t working-class welfare provision 202, 204–5, 210–11, 213 Bruce, Stanley Melbourne 246 Butterfield, Herbert 291 Calder, Angus 213 Canada 235, 394, 433f Castles, Francis G. 6, 233n3, 236, 237, 238, 239 Cayton, Horace R. 190 Central and Eastern Europe 457 Chamberlain, Neville 212, 217 Charles I (Karl), Emperor of Austria 77, 79, 81 Cherubini, Arnaldo 105, 109, 112 Chifley, Ben 240, 248, 249, 251, 256 child benefit/allowance Australia 243, 246, 250, 252 Austria 87–8, 94 Belgium 331, 333, 342, 344 Britain 206, 217, 218, 219, 221, 223 Denmark 308 Finland 278 France 136–7, 140 Germany 49 Israel 395, 401n10, 404, 405, 409 Netherlands 337 child labour protection Austria 83, 88, 429 Belgium 324 Britain 205 Germany 69 Italy 102 Japan 155 Switzerland 368 United States 181, 185 child welfare provision Austria 72

467

Belgium 329–30, 331 Britain 3, 205, 212, 215 Denmark 295 Finland 278 Italy 115 United States 178 China 156, 160 Christmas-Møller, John 311 Churchill, Winston 190, 217, 448n11 civil war America 13, 176–8, 366, 393 Austria 86 Denmark 39, 290, 292–3, 294, 313 Finland 260–1, 266–71, 283–4 Italy 117 Russia 21, 47, 99, 111, 113, 265, 266 Spain 366n2 Switzerland 366 Clam-Martinic, Heinrich 77, 79 class conflict/struggle 157, 264, 284, 369 see also labour unrest and strokes Clausewitz, Carl von 16 Cohen, Deborah 50 Cohn, Einar 298 Cold War 24–5, 122–3, 240, 256, 282, 385, 448–53 communism 158, 274, 275, 282, 450–1 conscription see military conscription corporatism 68, 91, 95, 114, 140, 143, 285, 308, 342, 348 Cox, Michael 436 Crimean War (1853–6) 261, 262 Curtin, John 240, 248, 251, 253, 254 Dahrendorf, Ralf 284 Daniel, Ute 44 D’Aragona, Ludovico 119–20, 121 Davidson, Alistair 253 de Gaulle, Charles 141, 142, 143 decolonization 2 Deeming, Chris 236 demobilization Australia 252 Austria 79, 82, 83 France 133 Germany 36, 47, 48, 63 Great War 431 Italy 112 Switzerland 386 Weimar Republic 4 see also war veterans democracy consensus 68, 91, 95–6 direct (referenda) 365, 366, 367, 372, 374, 378, 382f, 384, 387 economic 279, 311

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468

Index

democracy (cont.) egalitarianism 169 liberal 400, 448 Nordic 270–1, 305 parliamentary 145, 268, 271 post-war impact on 15n4, 24, 142, 213, 273, 275, 346, 429 post-war state intervention measures 4, 47 proportional representation 24, 81, 95, 111, 233, 366, 372, 373, 374, 435n5 social 37, 142, 201, 256 US racial policy and 190–1, 195 see also democratization; suffrage and voting rights democratization 9, 12t, 68, 95, 102, 195, 225, 313, 333, 340, 341, 427 electoral reform 24, 69, 73, 111, 336, 429 see also suffrage and voting rights demographic catastrophe 82, 105, 372 demographic structure, impact of war on 94, 431 demographic transition 11t, 15–16, 71, 72, 178, 331, 372, 428 Denmark accident insurance 294, 301 agricultural public employment projects 309 agriculture 297, 298, 304 banks/banking sector 310 birth rate 305 child benefit/allowance 308 child welfare provision 295 childcare provision 305 communist internment 306, 310 constitutional reform 293 deportation of Jews 306 economic depression 303–4 emergency powers and legislation 297–9, 304, 308 gender relations 301, 315 German occupation period (1940–5) 306–11 German refugees 311–12 health/sickness insurance 294, 301, 306 Højre (The Right) political party 296–7 housing provision 299, 311 income inequality 446f industrial relations 308 industrialization 154n4, 297 Kulturforsvaret (cultural defence) policy 296, 297, 305, 312, 313 labour movement and trade unions 300, 308 labour regulation 294, 308–9 liberal constitution (1849) 292 maternity leave 305

military conscription 13f, 292 military financing and expenditure 300, 303f military forces 296t, 297, 300 military journals 295–6 Napoleonic Wars 291 nation building 290–3, 294, 295, 304 nationalism 292–3 Nazi repression 306 Nordic democracy 311 Nordic welfare state 290, 305 old-age pensions/insurance 294, 301, 304, 307–8, 311 pensions provision 301 Poor Law 293–4, 310 population policy 304–5 rationing 298, 308 rural economy 297, 304 rural to urban migration 299 Schleswig Wars (1848–51, 1864) 39, 290, 292–3, 294, 313 Social Democratic Party 293, 297, 301, 302–3, 304, 305, 308, 311, 312, 313 social eugenics 305 social expenditure (World War I) 299–300 social expenditure (World War II) 310 social expenditure, state vs. municipality comparison (1891–1947) 314f Social Liberal Party 297, 298, 302, 303, 304, 312, 313 Social Reform Act (1933) 302, 304 state capacity 294, 313 suffrage and voting rights 292, 301 taxation 295, 300, 301, 305, 310–11 unemployment 304, 308–9 unemployment insurance/benefits 295, 299, 304, 308, 309 urbanization 297 Venstre (liberal-agrarian) political party 293, 296–7, 302, 303, 304, 313 veterans assistance 292, 294 war incidence and intensity 26t war intensity index 433f war neutrality 293, 296, 297, 303, 312 war preparation (World War II) 305–6, 313 warfare–welfare nexus 290–1, 311, 312–15 welfare legacies of 19th century nationalist wars 293–7 welfare legacies of World War I 300–2 welfare legacies of World War II 311–12 welfare provision and policy (1919–39) 302–6 welfare provision and policy (World War I) 297–300

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

Index welfare provision and policy (World War II) 307–11 women’s labour market participation 315 work programmes 304, 309 DeViney, Stanley 7, 437 Dlugosz, Idalia 420 Dollfuss, Engelbert 86 Drees, Willem 354, 355 Dryzek, John 3, 6, 433, 441 Dwork, Deborah 3 economic growth 12t, 23, 96, 282, 367, 435–6 economic inequality impact of war on 6, 23, 445–8 social protection policy 239, 395, 412 see also poverty economic planning currency control 19 Keynesianism 142, 237n9, 238 nationalization 19, 95, 142, 209, 211 price control and regulation 19, 75, 185, 298, 356 rationing 19, 42, 207, 214, 223–4, 308, 343 statism 128–34, 142 tariffs 178, 179, 370 Taylorism (scientific management) 279–80 ‘war socialism’ 19, 45–6 see also economic reconstruction; labour markets; labour regulation; military expenditure; military financing; taxation economic reconstruction 12t, 23–4, 95, 105, 181, 184, 238, 248–9, 254, 255–6, 332–3 education Beveridge reform proposals 143 compulsory 269, 324 egalitarian provision 55 fascist socialization programmes 115 illiteracy programmes 16 military interest in 71, 101 military provision of 16, 101, 251–2, 268 military skill requirements and 16 Nordic reforms 278, 283 programmes for war veterans 3, 9, 178, 193, 401 role in national identity development 296 state’s role in 102, 127, 160, 304 war preparation and educational reform 11t Elias, Norbert 1, 23 Ellis, John 436 equality of sacrifice principle 11t, 14–15, 20, 24, 311, 314, 417, 429 Erikson, Robert S. 3 Erzberger, Matthias 48, 63 Esping-Andersen, Gøsta 2, 7, 149–50, 236, 395, 441

469

eugenics 4, 90, 165, 305 European integration 24 Feldman, Gerald D. 37–8, 45, 47 Figl, Leopold 91n60 Finland accident insurance 265, 269 Agrarian Party 268, 269, 270, 271, 274, 277 agriculture and forestry 277 armed forces 263–4 child benefit/allowance 278 child welfare provision 278 Communist Party 270, 271, 273, 274–5 Continuation War (1941–4) 260, 270, 271–2, 273, 275, 276, 279 Crimean War (1853–6) 261, 262 Disabled War Veterans Association of Finland 276 employers’ organizations 280 famine (1866–8) 262–3 Finnish League of Companions in Arms 273, 276 gender relations 278 General Strike (1905) 264 Grand Duchy 262, 263–4 health/sickness insurance 269, 283 housing provision 276–7, 277–8 industrialization 263 Karelian population 276–7 labour movement 263, 264, 265, 267, 270–1 labour regulation 263, 264, 265, 268–9, 273–4 land reform 268 Lapland War (1944–5) 260, 272 Lotta Svärd (women’s organization) 273, 276 Lutheran Church 262 military conscription 13f, 263–4, 268 military financing and expenditure 280 nation building 262–3, 268, 274–5, 283–4 national agency 260, 261, 277 nationalism 261, 262, 272 Nordic democracy 270–1 Nordic welfare state 260, 278, 281, 283 Old-Age and Disability Insurance Scheme (1937) 269 Olympic Games (1952) 276 parliamentary democracy 268, 270–1 Peace Treaty of Paris (1947) 272 pensions provision 274, 276 poor relief 262, 269 pronatalism 277 rational/scientific planning 277–83 rural economy 268, 276–7 Russian Civil War (1917–18) 260, 265–7

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470

Index

Finland (cont.) Russo-Japanese War (1904–5) 261, 264 Russo-Swedish War (1808–9) 261, 262, 284 social cleavages 284 Social Democratic Party 264, 265–6, 269, 270–1, 273, 274–5 suffrage and voting rights 264 talkoot (community cooperation) 285 taxation 265, 269, 280, 281 Taylorism (scientific management) 279–80 trade unions 269, 271, 273–5 Työterveyslaitos (Institute of Occupational Health) 279 unemployment insurance/benefits 265, 269 Väestöliitto (Family Federation) 277–8 veterans assistance 273, 274, 276 voluntary organizations 274, 278 war incidence, intensity, and casualties 26t, 260, 267, 271, 272 war intensity index 433f war mobilization (World War I) 265–7 war mobilization (World War II) 271–3 warfare–welfare nexus 261, 283–5 welfare legacies of the Russian Civil War 267–9 welfare legacies of World War II 273–83 Winter War (1939–40) 260, 271, 272, 273, 275, 276, 277, 283 women’s labour participation 278 women’s organizations 278 Flora, Peter 6 France accident insurance 129 agricultural subsidies 145 Alsace and Lorraine 127, 138 banks/banking sector 145 birth rate 16, 128, 136, 428 charity and philanthropy 129, 132–3, 134 child benefit/allowance 136–7, 140 commune system 128 corporatism 143 demobilization 143 education system 127 Foreign Legion 366 gender relations 131 healthcare 131–2, 133, 137, 138, 141 health/sickness insurance 138, 144 hyperinflation 135 income inequality 446f industrialization 128, 130 invalid insurance 138 labour disputes 154 labour regulation 129, 139, 140 maternity benefit/allowance 138, 140 military conscription 13f, 127

nationalization 142 ‘night watchman’ state 128 old-age pensions/insurance 138, 144 Paris Commune (1871) 47 pronatalism 130, 131, 135–7, 139, 428 Red Cross 132 Resistance social welfare 142 rise of the ‘new poor’ 133–4, 135, 137–9 separation allowances 131 social welfare provision 129 statism 128–31, 142, 145 suffrage and voting rights 132 taxation 127, 129–30, 133, 134, 145 trade unions 128, 135, 140 unemployment 130, 141 urbanization 128, 130 veterans assistance 127, 128, 133 Vichy period (1940–4) 139–41 war incidence, intensity, and casualties 26t, 133 war intensity index 433f war preparation (World War I) 127 welfare legacies of World War I 131–9 welfare legacies of World War II 141–5 women’s labour participation 132, 133 Franco-Prussian War (1870–1) 16, 39, 128, 367, 428 Franz Joseph I, Emperor of Austria 67, 77 Fraser, Derek 3 French Revolution (1789–99) 128, 158, 159 Frisch, Hartvig 305 Fuss, Henri 347 Gal, John 1 Galopin, Alexandre 342, 344 Garton, Stephen 245 Garvey, Marcus 188 Gasperi, Alcide de 122 gender inequality 420–1 gender relations impact of mass conscription on 16 impact of war on 3, 5, 278, 301, 315 welfare policy and 201, 211, 420–1 George, Alexander L. 7 Germany accident insurance 37, 49 agriculture taxation protection 58 Austro-Prussian War (1866) 39, 67, 367 Auxiliary Services Act (1916) 4, 46 Bismarckian social welfare 37, 39, 59, 70, 99, 120, 123, 124 Burden Sharing Act (Lastenausgleichsgesetz, LAG; 1952) 60 child benefit/allowance 49 child labour protection 69 childcare provision 46, 57

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

Index demobilization 36, 47, 48, 63 democratization 4 food rationing 42 food riots 47 forced labour 45, 332 Franco-Prussian War (1870–1) 16, 39, 128, 367, 428 German Army League 40 guest workers 45 health/sickness insurance 37, 54 hyperinflation 339 income inequality 446f invalid insurance 37 labour disputes 154 labour mobilization 36–7, 51–3, 55–7 labour regulation 45, 48 labour relations and trade unions 4, 37–8, 40, 45–6, 47 labour shortages (World War I) 4, 42, 44–6 maternity benefit/allowance 42, 46n7 militarism 38, 51, 60 military conscription 13f, 14, 41, 51 military financing and expenditure 40, 51, 57–8 municipal farms 43 munitions industry 44 old-age pensions/insurance 37, 295 poverty 42 Red Cross 39, 43, 57 refugee crisis 58 Schleswig Wars (1848–51 and 1864) 39, 290, 292–3, 294, 313 separation allowances 42, 53, 56, 61 sickness insurance 37 Social Democratic Party (SPD) 21, 40, 47, 154 social imperialism 39–40 social welfare provision (World War I) 42–4 social welfare provision (post-World War II) 58–60 subsistence farming 45 tax reform 48, 63 Triple Alliance 103 ‘Turnip Winter’ (1916–17) 47 unemployment insurance/benefits 42–3, 48, 52 unemployment rate 42, 44 veterans assistance 39, 48–50, 60 voluntary organizations 39, 43 völkisch welfare state 4, 88, 90 war incidence, intensity, and casualties 26t, 38, 46 war intensity index 433f war mobilization (World War I) 40–7 war mobilization (World War II) 53–8

471

war preparation (World War I) 39–40 war preparation (World War II) 51–3 war victims assistance 59–60 warfare–welfare nexus 61–3 wars of German unification 37, 39 welfare legacies of World War I 47–50 welfare legacies of World War II 58–63 women’s labour participation 44, 56 women’s movement 43, 46 Zimmermann Telegram 178 see also Nazi Germany; Weimar Republic Gifford, Brian 420 Giolitti, Giovanni 102–3, 113 Global South 457–8 Godart, Justin 141–2 Gollan, Robin 252 Goodin, Robert 3, 6, 433, 441 Gorbach, Alfons 91n60 Göring, Hermann 52 Gosselin, Charles 137–8 Gramsci, Antonio 113 Grandner, Margarete 69, 79 Grinda, Édouard 138 Guisan, Henri 383 ‘guns and butter’ trade-off 6, 11t, 17, 18, 51, 119, 193, 225t, 397, 449–50 Hall, Peter 236 Halls, W. D. 140n38 Harris, Jose 5, 221, 222 Hatje, Ann-Katrin 428n1 health/sickness insurance analysis of impact of war 437, 438f, 439, 440t Australia 231, 235, 237, 246, 249 Austria 69–70, 73, 74, 80, 84, 87, 90 Belgium 322, 323, 344, 349–50 Britain 204–5, 208t, 210t, 219, 220 Denmark 294, 301, 306 Finland 269, 283 France 138, 144 Germany 37, 54 Italy 99, 112, 116, 119, 121t Japan 3, 150, 151, 153, 154, 157, 160–2, 165, 166–71 Netherlands 324–5, 340, 344–5, 355–6 Switzerland 367, 369, 373, 374, 376t, 379f, 384, 386 Helfferich, Karl 46 Herriot, Édouard 132, 141 Hicks, A. 437 Hindenburg, Paul von 46 Hine, Darlene Clark 192 Hintze, Otto 1, 14, 15 Hirschfeld, Gerhard 41n4 Hitler, Adolf 55, 62, 86n31, 89, 190, 272, 304

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

472

Index

Hobsbawm, Eric 449 Hockerts, Hans Günter 55, 55n14, 58n16 Hollweg, Bethmann 20 Holocaust 91, 401n9, 413, 418 Hoover, Herbert 328 Hötzendorf, Franz Conrad von 74, 77 Howard, John 246n19 Howard, Michael 2–3 Hughes, Morris 242 hyperinflation 18, 23, 82, 85, 95, 339, 417, 441 Ikeda, Hayato 168 imperialism 12, 13 industrial relations 9, 20, 212, 234–5, 238, 429 collective bargaining 118, 185, 212–13, 330–1, 342–3, 347 compulsory arbitration 234, 236, 308 corporatism 91, 95, 308–9, 342 Nordic model 270–1 social pacts 346–52 see also labour markets; labour regulation; labour unrest and strikes; trade unions industrialization demographic impact of 15–16, 156 impact on welfare policy 11t, 13–14, 149–50, 153–5, 171 national degeneration of health 3, 13–14, 71–2 relation to public welfare development 149–50, 153–4, 171 warfare and 2, 8, 11t, 171 influenza epidemic (1918) 82, 105, 372 Inglot, Tomasz 457 International Labour Organization (ILO) 24, 212, 269, 281, 452 International Monetary Fund 452 international organizations codification of rights 12t post-war development of 24 role in policy diffusion 12t, 24 Ireland 433f Israel Arab citizens 400, 400n7, 401n10, 412, 413t Arab–Israeli War (1948–9) 393–4, 398f, 405 benefit creep 406–7 benefit expansion and contraction logic 415–18 benefit generosity 407–9, 408f bereaved family benefits 393, 401, 402, 404, 405–6, 407–9, 408f, 411, 415–17 cash benefits 403–4, 403f, 406 child benefit/allowance 395, 401n10, 404, 405, 409 childcare provision 395 clientelism 396

compensatory benefits 401–7 conscription 13f, 402–3 crowding out effect of military welfare provision 394, 420 democracy 400 disability insurance/benefits 395, 401–2, 404, 405, 407–9, 408f, 411, 414t, 418 Druze population 399n5 family as source of welfare provision 396 First Lebanon War (1982–5) 398f gender relations and inequality 420–1 Goren Committee 418 Holocaust victim benefits and compensation 401n9, 414t housing provision 395 Israel Defence Forces (IDF) 399, 416 Israeli–Egyptian ‘War of Attrition’ (1967–70) 398f, 404 Jewish immigrants 393–4, 396, 400, 410, 412, 413t, 418 labour movement 410 loyalty benefits 400, 410–12, 415, 430 militarist society 399 military conscription 399, 455 military/non-military benefit disparity 407–9, 408f, 420 nationalism 399 occupied territories 398 orthodox Jewish community 396, 399, 400, 413t Palestinians 398, 400 pensions provision 396 poverty 395, 396 public opinion surveys 399, 410, 412–15, 413t–14t republicanism 399–400, 410, 412–13 reservists benefits 403, 404, 406, 411, 414t, 417–18 Second Intifada (2000–5) 398f Second Lebanon War (2006) 398f single parents benefit 396 Six-Day War (1967) 398f, 405, 406 social expenditure and military burden 397 targeted compensation 394, 406, 419 unemployment insurance/benefits 395 universal welfare model 396 veterans assistance 393–4, 401–2, 405 Victims of Hostile Action programme 402, 406 war incidence, intensity, and casualties 398f warfare–welfare nexus 394–5, 397, 403–4, 418–20 welfare state development 8, 395–7 widows pension/benefits 401, 402, 404, 405–6, 407–9, 408f, 411, 416–17

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

Index women’s military service 399, 420 Yom Kippur War (1973) 398f, 404, 406 Zionism 400 see also Jews Italo-Turkish War (Libyan war 1911–12) 103 Italy agricultural labour unrest 111 agricultural loan subsidies 110 agricultural pension and unemployment insurance 110 Catholic Church welfare 100, 102 child labour protection 102 child welfare provision 115 coalition politics 111–12 colonialism 101, 103 Commission for the Reform of Social Insurance 119–22 Commission for the Study of Medical Insurance 107 Communist Party 451 demobilization 112 democratization (pre-World War I) 102 fascism 114–17 female agricultural workers 104, 110 health policy 101–2, 105, 108, 116 health/sickness insurance 99, 112, 116, 119, 121t labour radicalization 111 labour regulation 102 land purchase subsidies 104 Libyan war (Italo-Turkish War, 1911–12) 103 maternity insurance 102, 115 military conscription 13f, 100–1, 103 military financing and expenditure 104–5 National Health Service 116, 121t political polarization 122–3 pronatalism 115–16, 428 proportional representation 111 Rava Commission 106–7, 108–10 Resistenza (resistance fighters) 117–18 social assistance centres 114, 116 social protection in agricultural sector 106, 109, 114, 121t ‘Southern Question’ 100–1 suffrage and voting rights 103, 111–12, 124 taxation 101 trade unions 102, 103 Triple Alliance 103 Ufficio Mobilitazione Industriale (UMI) 104 unification (19th century) 100, 103 universal welfare model 99, 106–7, 108–13, 120–2 veterans assistance 103, 105–6

473 war incidence, intensity, and casualties 26t, 105 war intensity index 433f war mobilization (World War I) 103–5, 110 war mobilization (World War II) 117–19 war preparation (World War II) 116–17 warfare–welfare nexus 123–4 welfare legacies of World War I 108–13 welfare legacies of World War II 118–21, 121t welfare provision (pre-World War I) 100–3 women’s labour participation 102, 104, 110, 115 women’s organizations 102

Jansa, Alfred 86n31 Japan accident insurance 152 child labour protection 155 civilian conscription 156 Confucian paternalism 155 conservative elites 154–5 economic miracle period (1960–75) 168, 173 egalitarianism 158, 167, 168, 169, 171 eugenics policies 165 expansionism 428 health/sickness insurance 3, 150, 151, 153, 154, 157, 160–2, 165, 166–71 healthcare 151–2, 163–4, 428 housing policy 165 income inequality 446f Industrial Patriotic Society (sangyō hōkokukai) 150 industrialization 149–50, 152–3, 153–4 kakushin ideology 158–9, 167 Kantō earthquake (1923) 153 labour disputes 150n1, 154 labour regulation 152, 154, 155 labour shortages 163 Liberal Democratic Party (LDP) 167–8 Marco Polo Bridge Incident 159n10, 160 military–bureaucratic welfare 150, 156, 158–65 military conscription 13f, 156 military financing and expenditure 152 Ministry of Health and Welfare (MHW) 149, 150, 157nn8 and 9, 159–62, 164–5 ‘national defence state’ (kokubō kokka) 158–9 Pearl Harbor attack 156, 196 pensions provision 153, 162–3, 166, 167 pronatalism 428

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

474

Index

Japan (cont.) public assistance policy 163–5 rationing 156 Russo-Japanese War (1904–5) 13, 47, 152–3, 261, 264 ‘social work’ and ‘welfare work’ distinction 157, 160 suffrage and voting rights 153, 154 taxation 152, 154 Tokyo Imperial University 151 total war period (1937–45) 149, 156–65, 248, 253, 428 trade unions 150, 156 unemployment insurance/benefits 165, 166 veterans assistance 152, 153, 164 war incidence, intensity, and casualties 26t, 156–7 war intensity index 433f war mobilization 156 warfare–welfare nexus 155–6, 165–73 welfare legacies of World War II 165–8 welfare policy (19th century) 151–2 women’s labour participation 150, 154, 155 Jews concentration camps 89, 91n60 Holocaust victim compensation (Israel) 401n9, 414t, 418 Jewish welfare organizations 43, 90, 395 Nazi Aryanization policy 51, 89–90 Nazi repression 52, 89–90, 306 Jourdain, Paul 138 Kasza, Gregory J. 3, 439 Kewley, Thomas 251 Keynes, John Maynard 202, 218 Knorr, Klaus 451 Koizumi, Chikahiko 159, 161, 167 Konoe, Fumimaro 159–60 Korean War (1950–3) 177, 193–5 Krebs, Ronald R. 454 Krock, Arthur 192, 195 Krosigk, Graf Schwerin von 55 Krumeich, Gerd 41n4 Kuisel, Richard 145 Kuusi, Pekka 282 labour markets civilian war mobilization 81 female participation in 5, 20, 44–5, 115, 315, 387 impact of mass war on 4, 19, 61, 62, 77, 91, 308–9 labour regulation Australia 249 Austria 69–70, 73, 75–7, 79–81, 82–3, 87, 88, 89, 93

Belgium 321, 330–1, 333, 342–4, 347–51 Britain 205, 212 Denmark 294, 308–9 Finland 263, 264, 265, 268–9, 273–4 France 129, 139, 140 Germany 45, 48, 51–3, 55–7 Italy 102 Japan 152, 154, 155 Netherlands 336–7 Switzerland 367, 372 United States 181, 184, 185, 191 labour unrest and strikes 133, 135, 154, 372 Australia 256 Austria 78t, 79 Belgium 321, 330, 333, 344 Britain 154, 205, 209, 212 Denmark 300 Finland 264 Italy 101, 102, 111 Switzerland 371–2, 373, 375, 377, 381 United States 184 Labriola, Arturo 113 Laron, Michal 415 Lassalle, Ferdinand 37 League of Nations 24, 85, 269, 303 Lebel, Udi 415, 416 Lenin, Vladimir 111 Leo XIII, Pope 102 Levy, Jack S. 454 Ley, Robert 17, 38, 52–3, 55, 307 Linna, Väinö 285 Lloyd George, David 14, 204, 206, 246 loyalty and social solidarity 13t, 17–18, 61–2, 223, 431, 451 Low Countries see Belgium; Netherlands Ludendorff, Erich 17, 46, 158 Macintyre, Stuart 254, 255 McKernan, Michael 244 Macnicol, John 218, 219 Mai, Günther 4, 20 Mannerheim, Carl Gustaf 265, 267, 272 Marissal, Claudine 330 Marwick, Arthur 3 maternity benefit/allowance Australia 236t, 243, 249 Austria 90 France 138, 140 Germany 42, 46n7 Switzerland 376t, 387–8, 387f means-testing 153, 217, 237, 238–9, 402, 406, 415 disability benefits 408 family and maternity benefits 42, 219 supplementary pension benefits 216, 218

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

Index unemployment benefits 52, 83 veterans benefits 83, 276 Mendelsohn, Ronald 251 mercenaries 14, 366 Metternich, Klemens von 15 Middleton, Roger 221 Miguel, Edward 456 Milanovic, Branko 446 military battles Adua 101 Ardennes (Battle of the Bulge) 189 Marco Polo Bridge Incident 159n10, 160 Midway 156 Somme 46 Verdun 46 military conscription equality of sacrifice 11t, 14–15, 20, 24, 311, 314, 417, 429 fitness of recruits 13–14, 71f, 101, 159, 169–70, 200, 367, 428, 455 impact on gender relations 16 impact on political consciousness 14–15 impact on social and political rights 14–15, 84 post-Cold War decline of 454–5 racial minorities 20 social citizenship and 376t, 378, 383, 386–7, 451 universal/mass 12–15, 13f, 36, 51, 67, 70–1, 73, 84, 86n31, 103, 163, 253, 399 war preparation and 11t, 12–15, 13f military expenditure 75, 76f, 280, 296, 313–14, 431, 453f crowding out of social spending 6, 17, 394, 420 ‘guns and butter’ trade-off 6, 11t, 17, 18, 51, 119, 193, 225t, 397, 449–50 military financing new public revenues/taxes 6, 18, 58, 76f, 443 war bonds 57, 242 war loans 18, 75, 82, 87, 105, 110, 245 see also taxation military participation ratio 14–15, 253 Miller, Susanne 46 Millot, Roger 143 Mitchell, Deborah 236 Mittelstadt, Jennifer 177, 455 Mizoguchi, Toshiyuki 149 Mowat, Charles Loch 213 munitions industry female workforce 44, 244 government ministry oversight of 104, 129, 160 post-war unemployment 22, 82, 207, 209, 431

475

raw materials shortages 80 trade union role in 20, 181 wartime welfare benefits 181, 214, 223–4 Murphy, John 236, 243, 245 Mussolini, Benito 115, 117, 118 Myrdal, Alva 305, 428n1 Myrdal, Gunnar 305, 428n1 Naimark, Norman M. 19 Napoleonic Wars (1803–15) 262, 290, 364 Nazi Germany Aryanization policy 51 civilian conscription 52–3, 55–6 concentration camps 58, 89, 91n60, 310 eugenics policies 4, 54, 90 family benefits 53–4 foreign/forced labour 56–7, 56t Four-Year Plan 52 German Labour Front (Deutsche Arbeitsfront, DAF) 38, 51n12, 52, 54–5, 88, 140, 150 health policy 54 Hitler Youth 88 labour regulation and mobilization 51–3, 55–7 labour shortage 55–6 Ley welfare plan (1940) 54–5 militarization 51 military conscription 51, 55 military financing and expenditure 51, 57–8 Molotov–Ribbentrop Pact (1939) 271 Mutterschaftsleistung (‘service of motherhood’) 56 Operation Barbarossa (1941) 272 pensions provision 54 polycratic welfare state 52 pronatalism 428 regime legitimacy 19 Reichsarbeitsdienst (compulsory labour) 51, 53 separation allowance 61 silent war financing 58 social services 57 T4 euthanasia programme 54 taxation policy 58 völkisch welfare state 4, 88–90 Volksgemeinschaft (people’s community) 4, 55, 89–90 Waffen SS 366n2 war preparation (pre-World War II) 51–3 Wehrmacht 52–5, 62, 87, 88 welfare organizations 57 welfare state policy 38, 52, 53–5, 57, 61–2 women’s labour participation 56t Neergaard, Niels 295

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

476

Index

neo-liberalism 238, 396 Netherlands accident insurance 322, 325, 338 banks/banking sector 325, 337, 339 building industry 335 Catholic employers 325–6, 339–40 child benefit/allowance 337 compulsory education 338 economic aristocracy 325–6, 338–40, 353 economic depression 335 food shortages 334 Foundation of Labour manifesto (1942) 352–4 health/sickness insurance 324–5, 340, 344–5, 355–6 housing provision 327, 335 income inequality 447f industrialization 325, 355 Koninklijk Nationaal Steuncomité (Royal National Aid Committee, KNS) 334–5, 338 labour movement 338, 339, 353 labour regulation 336–7 military conscription 13f mutual societies 325, 345, 356 National Labour Council 337 National Labour Front (NAF) 346 Nazi occupation (World War II) 320, 344–6 old-age pensions/insurance 326, 337, 354 pensions provision 337 people’s insurance 353–7 pillarization 322, 340 political impact of World War I 336–9 Rijksverzekeringsbank (public social insurance bank) 337 Socialist Party 336, 337, 352 suffrage and voting rights 336, 337 trade unions 327, 334, 335, 337, 338, 352–3, 355 unemployment 334, 335, 337 unemployment insurance/benefits 327, 334–5, 337, 338, 346, 354–5 urbanization 327 Van Rhijn Commission 353, 356 Vereeniging van Nederlandsche Werkgevers (Association of Dutch Employers) 325 war incidence and intensity 26t war intensity index 433f war neutrality (World War I) 320, 334 warfare–welfare nexus 357–8 welfare impact of World War I 334–8 welfare legacies of World War I 338–43 welfare provision under Nazi occupation 344–6 New Zealand 37, 230, 236, 249, 433f

Nitti, Francesco Saverio 112–13 Noonan, David 241–2 Nord, Philip 140n39 North Africa 117, 233, 248 Norway impact of war on welfare state development 4 income equality 239 Napoleonic Wars (1803–15) 290 war intensity index 433f war intensity and life insurance correlation 442f war neutrality (World War II) 364 Obinger, Herbert 432, 449 Olah, Franz 91n60 old-age pensions/insurance Australia 231, 235, 247–8, 249 Belgium 322, 332, 344 Britain 204, 207, 208t, 210 Denmark 294, 301, 304, 307–8, 311 Finland 269 France 138, 144 Germany 37, 295 Netherlands 326, 337, 354 Switzerland 365, 372, 373–4, 376t, 381, 384, 386 Organisation for Economic Co-operation and Development (OECD) 62, 239, 395, 452 Pacific Rim 232, 236n7 Pacific War (1941–5) 149, 156–65, 253, 428 paradox of war 2–3, 149 Patton, George 189 Payer, André 130 Peace Treaty of Paris (1947) 272 Pedersen, Susan 3, 206 Persson, Torsten 456 Pétain, Philippe (Marshal) 139 Pickstone, John 212, 220 Piketty, Thomas 6 pillarization 322, 340 Poland 262, 271, 343, 457 policy diffusion 7, 11t–12t, 19–20, 54n13, 223–4, 225t, 295, 381–2, 452 Pollard, Sidney 221–2 Porter, Bruce D. 2, 24, 129 poverty 42, 68, 156, 163, 222, 282, 298, 395, 396, 409, 412 Preller, Ludwig 4, 36, 451 press freedom 4, 69, 130 Przeworski, Adam 24n8 public/social expenditure 93f, 94, 124, 168, 208t, 221–2, 299–300, 303, 305, 310, 379f, 434f

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

Index crowding out effect of military spending 6, 17, 394, 397, 420 ‘guns and butter’ trade-off 6, 11t, 17, 18, 51, 119, 193, 225t, 397, 449–50 new welfare constituencies 11t, 18, 22, 433–4, 457 see also military expenditure Purseigle, Pierre 18 Randolph, A. Philip 189 Ranke, Leopold von 15 Rathbone, Eleanor 218 Rava, Luigi 108 Redlich, Joseph 75 refugees and displaced persons housing needs 79 internment camps 312 post-World War II crisis 9, 22, 58, 311–12, 384 social protection measures 12t, 80, 82, 130 Reidegeld, Eckart 39, 45, 46, 55n15, 56 Reinhardt, Fritz 53 risk pooling 3, 11t, 21 Ritter von Orges, Hermann 15 RMS Lusitania 178 Rode, Ove 298, 301–2 Rodgers, Daniel T. 179, 180 Roe, Jill 250 Rogers, Roy 187 Romanet, Émile 131 Roosevelt, Franklin D. 176, 184, 185, 186, 187, 190, 192–3 Ruffieux, Roland 378 Russia 40, 77, 279, 284, 449, 453 Bolsheviks 47, 113, 266–7 Civil War 260, 265–7 see also Soviet Union Russian Revolution (1917) 21, 47, 99, 111, 113, 265, 266 Russo-Japanese War (1904–5) 13, 47, 152–3, 261, 264 Russo-Swedish War (1808–9) 261, 262, 284 Sarkozy, Nicolas 143 Sauckel, Fritz 56 Sawer, Marian 238n10, 247–8 Scheidel, Walter 446 Scheve, Kenneth 15, 443 Schleswig Wars (1848–51, 1864) 39, 290, 292–3, 294, 313 Schmidt, Manfred G. 4, 60 Schmitt, Carina 432, 449 Scholliers, Peter 336 Schotsman, G. J. 238 Schumpeter, Joseph 84

477

Schuschnigg, Kurt 86 Seldte, Franz 54n13 ‘self-mobilization’ 18 Seton-Watson, Christopher 111, 112, 113 Shackleton, David 205 Shalev, Michael 412 Shaver, Sheila 251 Shennan, Andrew 143 Sino-Japanese War First (1894–5) 162 Second (1937–45) 149, 156–65 Skocpol, Theda 178, 393, 457 Smyth, Paul 234, 238, 255 social citizenship 376t, 378, 386, 393, 451 social democracy 37, 142, 201, 256 social and political rights 4, 11t–12t, 14–15, 23, 24, 38, 42, 48, 68, 169, 177, 195 see also suffrage and voting rights socialism 3, 62, 122, 157, 158, 184, 212, 410, 448, 450 Soskice, David 236 Soviet Union 122, 253, 260–1, 268, 270, 271–2, 274–6, 279, 281–2, 397, 412, 449, 457 see also Cold War Sparrow, James T. 185 Speer, Albert 55, 56 Stalin, Joseph 118, 270, 271, 272, 449 Stampfli, Walter 381 Stark, Kirk J. 18 Stasavage, David 15, 443 Stauning, Thorvald 302 Steincke, Karl Kristian 302, 304 Stoker, Laura 3 Storrs, Landon 451 Stürgkh, Karl von 74, 75, 77 suffrage and voting rights African American 191–2 Australia 234n5 Austria 68, 81 Belgium 323, 333, 341 Britain 207, 209, 223 Denmark 292, 301 Finland 264 France 132 impact of war preparation on 15n4 Italy 103, 111–12, 124 Japan 153, 154 Netherlands 336, 337 post-war developments 24 Switzerland 372 United States 177, 181–4, 191–2 women’s 24, 43, 179, 182–4 Sweden 4, 15, 154n4, 428n1, 433f, 442f, 446f, 453, 455

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

478

Index

Switzerland accident insurance 367, 369, 373, 374, 376t, 378, 379f, 384, 386 army structure and military social security expenditure 368t banks/banking sector 374 child benefit/family allowance 376t, 380 child labour protection 368 civil war (Sonderbundskrieg, 1847) 366 Communist Party 375 corporate community (Betriebsgemeinschaft) 380 corporate welfare institutions 371f demobilization 386 democratic people’s community (Volksgemeinschaft) 380, 383 direct democracy (referenda) 365, 366, 367, 372, 374, 378, 382f, 384, 387 disability insurance/benefits 373, 376t, 384, 385 employers’ organizations 378, 380 European social model 364 Federal Council 369, 370, 372, 373, 375, 377, 381 federalism 365, 373, 382 food shortages 371 Freisinn (Radical Party) 366, 372, 377, 381 gender imbalance of welfare system 378, 385 gender relations 378 health/sickness insurance 367, 369, 373, 374, 376t, 379f, 384, 386 income inequality 447f industrialization 366–7 influenza epidemic (1918) 372 labour regulation 367, 372 labour relations 378, 380 local welfare provision 370, 373 maternity benefit/allowance 376t, 387–8, 387f military conscription 13f, 14, 367, 368 military forces 364, 366, 367–9, 368t, 385, 387 military social citizenship 376t, 378, 383, 386–7 mixed public/private welfare system 364, 370, 386 mutual societies 367 nation building 366–9 National Strike (Landesstreik, 1918) 371–2, 373, 375, 377, 381 old-age pensions/insurance 365, 372, 373–4, 376t, 381, 384, 386 old-age and survivors’ insurance (AHV) 373–4, 376t, 379f, 381–5, 382f, 386, 388

pensions provision 371f, 374, 376t, 381, 384, 386 Pro Senectute (charitable foundation) 370–1, 371n4, 378 proportional representation 366, 372, 373, 374 social expenditure (1938–53) 379f social expenditure (Cold War period) 385–7 social insurance expenditure (1930–60) 379f social policy development (1918–60) 376t Socialist Party 366, 371–2, 375, 377, 381, 385 soldiers benefits (Erwerbsersatzordnung, EO) 365, 369, 376t, 377–85, 379f, 387–8 suffrage and voting rights 372 Swiss Accident Insurance Institute (SUVA) 373, 374, 376t, 384, 386 Swiss Association for Soldiers’ Welfare (Schweizer Verband Soldatenwohl, SVS) 370, 371n4 Swiss Guard 366 taxation 370, 373–4 Trade Union Federation 371–2, 383, 387 trade unions 367, 373, 375, 378 tuberculosis prevention law 376t, 384 unemployment 373, 374, 384 unemployment insurance/benefits 373, 374, 376t, 384, 386 veterans assistance 366 voluntary organizations 370–1 war incidence, intensity, and casualties 26t, 366 war intensity index 433f war neutrality 364, 369, 377, 385 warfare–welfare nexus 364–5, 367, 376t welfare legacies of World War I 369–70, 372–5 welfare legacies of World War II 385–8 welfare provision and policy (1870–1914) 366–9 welfare provision and policy (World War I) 365, 369–73 welfare provision and policy (World War II) 365, 375–84 women army volunteers 387 women’s labour market participation 387 Taafee, Eduard von 69, 73 Takayama, Noriyuki 149 Talma, A. S. 326 targeted welfare 139, 155, 178, 193, 234, 269, 276, 292, 308, 393, 406, 419 Taylor, A. J. P. 213

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

Index taxation alcohol and tobacco taxes 374 consumption tax 85, 305 extraordinary taxes 104–5, 305 income tax 58, 127, 178–81, 186–7, 242, 246, 249, 281, 295, 301, 310, 341, 370, 444f–5f indirect 58, 75, 341 inheritance tax 152, 238n11, 341 joint taxation of spouses 281 mandatory savings schemes 311 military exemption tax 368 new taxes 6, 18, 58, 76f, 443 pay-as-you-earn 70, 85, 95, 281, 354, 382, 386 progressive 6, 15, 18, 40, 178, 180, 186, 237, 246, 269, 281, 300, 301, 310, 447 property tax 133, 203, 280, 281, 341 redistributive 61, 63, 138, 341 supertax 341 turnover tax 281 war profits tax 300, 301, 341, 370, 374 wealth tax 238, 373 technological development 12–13 effects on military skill requirements 16, 454 impact on war–welfare nexus 454 ‘machine war’ 13 weaponry 12–13, 16, 117, 454 Temple, William 202 Therborn, Gøran 4–5 Thompson, William R. 10 Thorndike, Joseph J. 18 Tilly, Charles 1, 443 Titmuss, Richard 1, 2, 3, 5n1, 21, 200–1, 202–3, 215, 250, 393, 397, 426 Todt, Fritz 52, 56 Tōjō, Hideki 156 Tokonami, Takejirō 155n7 Tomlinson, Jim 221 Toronto, Nathan 13 ‘total war’ 8, 19–22, 45–6, 61–2, 91, 116, 133, 135, 158, 240, 248, 365 trade unions bargaining power 4, 20, 46, 429 collective bargaining 118, 185, 212, 269, 273, 330–1, 342, 355, 372 Nazi and fascist repression of 38, 86 resistance to statutory unemployment benefits 42, 367 role in social policy development 47, 79, 102, 265, 329, 352–3 unemployment insurance schemes 269, 322, 327, 330, 334–5, 343, 373 war labour committees 45 wartime industrial action agreements 40, 76 workers’ councils 344, 348

479

Trägårdh, Lars 283 Treaty of Saint-Germain (1919) 81 Treaty of Versailles (1919) 38, 47, 49, 51, 127, 300, 452 Troelstra, Pieter Jelles 336, 337, 340 Troy, Patrick 255 Truman, Harry S. 168, 194, 195 Trump, Donald 453 Trumpeldor, Joseph 410 Uhr, John 233n3 unemployment insurance/benefits Belgium 328–9, 330, 342–3, 347–8, 349 Britain 205, 207, 208t, 209–10, 210t, 211, 212, 217, 218 Denmark 295, 299, 304, 308, 309 Finland 265, 269 Germany 42–3, 48, 52 Ghent system 269, 373, 376t, 384 Israel 395 Japan 165, 166 Netherlands 327, 334–5, 337, 338, 346, 354–5 Switzerland 373, 374, 376t, 384, 386 trade union schemes 269, 322, 327, 330, 334–5, 343, 373 United States 185 United Kingdom see Britain United Nations 24 United Nations Relief and Rehabilitation Administration (UNRRA) 58 United States African Americans 177, 188–92, 194–5 American Civil War (1861–5) 13, 177–8, 366, 393, 430, 457 anti-discrimination policy and legislation 191–2 banks/banking sector 184 child labour protection 178, 181, 185 child welfare provision 178 Civil Rights Movement 188–92 Congress of Racial Equality (1942) 190 democracy and racial policy 190–1, 195 Democratic Party 179, 184 Fulbright program 452 GI Bill (Serviceman’s Readjustment Act 1944), 3, 177, 193, 195, 430 healthcare policy 177 income inequality 447f Jim Crow laws 190–1 Korean War (1950–3) 177, 193–5 labour movement 184, 185 labour regulation 181, 184, 185, 191 McCarthyism 451 Marshall Plan 279, 375, 452 maternalist reforms 178, 181, 184, 393, 457

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

480

Index

United States (cont.) military conscription 13f, 185 military desegregation 177, 194–5 military financing and expenditure 185 military welfare state 455 munitions industry 181 National American Woman Suffrage Association (NAWSA) 182, 183 National Association for the Advancement of Colored People 190 New Deal (1930s) 168, 176, 177, 184–6, 281, 451 Pearl Harbor 156, 196 Progressive Movement 179, 181, 184, 186 Red Cross 182 Republican Party 366 Rockefeller Foundation 279, 452 Rosie the Riveter 181 Seneca Falls Convention for women’s rights (1848) 182 Soldier Voting Act (1942) 191–2 Sputnik crisis 448–9 state capacity 176, 181, 185, 188, 195 suffrage and voting rights 177, 181–4, 191–2 targeted compensation 178, 193, 393 tariffs 179 taxation 177, 178, 186–8, 191–2 Temperance Movement 181 trade unions 185, 191 unemployment insurance/benefits 185 veterans assistance 177, 178–9, 193, 366, 420, 430 Vietnam War (1955–75) 3, 177, 193, 240, 430 war incidence, intensity, and casualties 26t, 178 war intensity index 433f war mobilization (World War II) 185–6 war risk insurance 181 warfare state (World War II) 185–92 warfare–welfare nexus 195–6 welfare legacies of the Civil War 178, 393, 457 welfare legacies of the Great Depression 184–5 welfare legacies of the Vietnam War 177 welfare legacies of World War I 177, 179–84 welfare legacies of World War II 177, 192–3 women’s labour participation 181–3 women’s war service and suffrage 177, 181–4 Universal Declaration of Human Rights 24 urbanization 3, 13–14, 68, 71, 128, 297

Van Acker, Achille 348, 357 Vandervelde, Emile 329, 342 Vietnam War (1955–75) 3, 177, 193, 240, 430 veterans assistance Australia 232–3, 236, 243–5, 430 Austria 79, 80, 83–4, 92–3 Britain 207, 209, 224, 225t Denmark 292, 294 Finland 273, 274, 276 France 127, 128, 133 Germany 39, 48–50, 60 Israel 393–4, 401–2, 405 Italy 103, 105–6 Japan 152, 153, 164 Switzerland 366 United States 177, 178–9, 193, 366, 420, 430 voluntary/charitable welfare activity hospitals 212, 220 local organizations 43, 274, 276, 278 Lotta Svärd (Finland) 273, 276 Red Cross 39, 43, 57, 132, 182 women’s involvement in 104, 178 voting rights see suffrage and voting rights Walker, Ronald 240n13 Walter, James 248–9 war mobilization equality of sacrifice 11t, 14–15, 20, 24, 311, 314, 417, 429 impact of, on social policy 11t, 17–21 patriotic fervour 18, 74 propaganda 18, 54–5, 116, 182 ‘rally round the flag effect’ 10, 20, 40 war veterans disability 9, 15, 22, 48–50, 60, 83–4, 241, 260 disability benefits 60, 74, 93, 100, 274, 276, 394, 401–2, 404–11, 408f, 414t, 414–15 disability employment policy 49n10, 93, 95 education programmes 3, 9, 178, 193, 401 psychiatric treatment 279 reintegration programmes 6, 9, 12t, 22, 50, 60, 61, 95, 133, 207, 430 taxation in aid of 15 see also veterans assistance war victims 6–9, 11t, 50, 59–60, 83, 92–3, 331–2, 403, 419, 431, 436–7, 439 ILO social spending data 434f warfare state 2, 114–17, 185, 201, 206, 224 warfare–welfare nexus causal effects and relationships 1–25, 11t–12t, 22–5, 426, 427 Cold War impact 448–53 comparative research 5–10, 426, 427–32 contextual variation 25–6, 172, 427–32 convergence theory 171

OUP CORRECTED PROOF – FINAL, 23/5/2018, SPi

Index country case study findings and patterns 427–32 demand-side and supply-side effects 8–10, 11t–12t, 426–7, 429–31 divergence theory 171 future research questions 456–8 ‘guns and butter’ trade-off 6, 11t, 17, 18, 51, 119, 193, 225t, 397, 449–50 long-run effects 11t–12t path-dependencies 168, 235–6, 239, 256, 405, 419, 431–2, 435t policy diffusion 7, 11t–12t, 19–20, 54n13, 223–4, 225t, 295, 381–2, 452 post-Cold War developments 453f, 453–6 post-war legacies 11t–12t, 431 quantitative evidence 432–48 revisionist interpretations of 5 scale effects 21, 230, 239, 241–3, 249, 256, 320, 328, 334, 357, 394, 431 social spending patterns 433–7, 434f, 435t, 436t, 456 state capacity enhancement 4, 9, 11t, 15, 19, 426–7, 429–30 varieties of capitalism approach 172 war impact on public–private welfare mix 441–3, 442f, 442t war impact on social inequality 445–8, 446f–7f war impact on taxation policy 443–5, 444f–5f war intensity factor 428, 430, 433f welfare programme adoption and reform patterns 437–40, 438f, 440t Waris, Heikki 273 Watts, Rob 238 Weber, Max 1, 13 Weimar Republic demobilization 4 industrial relations 4, 47–8 tax reform 48 veterans and war victims assistance 48–50 war veterans radicalization 50 welfare state policy 38, 47–50 welfare state Bismarckian 37, 39, 59, 70, 99, 120, 123, 124 concept of 1–2 human well-being as objective of 2

481

new welfare constituencies 11t, 18, 22, 433–4, 457 Nordic model 260, 278, 281, 283, 290, 305, 451 Whalen, Robert Weldon 41n5, 49 Wheatley, John 212 Wilensky, Harold L. 3, 6, 14, 149, 449–50 Wilson, Woodrow 182–3 Wimmer, Andreas 9, 26 Winkel, R. 302 With, Erik 305 women Mutterschaftsleistung (‘service of motherhood’, Nazi Germany) 56 ‘on the strength’ military wives 206 public health measures aimed at 14 separation allowance 42, 53, 56, 61, 131, 206, 211 suffrage and voting rights 15n4, 24, 43, 81, 132, 179, 182–4, 223, 372, 429 voluntary welfare activity 39, 104, 178 see also child benefit/allowance; gender inequality; gender relations; maternity benefit/allowance; women’s labour market participation; women’s movement women’s labour market participation agricultural workers 90, 104, 110, 244 Australia 244 Austria 77, 90, 91 Belgium 331 Britain 207, 214, 225t Denmark 315 Finland 278 France 132, 133 Germany 44, 56 Italy 102, 104, 110, 115 Japan 150, 154, 155 munitions workers 44, 244 Switzerland 387 United States 177, 181–4 women’s movement 43, 46, 182 World Bank 397, 452 Yamagishi, Takakazu 168 Zimmern, Alfred 202 Zionism 400