Along with industrialization, complex institutional systems whose purpose was to protect individuals, workers, citizens and their families from a certain number of “risks” during their lives, appeared at different time periods in various nations. That was particularly the case for the consequences of loss of income due to disease, work-related accidents, unemployment and old age. Over the course of the 19th century, two main models for dealing with those social issues can be distinguished; one private (philanthropy), the other, public (municipal socialism). Neither one entirely replaced the other, instead, they often intertwined, with the balance between the two differing across Europe.
Two Historical Matrices: The Bismarck Model and the Beveridge Model
To understand the range of social-protection models in Europe, the standard distinction made is between two systems: the one imposed in Germany by Chancellor Otto von Bismarck (1815-1898) in the late 19th century, and the one implemented in the United Kingdom after World War II, based on a report the economist William Henry Beveridge (1879-1963) was commissioned to write by the British government during the war. Those two models arose not only in different periods with different economic and political contexts, they also attempted to respond to two different sets of problems. The social-protection laws passed in Germany were introduced as a response to the “working-class problem” and to the risks associated with industrialization that took place there later than elsewhere in Europe, but very quickly. The Beveridge Model was not just a project intended to move from a war economy to one of peace and well-being, it was also in keeping with a long English tradition begun in the early 17th century with the first Poor Laws, which were an attempt to solve “the problem of poverty.”
The laws passed in Germany from 1883 to 1889, about health insurance, workplace accidents and retirement pensions, had certain particularities. To begin with, the measures were adopted in a context of social tension with a risk of insurrection fueled by the crisis of the 1870s and the rise of the Socialist International. Chancellor Bismarck’s objective was to pull the rug out from under the workers’ movement by adopting at almost the same time (in 1878) both repressive measures intended to eliminate socialist propaganda and social-protection laws whose goal was to begin to meet the needs created by a certain number of hazards in the lives of working-class families. The solution chosen was to require low-income workers to get insurance for risks like sickness, workplace accidents, and old age. Next, the insurance logic made it possible to cover the costs of welfare benefits by imposing the principle of contributions or dues divided in various proportions between employers and workers. Lastly, the principle of welfare organizations being self-administered by those who financed them, i.e. representatives of both employers and workers (co-management), enabled the growth of reformist unionism which went along with managing that system. That principle constituted one of the foundations of the German corporatist model. Founded on collective negotiations by professional sectors, it was applied in Austria and Hungary, and Scandinavia in the 1910s, as well as in the United Kingdom from 1906 to 1911, where unemployment insurance was added to the mix. France also followed the insurance-based path with legislation in 1898 about workplace accidents, a 1910 law about retirement pensions for workers and farmers, and 1929-1930 laws about social insurance.
In the context of World War II, Churchill’s government asked the economist William Beveridge to think about the effects that both the Great Depression and the war would have on the United Kingdom’s social-protection system. In 1942, Beveridge handed in a report (Social Insurance and Allied Services) in which he recommended an in-depth reform of the system that had been in place up until that time. His logic was to eliminate poverty through a national social effort, a “social security” based on citizenship. Without challenging the insurance aspect, he suggested developing a “universal” base that would enable all citizens, whatever their position on the labor market, to access some minimum social-security benefits (“uniformity”). Those benefits would be provided for by a different source of funding, taxes, and would establish government oversight of a single, public social-security service (“unicity”). The best example of that was Britain’s National Health Service. Implemented by a Labour government from 1944 to 1946, it enabled all citizens to access a range of free public health-care services. The Scandinavian countries, Canada, the United States and France were all inspired by it. Pierre Laroque, who was in London alongside General de Gaulle towards the end of the war, was tasked by him to come up with a proposal for a “sécurité sociale” in France (1945 rulings). Corporatist opposition from many sectors got the better of the universal model recommended by Laroque, which is why it is often said that the French system is a hybrid between Bismarck’s model and Beveridge’s.
Welfare State Models Undergoing Profound Transformation
Long centered on the macro-economic and financial aspects – particularly the issue of the sustainability of social-protection expenses in a context of a globalized economy and evolutions in the labor market – discussions about social-protection systems have been evolving over the last few decades. Alongside the process of building Europe, which notably included the possibility of a single, common foundation for social Europe, comparing national systems led to identifying different welfare state types or models. That process involved academic controversy about the type of variables that should be taken into account and the number of those standardized models. In that discussion, light was cast on the role of variables that had hitherto been relatively overlooked, such as the question of the division of household labor and caretaking between the sexes, the protective role of family ties and the issues of equality that they raise.
The debates focused mainly on changes and reforms to those myriad models and raised the issue of their possible convergence, as well as the risk of their being dismantled. A consensus seems to be taking hold as to the two main triggers for those reforms, namely: one is economic crises (from the one in the mid-1970s to the one in the 2010s) – including the health and economic crisis that began in 2020 with the pandemic, and the other, socio-demographic changes. The latter are numerous: aging populations, the transformation and fragilization of family structures, women’s access to the labor market. Circulations of workers within Europe or from outside of it has also fueled great debate and many studies on the costs and benefits of social protection.
By the turn of the 21st century, the main issue seemed to be how to design those systems’ future. In his book L’esprit de Philadelphie (“The Philadelphia Spirit,” 2010) about the nature of the powerful political choices and international institutional and legal arrangements made immediately after World War II, at the time of the first international declaration of rights with truly universal ambitions, Alain Supiot criticizes the currently dominant tendency that consists in seeing neoliberal reforms as ineluctable. He points to another path, which would require significant political choices. The determination to defend and preserve social protection has been leading more and more academics to wonder how best to renew or re-found social-protection systems at both the national and international levels.
