Saturday, 24 May 2014

OLD AGE PENSIONS ARE BISMARCK PLOT

There are many things in the state and feelings of the German people which are unsatisfactory and even threatening. The protection policy has not answered all that was expected of it. The industries for whose benefit it was inaugurated are not healthy under the fostering process, while other interests are suffering severely under the strain. The harvest, especially in Silesia and east and west Posen, has been defective, and bad trade has generated strikes in Berlin and elsewhere. The spread of Socialism and lesser forms of discontent has caused alarm, and necessitated that some of the larger towns should be placed under martial law. The disquieting cry for free trade has been raised in disagreeable quarters, while the stream of industrial emigration flows on without a check, and the approaching census is likely to make curious revelations. In these circumstances Bismarck is setting himself to devise means for the improvement of the condition of the populace, especially of the working classes, but he has as yet no notion of finding the solution of the problem in the relaxation of those heavy burdens which the overgrown military system has necessarily imposed. He purposes rather to take labor under his wing, " to drill all working and trading creatures into a vast system of hive-like obedience, discipline, and unity of action;" to call to his aid a permanent Council of Economic Experts to help him in framing Government Bills which involve questions of political economy, and to give advice as to the actuarial and commercial details of a system of general State insurance. Simultaneously with this new-born zeal for the material prosperity of working men in Germany we have in England a revival of schemes for a system of national insurance which would greatly relieve the community from the burden of poor rates and secure to every individual who may need and claim it a certain moderate provision for sickness and old age. From time to time this idea has been revived and discussed. It underlies the theory of friendly societies; a modification of it has been adopted on a small scale by many private companies; it has very recently assumed prominence through the lectures and speeches of Mr. Blackley, a clergy man of Hampshire. Lord Carnarvon brought it before the House of Lords in June last Since then be and Mr. Blackley and Mr. Tremenheere have been discussing it in the Contemporary Review; and it has been alluded to in various speeches by representative public men, and in several of the congresses which have been so abundant within the last two months. As yet the subject is in the ventilation stage, and many crude proposals have been made, out of which in due season, and after careful sifting of chaff from the wheat, some definite plan will doubtless be presented for consideration in an early session of Parliament. Meanwhile, without ignoring difficulties which lie in the way, it may be useful to take a general look at the proposals, and to see what are the principal arguments for a scheme which professes to seek the elevation of the working classes by enforcing providence on the careless and unthrifty, and relieving the ratepayers of a burden of poor rates which the industrious and well-to-do have to bear for the sake of the idle and vicious. The underlying principle in all these proposals is that while it is the duty of the State to see that none of its citizens "should die from default of sustenance," it is equally the duty of the citizens to make provision for themselves and households in days of youth and strength and abundance of work. In every clime and country there are found loafers who, by inversion of scripture rule, can work, but to beg are not ashamed. The plague of improvidence is a cancer which eats into the heart of most communities, and tokens of its baleful presence are too apparent even in a young and undeveloped country like this. It is argued that it is both desirable and reasonable, therefore, that measures, compulsory if need be, be taken to ensure the community as a whole against the vices, follies, and misfortunes of individuals, and to protect such individuals against themselves by exacting from every citizen at certain times and in certain proportions such a sum as shall secure provision for sickness and old age. The proposal of Lord Carnarvon is that all citizens "whatever their class or profession may be, should pay their quota toward the fund between the ages, say of 17 to 21," the fund being sufficient to ensure say 8s. per week in time of sickness, and 4s. per week after 70 years of age. What that fair quota might be which would secure such a sum, whether the sum should be larger or smaller for sick allowance, whether the period for help on account of old age should commence at sixty-five or seventy, and many such questions, are matters of detail and actuarial calculation, but Lord Carnarvon considers that £20 paid by each individual in a lump sum or instalments between the ages he specifies could secure the moderate provision he suggests. Parents in the upper and middle classes whose children are kept at school, or at least are not earning wages at those ages, would pay this lump sum as part of their children's cost of training for a higher position in after years; while among the wage-earning population, even among the agricultural laborers, whose wages are the lowest, there could be, it is asserted, no difficulty in sparing that amount in five or seven years, and so far from the necessity of so doing being a hardship it would in reality be a salutary training and experience the benefit of which would, remain in a habit of thrift through after years. To this or any similar scheme, obvious objections both in principle and detail at once present themselves, but in the opinion of its advocates they are not vital, and are far outweighed by the expected advantages. It is of course urged that the principle of compulsion which is the essence of the plan is wrong; and no doubt it would be better if men were so constituted that they would do their duty to themselves and their families and the State of their own spontaneous motion. But how if they neglect it, and if others suffer and are made to pay because of their neglect, are questions asked in reply. The system of poor relief in England costs annually £8,000,000 sterling. Part of that huge sum goes to support the aged, infirm, and unfortunate—the honest and inevitable poor who must always remain in the land, and whose succor and care is a bounden duty. But a large part of it goes to the relief of those whose necessities have been brought on by improvidence and intemperance, and surely it is no hardship that they should be compelled to lay by for themselves at the time when opportunity and strength permit, as much as when properly invested and administered will form a general fund, out of which they will be kept when sickness or old age incapacitates them from labor. As Lord Carnarvon says—"It is no curtailment of liberty in the true sense that men should be deprived of the power of becoming paupers, and of living on the charity or the hard-won earnings of those who, often with no superior advantages, have by a manly and life-long struggle with fortune kept themselves and families above the level of dependence." Moreover in the case of those who themselves are never likely to be in circumstances to need this provision for sickness or old age, the compulsion is not imposed for the first time its incidence is only changed. Every house holder in England is compelled now to pay a heavy yearly tax to support aged and infirm, and even able-bodied paupers; and if poor rates can be abolished or greatly lessened by the compulsory insurance of all for moderate payments at a period when they would not be greatly missed, the community at large would undoubtedly be the gainers. Of the same nature is the objection to the proposal on the ground that it extends the area of State interference and increases the danger of centralization. This again Lord Carnarvon undertakes to answer. He says that whether we like it or not State interference has grown and is growing. " The child in his cradle must be guarded by vaccination against disease ; a few years later he must be instructed in particular subjects and branches of education; and when finally he comes to man's estate he will not be allowed to live, to sleep, to eat, to drink, to read, or to travel as he pleases, but will become the creature of all that intricate protection which Acts for model lodginghouses and libraries, public analysts, sale of meat, and many other public institutions have built up; perhaps even before long Parliament will fence in his moral inclination by restrictions on the use of intoxicating liquors." From this he argues that while State interference is certainly not pure gain, the general good must override individual inclination and freedom of action, especially if, "as in this particular case, the step is attended with advantages which none will seriously deny." Of course there must in a highly civilised and densely peopled country be many forms of State interference with individual liberty; but the principle should never be yielded that each interference is an evil only to be defended on the ground that it secures to the community a benefit overbalancing the evil. Objections have also been raised as to matters of detail and modes of working. To be successful a scheme like this must include all alike, and doubtless then will be difficulty in formulating and still more enforcing it. But matters of detail can readily be adjusted if the principle were established that for the sake of the thrifty, careful, and well-to-do, unthrift and hand-to-mouth living should be discouraged and condemned. The burden of supporting a nation's poor should not be thrown on shoulders only because they have proved competent to bear their own burdens well, and prima facie the scheme for compulsory insurance lessens if it does not abolish that necessity. As the sum for sickness and the provision for old age ought in justice to be the smallest possible consistent with subsistence, there would still be abundant scope for friendly societies and insurance offices, to which the State scheme would be an ally, not a rival. The lad of 17 to 21 would be none the worse, but all the better of the lesson in self-denial and thrift which he would be taught by having these insurance sums exacted from him at a time when the money might have been badly spent; while he would have the satisfaction when he reached his majority of knowing that by his own exertions, and out of his own savings, he had rendered starvation impossible for all future time and that should he need it he could claim from the State allowance for sickness and aliment for old age, not as a pauper dole, but as a right which he has purchased. These are some of the arguments which the supporters of this scheme advance, and though they admit that much may be said against their plans, and a great deal yet remains to be elaborated before they can be made workable, they are worthy of consideration as an attempted step in the direction of promoting national thrift and prosperity.

The South Australian Advertiser 15 December 1880

In my last I ventured to prognosticate that his Social-Democratic measure for the compulsory insurance of working men against poverty in their old age would be rejected by the Reichstag. Not only has that forecast been realized, but the Bill, amended and all but entirely recast, has since suffered a similar fate at the hands of the Federal Council. Nevertheless, Prince Bismarck has recently announced to his more intimate friends that he intends to bring it up again before the new Parliament the first thing next session, and that if that Assembly should refuse to pass it he will try another, which is equivalent to threatening the coming Reichstag with dissolution before it is even elected. The rejected Bill was the sort of measure that even Mr. Gladstone, advanced as are his ideas, would not venture to propose to the House of Commons, could he command a larger working majority than that actually at his disposition. Any serious attempt by the Legislature to introduce so arbitrary an expedient for rendering thrift and precaution obligatory upon the working classes would probably in England lead to a revolution. Of course everybody here knows that it was devised by Bismarck to cut the ground from under the feet of a Social Democratic grievance, and to checkmate agitators of the Lassalle school upon their own chessboard. Indeed, I have no doubt that Bismarck during his brief liaison with Ferdinand Lassalle picked up the idea of workmen's insurance from that clever but somewhat flashy demagogue. It was one of Lassalle's favourite fads, by him borrowed from Charles Fourier, and presenting itself to his mind in a federative and co-operative aspect as an institution destined to be originally voluntary, the outcome of the “people's will,” and only to become compulsory by a further pronouncement and exercise of that will. Bismarck's view of it naturally enough was a totally different one. He saw in it a fresh instrument for bringing State control to bear upon the people's earnings and, through their pockets, upon their conduct and behaviour. It was the potential despotism of the expedient that took his fancy, not the democratic notion upon which it was founded. What Lassalle in his airy way regarded as a solemn trust, to be confided by a nation to some sort of generally elected oligarchy, Bismarck perceived to be eminently susceptible of conversion into an increment of power to the State. For its capacity in this respect he took it up, intending to borrow, as it were, a weapon from the Social Democratic armory of theories wherewith to deal Social Democracy itself a smashing blow. The project was a truly Bismarckian one; bold, ingenious, and sufficiently adventurous to catch the fancy of a good many imaginative German idealists. Its fulfilment would have imposed no additional charge upon the national exchequer. But the Conservatives and Clericals sniffed at it until they detected, or thought they detected, that it smelt of petroleum ; and the National Liberals, who, considering the denomination of their party, are curiously unfriendly to the working classes, went into the Government Bill so deeply that they succeeded in discovering it to be an unholy part with Communism, menacing to the liberties of the subject, and especially devised for the purpose of still further centralizing power in the hands of that formidable impersonality, the State. Besides, they owe the Chancellor such a voluminous batch of grudges for the uncommonly rough treatment they have received from him during the put three years that as soon as they found out he had set his heart upon passing this particular measure they resolved to thwart his wishes, and to that end, coalesced with their foes of the Centre. With such a combination arrayed against it the Bill was thrown out in due course, to the great aggravation of its author's bodily ailments.

South Australian Register 13 August 1881

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