The Politics of Social Solidarity: Class Bases of the European Welfare State 1875-1975

The Politics of Social Solidarity

The Politics of Social Solidarity Class Bases of the European Welfare State 1875-1975

Peter Baldwin

I CAMBRIDGE UNIVERSITY PRESS

PUBLISHED BY THE PRESS SYNDICATE OF THE UNIVERSITY OF CAMBRIDGE

The Pitt Building, Trumpington Street, Cambridge, United Kingdom CAMBRIDGE UNIVERSITY PRESS

The Edinburgh Building, Cambridge CB2 2RU, UK http://www.cup.cam.ac.uk 40 West 20th Street, New York, NY 10011-4211, USA http://www.cup.org 10 Stamford Road, Oakleigh, Melbourne 3166, Australia Ruiz de Alarcon 13, 28014 Madrid, Spain © Cambridge University Press 1990 This book is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 1990 First paperback edition 1992 Reprinted 1993,1996,1999 British Library Cataloguing in Publication data Baldwin, Peter The politics of social solidarity: class bases of the European welfare state, 1875-1975. 1. Welfare state. Political aspects I. Title 36i.6's Library of Congress Cataloguing in Publication data Baldwin, Peter The politics of social solidarity: class bases of the European welfare state, 1875-1975 / Peter Baldwin. p. cm. Includes bibliographical references. ISBN 0521 37512 6

1. Welfare state. 2. Solidarity. I. Title. JC325.B33 1990 - dc20 89-17312 CIP ISBN o 521 37512 6 hardback ISBN o 521 42893 9 paperback

Transferred to digital printing 2003 Acknowledgement is gratefully made to the archives listed in the bibliography for permission to make use of the sources in their possession.

Parts of Chaper 1 have appeared as "The Scandinavian Origins of the Social Interpretation of the Welfare State," Comparative Studies in Society and History, 31, 1 (1989), of Chaper 2 as "How Socialist is Solidaristic Social Policy? Swedish Postwar Reform as a Case in Point," International Review of Social History, 33, 2 (1988).

In memory Birgit Baldwin 1960-1988

Contents

Acknowledgments Abbreviations Introduction: Welfare, Redistribution and Solidarity

page *x xi i

The Origins of the Solidaristic Welfare State: Scandinavia Farmers, Conservatives and the Origins of Solidaristic Social Policy: Denmark Workman's Comp, Everyman's Comp? Farmers, Conservatives and the Origins of Solidaristic Social Policy: Sweden

55 65 76

Interlogue

95

83

The Triumph of the Solidaristic Welfare State: Britain and Scandinavia Beveridge and the Ambiguities of Solidarity The Middle Classes and Scandinavian Solidarity: Sweden The Middle Classes and Scandinavian Solidarity: Denmark

107 116 134 147

The Failure of the Solidaristic Welfare State: France and Germany Solidarity, Social Security and Salaried Employees: France The Self-Employed and the Allure of Social Separatism Allies, Germans and Solidaristic Reform A Farewell to Beveridge: Social Democratic Social Policy Securing Wage Earners' Social Insurance

158 163 172 186 201 203

From Beveridge back to Bismarck: The Superannuation Issue Wage Earners, Social Equality and Superannuation: Sweden

208 212

viii

Contents

Wage Earners, Social Equality and Superannuation: Denmark Milestone to Millstone and Beyond: Britain's Road from Beveridge to-Titmuss 5

223 232

Solidarity by the Back Door French Independents, Decline and the Dissolution of Separatism A Distributive Hot Potato: German Artisans between Workers and Employees Mopping Up: Other German Independents Solidarity by the Back Door

248

268 275 279

Conclusion: The Social Bases of Solidaristic Reform

288

Bibliography Index

300 346

253

Acknowledgments

Comparative studies widen the scope not only of the questions asked, but also of the obligations incurred trying to answer them. Academically, I am above all indebted to the advisor of the dissertation from which this book was hewn, Charles Maier, a scholar who has set many of the standards that other comparative historians attempt to emulate, and equally to my Doktoronkel, Franklin Ford. Others to whom I am grateful for advice, encouragement, readings and leads are: Bent Rold Andersen, Ernst Andersen, Dorte Bennedsen, Pierre Bony, John Brewer, James Cronin, Giinter Dax, Francois Ewald, Aris Fioretos, Carl-Axel Gemzell, Solange Goldman, Jean Grob, Catherine Gross, Peter Hall, Fen Hampson, Hugh Heclo, Knud Heinesen, Hans Giinter Hockerts, S. A. Hoybye, Madeleine Hurd, Lars Norby Johansen, Hans-Dieter Kreikamp, Stein Kuhnle, Pierre Laroque, Denis Lefevre, Daniel Levine, Henrik Jess Madsen, Ernest May, Jorn Henrik Petersen, Christine Petillat, G. R. Nelson, Francis Netter, Dominique Schnapper, Thomas A. Schwartz, Theda Skocpol and Pat Thane. Gregory Pass and Clare Parsons did helot service as research assistants. The late Gaston Rimlinger, a pioneer in the field of comparative welfare studies, was especially generous with his time and help. The staff of the Parliamentary Library in Copenhagen extended a much overstayed welcome and allowed me the run of their superb collection of government papers. Thefirstdraft was written in the University of Frankfurt library, a place with all the charm of a bus terminal, that offers even distractible minds no alternative to work. The resources to accomplish the research and the academic grand tour it made a pleasant necessity I owe to the Krupp Foundation, the DAAD, the American-Scandinavian Foundation and the History Department of Harvard University. In the course of archival peregrinations and subsequent distillation, I have also accumulated debts of hospitality and friendship: to Bella Strauss

x

Acknowledgments

on Gotts Island, to Elizabeth and William Purcell in Cambridge, Mass., to Isa and Olga Ragusa in New York City, to Morten Vest and Tina Eriksson in Copenhagen, to Brian McGuire and Ann Pedersen in Skamstrup, to Marianne Oberg in Stockholm, to Ruth Ehrlich in London, to Leszek Kolakowski and Tamara Kolakowska in Oxford, to Mut Miiller and Ite Deutsch in Frankfurt, to Gottfried and Erna Richter then of Oggersheim, and above all to Peter and Renate Stange in Sankt Augustin, my first friends in Germany. Aron Rodrigue and Peter Mandler have watched over all this as comrades and colleagues. A welcome tendency in the acknowledgments of first academic books in recent years has been the demise of ritual genuflection before the altar of the spouse/muse/typist. Dagmar Richter, an architect by profession, has I am glad to say - had better things to do than act as academic support staff. And yet, without the archival travels on which what follows is based, our paths would never have crossed. A happier or closer connection to this book I cannot imagine. To Jenny Jochens and John Baldwin, both as parents and as colleagues, I owe a lifetime of example and encouragement. This book is at least as much theirs as mine. Finally, my only and bitterest regret is that my sister, a scholar in the bud, nearing completion of her own dissertation, did not live to see this. She was killed by a drunk driver, another victim of a modern scourge that our society only grudgingly confronts, only feebly handles. To her memory, one of happiness, grace and charm, this book is dedicated.

Abbreviations

ABA ACDP AdsD AGIRC AK AN ARA ATP BA BA/Zw BdfB BRAK BT CANAM CANCAVA CAPEB CDU CFTC CGC CGPME CGT CGTU CIDUNaTI CNJA CNPF CNR

Arbejderbevsegelsens Bibliotek og Arkiv, Copenhagen Archiv fur Christlich Demokratische Politik, St. Augustin Archiv der Sozialen Demokratie, Bonn Association generale des institutions de retrait des cadres Andra kammaran Archives nationales, Paris Arbetarrorelsens Arkiv, Stockholm Arbejdsmarkedets Tillsegspensions Huset, Hillerod Bundesarchiv, Koblenz Bundesarchiv, Zwischenarchiv, St. Augustin Bundesverband der freien Berufe Bundesrechtsanwaltskammer, Bonn Deutscher Bundestag Caisse nationale d'assurance maladie et maternite des travailleurs non salaries des professions non agricoles, Paris Caisse autonome nationale de compensation de l'assurance vieillesse artisanale Confederation de l'artisanat et des petites entreprises du batiment, Issy-les-Moulineaux Christlich-Demokratische Union Confederation francaise des travailleurs chretiens Confederation generale des cadres Confederation generale des petites et moyennes entreprises Confederation generale du travail Confederation generale du travail unitaire Comite d'information et de defense - Union nationale des travailleurs independants Centre national des jeunes agriculteurs Conseil national du patronat fran^ais Conseil national de la resistance

xii

Abbreviations

CRD CSU DAF DAG DAV DGB DP FDGB FDP FK FNSEA FNSP FT HDE HSSC ILO JO Deb JO Doc Labour LO LSE LT MRP NEC NHS OMGUS ORGANIC PCFSS PRO RA/D RA/S SACO SAP SFIO SfU

Conservative Party Archives, Conservative Research Department, Oxford Christlich-Soziale Union Deutsche Arbeitsfront Deutsche Angestelltengewerkschaft Deutscher Anwaltsverein Deutscher Gewerkschaftsbund Archives, Diisseldorf Deutsche Partei Freier Deutscher Gewerkschaftsbund Freie Demokratische Partei Forsta kammaren Federation nationale des syndicats d'exploitants agricoles Fondation nationale des sciences politiques, Paris Folketinget Hauptgemeinschaft des deutschen Einzelhandels, Cologne Health and Social Services Committee International Labor Organization Journal officiel, Debars parlementaires, Assemblee nationale Journal officiel, Documents parlementaires, Assemblee nationale Labour Party Archives, London Landsorganisationen, Stockholm London School of Economics Landstinget Mouvement republicain populaire National Executive Committee National Health Service Office of Military Government, United States Caisse de compensation de Porganisation autonome nationale de l'industrie et du commerce, Paris Policy Committee on the Future of the Social Services Public Record Office, Kew Rigsarkivet, Copenhagen Riksarkivet, Stockholm Sveriges Akademikers Centralorganisation Sveriges socialdemokratiska arbetareparti Section francaise de Tinternationale ouvriere Socialforsakringsutskott

Abbreviations

SGSOA SIC SIF SIIWC SOU SPD SSSC SVAG SVK TCO TGWU TUC UCCMA UDSR UNR-UDT VAB ZDH 2LU iSaU 2SaU

xiii

Study Group on Security and Old Age Committee on Social Insurance and Allied Services Svenska industritjanstemannaforbund Social Insurance and Industrial Welfare Committee Statens offentliga utredningar Sozialdemokratische Partei Deutschlands Social Services Sub-Committee Sozialversicherungsanpassungsgesetz Socialvardskommitten Tjanstemannens centralorganisation Transport and General Workers' Union Trades Union Congress, Archives, London Union des caisses centrales de la mutualite agricole, Paris Union democratique et sociale de la resistance L'union pour la nouvelle republique - Union democratique du travail Versicherungsanstalt Berlin Zentralverband der Deutschen Handwerk Andra lagutskott Forsta sarskilda utskott Andra sarskilda utskott

Introduction: Welfare, Redistribution and Solidarity

Joseph Schumpeter once claimed to be able to detect the thunder of world history in accounts of public finance. Fiscal topics - issues of the budget, taxation, the growth of state spending - best revealed the spirit of a people, its cultural level, its social structure.1 The development of the welfare state is a topic which similarly conceals questions of utmost importance under matters that may at first seem merely technical and abstruse. Social insurance, old-age pensions, workers' compensation, actuarial risk, waiting time, point-indexing and cost-of-living differentials rarely seem the stuff of dramatic narrative. In fact, approached from the right angle, the nuts and bolts of social policy testify to the heated struggles of classes and interests. The battles behind the welfare state lay bare the structure and conflicts of modern society. Ongoing disputes among groups for redistributive advantage, contests over solidarity, force a constant renegotiation of the social contract. Applying the instruments of social insurance on behalf of increasing numbers of citizens to ever greater varieties of risk and ill fortune, the modern welfare state decisively advanced society's ability to treat each of its members equally. It did so, however, less by redistributing wealth than by reapportioning the costs of risk and mischance. Insurance translates the effects of fate, luck and iniquitous social circumstance into the common denominators of cash, kind and services, then reallocates them so that the stricken bear no more than an average burden and those spared assume responsibility for events not directly affecting them. In terms of misfortune's consequences, all who are members of a common risk pool stand equal. In this respect, only a minor difference separates any form of insurance 1 Joseph Schumpeter, "The Crisis of the Tax State," in A. Peacock et al., International Economic Papers (New York, 1954), p. 7, quoted in Michael Mann, "State and Society, 1130-1815: An Analysis of English State Finances," Political Power and Social Theory, 1 (1980), 168.

2

Introduction

from social insurance and its comprehensive expansion in the welfare state. Once risks are pooled, the individual faces uncertainty no longer alone but as part of a larger group. The novelty of social insurance was the extension of this confrontation of risk in community from a small circle, sometimes self-selected to its advantage, sometimes isolated to its own peril, not only to a much larger group - possibly society as a whole - but even, through intergenerational transfers, to the still unborn. The magic of averages, in Churchill's wartime phrase, was harnessed for the millions. Social insurance's advantage lay in the expanse of the community it embraced, the scope of the problems it resolved, the intervention allowed by the state's power and the justice of the redistribution that followed. The terms of misfortune's reapportionment were determined not privately, but by society as a whole in accordance with commonly accepted standards of equity. Concerns that had formerly been individual became political. What happened in case of illness, disability, old age, unemployment and parenthood was now decided in line with agreed-on principles of fairness. In areas where happenstance and circumstance had ruled most arbitrarily, regularity, predictability and equality took over. The rules, conventions and standards of justice that governed the formal interaction between society's members and determined the terms of citizenship were gradually extended to apply also to the most personal and individual matters of risk and misfortune. Relations between citizens, formerly regulated primarily in a civil and political sense, were altered accordingly. As economic producers or as members of different classes, individuals were still treated unalike by the market and by inherited hierarchies. But as creatures subject to risk, they could stand equal. Full membership in the community was possible for all citizens, not only as bearers of civic rights or as political participants, but as mortals buffeted by misfortune and unsettled by insecurity. With the development of the welfare state, society decisively improved on its ability to decide autonomously its rules of association without regard to the dictates of nature, fate or circumstance.2 2

Francois Ewald gives a magisterial analysis of the world-historical significance of social insurance and the welfare state in V etat providence (Paris, 1986), esp. pp. 395-405. Foucault has also discussed some of the themes elaborated in this remarkable work in his "Un systeme fini face a une demande infinie: Entretien avec Michel Foucault," in Robert Bono (ed.), Securite sociale: L'enjeu (Paris, 1983). For a similarly ambitious, but less adventurous concept of social policy, see Stein Ringen, The Possibility of Politics: A Study in the Political Economy of the Welfare State (Oxford, 1987), ch. 1.

The Possibility and Reality of Solidarity

3

The Possibility and Reality of Solidarity Social insurance provided the tools with which to reapportion and moderate the effects of natural and manmade misfortune. The comprehensive, all-inclusive risk-sharing that was characteristic of the best-developed welfare states made possible equality not only in the formal sense of civil and political rights, but also in the practical terms of a common minimum of protection. Although such an egalitarian approach was potentially inherent in social policy's ability to reallot misfortune, it was far from being universally realized. Welfare states varied much in the degree of redistribution they embodied, both between nations at any given time and across any one country's development. Clearly, the first attempts to spread burdens broadly were not guided by any solidaristic vision. Bismarck's interest in social insurance was motivated by reactionary intentions. A modicum of redistribution in the form of pensions, sickness insurance and workers' compensation was to preempt the Social Democrats from winning a greater following and pursuing more ambitious attempts at justice. Even when going beyond Bismarck's conservative agenda, the architects of social policy have only with difficulty shaken off the suspicion that they were substituting for more fundamental reform, that social policy and social change were mutually contradictory. Critics from the left have enjoyed the advantage of consistency in their attempts to unmask the welfare state as a reformist detour from the high road to the workers' state. And yet neither its conservative origins nor the reactionary ends it can in theory serve have tainted the welfare state everywhere or always. The momentum of social policy development has carried it beyond such an inauspicious beginning. Precisely the ability of the mature welfare state to surpass Bismarck has made it a turning point in modern history. At certain times and places the welfare state's potential does appear to have been realized, the community of risk has coincided with the human community, the justice of redistributed misfortune has moderated the senseless randomness of natural calamity and the cruelty of social inequity. Postwar reforms in Britain, associated with Beveridge's name, once came closest to this social policy epiphany in the popular understanding. The sociologist T. H. Marshall earned a lasting reputation by formulating in abstract terms the sense that Labour's legislation had ushered in a new epoch. The concept of citizenship was his keystone. He defined it as "full membership of a community," premised on a "kind of basic human

4

Introduction

equality" that, while tolerating differences of class and wealth, guaranteed each a minimum standard regardless of the hand dealt by fate, biology and society.3 Citizenship, he divided into three components: civil, political and social. Once wound into a single strand in some golden age, but since then unravelling, they had been recovered, each in its own century: civil rights in the eighteenth, political in the nineteenth and social in the twentieth.4 The modern drive towards social equality was the latest phase of an evolution of citizenship in continuous progress for over two centuries. In fact, Marshall stood poised to herald the achievement of his conception as he delivered his analysis in a series of lectures at Cambridge in 1949. Taking effect the previous year, Labour's reforms had once again brought into realignment the three facets of citizenship. Social rights completed the troika, an equality of status helping counterweigh disparities of income and class.5 Comparable attempts at innovation in social policy on the Continent after the Second World War were infused with similarly fervent hopes and ambitions, but came to little. With their failure and as the luster wore off British reforms, a less exalted attitude set in. As postwar aspirations for significant change dimmed in most countries, the distance between the possibilities of universal risk-sharing and the difficult actualities of their implementation made itself felt. Only in Scandinavia, whose social greenhouses brought the welfare state to its most luxuriant fruition, was Marshall's vision upheld of egalitarian welfare policy that unified the trinity of rights and gave content to a lowest common denominator of citizenship. But even if the theoretical potential of the welfare state was only occasionally and partially realized, it still serves to focus attention on the issues that have been contested in the development, expansion and extension of social policy and to frame the questions over which battles have been fought. 3 An adumbration from outside the Anglo-Saxon sphere is to be found in Alberto Masferrer, "El minimum vital" (1929), in his El minimum vital y otras obras de cardcter sociologico (Guatemala, 1950), esp. pp. 200-09. 4 Marshall's concept of social citizenship has been described as an Anglo-Saxon version of Gemeinschaft; see Anne-Lise Seip, Om velferdsstatens framvekst (Oslo, 1981), p. 17. Critically on this conflation of various kinds of rights, see Maurice Cranston, "Humans Rights, Real and Supposed," in D. D. Raphael (ed.), Political Theory and the Rights of Man (London, 1967). For criticism of Cranston, in turn, see Raymond Plant et al., Political Philosophy and Social Welfare: Essays on the Normative Basis of Welfare Provision (London, 1980), pp. 74-82; and David Watson, "Welfare Rights and Human Rights," Journal ofSocial Policy, 6, 1 (January 1977). 5 "Citizenship and Social Class," in his Class, Citizenship and Social Development (Chicago, 1963). For an elaboration of the history of social rights, see Gaston V. Rimlinger, "Capitalism and Human Rights," Daedalus, 112, 4 (Fall 1983).

The Possibility and Reality of Solidarity

5

Insurance has existed for millennia, social insurance developed in response to the widespread and multiplied uncertainties attendant on modern economies, while the solidaristic welfare state of a Marshallian cast has been the exclusive preserve of only a few nations at certain times in the twentieth century. With insurance, from Babylonian bottomry to Lloyd's of London, humans have attempted to outcalculate fate, reapportioning misfortune so that no policyholder need face its effects alone. Social insurance, expanding the scope and audience of plain insurance, was both an effort to master the increased risks of new technologies and a replacement of older, familiar forms of succor and sustenance, undercut by the decline of traditional society. In at least a minimal sense, social insurance quickly became a functional appurtenance of all modern societies, whether autocratic, democratic or communist. By contrast, the fully matured solidaristic welfare state, covering all equally against every risk, emerged only exceptionally. Given a general tendency over the last century for the state to play an increasing role in the provision against risk, why have only certain countries managed to take the step from a basic level of welfare necessitated by the functional requirements of industrialized economies to a more egalitarian form of social protection? Why have only some gone from Bismarck to Beveridge, not to mention Bevan? What accounts for the varying fortunes of solidaristic welfare? Up to a point, the development of social policy and the welfare state is not difficult to explain. Some level of intervention is required for modern economies to perform optimally. To this extent, social policy serves necessary functional and therefore uncontroversial economic purposes: rehabilitating the injured, retraining the redundant, facilitating labor mobility and stabilizing production and consumption patterns. Since nations similar in economic terms have varied much in their approach to social policy, however, other factors must also have played a role. At some stage in the evolution of certain welfare states, the degree of redistribution functionally required seems to have been surpassed and the nature of social policy came to be determined by considerations other than the merely economic. Above the economically necessary minimum there has also been a politically determined lowest level, a measure of welfare willingly accepted by elites in hopes of preserving their position - property's ransom for security in Joseph Chamberlain's phrase.6 In certain nations, Bismarckian 6 Quoted in John Saville, "The Welfare State: An Historical Approach," New Reasoner, 1, 3 (Winter 1957-58), 14.

6

Introduction

Germany being the classic example, workers were paid in the coin of social policy for what was withheld from them in political terms: pensions for empowerment. Social policy served a politically functional role, stabilizing circumstances that would otherwise have been more volatile. It is clear that some welfare states have gone beyond the economically necessary minimum. Less obvious is whether, in a similar way, the lowest level of statutory intervention has also been surpassed that is politically functional for those who fear that they otherwise stand to lose more than just the expense of social policy. It is difficult to disprove empirically the hermetic logic of the view that regards even generous welfare legislation as a factor in the equilibration of an inherently unfair status quo. Yet, even so, it is apparent that such tight reasoning cannot adequately explain why some welfare states have been significantly more comprehensive and generous than others. If none has gone beyond the politically functional minimum, then the political functions they have served must have fluctuated as much as welfare states have differed. Precisely this variation, however, is historically ill-fitting. The Nordic nations, with their generous policies, were not in any obvious sense potentially more explosive political powder kegs than, say, France and therefore not in need of especially elaborate social measures. If Swedish elites granted more significant concessions than their Gallic counterparts, then this was either because of their unusually benevolent dispositions or, more plausibly, because greater demands were effectively made of them. If so, then the concept of a politically functional minimum of social policy, a price paid by society's elites for continued preeminence, rapidly becomes untenable the more significant are the welfare victories won at their expense. Where the welfare state achieved its highest development, the tables appeared to have been turned: what the haves maintained by making concessions seemed diminishingly important compared to what the have-nots won by marshalling their strength. Egalitarian, comprehensive and all-inclusive social policy, epitomized in Beveridge and Bevan's reforms and especially in the postwar Scandinavian, social democratic welfare states, at first glance served the interests of the least fortunate best. Society's disinherited were, for once, given a status equal to the better-off, not just formally, but also in the tangible measure of a common basic protection against risk. Was the politically functional minimum now surpassed in the Beveridgean and social democratic welfare states, where the least advantaged received more than was necessary to preserve basic stability? Was the fundamental economic and political rationality of much social policy

The Possibility and Reality of Solidarity

7

(allocating resources by need rather than merit or desert, oiling first the squeakiest wheel) transcended by measures that distributed more than otherwise likely to groups not earlier in receipt of their fair share? If so, then the best-developed welfare states pose the question of why those from whom resources were transferred acquiesced. If the fortunate, in fact, granted the unprivileged concessions beyond what was required, then why did they do so? If the impoverished managed to wrest advantages, then how did they achieve this? The welfare state raised the possibility of equality in the real terms of risk redistribution, the possibility of solidarity. Only some welfare states have gone significantly beyond the levels of social policy necessitated by economic optimality and basic political legitimacy to achieve a degree of redistribution that speaks as much to the needs of the least fortunate as to the fears of the better-off. How such solidarity was possible is the concern of this book. Until recently, it has been common to seek the social source of the most comprehensive and generous legislation in the ability of those groups and classes with most at stake to achieve their goals - a laborist approach to the welfare state. Society's disinherited had the most obvious interests in social policy. In some nations at certain times, these were taken up and successfully pressed by well-organized labor movements and parties of the left. Workers were the objectively solidaristic class whose ambitions here determined the development of welfare provision. While largely plausible as far as it goes, the problem with this approach is its inability to account for variations in detail. Phrased at a level of great generality, it commands assent. Those industrialized regions of the world with the strongest labor movements tend also to have the most finely woven social nets: Europe more so than the United States and Japan; within Europe, Sweden more than France. Nevertheless, when pressed for a more fine-grained account of apparent anomalies and exceptions, matters are less obvious. How should one explain welfare states, like the Dutch, able to achieve Scandinavian levels of spending with no history of Social Democratic hegemony? How can one account for French and German legislation in the 1960s and 1970s modeled on Beveridgean and Nordic patterns that was passed with middle-class support against objections from the left? Or, turning to those nations whose experience allegedly exemplifies the laborist approach, is the only, or even the best, way to account for the acceptance by the bourgeoisie and its parties of redistributive social policy reform after the Second World War the view that the middle classes succumbed to pressure from the left, encouraging them to accept measures which, given their

8

Introduction

preferences, they would have rejected? Was the much-celebrated consensus underpinning the social democratic welfare states of Scandinavia and Beveridgean Britain at best a tense cease-fire, respected by the bourgeoisie only because the left was now powerful or because the hardships of war had temporarily sapped the middle class's will to resist redistributive reform? Were the terms of this agreement determined primarily from below? Was the middle class's stake here largely negative? The laborist approach to the welfare state works best for Scandinavia starting in the 1930s and for Britain during the Beveridge era.7 Because of its circumscribed formulation, narratives phrased in these terms have gradually walled themselves into a Nordic ghetto, explaining Scandinavian and, diminishingly, British exceptionalism to the satisfaction of some, but ever less able to deal in a detailed and nuanced manner with the broader development of the welfare state. The difficulty of applying the laborist approach elsewhere, of explaining, for example, increasingly elaborate social provision even in nations not dominated by Social Democratic parties or of accounting for variations between countries otherwise similar in terms of working-class mobilization, has in recent years prompted scholars to consider new explanations, whether generalized varieties of corporatism associated as closely with Catholic as with Socialist parties or whether a focus on the state, the variations of its structures and their influence on the different courses taken by the development of the welfare state.8 This shift to alternative forms of interpretation threatens to weaken all class-based accounts of the welfare state, much as social explanations used in the historical analysis of other periods and subjects have in recent years come under attack. It would be unfortunate if a social approach to the welfare state were in this way hollowed out because its best-known elaboration had removed itself from the intellectual fray by retreating into the well-armored, but narrow redoubt of the laborist interpretation. The dead end with which the barrenness of the laborist approach, as currently practiced, threatens all socially based explanations of social policy can, nevertheless, be avoided by recognizing that such an account formulated in terms of the working class's strength and organization is but 7 Which is why only general histories that deal with Britain and Sweden define their current essences as welfare states; see T. O. Lloyd, Empire to Welfare State: English History 1906-1967 (Oxford, 1970); Pauline Gregg, The Welfare State: An Economic and Social History of Great Britain from 1945 to the Present Day (London, 1967); and Kurt Samuelson, From Great Power to Welfare State: 300 Years of Swedish Social Development (London, 1968). 8 References to the literature are given below.

The Possibility and Reality of Solidarity

9

one instance of a broader logic of social interest behind the welfare state and its development. Workers were often that group most concerned with social policy, but they have not been the only one. Nor, in a broader comparative analysis, have their interests been more than a single factor, however important, among many competing ones. Workers' concerns have been determined and consequently altered by historical circumstances. In the evolution of the welfare state there has been no one uniform and consistent, objectively solidaristic class. In many cases, the bourgeoisie, or various subcategories thereof, also developed pressing interests in social policy, not just as Bonapartist manipulators, but as creatures subject to misfortune surpassing their capacity for self-reliance or as groups that, in certain instances, stood to win more than they lost from risk redistribution. In fact, to the extent that social policy has ever gone beyond economically and politically functional minima, it is hard to deny the role played by the middle classes, especially in decisions arrived at consensually. Substantial victories for the worst-off in circumstances short of wholesale upheaval are inherently ambiguous. Since even the full-fledged welfare states of Scandinavia were born of reform, not revolution, since they were democratically agreed to, not unilaterally imposed, those classes which apparently abandoned claims to some of their resources must also have influenced the terms of change. The simplest, and most frequently answered, questions posed to the welfare state concern the nature and extent of the benefits now won by the disadvantaged. A much more intriguing problem deals with the stake developed by the comfortably upholstered middle classes in such reform. To analyze the role of the middle classes in the development of even generous and solidaristic social policy is not, however, willfully to turn the laborist approach on its head, evicting the working class and installing the bourgeoisie as the cornerstone constituency of social policy, implausibly claiming to have replaced one key group, one social base of the welfare state, with another. It is, rather, to develop further a social analysis that the laborist account has cultivated well, but too narrowly, to explore the broader social logic of the welfare state's evolution, to resist the abandonment of all social explanations of social policy that is currently encouraged by the failure to develop a more broadly applicable version. The welfare state does benefit the needy and risk-prone at the expense of those less malevolently buffeted by misfortune and injustice. Yet the precise class identity of these actors who most need the risk redistribution allowed by comprehensive social policy has varied remarkably with

io

Introduction

historical circumstances. To speak of the welfare state's social basis is therefore misleading except within narrowly circumscribed temporal and geographical limits. In a broader comparative perspective, the welfare state has been founded on differing combinations of social bases. Class, Risk and the Social Bases of Solidarity Analyses of the welfare state's progress beyond the irreducible minimum needed to lubricate the gears of modern societies and polities commonly impute new motives to familiar actors. A middle class that, in the heyday of liberal ideology, had supposedly safeguarded its interests by insisting on the virtues of self-reliance, by disparaging solidarity, was gradually persuaded to alter its approach, a change that culminated in the postwar Beveridgean and Scandinavian waves of social reform. The growth of working-class strength, in some accounts, forced this formerly unsolidaristic bourgeoisie to reconsider what it was willing to grant the less fortunate. In others, the upheaval and uncertainty of war gave even those who had once been self-reliant a newfound interest in mutual aid. Increasingly generous notions of humanitarian concern and revised conceptions of the state's proper role allowed both old-fashioned Manchesterism and Bismarckian statutory paternalism to be replaced by a more benevolently interventionist approach, based on an evolving acceptance of social rights as a necessary complement to their civil and political antecedents. In each case, a crucial group at the fulcrum of political decision-making now apparently shifted from the customary pursuit of self-interest that had formerly dictated a curtailment of any widespread redistribution to the destitute and needy. Yet why should self-interest have been any less than normally compelling during this crucial period in the welfare state's development? Even if the middle class changed its approach, was this necessarily a sign of greater enlightenment, of less than the usual avarice, or of a new bourgeois inability to defend its "true" interests against a strengthened labor movement? Did the middle classes capitulate to workers' demands with little or nothing to say on their own behalf? What danger of welfare whiggery do we court in charting here a steady incremental progress either of humanitarianism and statutory benevolence or of the working class's conquest of solidaristic reform? Conversely, if bourgeois self-interest was the motive behind even solidaristic social policy, must we conclude that even the most generous welfare state ultimately serves the interests of society's elites in

Class, Risk and the Social Bases of Solidarity

n

preserving their privileged status, however much the price they pay has increased? Did Beveridge just glove capitalism's iron fist - naked with Bismarck - in welfare velvet? The issues at stake in a reform of social policy that appears to go beyond economically or politically functional minima in fact concern the nature of the actors behind such changes more than they do their motives. Whose self-interest is being pursued and how it is best served are the pertinent questions. Examinations that portray the haves as equilibrating the status quo by granting social policy concessions or the have-nots as finally wresting advantage from the more favored in the form of generous benefits assume the presence of coherent class actors - whether a unified bourgeoisie intent on resisting claims to its resources or a proletariat marshaled in serried ranks and determined to force compensation from the privileged. Most examinations of the social bases of welfare reform narrate a scenario pitting upper and lower, rich and poor, middle and working class in combat for redistributive advantage. Workers and society's disinherited sought solidarity. The bourgeoisie and other well-positioned groups, in turn, resisted any such designs on their pockets.9 The outcome of this dichotomized contest over redistribution depended on the respective strengths of these polar actors. A strong, self-confident bourgeoisie was able to turn back ambitions for solidaristic reform. Conversely, a sufficiently powerful labor movement might overcome such obstacles. Upon closer inspection, such simple antinomies turn out to have held only partially. Although they intersect and often coincide, the actors who do battle over welfare policy and social classes in the more general sense are, in fact, two distinct entities. Redistributive winners and losers are the contestants whose engagements have determined decisions over solidaristic social policy. And yet, because the secondary redistribution undertaken by social insurance reapportions the cost of misfortune most immediately according to actuarial criteria, and not in line with the social distinctions that are important in the primary economic distribution, such actors have been first and foremost risk categories that translate only indirectly and 9 *'... socialist labour movements attempt to create 'institutional' welfare states, in which politics assumes as natural a place in the distributive processes as the market and the family. Bourgeois forces, in contrast, strive for 'marginal' types of social policies, where public policy is appropriate only when the market and the family fail in their natural role as providers for the individual" (Gosta Esping-Andersen and Walter Korpi, "Social Policy as Class Politics in Post-War Capitalism: Scandinavia, Austria, and Germany," in John H. Goldthorpe (ed.), Order and Conflict in Contemporary Capitalism (Oxford, 1984), pp. 185,181). See also Gosta Esping-Andersen, "Power and Distributional Regimes," Politics and Society, 14, 2 (1985), p. 224.

12

Introduction

variably into the usual definitions of class and social group. Risk categories are actors identified and given interests in common by their shared relations to the means of security, by their stake in or against the redistribution of risk promised by social insurance. These relations to redistributive measures are shaped by the interaction of at least two different factors: (i) the simple incidence of risk as it afflicts the group in question, and (2) the group's ability to shoulder its burdens unaided, its capacity for self-reliance. Risk incidence has affected some groups more than others at any given moment.10 By the very conditions of its occupation, the industrial proletariat has been particularly exposed to certain risks (unemployment, workplace accidents) and therefore especially concerned with spreading such burdens. For other risks (illness, penurious old age, childbirth and childrearing), the working class has had no interest in a redistribution of costs that it did not share equally with the impoverished and precariously perched members of other social groups. Although it may have suffered more than its share of risks, the proletariat has had no monopoly on uncertainty or on an interest in measures to ameliorate such circumstances. Nor has the industrial working class been the risk-prone group in every country at the time social insurance was first developed. Since welfare legislation began across nations with quite different social and economic complexions, the preeminently needy class within each has varied from place to place. In agrarian Scandinavia of the late nineteenth century, for example, farmers and peasants made up the group most concerned with social policy, not in the sense that they were objectively exposed to more uncertainty than the, as yet, only vestigially developed Nordic proletariat, but in the sense that they were the ones whose pursuit of redistribution determined the course taken by the first legislative initiatives here. In an actuarially orthodox system of insurance with voluntary membership, as with most forms of private insurance, risk incidence would be the main and possibly the only criterion of redistribution. To the extent that social insurance is distinguished from private arrangements by placing costs in some measure according to the ability to bear them and not only to 10 What counts as misfortune or risk worth confronting has also been as much a social construct as an objective given. For the purposes of an account of social insurance, however, such otherwise very interesting problems can be considered already settled. See Mary Douglas and Aaron Wildavsky, Risk and Culture: An Essay on the Selection of Technical and Environmental Dangers (Berkeley, 1982); Mary Douglas, Risk Acceptability according to the Social Sciences (New York, 1985); Nick Manning, "Constructing Social Problems," in Manning (ed.), Social Problems and Welfare Ideology (Aldershot, 1985); and Malcolm Spector and John I. Kitsuse, Constructing Social Problems (New York, 1987), esp. ch. 5.

Class, Risk and the Social Bases of Solidarity

13

their incurrence, or by giving benefits as much in relation to economic need as to any other mark of entitlement, a group's ability to master risk, its good or poor fortune, has also become an element in reallocation.11 To a reapportionment of risk in the narrowest sense has been added a modest measure of economic redistribution. Risk incidence has therefore been only one factor deciding the stakes any given group had in a displacement of burdens through social insurance. The question has not been merely how risk-prone a particular class was, but how able it was to face uncertainty. The group's capacity for self-reliance, its good or ill fortune, has been the other variable that has determined its actuarial profile for the purposes of social insurance. Self-reliance, in turn, has been the outcome of at least two elements: the group's economic prospects and its demographic outlook. Among communities variously affected by risk, redistribution benefits those buffeted by misfortune, courtesy of those less exposed to uncertainty. Within a sufficiently homogeneous risk community, on the other hand, redistribution threatens to shift burdens from the economically hard-pressed to the flourishing, giving the latter reason to avoid such reform, the former to seek it. In a similar manner, groups in a position of demographic growth or at least stability may be asked for sacrifices on behalf of those in decline. Risk incidence and the capacity for self-reliance as indicated by economic and demographic fortune together determine a group's actuarial profile and thereby what it stands to win or lose from social insurance's ability to reallocate the costs of uncertainty. In the simplest logic, those with high risk and low fortune will invariably win from redistribution and therefore seek it. These are the needy in terms of the actuarial criteria employed by social insurance. Conversely, those with low risk and high fortune will have opposing interests. In between, varying constellations of risk incidence and fortune, coupled to considerations of how the system of redistribution is structured (Are burdens placed heavily by ability to bear them or with financial neutrality in accordance with their incidence? Are benefits restricted to the poor or given to all who meet the formal criteria of membership?), will determine the stake held by any given group. If we translate into more concrete social terms the abstract risk categories that 11 Such economic redistribution has been accomplished both by asking more from the rich than the poor in terms of financing (through premiums or indirectly through taxes), but equally by withholding from the affluent through the use of means tests benefits for which there was in some sense entitlement. Targeting benefits is a form of economic redistribution and campaigns to decrease means-testing (discussed in Chapter 2) were therefore to a significant extent attempts by the affluent to reduce such reapportionment.

14

Introduction

are identified as the actors in such matters by social insurance's actuarial logic, then the classic example of a needy class has been the industrial proletariat - that group with the most pressing concern for redistribution, not just because it was especially associated with the vagaries of modern economies and technologies, but also because its low pay left it unable to meet risks unaided. Conversely, the ideal case of an unsolidaristic class has been the prospering independent bourgeoisie, a group not only spared many risks, but also well equipped to meet those it faced through the property ownership that guaranteed it an income even in times of misfortune. This particular equation between the risk categories thatfigurein social insurance's redistributive logic and the classes of society as they exist beyond such actuarial calculations underlies the reasoning behind most social explanations of the development of welfare policy. The poor and risk-prone are the obvious clients of a system that promises to reapportion the effects of uncertainty. The affluent and safe, in turn, have good reason to shun attempts to make them share burdens with the ill-starred. The battlelines in such analyses are drawn between two separate camps: (i) the potential redistributive winners and solidaristic groups - the working class above all, perhaps those members of the petty bourgeoisie closest in day-to-day circumstances to the proletariat, white-collar wage earners for some risks, in general the poor and dispossessed; (2) the redistributive losers and therefore unsolidaristic groups of the independent propertied middle classes, most of the petty bourgeoisie, and white-collar wage earners for other risks. In shorthand, disputes over risk redistribution and social policy are usually portrayed in such accounts as a battle between working and middle class, poor and rich, lower and upper. And yet, however appealing, such simple polarities are deceptive. Although this particular resolution of the identity of the actors in social insurance's reallocative logic may have held historically in certain nations at particular times, although redistributive winners and losers may, in fact, have translated into concrete social terms as industrial proletariat and independent bourgeoisie, this one specific factoring of the equation has by no means been universal. Each of the elements (risk incidence, fortune) that determine a group's stake in displacing burdens through social insurance has both varied between nations at any given time and evolved within each over the course of the welfare state's development. Risk incidence has not been a static historical given. Agriculture, once among the safest occupations and

Class, Risk and the Social Bases of Solidarity

15

therefore unconcerned with accident insurance, became mechanized and perilous. Emerging groups of white-collar wage earners, conversely, may have been as reliant on their labor power and therefore on unemployment insurance as their manual colleagues among the dependently employed, but their stake in workers' compensation was less urgent than for the laborer confronted with the more tangible prospect of physical harm. The growing chances of surviving to the age of unaffordable diseases, along with the increasing sophistication and cost of medical treatment throughout life, has made health insurance a matter of concern for even the otherwise best-positioned classes, leaving only the specifics of its implementation to debate: private, social or national measures. More dramatic, in turn, have been changes in the ability of various groups to face uncertainty. Even without a shift or an increase in risk incidence, formerly unsolidaristic groups have acquired a stake in redistribution through their faltering capacity to carry burdens unaided. Immediately after the Second World War, the independent middle classes on the Continent, confident in their ability to master their own risks and unwilling to help shoulder workers' burdens, refused redistributive reform. As demographic and economic misfortune sapped the resilience of their risk community during the following decades, however, it became clear that the self-employed now stood to win from solidaristic legislation and their ambitions accordingly pivoted. During this period, the working class too shifted position, but from the opposite perspective, moving in certain respects away from a solidaristic stance. This evolution was not the result of any obvious lessening of the risk that workers faced as a class during the postwar decades. Although many wage earners did enjoy greater individual prosperity than before the war, this in and of itself was also not sufficient to change the approach taken by the group as a whole to social policy. What swung the dependently employed classes around from winners to potential losers in social insurance's redistributive calculus and thereby determined the labor movement's new negative reactions to certain solidaristic reforms in the 1960s and 1970s was, above all, the consequence of occupational migrations that transformed them into demographic gainers. Demographically speaking, wage earners were now the actuarially sound class from which redistribution, channeled in this case both through pensions and health insurance, would flow to other groups. Similar demographically based antagonisms also marred relations among wage earners themselves, between salaried employees (the winners) and manual workers.

16

Introduction

Risk incidence and the capacity for self-reliance have been the variables whose intersection defined the interests held in a redistribution of uncertainty's costs by any particular group at a given time. They have framed the group's actuarial profile, decided the extent of its redistributive need and determined what it stood to gain or lose from social insurance. Equ^Hy important, however, the construction of the social insurance system itself has enhanced existing, or created new, tendencies for or against a reailocation of risk. Social insurance has not been a neutral system that merely reapportioned the effects of uncertainties existing as a given beyond its influence. It has not just mirrored economic and demographic changes or the evolution of risk incidence. Rather, it has directly affected how such developments have been perceived and received in the political forum. The formulation of social insurance reform has affected calculations of what any group stood to win or lose from redistribution. The way in which legislation defined the groups singled out for intervention was among the primary decisions in this respect: whether all citizens, regardless of social class but dependent on income, as in nineteenthcentury Scandinavia; whether only certain classes broadly defined, as in Bismarckian Germany; whether very finely calibrated social groupings, as in France after the Second World War. Choices such as these significantly influenced both the identity of the groups that stood to profit or lose and the manner in which such realizations were arrived at and thereby potentially acted on. Social insurance has created new possibilities for risk reailocation where none existed and, in the process, has itself shaped interests in or against them. When Danish farmers attempted in the nineteenth century to shift burdens to their urban opponents, they were prompted not only by the social costs they faced (the need to provision their labor force) and by their reluctance to bear them unaided (their export orientation that impeded hopes of passing expenses on to consumers), but equally by the opportunity presented to them, in the guise of various proposals on pensions legislation, for displacing to others some of the load they would contrariwise have had to carry alone. The redistributive battle fought out under the mantle of social insurance was in no sense inevitable or necessary. Farmers would have preferred fiscal reform, but were, for reasons of political tactics, persuaded to seek redress for their concerns through social policy instead. In many cases, the particular construction of the social insurance system has itself played a major role in creating or spurring on redistributive

Class, Risk and the Social Bases of Solidarity

17

interests. The manner in which the affluent self-employed were locked into the same risk communities as their impoverished colleagues in France after the Second World War, for example, gave the well-off cause that would not otherwise have been theirs to seek the nation's aid, to pursue solidaristic reform in hopes of alleviating burdens. The means tests that kept the middle classes from statutory benefit in Scandinavia were the factor that here prompted the parties of the center and right to embrace universalist reform in hopes of reversing the bourgeoisie's exclusion from increasingly generous treatment, otherwise reserved for the poor. In a similar way, the failure of Beveridge's flat-rate national pension structure to provide the poorest with subsistence benefits made later attempts to introduce a system of supplementary pensions in Britain a matter of more concern to the manual working class than was the case in Sweden, where reform was tailored to suit white-collared tastes. Social insurance redistributes according to the actuarial criteria of risk and fortune. Its actors may be classes, but only as they pursue their interests as risk categories. Needy risk communities have sought a reallotment of burdens while the advantaged have resisted. Battles between these groups, the political struggles over how to fashion social insurance reform detailed in the following chapters, have significantly determined the nature of welfare policy. The social identity of such actors has not, however, been fixed once and for all, nor has it remained constant throughout the evolution of the welfare state.12 Risk categories and social classes have intersected variously. The stake held by certain classes in social insurance has altered as their actuarial profiles have evolved. Classes have changed in terms of their interests as risk categories. Risk categories have sometimes coincided with entire classes as they are defined in terms other than the actuarial. The interests of the industrial proletariat both as a class and as a risk category have tended to be consistent - a coincidence that founds the widely held view that its concerns in particular have lain behind social policy reform of the most redistributive sort. Nevertheless, on the occasions when workers' interests did change, the new approach was determined not by their relations to the means of production, but by their stake in the means of security. They acted as a class in terms of their interests as a risk category. When the 12

Hence the inadequacy of the overly static approach taken in an otherwise stimulating meta-approach to social policy by Abram de Swaan, In Care of the State: Health Care, Education and Welfare in Europe and the USA in the Modern Era (Cambridge, 1988), esp. pp. 167-77.

18

Introduction

French and German labor movements shifted from favoring to opposing solidaristic pension and health insurance legislation in the 1960s and 1970s, it was the transformation of the working class from a winner to a loser in social insurance's redistributive calculus that explains the volteface. Equally often, on the other hand, risk categories have cut across more general social groupings. The middle class in particular has embraced a multitude of risk categories with divergent interests that explain its vacillating approach to redistribution. Depending on which, if any, risk category won the upper hand to speak for the class as a whole, it has sometimes favored, sometimes resisted, solidaristic reform. As frequently, however, the middle class has fragmented into its actuarial components, taking different and mutually contradictory approaches. In no sense has the bourgeoisie historically been a consistently unsolidaristic class. The characteristics "needy," as defined for the purposes of social insurance, and "socially disadvantaged" frame groups that have intersected variously by nation and historical period. Groups heavily affected by greater risk than they were able to meet unaided have often, but not invariably, been the proletariat or the poor. Protection against risk has been sought more universally than a redistribution of resources. Economic and demographic evolution has continuously altered the identity of those groups that stood to be least or most favored by the reallocation of risk. Under certain circumstances, the displacement of misfortune's effects brought about in the welfare state has therefore been pursued by social groups that, while suffering from particular risks and therefore needy, were otherwise not, or had not always been, among the economically disfavored. In a similar way, classes formerly in need have lost their solidaristic interests once prosperity, demographic health or the workings of social insurance's reallocative calculus threatened to make them redistributive losers. Because risk categories and classes are disjoint in this sense, coalitions of interest in a reapportioning of burdens have been negotiated that are far more complex and socially multifarious than the usual binary approach to disputes over social policy: proletariat against bourgeoisie, poor versus rich. For similar reasons, the transmission of welfare interests to the political level - left against right - has been significantly less c^arcut than often assumed. Contradictory and vacillating approaches to risk redistribution among the pertinent interests have impeded any less fragmented and ambiguous a formulation of position among politicians. Social insurance distributes according to actuarial need. Need, as defined for these purposes, and disadvantaged social position are only partially

Class, Risk and the Social Bases of Solidarity

19

correlated. Despite common assumptions to the contrary, the welfare state does not, therefore, first and foremost safeguard the interests of the poor as poor. Within social insurance, redistribution does not primarily take place vertically between classes or income strata - between bourgeoisie and working class, between affluent and impoverished - but horizontally over the lifespan of the individual and, in cross-section at any given moment, between risk categories (from healthy to sick, young to old, ambulatory to disabled, working to unemployed) that only secondarily and partially overlap with social groups as defined in other terms.13 It is a pooling of risk rather than resources.14 Only some risks are associated with poverty, marginality or dependent employment. Workers and the economically disadvantaged tend to be especially hard hit by unemployment and job-related disability. All, on the other hand, are subject to illness and old age. In many cases, those favored by the primary economic distribution have been sufficiently affected by certain risks or have been hearty enough consumers of statutory services to acquire an interest in the secondary redistribution of social policy that has been as keen as that of the less fortunate: the well-off in pensions and health insurance to cover the expensive diseases of prolonged old age, the middle classes in state-funded higher education, the otherwise procreatively circumspect bourgeoisie in family allowances, farmers in agricultural subsidies, employers in an accident insurance that has shifted their burdens to a broader community. Complex interactions of class and risk category have determined the approach to reform taken by particular groups in circumscribed contexts. The logic of insurance's contests between risk categories for reallocative advantage says little about the specific social identity of the groups that stand to gain or lose. As redistributive decisions were taken in different historical and national circumstances, these abstract categories acquired a social content. Laborers, salaried employees, farmers, artisans, businessmen, liberal professionals, civil servants, middle and working class, all are groups defined by criteria other than risk and fortune and yet all have also 13 The literature on redistribution is large and, for Europe, focused on Britain. Good starting points are Adrian L. Webb and Jack E. B. Sieve, Income Redistribution and the Welfare State (London, 1971), esp. ch. 1; Julian Le Grand, The Strategy of Equality: Redistribution and the Social Services (London, 1982); and Frank Field et al., To Him Who Hath: A Study of Poverty and Taxation (Harmondsworth, 1977), ch. 9. For an overview, see Hannu Uusitalo, "Redistribution and Equality in the Welfare State," European Sociological Review, 1, 2 (September 1985). 14 Peter Taylor-Gooby, "The Distributional Compulsion and the Moral Order of the Welfare State," in Adrian Ellis and Krishan Kumar (eds.), Dilemmas of Liberal Democracies (London, 1983), p. n o .

20

Introduction

had interests determined by their actuarial profiles. They have acted both as classes or occupational groups and as risk categories. The intersection of categories of risk with such classes and groups in decisions on redistribution has cut at various angles in different contexts. Risk and fortune have bound some groups together, split others apart. Classes unified according to certain criteria have turned out to span several risk categories with contradictory interests. Some have declined demographically or economically to see their smug assumptions of self-reliance, once nourished by prosperity, now shattered in poverty. Groups that were needy in one country at a certain time have been self-reliant or nonexistent elsewhere. Others have discovered needs not contingent merely on impoverishment. Redistribution has therefore been contested not only between classes in the most unspecific sense (workers versus bourgeoisie), but also between groups with varying incomes (salaried employees versus manual workers, businessmen versus shopkeepers), between ones with differing risk profiles (farmers versus workers, liberal professionals versus artisans) and between groups with divergent demographic fortunes (whiteversus blue-collars, wage earners versus the self-employed).15 Social insurance's risk categories and the groups of the primary economic distribution are connected only mediately. Rich and poor, upper, middle and lower class, proletariat and bourgeoisie are distinctions that bear only indirectly on the decisions taken in social insurance. Its categories add new complications to those of the economic distribution, involving risk as well as fortune, demography and plutocracy. The criteria required to analyze relations to the means of security rather than the means of production are different. Examining the social bases of social policy is to give an account of the actuarial logic of risk reallocation as it has been played out in various national contexts at different times. The historical question is whether any single social group, as defined independently of risk and fortune - of its actuarial profile - had necessary interests in redistribution. Was there a sufficiently consistent coincidence between risk category and social group to claim that solidaristic welfare policy had a societal foundation, a home in the interests and aspirations of one 15

Social insurance also creates new, or inflames otherwise unsuppurating, redistributive antagonisms: parents versus the childless, the respectable working class versus the profligate poor, shopkeepers versus large-scale distributors, renters versus homeowners. Some think that the creation of such new antagonisms is a deliberate ploy to divert attention from and moderate more fundamental and dangerous class enmities. In fact, it would seem to stem from social insurance's articulation in terms of risk categories rather than classes in the broader sense. See Vic George and Paul Wilding, The Impact of Social Policy (London, 1984), pp.215-17.

The Logic of Solidarity

zi

particular class? This is the problem an examination of the social bases of the welfare state must explore. The Logic of Solidarity Not all, in fact very little, social policy has been solidaristic. Welfare states have varied much in this respect. Where their nature was determined by elites who were still persuaded that self-reliance was feasible, redistribution was restricted. Bismarck's socially particularist, earnings-related, contributory version of social insurance expressed a conservative intent in its very formulation and design, not just in the political goals it was meant to serve. In contrast, the Scandinavian welfare states, founded on an all-embracing, egalitarian, tax-financed approach, seemed to reflect their origins in the redistributive ambitions of the unfortunate. Why there has been unsolidaristic social policy is satisfactorily explained by the market's inability to assure its own continuation without interventionist adjustment and by the need to preserve political and economic stability. The more vexing question is whether, and if so how, such early, restricted forms of welfare were transcended in certain countries by more equitable, redistributive varieties that broke with even a tempered market logic. Why have the fortunate ever agreed to institutionalize aid for the worse-off except to the degree necessary to prevent unrest or still the naggings of conscience? How, short of revolution, have the disinherited been able to wrest real concessions? Two approaches, based respectively on appeals to reason and emotion, self-interest and altruism, both fail to solve the historical problem of explaining the solidaristic welfare state. The first denies that there is a difficulty here at all. For economists, able to reduce even apparently genuine altruism to rationally motivated self-interest, moderate redistribution is the outcome of an enlightened cost-benefit analysis. Their concern has been how and why statutory intervention improves the free workings of the market, how public goods are most judiciously supplied through the state.16 Turning to social policy in the narrower sense, an economic approach reduces what might otherwise seem like solidaristic measures to profitable calculations. Much of what appears to be redistribution is in fact merely insurance.17 In other senses, too, there are 16 For example William Baumol, Welfare Economics and the Theory of the State, 2nd edn (Cambridge, Mass., 1965). 17 Kenneth J. Arrow, "Uncertainty and the Welfare Economics of Medical Care," in his Essays in the Theory of Risk-Bearing (Amsterdam, 1971), p. 185.

22

Introduction

economic efficiencies to be won from altruistic behavior.18 Preventive medicine is more cost-effective than the hospital emergency room. Economic analysis manages to fit seemingly unilateral transfers into the framework of utility maximization, however limited may be the applicability of such abstractions to the real world. 19 Exchanges of this sort are only apparently quids without quos and in fact bring to givers returns ranging from the satisfaction of virtue to the undisturbed enjoyment of their own goods. Rationally calculating individuals, aware of society's utility interdependence, maximize their own well-being by improving that of others. 20 The economist's approach falters, however, when faced with disagreements over social policy. Why would anyone object to mutually beneficial arrangements except out of ignorance? Either the contestants fail to recognize their own advantage in disputed forms of statutory intervention or they are fighting over the degree of redistribution, not its very existence. In the latter case the original problem of why solidarity varies and what conditions favor or hinder its expression reappears unresolved. While apparently altruistic behavior may be capable of analysis in terms of utility-maximizing on an individual level, transferring such lessons to the political plane is less straightforward. Individuals may be economically rational, but groups and classes - the actors in politics - must recognize and develop their stake in reciprocal exchanges before they can be realized. It may be possible through individual utility-maximizing to create situations that involve no jostling for redistributive advantage and therefore provoke little controversy. The endless battles among contestatory groups over the reform of social policy, however, demonstrate that no similarly tidy logic will suffice here. 18 Richard Titmuss, The Gift Relationship (London, 1971). Trenchant criticism of this approach is to be found in Kenneth J. Arrow, "Gifts and Exchanges," in Edmund S. Phelps (ed.), Altruism, Morality and Economic Theory (New York, 1975). More generally see David Collard, Altruism and Economy: A Study in Non-Selfish Economics (Oxford, 1978); Harold M. Hochman and J. D. Rogers, "Pareto Optimal Redistribution," American Economic Review, 59,4 (September 1969); and Mordecai Kurz, "Altruistic Equilibrium," in Bela Balassa and Richard Nelson (eds.), Economic Progress, PrivateValues and Public Policy {Amsterdam, 1977)19 For criticism of the usual definition of economic rationality (consistency, self-interest maximization), see Amartya Sen, On Ethics and Economics (Oxford, 1937), chs. 1, 2; and Amartya Sen, "Rational Fools: A Critique of the Behavioural Foundations of Economic Theory," in his Choice, Welfare and Measurement (Oxford, 1982). 20 Formalized in Kenneth E. Boulding, " N o t e s on a Theory of Philanthropy," in Frank G. Dickenson (ed.), Philanthropy and Public Policy (New York, 1962). There are also biological variants on this basically economic logic; see Robert L. Trivers, " T h e Evolution of Reciprocal Altruism," Quarterly Review of Biology, 46,1 (March 1971). For a rational choice approach to the problem, see Michael Hechter, Principles of Group Solidarity (Berkeley, 1987).

The Logic of Solidarity

23

The opposite and even less satisfying approach to the solidaristic welfare state appeals to altruistic sentiments, a feeling of mutual aid not reducible to other emotions or calculations.21 Caring is a basic human instinct, but also, alas, subject to the problem of the free rider, the difficulty of motivating sacrifices that each individual would prefer to see borne by others. In this approach, social policy is therefore the expression of such concern, institutionalized to ensure that all actually fulfill the obligations dictated by their emotions.22 The difficulty here remains that further elaboration is still required to explain why altruism is sometimes triumphant, but at other times not. Emotional bonds of sympathetic community may hold for the primary collectivities of kin and kind, but can be generalized to a larger society only within limits.23 Altruism is of little significance in the forum for political infighting, where decisions for or against solidaristic reform are taken, but where noble emotions are given more chance of expression than of realization. Similarly troublesome are the obstacles that prevent altruism from establishing a right to aid received unilaterally and therefore demeaningly.24 Sentiments of mutual aid have often motivated reformers to fight for generous conceptions of social justice, but a focus on ideological changes among such actors will not explain how solidaristic social policy is possible. The important question is why those not inspired by a transcending moral vision at times have accepted, even embraced, redistributive reform. Two other, more successful, explanations suggest themselves as answers to the question of how solidarity was fostered beyond the rarified realm of well-intentioned reformers. Solidarity benefits the unfortunate, the needy categories defined in the actuarial logic of social insurance. These objectively solidaristic groups might win sufficient political strength to implement policies favoring them at the expense of the less stricken. Alternatively, even otherwise self-reliant groups might for various reasons 21 The argument is not made more convincing by framing it invertedly, in terms of duties to the vulnerable, as in Robert E. Goodin, Protecting the Vulnerable: A Reanalysis of Our Social Responsibilities (Chicago, 1985). 22 David Miller, "Altruism and the Welfare State," in J. Donald M o o n (ed.), Responsibility, Rights and Welfare: The Theory of the Welfare State (Boulder, 1988). For an attempt to show that philanthropic instincts would be acted on even without such regulation, see Robert Sugden, Who Cares? An Economic and Ethical Analysis of Private Charity and the Welfare State, Institute of Economic Affairs, Occasional Paper 67 (London, 1983); and Robert Sugden, "On the Economics of Philanthropy," Economic Journal, 92, 366 (June ,1982). 23 Theodor Geiger, On Social Order and Mass Society: Selected Papers, ed. Renate May ntz (Chicago, 1969), pt. 3. 24 J. Donald M o o n , "The Moral Basis of the Democratic Welfare State," in Amy Gutmann (ed.), Democracy and the Welfare State (Princeton, 1988), pp. 35-36.

24

Introduction

conclude that, no longer able to manage on their own, they now also stood to benefit from solidarity. The utility-maximizing to which economists reduce the actions of individuals could, under certain circumstances, be replicated within the group. Any combination of these two factors (the increasing strength of already solidaristic groups and developing redistributive interests among the formerly fortunate) is, of course, also possible. These two approaches have been used to explain the social changes that allowed solidaristic welfare policy to succeed on occasion: in Scandinavia starting in the 1930s, but especially after the Second World War; and briefly and much less successfully - in Britain with the Beveridge Plan and Labour's reforms. The absence of such factors, conversely, is invoked to account for the failure of similar reforms during the Beveridge era in France and Germany. The first is the tack taken by the laborist approach, one that might better be called the social interpretation of the welfare state.25 Solidaristic social policy is here explained by the triumph of the interests of the poor and the working class, spoken for by the labor movement and the left. W7hile welfare had earlier and elsewhere been motivated by elites and their interests, and was therefore restricted and conservative, in social democratic Scandinavia and Beveridge's Britain a new universalist, solidaristic, egalitarian vision was successfully advocated by the disadvantaged themselves on their own behalf.26 The second approach poses the problem the other way around: how did otherwise self-reliant groups become interested in solidarity? It is best exemplified by analyses of the effect wrought by the Second World War in bringing forth the agreement behind British reforms. Richard Titmuss, the LSE professor whose own rise from the working class to academic prominence epitomized the virtues of overcoming class barriers, made a name for himself by tracing the origin of this unprecedented consensus to the unusual conditions of the war. Wartime hardships created a sense of social cohesion and unanimity, a wish to continue the new spirit of equality into the peace and to temper inherited class divisions. The common plight, sparing neither rich nor poor, forced a recognition that, in the broadest sense, all face similar circumstances and thereby helped pave the way for 25 Borrowing the term Alfred Cobban immortalized to describe explanations based on social classes and their evolution as he attacked the classic example of such an approach - the French Revolution as a bourgeois revolution; see The Social Interpretation of the French Revolution (Cambridge, 1964). 26 Kurt Samuelsson, "The Philosophy of Swedish Welfare Policies," in Steven Koblik(ed-), Sweden's Development from Poverty to Affluence, ij$o-i 99-> JO7-

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was, nevertheless, prohibitively expensive and some form of premiums would have to be collected.111 Since a majority of Swedish farmers were protectionists, they did not, like the Danes, fear their inability to pass on additional costs and could accept a partially contributory solution for pensions. Premiums from employers, however, were to play no role in an all-inclusive system lest wage earners thus be privileged and small independents be called on to pay both for themselves and any workers they might hire. Uniform contributions and benefits, the commission argued, were unsatisfactory because they would have to be pitched at the lowest level of the rural poor and could not hope to satisfy urban workers. Some gradation by income was therefore necessary. For reasons of administrative simplicity, a system of three pensions classes was preferred to individually determining benefits as a percentage of income.112 Since insurance was to replace aid otherwise channeled through poor relief or individually to the elderly by their families, state subsidies were not to exceed the sums thus saved - one-third of this now being paid by local governments, the rest coming from the state.113 The government's bill, the source of the 1913 pension law, followed the commission's recommendations.114 Had measures been passed some decades earlier, it admitted, they would probably have been limited to wage earners. Favorable economic developments, in the meantime, now permitted all to be included. Modest contributions were to be collected 111 An important cause of the Swedes' concern with costs was tied to demographic peculiarities, especially the agedness of the population; see Alderdomsforsakringskommitten, Kostnadsberdkningar, vol. 2, p. 120; Allmdn pensionsforsdkring, pr*i6i-63; Riksarkivet, Stockholm (RA/S), 20/1, Alderdomsforsakringskommitten, Commission to Statsradet, 9 March 1910; and Anders Lindstedt, Forslaget till lag om allmdn pensionsfdrsdkring (Stockholm, 1913), pp. 8-10. 112 Allmdn pensionsforsdkring, pp. 57—59, 63-64, 68-73, 91~9Z> 99-> IO7- The lowest contribution class, by far the largest, covered the rural population and most women; the second, most industrial workers and smaller independents; and the highest, the best-paid wage earners and self-employed. The lowest class contribution of two crowns was significantly lower than the German equivalent (3.70 crowns). 113 A peculiarity of the Scandinavian debate was its concern with aid within the family and the resentment children felt at having to support their parents, and the stigma, in turn, of receiving such aid. Examples include RA/S, Alderdomsforsakringskommitten, 20/4, Folkpensioneringskongressen, 12-14 October 1910, minutes, Ora Kommun; and Allmdn pensionsfdrsdkring, pp. 20, 45. For Denmark, see Betankning, afgiven af den ved de allerheieste Resolutioner af z8de Mai og ute Juni 1869 til at tage Fattigvcesenets Ordning m.m. under Overveielse nedsatteKommission (Copenhagen, 1871), pp. 7—8; and Rigsdagstidende, FT, 17 December 1890, col. 1616; 20 December 1890, cols. 1796,1834. A modern version is the claim that the point of the welfare state is to free all by making them independent of each other; see Preben Wilhjelm and Ebbe Reich, "Ulighederne skal bevares: Interview med H. C. Seirup," Politisk revy, 3, 61 (26 August 1966), 13-14. "It is not inequality that is the problem," as Voltaire observes in his Philosophical Dictionary, "but dependence." 114 Riksdagens protokoll, Prop. 1913:126, pp. 28, 34, 48, 50, 126—27, 186—87.

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from each member, but employer premiums had been replaced by statefinancing so that wage earners did not profit while independents were saddled with double burdens. Workers were further disadvantaged by the proposed legislation when municipal supplements to compensate urban dwellers for their high costs (more satisfactorily at least than the only moderate gradation of the pensions themselves) were ruled out. 115 Farmers had long pushed for universalist, significantly tax-financed reform of this ilk. Until the beginning of the century, they had been unable to do more than impede proposals that contradicted their wishes. After the electoral reforms of 1907-09 relaxed suffrage restrictions, however, their votes and interests became important to the Liberals and their concerns were taken more seriously.116 Conservatives in this period made breakthroughs to employers and white-collar wage earners, becoming a party of industry and the cities. Social Democrats, in turn, strengthened their following among workers. Squeezed from both sides, Liberals were forced out into the countryside in search of fresh electoral blood. 117 The 1913 law on national pensions reflected farmers' newfound political importance, an outcome of their longstanding campaign for social policy tailored to rural needs. The approach taken by the left to reform was particularly interesting, given the commonly accepted retrospective coupling between Social Democratic parties and solidaristic initiatives. Unlike the Danes, Swedish Social Democrats at the turn of the century focused attention exclusively on the metropolitan working class. Although the most urbanized of the two countries, Denmark was economically more dependent on agriculture than Sweden, whose mining and timber colored her with a more industrialized hue. 118 Danish farms tended to be larger, worked by laborers who offered a riper field for recruitment than Sweden's small independent

115 Reintroducing municipal cost-of-living supplements would occasion a major battle between Social Democrats (favoring them to benefit the cities) and Agrarians (resenting them for the same reason), bringing down the Social Democratic government in 1936, but would be part of the horsetrade that underlay the government of Social Democrats and Agrarians later that year. 116 This was also the first period of bloom for agrarian interest organizations; see Birger Hagard, "Den politiska bonderorelsens framvaxande-organisationsstravanden fore 1910," Statsvetenskaplig tidskrift, 64, 1 (1982). 117 Leif Lewin et al., The Swedish Electorate, 1887-1968 (Stockholm, 1972), pp. 279—80. 118 There are overviews in Lennart Jorberg, "The Industrial Revolution in the Nordic Countries," The Fontana Economic History of Europe, vol. 4, pt. 2 (New York, 1976-77); Lennart Jorberg, Growth and Fluctuation of Swedish Industry, 1869-1912 (Lund, 1961); and Lennart Jorberg, The Industrial Revolution in Scandinavia, 1850-1914 (London, 1970).

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cultivators.119 Socialist ideology reflected such differences. Formulating its first program, the Swedish left ignored the agrarian question, assuming and thereby helping to assure the futility of winning support in the countryside.120 A Kautskian approach to agriculture squared off against Danishstyle hopes for a "people's party" in internal debate.121 Only after the century turned did orthodoxy make way for reformism. In part, the Swedes replicated an adjustment of Marxist doctrine to political reality common across European socialism. In equal measure, they bowed to the force of domestic social peculiarities, the political costs of rebuffing the rural classes with too blinkered a favoritism for workers. The advantages of appealing to agrarians became especially obvious after electoral reforms extended the franchise. In 1911, the year of thefirstelections with universal male taxpayer suffrage for the lower chamber, the party revised its program's focus from the working class, narrowly defined, to all the oppressed, whatever their social origin.122 Despite such shifts, Social Democratic support for pension reform in 1913, far from unanimous, coincided with sharpening internal party conflict.123 Early in the year, the parliamentary group had welcomed a universalist approach, but later discussion revealed dissent.124 The party Executive regretted the abandonment of employer contributions and was seconded by the unions.125 Some, like the well-known sociologist and senator Gustav Steffen, preferred pensions on the German model that 119 For numbers (in need of s o m e recalculation for comparability), see Danmarks Statistik, Statistisk Aarbog, 1896, table 22; and Historisk statistik for Sverige, vol. 2 , table D12. For a later period, see Therkel Matthiassen, Herregaardene og Samfundet (Copenhagen, 1943), pp.111-17. 120 John Lindgren, Det socialdemokratiska arbetarpartiets uppkomst i Sverige 1881-1889 (Stockholm, 1927), pp. 291-94. 121 G. Hilding Nordstrom, Sveriges socialdemokratiska arbetareparti under genombrotts-

dren 1889-1894 (Stockholm, 1938), pp. 184—85,256,261, 388—98,613—23; Hjalmar Branting, "Industriarbetarpartiellerfolkparti?," (1895) in his Tal och skrifter,vo\. 8 (Stockholm, 1929), pp. 48-50. 122 Herbert Tingsten, The Swedish Social Democrats: Their Ideological Development ( T o t o w a , N . J . , 1973), p p . 1 1 5 - 9 5 ; Seppo Hentila, " T h e Origins o f the Folkhem Ideology in Swedish Social D e m o c r a c y , " Scandinavian Journal of History, 3, 4 (1978); Lars Bjorlin, drsbok (1974); Birger "Jordfragan i svensk arbetarrorelse 1 8 9 0 - 1 9 2 0 , " in Arbetarrorelsens och maktovertagandet: SAP.s politiska strategi 1889-1911 S i m o n s e n , Socialdemokratin (Goteborg, 1985), chs. 7, 8. 123 Seppo Hentila, Den svenska arbetarklassen och reformismens genombrott inom SAP fore 1914 (Helsinki, 1979), p p . 2 2 8 - 2 9 ; Ragnar Edenman, Socialdemokratiska riksdagsgruppen 1903-1920 (Uppsala, 1946), p p . 1 6 5 - 9 9 , 2 7 8 - 8 0 . 124 Arbetarrorelsens Arkiv (ARA), S t o c k h o l m , Sveriges Socialdemokratiska Arbetareparti (SAP),Riksdagsgruppen, minutes, 19February 1 9 1 3 , 2 8 M a r c h 1913, 31 M a r c h 1 9 1 3 , 1 0 April 1913. 125 A R A , SAP, Partistyrelsen, minutes, 14 April 1913; Landsorganisationen (LO), Berd'ttelse, 1913, p . 10.

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treated workers and independents separately and required the productive process to meet its own social costs. The government's proposal, Steffen feared, threatened to extend to all a system that had been formulated in the interests of the self-employed.126 Hjalmar Branting, the Social Democrats' leader, hesitantly accepted the bill. His intervention in parliament was a masterful summation of the pension issue and its social background. Had the Swedish working class been more powerful at the time when legislation was first proposed, he conceded, the problem might have been resolved along Bismarckian lines. But even with measures initially limited to the dependently employed, changes would certainly have followed. Contributory workers' insurance on the German model could not have been extended beyond large industries. In Sweden, small employers and farmers were a powerful force, able to resist financing by premiums more resolutely than their counterparts across the Baltic. The Social Democrats had shifted their stance, Branting admitted. From having supported initiatives limited to workers, they now favored a universalist approach. The advance of the popular classes in the countryside, recently granted increased representation by electoral reform, was behind the broad acceptance of an all-inclusive social policy. Sweden was not an industrialized country like Germany or Britain and small independents relied on poor relief in times of need as much as wage earners. Social insurance that focused only on workers ignored the peculiarities of her social structure. Accepting the inevitability of universalist reform, Branting went on to the difficulties of securing fair treatment for workers in an all-inclusive system. Harmonizing interests between the poor in the countryside and wage earners was troublesome. State subsidies for pensions should be distributed in relation to the premiums paid by individual members higher, in other words, for urban than for rural groups. Eliminating municipal supplements and giving workers pensions that were not much larger than those of farmers had been a step backwards. Universal coverage made it difficult to maintain sufficient differentiation between the well- and the poorly-paid. Improvements for the most impoverished should not be bought at the expense of the industrial working class.127 Only gradually, by dint of political necessity, were Swedish Social Democrats atfirstwon for the sort of universalist, tax-financed policy that 126

Riksdagens protokoll, FK 1913:34, 21 May 1913, pp. 31-36. Riksdagensprotokoll, AK1913:48,21 May I9i3,pp. 44-64; AK1913:49,21 May 1913, pp. 31-36. 127

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later came to be associated especially with them. When the initial decisions on the basic direction of Nordic social insurance were taken here, its solidaristic characteristics were determined by the farmers' narrow, but persistently pressed demands. In the laborist interpretation of the welfare state, Bismarck's reforms exemplify policies used for reactionary, Bonapartist purposes. The Scandinavian welfare states, in contrast, were qualitatively different in their ability to realize the need of the disadvantaged for mutual aid, to shift burdens from threadbare to well-tailored shoulders. Despite its attractions, this laborist approach to the history of social insurance development suffers from overly teleological assumptions and anachronistically attributes the unusual features of Nordic welfare (universalism, tax-financing) to the power and influence of the Social Democratic parties that only later came to power here. Decisions in favor of a solidaristic solution to social insurance were, in fact, taken at a time before the left had much say in the matter and often against its will. The cornerstone of the unique Scandinavian welfare edifice was set in place already during the late nineteenth century, not in the 1930s or after the Second World War. While social insurance had been formulated first in Germany with the urban labor aristocracy in mind, this group could not be the focus north of the Eider. Nordic pensions were made universalist because farmers refused to be excluded from new forms of statutory generosity. They were financed through the state by taxes rather than with premiums because the countryside in this way expected to pay less than its share of the benefits. State-subsidized social policy is no better than the fiscal base on which it rests. To attribute the (often dubious) progressivity of twentieth-century measures to an earlier period is to misunderstand the nature of battles that were then fought between classes in the guise of tax and welfare reform. Before the era of progressive income and wealth taxes broached at least the possibility of a redistributive allotment of social costs, welfare policy financed by the central state's indirect consumption levies lessened the expense of poor relief that tended to be underwritten by local land taxes, paid by farmers. Far from being an attempt to apportion costs by the ability to bear them, state-financed social policy in this period was one element of a protracted dispute between rural and urban elites, whose resolution allowed farmers to shift burdens to their opponents. Universality and tax-financing were eventually accepted by the left as

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progressive, solidaristic characteristics of Nordic social policy.128 When this Scandinavian Sonderweg was first chosen, nevertheless, they were points demanded for its own particular reasons by the emerging agrarian bourgeoisie - only continued, not created, by Social Democrats in the 1930s and later. Such conclusions allow a realistic appraisal of the Nordic welfare state's unusual features that does not resort either to the vagueness of unique Scandinavian virtues or to the anachronism of socialism's forward march in these heavily petty bourgeois European nations. The origins of virtue turn out to be mundane. The solidarity of one age has its roots in the selfishness of another. 128 Although in the 1970s, with tax backlashes, financing social policy through progressive measures became a political liability and reforms introduced more indirect and earmarked levies; see Barbara Haskel, "Paying for the Welfare State: Creating Political Durability," Scandinavian Studies, 59, 2 (Spring 1987). The importance of progressive taxes peaked in Sweden during the 1950s and today they bring in only half of that total; see Enrique Rodriguez, "Den progressiva inkomstbeskattningens historia," Historisk tidskrift (Stockholm), 4 (1982), 543.

Interlogue

To discuss in equal detail, in a book about social solidarity as it has been expressed through welfare policy, five countries across the century from Bismarck to Thatcher, from the constitutional to the oil crisis, would strain the intellectual Sitzfleisch of even the most patient reader. Mercifully, such sacrifices are unnecessary. Scandinavia is significant to the extent that the social interpretation rests heavily, however mistakenly, on its experiences. The early histories of other nations do not enjoy this cachet. Not until the great wave of reform after the Second World War did the pursuit of explicitly solidaristic policies affect welfare reform in Britain, Germany and France. Whereas nineteenth-century Scandinavia merits examination for the origins of such an approach, little is won for this subject by dwelling on the prewar period elsewhere. The tenor of social policy was decided in early legislative initiatives, and most later reforms up until mid-century were codifications, in some cases expansions and elaborations of these, but rarely forays in fundamentally new directions. One major new development concerned unemployment, which was now treated as an insurable risk, first in Great Britain and later in Germany.1 Although an important evolution of social policy, unemployment sheds little light on the themes of this book. Such legislation was at first limited by definition to wage earners, in the beginning only manual workers.2 Disputes phrased in its terms revealed the power of one class vis a vis others, what a specific group could wrest from society as a whole. Compensation, not solidarity, was the extent of the redistributive issue thrown up. 1 Jose Harris, Unemployment and Politics: A Study in British Social Politics 1886-1914 (Oxford, 1972); Ludwig Preller, Sozialpolitik in der Weimarer Republik (Kronberg, 1978). 2 Unemployment (as a macroeconomic phenomenon in which one event tends to be statistically associated with further ones) also differs both from the demographically predictable incidence of old age and from the comparatively random and individualized occurrence of illness (excepting plagues and the like) and disability, making it a phenomenon that strains the usual boundaries of actuarial rationality, or at least requires a risk pool spanning more than one national economy (although even that would, of course, not suffice in worldwide downturns).

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Concerned a priori with one particular group, the politics of unemployment shared more in common with other socially specific measures (subsidies, tariffs) than it did with the potentially universalist and therefore ambiguous appeal of the legislation considered here. Reforms of such localized interest may test one group's strength, may be an element in larger negotiations, but they illuminate only dimly the question of solidarity. For this reason, not because unemployment is unimportant, but because it neither contradicts nor is necessary for the overall argument, it is here ignored. The bulk of what follows deals with the social policy revolution apparent as well as real - that followed in the wake of the Second World War. Beveridgean and Nordic reforms seemed to mark a fundamental change not only in social insurance, but more broadly in the relation of dependence to citizenship, poverty to entitlement, need to rights. A brief account here of developments in those countries - Germany, Great Britain and France - whose social policy characterized the approach that reformers now aimed to end seeks to bridge the gap between the nineteenth-century origins of solidaristic welfare in Scandinavia and its continuation after the war. Germany Bismarck's legislation defined the extreme of the social policy spectrum farthest from the Nordic focus on agrarian interests. His goal was to have the state address the needs of the industrial working class. Legislation on pensions covered only urban wage earners, excluding independents for various and slightly contradictory considerations. The least prosperous self-employed, although as needy as workers, were not regarded as numerous enough to justify intervention. The line between impoverished independents and the self-reliant was too indistinct to trace with assurance. Without employers, their contributions would, in any case, be unaffordable.3 The wage-related benefits adopted in the German system were also determined by a concern for the working class. Flat rates, first broached as a boon for rural areas, were quickly abandoned in favor of benefits related to average incomes within geographical areas.4 Even this proved insuffi3 Reichstag, Stenographische Berichte, 1888-89, Aktenstiick 10, 22 November 1888, esp. pp. 49-634 Reichstag, Stenographische Berichte, 6 December 1888, p. 1400; 1888-89, Aktenstiick 141, 22 March 1889, p. 913; Aktenstiick 10, p. 53; Gerhard A. Ritter, Social Welfare in Germany and Britain: Origins and Developments (Leamington Spa, 1986), pp. 44-45; Walter

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cient in the face of protest marshaled by urban interests: regional differentiation meant that neighboring workers of varying income received identical benefits. The government's decision to grade rates geographically, once it was forced to differentiate at all, had been dictated by administrative convenience, a response to the lack of adequate wage statistics.5 Such considerations, however, proved to be no match for the pertinent interest groups. With a regional approach, Social Democrats complained, skilled workers were unfairly given day laborers' benefits. A concern for the labor aristocracy, they insisted a mite defensively, was not incompatible with properly socialist conceptions of equality. Gleichmacherei was not their goal.6 Others agreed that, aiming to quieten discontent, social insurance ought to satisfy urban skilled workers. Differentiation of benefits in general was also a regional issue, demanded by representatives of high-wage areas.7 Faced with such protests, the government acquiesced, replacing geographical with wage categories despite the bother: politics over administration.8 Hopes for a socially pacific effect from social insurance came out explicitly in its financing. Contributions were expected to teach workers prudence and thrift, while also establishing their contractual right to benefits. At the same time, subsidies provided by the state promised to demonstrate its concern for the proletariat's well-being.9 And yet Bismarck had difficulties prevailing on this point, ironically enough the most Bonapartist of his ambitions. As far as accident insurance was concerned, he realized that, with Germany charting new welfare territory, exporting industries needed help were they to compete successfully with their still unencumbered foreign rivals.10 On the desirability of subsidies he was supported by small and medium-sized enterprises that were reluctant to carry accident insurance unaided, some because of their poor work conditions, others because they were labor intensive, yet others because of Vogel, Bismarcks Arbeiterversicherung: Ihre Entstehung im Krdftespiel der Zeit (Brunswick, 1951), p. 45. 5 Reichstag, Stenographische Berichte, 6 December 1888, pp. 141B—c. 6 Reichstag, Stenographische Berichte, 6 December 1888, pp. 155&-156A. 7 Reichstag, Stenographische Berichte, 7 December 1888, p. 194c. 8 Reichstag, Stenographische Berichte, 7 December 1888, p. 173D; 10 December 1888, p. ZIOB; 1888—89, Aktenstiick 141, p. 913. 9 Vogel, Bismarcks Arbeiterversicherung, p. 153. 10 Otto Quandt, Die Anfange der Bismarckschen Sozialgesetzgebung und die Haltung der Parteien (Das Unfallversicherungsgesetz 1881-1884) (Berlin, 1938), pp. 24-25. This is an interesting example of the ambiguities of scholarship during the Nazi era: it has some nasty things to say about Jews and quotes Mein Kampf once, but is otherwise useful.

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their safe production or export orientation.11 While welcoming a system of worker's compensation that spread their risks to a larger community, protectionist heavy industries, on the other hand, could afford purely contributory financing because they did not fear pricing their products out of foreign markets and they opposed subsidies in hopes of limiting the state's intervention.12 It was their concerns that prevailed on this point. By the time the turn came to pensions, however, the situation had changed. Disillusioned by their inability more thoroughly to influence the overall course of reform, heavy industrialists now lost interest in social insurance.13 National Liberals and others in the center who had opposed subsidies for accidents swung around as they came to appreciate the ability of publicly financed pensions to lighten the burden of poor relief.14 As in Scandinavia, the ambiguous virtues of state subsidies in the era before progressive income taxes allowed at least the illusion of a redistributive means offinancingcame out in the parliamentary debates. For the Center and the Freisinnige, paying for social insurance by fiscal means raised qualms. Whereas poor relief was financed through direct taxes, state subsidies rested on regressive indirect levies. It followed that the recipients of social insurance were to finance their own benefits, or - worse - that average citizens who were not workers, and therefore (in distinction to the Nordic systems) not covered, would pay for the laboring classes.15 Beginning with conservative intentions, social insurance was not initiated by the labor movement. Social Democrats were at first more interested in protecting than patronizing workers and favored work legislation of the sort that had been pioneered in Britain, but was rejected by Bismarck for burdening employers without any of social insurance's advantages.16 1! Hans-Peter Ullmann, "Industrielle Interessen und die Entstehung der deutschen Sozialversicherung 1880-1889," Historische Zeitschrift, 229, 3 (December 1979), 584—88. For similar worries on pensions see Reichstag, Stenographische Berichte, 7 December 1888,

pp. I68B, 179D. 12 Monika Breger, Die Haltung der industriellen Unternehmerzurstaatlichen Sozialpolitik in den Jahren 1878-1891 (Frankfurt, 1982), pp. 79ft"; Ullmann, "Industrielle Interessen," 588-91; Detlev Zollner, "Landesbericht Deutschland," in Peter A. Kohler and Hans F. Zacher (eds.),EinJahrhundertSozialversicherung (Berlin, 1981),p. 73; Vogel,Bismarcks Arbeiterversicherung, pp. 39—44; Quandt, Anfange, 54. 13 Ullmann, "Industrielle Interessen," 609. 14 Reichstag, Stenographische Berichte, 7 December 1888, pp. I68B-C. 15 Reichstag, Stenographische Berichte, 7 December 1888, pp. 177A—B, I86B—187c; 10 December 1888, pp. 2230-226A; 10 December 1888, p. 203c. For a similar pattern in accident insurance see Hans Rothfels, Theodor Lohmann und die Kampfjahre der staatlichen Sozialpolitik {1871-190$) (Berlin, 1927), p. 53. 16 Ritter, Social Welfare, pp. 72ft"; Lothar Machtan, "Workers' Insurance versus Protection of the Workers: State Social Policy in Imperial Germany," in Paul Weindling (ed.), The Social History of Occupational Health (London, 1985).

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They opposed Bismarck's proposals because benefits were miserly, workers inadequately represented in the system's administration and, most generally, because they represented socialism from above.17 Unlike Liberals and Catholics, the left favored an important role for the state and generous public subsidies raised through progressive taxes. Nonetheless, Social Democrats never categorically rejected premiums paid from what were otherwise described as impossibly low wages because on their contributory participation rested workers' claims to an administrative role.18 Great Britain

Tracing the development of British social insurance is complicated by its erratic course. On pensions, the English first followed the example set in New Zealand and Denmark for noncontributory universal benefits. The blotter had scarcely come down on the royal signature in 1908, however, before reformers took off in the opposite direction, enticed by Bismarck's example of contributory workers' social insurance. Their sincerest flattery' came to fruition in the National Insurance Act of 1911, holding Germany up as the model for British developments until Beveridge once again took a new tack. What distinguished the 1908 pensions from Bismarck's were the features they shared with the Scandinavian approach to social insurance. These can be dealt with seriatim. Noncontributory insurance: The British tradition of self-help, made possible by workers' comparatively high standards of living, faced social insurance here with two tasks: assisting the poorest, who were reliant on demeaning poor relief, and negotiating a modus vivendi with the powerful institutions of voluntary provision.19 Towards the end of the century, the friendly societies' hostility to statutory initiatives relaxed as their financial health was gradually undermined by heightened mutual competition and 17 Vernon L. Lidtke, The Outlawed Party: Social Democracy in Germany, 1878-1890 (Princeton, 1966), ch. 6; Hans-Peter Benohr, "Soziale Frage, Sozialversicherung und Sozialdemokratische Reichstagsfraktion (1881-1889)," ZeitschriftderSavigny-Stiftung fur Rechtsgeschichte, Germanische Abteilung, 98 (1981); Gaston V. Rimlinger, Welfare Policy and Industrialization in Europe, America and Russia (New York, 1971), pp. 122-30. 18 Hertha Wolff, Die Stellung der Sozialdemokratie zur deutschen Arbeiterversicherungsgesetzgebung von ihrer Entstehung an bis zur Reichsversicherungsordnung (Berlin, 1933), pp.36-37. 19 P. H. J. H. Gosden, Self-Help: Voluntary Associations in the 19th Century (London, 1973); Leslie Hannah, Inventing Retirement: The Development of Occupational Pensions in Britain (Cambridge, 1986), ch. 1.

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the added expense of their members' increasing longevity.20 Now more willing to concede the state a role, they nonetheless rejected a contributory approach that depended (as did they) on working-class premiums.21 While Bismarck sought to appease the urban labor elite, in Britain, with its already well-provided worker aristocracy, the goal of social insurance was to reduce the scope of poor relief and to aid the most impoverished.22 With the initial motive being to help the truly indigent, a contributory approach stood at a disadvantage. Proposals to this effect, Canon Blackley's especially, aimed to organize compulsory self-help for the improvident, shifting the cost of their maintenance from the ratepayers who financed public assistance to the needy themselves.23 Only on the assumption that poor-relief recipients were more feckless than destitute and could be coerced to save for their own upkeep did they make sense. Noncontributory solutions recognized the futility of such an approach: helping the worst-off required outside resources. Universalism: Because British policy did not share Bismarck's political aims, there was less reason to limit it to one particular social group. Like the poor relief they were intended to help supplant, noncontributory pensions aimed at the impoverished regardless of class. Nevertheless, granting benefits to all the destitute did not yet, as after the Second World War, mean giving them to all citizens. One of the main objections to noncontributory pensions was the cost of providing them even for the affluent. Booth favored completely universal measures and sought to discourage claims from the well-off by forcing all, the haughty and the hoi polloi, to queue at the post office.24 The more complicated solution eventually chosen was to limit the expense of a wholly all-inclusive system by means-testing. Flat-rate benefits: In part, uniform benefits were prompted by considerations of administrative feasibility. The battalions of clerks needed to run a 20 Bentley B. Gilbert, "The Decay of Nineteenth-Century Provident Institutions and the Coming of Old Age Pensions in Great Britain," Economic History Review, 17 (2nd series), 3 (1965). 21 James H. Treble, "The Attitudes of Friendly Societies towards the Movement in Great Britain for State Pensions, 1878-1908," International Review of Social History, 1 5 , 2 (1970). 22 Pat Thane, "Non-contributory versus Insurance Pensions 1878—1908," in her The Origins of British Social Policy (London, 1978), pp. 88—89; Lloyd-George in parliament, June 1908, quoted in Rex Pope et al. (eds.), Social Welfare in Britain, 1885-1985 (London, 1986), pp. 23-24; J. R. Hay, The Origins of the Liberal Welfare Reforms 1906-1914 (London, 1975), PP- 33-3423 Treble, "Friendly Societies," 272. 24 Doreen Collins, "The Introduction of Old Age Pensions in Great Britain," Historical Journal, 8, 2 (1965), 251-52.

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Bismarckian earnings-related scheme could not be recruited, as they had been in Germany, until the 1880 Education Act had shown an effect.25 Even after Lloyd George had been converted to a contributory approach in 1911, benefits remained largely flat-rate. Because the point of sickness insurance now, as it had been with pensions, was to aid the poorest, not to secure working-class standards, a uniform level sufficed. Flat rates also embroiled demographically homogeneous Britain in fewer controversies than they provoked among the Continent's more differentiated societies. Whereas German workers rejected uniform benefits formulated for the hinterland, Scandinavian farmers favored them precisely to gain a redistributive advantage on the cities. The labor movement at first shared the friendly societies' suspicion of statutory intervention.26 It supported only measures that favored workers without qualification, redistributed monies to the poor and gave the state the least inquisitorial role. 27 The goal was not social policy that cut employers' wage bills by targeting resources according to need, but an income sufficient in all phases of life. Only gradually was the working class persuaded that social policy could be turned to its advantage and Labour eventually became the state's firmest supporter in these matters.28 In a sense, it was Asquith and Lloyd George's success in financing noncontributory pensions through progressive taxation that made necessary British social policy's volteface in a contributory direction. Because they had already been able to enlist middle and upper-class efforts on behalf of the poor, the political rationing of any further golden eggs was painfully apparent. Recipients would themselves have to help finance benefits directly were there to be any further expansion of social insurance. Beveridge, who later led welfare policy away from Bismarck in other respects, was in this sense a devoted follower. Lloyd George, in turn, was converted to a contributory approach by his famous pilgrimage to 25 Patricia M a r y Williams, " T h e Development of Old Age Pensions Policy in Great Britain, 1878—1925," diss., Univ. of L o n d o n , 1970, p . 465. 26 Ronald V. Sires, " T h e Beginnings of British Legislation for Old-Age Pensions," Journal of Economic History, 14, 3 (Summer 1954), 247; Henry Pelling, " T h e W o r k i n g Class and the Origins of the Welfare State," in his Popular Politics and Society in Late Victorian Britain, 2nd edn (London, 1979); Martin Pugh, The Making of Modern British Politics 1867-1939 (New York, 1982), p p . 7 4 - 7 5 . O n the historiography of working-class pressure, see Hay, Liberal Welfare Reforms, pp. 25-29. 27 Pat T h a n e , " T h e W o r k i n g Class and State 'Welfare' in Britain, 1880-1914," Historical Journal, 27, 4 (1984). 28 Arthur Marwick, "The Labour Party and the Welfare State in Britain, 1900-1948," American Historical Review, 73, 2 (December 1967).

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Germany in the late summer of 1908.29 The left followed the Liberal lead only hesitantly. Despite the inadequacies of noncontributory arrangements, many still opposed having workers pay for their benefits.30 By the time Philip Snowden, Chancellor of the first Labour government in 1924, came out in favor of a contributory solution, the tax-financed alternative had lost most of its appeal for the left.31 France Before the heady attempts at reform in 1945, France was a welfare follower when she moved at all. At certain times she took the lead: a national pension fund in 1850, an accident insurance fund in 1868.32 Bismarck claimed to have learned from Napoleon III the secret of using social policy to win affection from the masses for even a politically parsimonious regime. But in this case pupil quickly outstripped teacher. Only in family policy did France strike out in uncharted directions. Partly, she was prompted by a birth rate that seemed to threaten dire economic and geopolitical consequences. Partly, employers here discovered a means of targeting resources that was more frugal than across-the-board wage increases.33 The Church's doctrine of a just wage was an influence on such reform, as was Social Catholicism in general. In other respects, however, France's development lagged behind neighboring nations by decades. The causes of this comparative retardation are several. Most nebulously, there was the tradition of liberalism and individualism that limited what French political instincts expected of the state. After the Second Empire, the republicanism of the late nineteenth century elevated distrust of strong central power to the realm of principle.34 The stalemate society of the Third Republic and the Bismarckian Empire's state socialism were in this 29 E. P. Hennock, " T h e Origins of the British National Insurance and the German Precedent, 1880-1914" a n d J. R. Hay, " T h e British Business Community, Social Insurance and the German E x a m p l e , " in Wolfgang J. Mommsen (ed.), Emergence of the Welfare State in Britain and Germany, 1850—1950 (London, 1981). Generally, see E. P. Hennock, British Social Reform and the German Precedent: The Case of Social Insurance, 1880-1914 (Oxford, 1987). 30 Eric J. Evans (ed.), Social Policy 1830-1914: Individualism, Collectivism and the Origins of the Welfare State (London, 1978), sect. 23. 31 Williams, "Pensions," p . 407. 32 Yves Saint-Jours, " F r a n c e , " in Peter A. Kohler and Hans F. Zacher (eds.), The Evolution of Social Insurance, 1881-1981 (London, 1982), p. 94. 33 Dominique Ceccaldi, Histoire des prestations familiales en France (Paris, 1957). 34 "Interventionist Radicals" had eventually to concede defeat; see Judith F. Stone, " T h e Radicals and the Interventionist State: Attitudes, Ambiguities and Transformations, 18801910," French History, 2, 2 (June 1988).

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sense almost diametrical opposites: social policy initiatives offered by an interventionist state as a substitute for political reform in Germany, political reforms achieved on the basis of an assumption that fundamental social and economic questions had already been resolved in France.35 Gambetta's nouvelles couches sociales restricted the state, workers distrusted it. The French labor movement, besides hampering its own influence by cantankerous fragmentation, affected syndicalist airs and sought solutions outside the state, not through it like the Lasallians across the Rhine. In any case, Thiers and Galliffet had ended the Commune by treating the left and whatever pressure it might have brought to bear on behalf of social reform in a way that made Bismarck's anti-Socialist laws seem moderate in comparison. From this period dates the French tendency not to look to the state in welfare policy for much more than the legal framework within which civil society's actors pursue their respective strategies. One example is the state's refusal to participate significantly in paying for social insurance.36 Subsidies, not to mention more complete tax-financing, were never serious possibilities here. Shifted from the state's mediation directly to civil society, redistributive battles were not veiled behind the statutory mechanisms of assessing, collecting and allocating resources, but fought out in hard-edged conflicts between competing interests. The central authority, as in its inability to compel participation in the pension system after 1910 or the flawed reforms of 1945, was at best an umpire, attempting to enforce the rules, but usually too weak to prevent the game from going consistently to the strongest and best-organized team. The leisurely pace of French industrialization, deemphasizing the need to provision an urban working class, also helped slow developments.37 The 1898 law on liability for work accidents, for example, was similar in its modesty to the Danish one and less seaworthy than the more urgently required measures on the books in Germany and Britain. France did not introduce insurance against unemployment until 1958, partly because her 35 Compared to Britain, however, the French were inclined by their political traditions to expect a more positive role for the state. Douglas Ashford has argued that the less dogmatic nature of French liberalism facilitated French acceptance of the welfare state. While possibly persuasive in the realm of ideas, his argument does little to explain why, in actual legislation, the French lagged behind the supposedly so liberalist English. See Douglas E. Ashford, The Emergence of the Welfare States (Oxford, 1986), pp. 78-100. 36 Saint-Jours, "France," pp. 136-37; Louis Musy, Les incidences economiques de la securite sociale (Fribourg, 1954), p. 34. 37 Henri Hatzfeld, Du pauperisme a la securite sociale: Essai sur les origines de la securite sociale en France, 1850-1940 (Paris, 1971), pp. 7-12.

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semi-industrialized economy with its many independents had long made the problem less pressing.38 Nor was there an imperative need for a functioning pension system when many workers retained ties to the countryside or aspired to a self-employed status. Contributory social insurance was often opposed because premiums threatened to burden the petty bourgeoisie, and small employers were especially hostile to statutory welfare intervention.39 It was the strength of the petty bourgeoisie, the Third Republic's social backbone for which welfare legislation represented an unwelcome intrusion, that delayed the development of the modern welfare state here.40 Unlike their Nordic colleagues, traditionally allied with enlightened monarchs against a common aristocratic foe, French peasants had won their most notable victories against the state. Scandinavian farmers may have been politically liberal and freetraders to boot, but they needed and were not shy in enlisting the state on their behalf.41 In the Third Republic's stalemate society (despite Chevalier, safely ensconced behind high tariffs) the French petty bourgeoisie was freed from further reliance on the state so long as protectionism remained sacred. In Scandinavia, significant social policy reforms were won by the middle classes through the state as markers of their ascent to power. In France, the nouvelles couches staked their claim, after the experience of the Second Empire, by limiting "the state's purview. Only after the turn of the century was statutory initiative sufficiently necessary that the countervailing forces were overcome. One result was the lame compromise of the 1910 pension law.42 The inclusion of both rural and urban wage earners here reflected the importance of the countryside, but with farmers and sharecroppers excused from compulsory participation, did not match the universalist results achieved in Scandinavia. As elsewhere, social insurance was welcomed for its ability to relieve the cost of public assistance, usually financed by more progressive taxes than even 38 Pierre Laroque, "Social Security in F r a n c e , " in Shirley Jenkins (ed.), Social Security in International Perspective (New York, 1969), p. 183. 39 O r at least most publicly hostile, since large employers also resisted; see Judith F. Stone, The Search for Social Peace: Reform Legislation in France, 1890-1914 (Albany, 1985), pp. xv,

107, 40

114-15-

Hatzfeld, Paupe'risme, ch. 5, pt. 4. O n the vulnerability of small, and therefore open, economies that fostered democratic corporatism, see Peter J. Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ithaca, 1985). 42 Details galore are t o be found in Irene Bourquin, "Vie ouvriere" und Sozialpolitik: Die Einfuhrung der "Retraites ouvrieres" in Frankreich um 1910 (Bern, 1977). 41

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noncontributory arrangements.43 Actuarially funded, benefits were vulnerable to inflation. Contribution cards reminded workers of the livret and many employers refused to deduct premiums from wages. When the courts absolved them of liability, the system became in fact voluntary and was progressively undermined. The extreme left (the Guesdistes and the CGTU) attacked social insurance altogether as a sop to content workers with less than their due. The moderate labor movement rejected the contributory principle as forcing them to pay a second time for what should already have been theirs.44 Jaures fought valiantly for pensions as a first step and managed to carry the SFIO with him.45 By 1930 the French were able to draw abreast of Bismarck and implement the rudiments of a social insurance system. Germany's example had been less influential than in Britain as France licked her patriotic wounds. Only the repatriation of Alsace and Lorraine after the First World War made learning from abroad a necessity. The provinces returned with a social policy patrimony that put the French to shame, forcing an equalization of conditions within the country as a whole.46 As France gradually industrialized, workers' social insurance became increasingly necessary. The new system, limited to manual workers by an income limit, covered neither work accidents nor unemployment. Farmers were at first included, then not when they insisted on occupationally separatist arrangements with significant individual choice.47 Contributions and benefits were related percentually to wages. The state contributed various minor subsidies. The different forms first assumed by welfare policy were significantly determined by the varying social and political contexts found in each nation. The two most divergent solutions were the Scandinavian and the German. Fears of an unruly working class, which were a less urgent motive in the pastoral North, prompted Bismarck's intervention. His socially specific focus on the proletariat, in turn, encouraged a contributory 43 Bourquin, "Vie ouvriere'\ pp. 157-58, 170. More generally, see Arthur Bovet, Les assurances ouvrieres obligatoires et leur role social (Bern, 1901), pp. 239-43. 44 Hatzfeld, Pauperisme, pp. 234-38, 247-48. 45 The SFIO's reformism came out also in its willingness to compromise on concurrent reforms over progressive taxation (Caillaux's tax bill) and proportional representation; see Kerry Davidson, "The French Socialist Party and Parliamentary Efforts to Achieve Social Reform, 1906-1914," diss., Tulane Univ., 1970, chs. 4, 5. 46 Georges Lefranc, Les experiences syndicates en France de 1939 a 1950 (Paris, 1950), pp.309-10. 47 Generally, see E. Antonelli, Comment furent votees les assurances sociales (Paris, 1933).

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approach. Financing through taxes, drawing from a community that (in Germany) was larger than the risk pool covered by insurance, meant enlisting the aid of others on workers' behalf. Why should the independent middle classes pay to insure the urban proletariat? In Scandinavia, universality and tax-financing went hand in hand because social insurance, far from being concerned with a feared minority, was a demand enforced by a now dominant social group in its own behalf on society as a whole. Since all were included, contributory financing was not necessary to localize burdens. In those cases where social insurance was not a matter of concern to all, but focused on particular groups, as with accident insurance, neither taxfinancingnor an all-inclusive scope was possible. Just as in the Nordic nations, exporting businesses and small-scale, labor-intensive producers in Germany favored state subsidies and tax-financing. Unlike Scandinavia, the petty bourgeoisie was now too weak here, faced with the new industrial classes, to prevail. The German system of financing rested largely on its own base, matching the insurance system it nourished - a matter of concern principally to industrial workers and their employers. The German system's earnings-related benefits were also chosen to serve the urban laboring classes best. The features of Scandinavian welfare that later came to be regarded as especially socialist were, in fact, first determined by the tasks facing social policy in societies coming to be dominated by a statist-oriented, agrarian bourgeoisie. The Bismarckian system's supposedly reactionary qualities, in turn, stemmed from its focus on the industrial working class. Britain and France arrayed themselves between these two extremes. In England, traditions of self-help shaped statutory provision. Pensions were initially made noncontributory and universalist in order to lessen competition with the friendly societies and because the point of social insurance was to spare the deserving indigent from reliance on poor relief. In France, a petty bourgeoisie averse to state intervention retarded and limited developments, permitting at best pale imitations of lessons learned from Bismarck. Not until the Second World War and the wave of reform inspired by Beveridge was she ready to run with the social policy pack. It is with this development, the rebirth of the welfare state in a new, apparently solidaristic form from the ashes of the world brought down by Hitler, that the story continues.

2

The Triumph of the Solidaristic Welfare State: Britain and Scandinavia

To contemporaries, the Second World War marked a turning point in the evolution of European society, one of those moments, often associated with crisis and turbulence, when "the social contract is reformulated."1 Just when things looked blackest, visions of a better future were proffered. Roosevelt's "new freedoms" lit a beacon; Beveridge's blueprint for egalitarian social change, issued to great acclaim in 1942, provided more specific formulations. In thefirstflushof reform following the end of hostilities, the promise of major innovation appeared to have been sincere. According to the most optimistic, Britain had peacefully undergone a socialist revolution.2 Similar, and more successfully far-reaching, initiatives in Scandinavia together with attempts at reform in France and Germany confirmed this trend in favor of solidaristic social policy as apparently one of the most significant expressions of the sentiment of national unity that, born in battle, was now to be made a characteristic of the peacetime era.3 The new sense of community was most tangibly embodied in plans for universalist, comprehensive, egalitarian social insurance, a goal captured in the phrase "social security."4 Reformers envisioned a system uniting all 1

Pierre Rosanvallon, La crise de I'etat providence (Paris, 1981), p. 29. C. A. R. Crosland, "The Transition from Capitalism," and R. H. S. Crossman, "Towards a Philosophy of Socialism," in Crossman et al., New Fabian Essays (London, 1952), pp.25, 60. Retrospective reevaluations are to be found in Anthony Crosland, "Socialism Now," in his Socialism Now and Other Essays (London, 1974); and R. H. S. Crossman, "The Lessons of 1945," in his Planning for Freedom (London, 1965). 3 For the background, see Tapani Paavonen, "Reformist Programmes in the Planning for Post-War Economic Policy during World War II," Scandinavian Economic History Review, 2

31, 3 (1983). 4 On the concept of social security, see Felix Schmid, Sozialrecht und Recht der sozialen Sicherheit: Die Begriffsbildung in Deutschland, Frankreich und der Schweiz (Berlin, 1981), pp. 43-52; Hans Giinter Hockerts, "Die Entwicklung vom Zweiten Weltkrieg bis zur Gegenwart," in Peter A. Kohler and Hans F. Zacher (eds.), Beitrage zu Geschichte und aktueller Situation der Sozialversicherung (Berlin, 1983), pp. 141-47; and Franz-Xaver Kaufmann, Sicherheit als soziologisches und sozialpolitisches Problem: Untersuchungen zu einer Wertidee hochdifferenzierter Gesellschaften (Stuttgart, 1970), ch. 3. On the history and uses of the term "welfare state," see A. M. Donner, Overde term "Welvaartsstaat" (Amsterdam, 1957); Stein Kuhnle, Velferdsstatens utvikling: Norge i komparativt perspektiv (Bergen,

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citizens, covering them equally for each risk regardless of the distinctions of class, fate or biology by which they were otherwise separated. Kindled by the Atlantic Charter, resolved at the ILO's 1944 Philadelphia congress, formulated in the Beveridge, the Marsh, the Wagner-Murray-Dingell, the van Acker, the van Rhijn, the Parodi-Laroque-Croizat and the D'Aragona Plans, and proclaimed in the UN's Universal Declaration of Human Rights in 1948, universalist social security in its most messianic formulations was to protect all against need and mischance, to guarantee a global New Deal and complete the course of human liberation.5 Social security was to social insurance what Bevan was to Bismarck. Modernizing liberalism, moderating socialism, the goal of postwar reform was neither social revolution, nor an unfair status quo, but to make freedom fair, to define basic conditions of equality. Beveridge's wife Janet caught the idea T. H. Marshall had ennobled in his Cambridge lectures in somewhat less abstract terms. "Whether you like it or not," she trumpeted, "whether you are glad or sorry, the Beveridge Report was the inauguration of a new relation within the state of man to man and of man to the state, not only in this country, but throughout the world. The ethic of the universal brotherhood of man was here enshrined in a plan to be carried out by every individual member of the community on his own behalf and on behalf of his fellows."6 This postwar recasting struck many contemporaries as marking a major change in the nature of the welfare state. Once guided by Bonaparte's and Bismarck's ambitions to substitute social for political reform, welfare policy was now informed by a widespread agreement that social rights should complete, not sidetrack, the process of emancipation. The unfortunate were to be helped by treating all equally. Poverty and need were no longer to exclude from full membership in the community. Where social policy had earlier sprung from the hopes of society's elites for stability, from capitalism's functional requirements or, at best, from hard-fought battles between proletariat and 1983), pp. 21-31; D. C. Marsh, The Welfare State: Concept and Development (London, 1980), ch. 2; and Rosanvallon, Crise de Ve'tat providence, appendix 1. 5 Georges Gurvitch, The Bill of Social Rights (New York, 1946); Pierre Laroque in Notes documentaires et etudes, 450 (25 October 1946); E. F. Rimensberger, Qu'est-ce que le plan Beveridge? (Neuchatel, 1943), pp. 15-16. In Italy, the Vanoni Plan, sometimes compared to other countries' postwar blueprints, came a decade later and was more concerned with production than redistribution; see Guido Menegazzi, / fondamenti del solidarismo (Milan, 1964), pp.211-14. 6 Janet Beveridge, Beveridge and his Flan (London, 1954), pp. 7,168. See also Guy Perrin, "Pour une theorie sociologique de la securite sociale dans les societes industrielles," Revue francaise de sociologie, 8, 3 (July-September 1967), 313.

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bourgeoisie, there now appeared to develop a broad consensus behind the welfare state. Two different, potentially contradictory, explanations have been advanced to account for this postwar seachange. The first extends the social interpretation. The war and its political aftermath allowed greater influence for the working class in Britain and Scandinavia and thereby social policy of a solidaristic cast. Conversely, the defeat of the left in both France and Germany during the first postwar years explains, in this account, why equally egalitarian reforms failed there. And yet, how was this apparently painless implementation of socialist goals possible? At the same time that Attlee's and Bevan's initiatives cemented the tie between working class and welfare state, the widespread consensus on which social policy reform seemed to rest weakened it. The left may have done the pushing but the door was already ajar, its hinges well-oiled, in the second explanation of postwar change. That parties of the center and right were unprecedentedly associated with reform seemed best explained by a general unanimity fostered by the war. The war made necessary a greater scope for the state's intervention.7 The bombing raids' indiscriminate destruction, blighting Bloomsbury as thoroughly as Brixton, prepared the ground psychologically for a wider sharing of risks.8 In Britain, the wartime consensus was but the culmination of an agreement between moderate socialists and reforming liberals in evolution since at least the

7 A. T. Peacock and J. V. Wiseman, The Growth of Public Expenditure in the United Kingdom, 2nd edn (London, 1967); Henry Roseveare, The Treasury: The Evolution of a British Institution (London, 1969), p. 278; Gregor McLennan et al. (eds.), State and Society in Contemporary Britain (Cambridge, 1984), chs. 2, 3. 8 Richard Titmuss, Problems of Social Policy (London, 1950), pp. 506-07; Titmuss, "War and Social Policy," in his Essays on 'The Welfare State', 2nd edn (London, 1963); Maurice Bruce, The Coming of the Welfare State, 4th edn (London, 1968), p. 326; T. H. Marshall, Social Policy (London, 1965), ch. 6; Jose Harris, "Some Aspects of Social Policy in Britain during the Second World War," in Wolfgang J. Mommsen (ed.), The Emergence of the Welfare State in Britain and Germany, 1850-1950 (London, 1981); Arthur Marwick, Class, Image and Reality in Britain, France and the USA since 1930 (New York, 1980),ch. 11; Arthur Marwick, "Problems and Consequences of Organizing Society for Total War," in N. F. Dreiziger (ed.) Mobilization for Total War (Waterloo, 1981); Robert E. Goodin and John Dryzek, "Risk-Sharing and Social Justice: The Motivational Foundations of the Post-War Welfare State," in Goodin and Julian Le Grand (eds.), Not Only the Poor: The Middle Classes and the Welfare State (London, 1987). Travis L. Crosby has argued the case the other way around, that the war changed not elites' attitudes, but the poor's; see The Impact of Civilian Evacuation in the Second World War (London, 1986). For a provocatively polemical attempt to reverse this perspective, portraying wartime decisions as crucial to Britain's longterm decline, see Correlli Barnett, The Audit of War: The Illusion and Reality of Britain as a Great Nation (London, 1986).

no

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1930s.9 Marshall was only the latest exponent of a liberal theory of citizenship in which all were granted a moral equality of status if not of income.10 Conservatives, too, were moved to accept a larger role for the state either by neo-corporatist inclinations or traditions of Tory paternalism.11 In Sweden, Liberals proceeded steadily forward in their acceptance of increased statutory intervention, hailing Keynes and Beveridge as the exemplars.12 Even Conservatives here developed eminently practical interests in the new forms of statutory social policy.13 Titmuss's analysis of the war's effect has begun to decay only after a long and distinguished half-life. The question is, how far does his explanation go? If impelled solely by a psycho-political sense of community, would the middle classes have accepted measures that otherwise contradicted their interests?14 What other motivations prompted the apparent consensus? Some have suggested that the bourgeoisie agreed to reform for fear of upheaval in the volatile postwar situation.15 Although such neoBonapartism demonizes the concerns of the center and right, attention to the conservative or at least moderate aims of successful postwar change 9 Arthur Marwick, "Middle Opinion in the Thirties: Planning, Progress and Political 'Agreement'," English Historical Review, 79, 311 (April 1964); Tony Cutler et al., Keynes, Beveridge and Beyond (London, 1986), ch. 1. 10 Andrew Vincent and Raymond Plant, Philosophy, Politics and Citizenship: The Life and Thought of the British Idealists (Oxford, 1984); Bill Jordan, Freedom and the Welfare State (London, 1976),ch. i$;JohnStevenson,British Society 1914-1945(London, 1984),pp. 322-29. 11 Nigel Harris, Competition and the Corporate Society: British Conservatives, the State and Industry 1945—1964 (London, 1972), pt. 2; John Selim Saloma III, "British Conservatism and the Welfare State: An Analysis of the Policy-Process within the British Conservative Party," diss., Harvard Univ., 1961, ch. 2. 12 Kent Zetterberg, Liberalism i kris (Stockholm, 1975); Rolf Torstendahl, Mellan nykonservatism och liberalism: Idebrytningar inom Hogern och Bondepartierna 1918—1934 (Uppsala, 1969); Bertil Ohlins memoarer, 1940-1951 (Stockholm, 1975), pp. 79—80. 13 The "people's home" ideology, later appropriated by the Social Democrats, had originally been a paternalist Conservative conceit; see Bernd Hennigsen, Der Wohlfahrtsstaat Schweden (Baden-Baden, 1986), pp. 312-13. 14 For scepticism on Titmuss, see Kevin Jefferys, "British Politics and Social Policy during the Second World War," Historical Journal, 30, 1 (1987); and Edwin Amenta and Theda Skocpol, "Redefining the New Deal: World War II and the Development of Social Provision in the United States," in Margaret Weir et al. (eds.), The Politics of Social Policy in the United States (Princeton, 1988). For other revisions and refinements of the war-as-bringer-of-change thesis, see Harold L. Smith (ed.), War and Social Change: British Society in the Second World War (Manchester, 1986); and Arthur Marwick (ed.), Total War and Social Change (London, 1988). 15 Alva Myrdal, "Internationell och svensk socialpolitik," in Ett genombrott: Den svenska socialpolitiken: Utvecklingslinjer och framtidsmdl (Stockholm, 1944), pp. 443-44; Hans Achinger, Soziale Sicherheit: Eine historisch-soziologische Untersuchung neuer Hilfsmethoden (Stuttgart, 1953), pp. 14-15; Edeltraut Felfe, Das Dilemma.der Theorie vom "Wohlfahrtsstaat": Eine Analyse des "schwedischen Modells" (Berlin, 1979), pp. 32-33. This is the theme of Harold J. La ski, Reflections on the Revolution of our Time (New York, 1943) and, similarly, R. H. Tawney, Equality, 3rd edn (London, 1938), pp. xvii-xviii.

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does help explain their conciliatory attitude. The need to account for the interest developed by the bourgeois parties in reform testifies to the continued power of the social interpretation and the particular couplet it cements between a strong workers' movement and solidaristic welfare policy. The assumption remains that the middle classes gain little from social policy and normally resist its expansion. Although this may have been the case in earlier and other periods, it was not true of postwar changes. Like all welfare policy - treating the effects of inequalities, not their cause - Anglo-Scandinavian initiatives fell short of the left's most radical demands. But to explain their success only in terms of an absence of disquieting ambitions is inadequate. The bourgeois parties in the immediate postwar era also developed pressing reasons of direct and positive self-interest for their support of reform. In the social interpretation, postwar reforms mark the point at which claims that had once voiced the demand of one class for alms from another were transformed into an articulation of each individual's potential need for solidarity. It was during this period in Scandinavia and, less successfully, in Britain that was constructed what has been called the Social Citizenship State, the realization of Marshall's vision which aimed to give all an equal social right to basic security and welfare regardless of their class or status position.16 Social Democratic parties built a broad consensus behind redistributive policies, forging a coalition of workers and the middle classes that gave their welfare states firmer political foundation than more residual and conservative ones, aimed primarily at the poor.17 Its universality and all-inclusive scope was, in this view, a crucial feature of the Anglo-Scandinavian welfare state. The impoverished were no longer 16

Gesta Esping-Andersen, Politics against Markets: The Social Democratic Road to Power (Princeton, 1985), p. 157; Gosta Esping-Andersen and Walter Korpi, "From Poor Relief to Institutional Welfare States: The Development of Scandinavian Social Policy," in Robert Erikson et al. (eds.) The Scandinavian Model: Welfare States and Welfare Research (Armonk, 1987), pp. 42,49;Gosta Esping-Andersen, "PolitischeMachtundwohlfahrtsstaatiiche Regulation," in Frieder Naschold (ed.), Arbeit und Politik (Frankfurt, 1985), p. 483; Gosta EspingAndersen and Walter Korpi "Social Policy as Glass Politics in Post-War Capitalism: Scandinavia, Austria and Germany," in John H. Goldthorpe (ed.) Order and Conflict in Contemporary Capitalism (Oxford, 1984), p. 185. For an example of the continuing importance of the social citizenship concept for the laborist theory, see Walter Korpi, "Power, Politics and State Autonomy in the Development of Social Citizenship: Social Rights during Sickness in Eighteen OECD Countries since 1930," American Sociological Review, 54,3 (June 1989). 17 Walter Korpi, "Social Policy and Distributional Conflict in the Capitalist Democracies: A Preliminary Comparative Framework," West European Politics, 3, 3 (October 1980), 304-05; Walter Korpi, The Democratic Class Struggle (London, 1983), ch. 9; Gosta Rehn, "The Wages of Success," in Stephen R. Graubard, Norden: The Passion for Equality (Oslo, 1986), p. 148; Esping-Andersen, Politics against Markets, pp. 30-36 and passim.

in

The Triumph of the Solidaristic Welfare State

marginalized as the only ones in need. The potential for backlash from those who paid while not benefiting from social policy was lessened.18 Universality seemed to have been a fruit of the left's ability to translate claims put forth by the unfortunate into common interests shared by a majority of society.19 The success of solidaristic, egalitarian welfare in certain countries, its failure elsewhere, is therefore explained by the varying fortunes of the labor movement and the left and their ability to set the tenor of reform. The following two chapters examine the triumph of solidaristic welfare reform in Britain and Scandinavia after the war, its failure on the Continent.20 The conclusions they reach differ from the social interpretation. The universality of significant postwar legislation sprang not solely or even primarily from the strength of the left, but in fact followed equally immediate and direct interests developed by the bourgeoisie in all-inclusive social policy. It was not only the Social Democrats who cemented political support for solidaristic measures by including each citizen, but just as much those who had traditionally been excluded from welfare who now saw their chance to be among the beneficiaries of the state's largesse. Conversely, the failure of apparently similar initiatives on the Continent was due not to the left's impotence, but to the radical redistributive ambitions that were here embodied in reform. Rather than benefiting the middle classes, French and German measures consciously aimed to help the poorest at the expense of the better-off, thereby provoking the resistance that led to their failure. In Britain and Scandinavia, it was the innocuous, indeed deliberately pro-bourgeois, aspects of reform that explain the ease of its success. The victory of solidaristic welfare here did mark an evolution of social policy from a limited form of aid for the indigent and marginal to a status as a civic right, from emergency reliefthe ambulance behind the battlelines of capitalism - to an everyday 18 Sara A. Rosenberry, "Social Insurance, Distributive Criteria and the Welfare Backlash: A Comparative Analysis," British Journal of Political Science, 12,4 (October 1982); Harold L. Wilensky, The Welfare State and Equality (Berkeley, 1975), pp. 37-42, 54—59. 19 The assertion that social rights and a universalist and solidaristic approach to the welfare state are socialist conceits may be found in Esping-Andersen and Korpi, "From Poor Relief to Institutional Welfare States," pp. 43-45. 20 With all due consideration for the many differences between Beveridgean and Scandinavian reforms of the period and especially for the varying paths followed and degrees of success achieved by these two sets of welfare states in later years, both contemporary reformers and later observers identify similarities that set these systems apart from the Continental Bismarckian approach. "The model," as Esping-Andersen and Korpi write of reforms during the immediate postwar years in Scandinavia, "was Beveridge rather than Bismarck." See Esping-Andersen and Korpi," "From Poor Relief to Institutional Welfare States," p. 49; and Esping-Andersen, Politics against Markets, p. 157.

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necessity of modern life, where need and self-reliance were seldom predictable and all might one day find themselves thrown on the public's mercy. This new vision - a major element of the Social Citizenship State was nonetheless a child whose parentage was more than shared by the left with the bourgeois parties.21 How European welfare systems achieved universalist reform varied in accordance with the manner that social policy hadfirstbeen implemented in the nineteenth century. Possible developments were defined at one extreme by the Continental tradition of contributory social insurance for the working class, at the other by the Nordic approach with its universalist, means-tested, tax-financed benefits. Germany and France had begun with legislation that - limited to certain classes defined by their employment was related to need only insofar as some social groups were less fortunate than others. In Scandinavia, on the contrary, first measures covered all classes, but only the poor within each. British developments vacillated between these two poles. Postwar universalist reform, in this case as embodied in pensions, was therefore a goal arrived at by separate paths from at least two distinct starting points. Along the route followed on the Continent, it meant expanding measures formerly limited to workers laterally so as to include also other classes. Such horizontal universalism was important in France and Germany, where the self-employed and salaried employees were now also to be enrolled in social insurance. To the North and across the Channel, in contrast, horizontal universalism was scarcely an issue since the needy of most classes were already covered by statutory pensions. In Britain, reform now moved in a partially horizontal direction, yet the extent to which wage earners - who were already enrolled - demographically dominated the population here meant that, while Beveridge included all social groups in social insurance, in fact he added relatively few new members to the system's rosters. Because the needy of most classes already belonged, universalist reform in Britain and Scandinavia involved a vertical movement that drew in those who had not formerly been the object of statutory attention. Anglo-Scandinavian universalism, in effect, meant giving what had previously been reserved for the poor alone also to the better-off. Need was eliminated as a prerequisite for entitlement by abolishing the means tests and relaxing the 21 On this point Sven Olsson and I are more in agreement than might seem apparent from a cursory reading of his criticism; see Sven E. Olsson, "Working Class Power and the 1946 Pension Reform in Sweden: A Respectful Festschrift Contribution,"'International Review of Social History, 34, 2 (1989); and Peter Baldwin, "Class, Interest and the Welfare State: A Reply to Sven E. Olsson,'* International Review of Social History, 34, 3 (1989).

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earnings rules that otherwise disqualified the well-off from measures targeted at the poor. The arguments advanced for such reform were various, but the most important concerned the relationship between benefits that were statutory and needs-based, on the one hand, and private, unconditional provision on the other. As long as their stigma was not prohibitive, targeted arrangements helped the poor most. The great disadvantage of entitlement determined by need, however, was the discouraging effect it had on self-help. Voluntary provision diminished eligibility for targeted benefits. Attempts to raise statutory pensions above a miserly minimum were therefore resented by the well-off, not only as the taxes necessary to finance reform increased, but because the direct penalties, within the field of social provision itself, for self-help were sharpened. The more ample the means-tested benefits became, the more painfully the unimpoverished felt their exclusion. When Sweden abolished, or sharply decreased, means-testing and introduced universalist pensions in 1946, the groups with most to gain from such a reform were those which already had significant social provision or other means of their own that barred them from receipt of statutory benefits: a minority of affluent independents and salaried employees whose interests were still spoken for primarily by the center and right. Universalism was accordingly an issue favored by the bourgeois parties and thrust upon the left by its political rivals. It did not, however, remain so for long. Although Social Democrats accepted universalism only reluctantly in 1946, their later conversion was not the result of tactical considerations alone. With the spread of postwar affluence, allowing increasing numbers of workers other provision in addition to statutory benefits, and especially with the development of supplementary pension schemes, universalist reform would have been entered even on the left's agenda, had the issue not already been resolved by the center and right. In Denmark, where reform came later, the results differed slightly. Social Democrats were here the first to identify and harvest the popular appeal that increasing affluence and the spread of voluntary provision lent all-inclusive pensions. Fascinated by a contributory solution to the conflict of entitlement between means-tested and unconditional measures, Danish Conservatives and Liberals took longer than did their Swedish colleagues to formulate an interest in universalist reform. Once a contributory approach had been eliminated as a political possibility, however, the bourgeois parties switched gears with agility. They drove a hard bargain in the pension reform of 1956 and took the lead in introducing complete

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universalism during the early 1960s, this time against the objections of the far left and those Social Democrats who were unwilling to draw the full consequences of indiscriminate social policy generosity. The situation had by this point reversed as the left rediscovered its initial ambivalences towards universalism, now insisting that a degree of means-testing be retained to safeguard the interests of the neediest. In Britain, left and right joined in support of pensions for all. Political and social interests here were less polarized over universalism than in Scandinavia. Beveridge's choice of flat-rate contributory financing eliminated any prospect of vertical redistribution within the social insurance system itself and helped defuse objections to reform. Changes in his proposals as they passed through the legislative machinery allowed the newly included classes (those formerly regarded as secure enough to manage on their own) to win for themselves a more generous treatment than Beveridge had intended and helped buy their support. While bourgeois interests in this way identified good reasons to back Beveridgean reform, Labour had more pronounced motives for abolishing need as a condition of entitlement than had the Scandinavian left in 1945. The stigma of targeted benefits directly affected Labour's constituency, while in Denmark, where such considerations were also important, small independents in the Radical camp were the acute sufferers. The British working class, better served than the Nordic by voluntary provision and different forms of self-help, had particular cause to end the means-testing that otherwise stood between it and benefits.22 Nonetheless, British socialists also suffered the same ambiguities of universalism that plagued their Scandinavian colleagues.23 The dispute here focused on the subsistence issue, whether benefits given to all were to be adequate by themselves. Should the state assure even those without pressing need enough for a modest existence by right? The social utility of targeting benefits was a virtue against which the dilemma of squandering scarce resources on the well-off in the name of national solidarity had to be weighed. Flat rates that gave the same benefits to all, although sometimes regarded as a particularly egalitarian and socialist characteristic of AngloScandinavian welfare, were also a feature of reform only tenuously 22 Conversely, Labour's support for reform that was of interest to the middle classes helped it electorally among these groups; see James E. Cronin, Labour and Society in Britain, 1918-1979 (London, 1984), ch. 7; and John Bonham, The Middle Class Vote (London, n.d. [1954]), ch. 10. 23 For example, Barbara Wootton, "The Labour Party and Social Services," Political Quarterly, 24, 1 (January-March 1953), 56-57.

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connected to the working class or the left. Uniform benefits were, of course, least inadequate in low-cost areas. Elsewhere, in the cities especially, differentiation was needed to ensure that all were treated equally in real terms. In Britain, it was the representatives from provincial low-rent regions who successfully insisted that Beveridge abandon gradation by cost and stick to flat rates. In Scandinavia, social group and geographical area coincided more consistently, allowing a coalescence of rural and largely self-employed interests behind a uniform approach and in opposition to urban workers who backed earnings-related measures. The overarching issue prompting vertically universalist reform in Britain and Sweden was the antagonistic relationship between means-tested statutory and contractually based private provision against risk. How could the state treat the destitute more generously while not tempting others to relax efforts at self-help, and having them eventually slip into the ranks of the needy and eligible? Granting full benefits to all, in effect, deliberately anticipated the ultimate consequences feared from the clash between need-based and unconditional measures. If means-testing continued to discourage self-help, all - in the worst case - would eventually qualify for targeted provision. Giving benefits to all to begin with might, conversely, stimulate, or at least not impede, voluntary arrangements. Universalist reform in the Anglo-Scandinavian countries was, in this way, a conscious attempt to encourage private efforts at self-help. Generalizing protection was an immediate increase in the state's welfare function that aimed in the long run to restrict it. This almost classically liberal motivation also helps explain the appeal reform held for parties not usually associated with such efforts. Beveridge and the Ambiguities of Solidarity "In one of the darkest hours of the war," James Griffiths, Labour Minister of National Insurance and legislative midwife for thefirstround of postwar reform, gushed in his memoirs, "at the end of 1942, the Beveridge Report fell like manna from heaven."24 The advantages of retrospection present November 1942, after El Alamein, in a less somber light. The second half of Griffiths's account, also a trifle exaggerated, testifies to the report's tremendous effect. Borne aloft by well-organized publicity, it became a bestseller from His Majesty's Stationery Office and an element in the 24

James Griffiths, Pages from Memory (London, 1969), p. 70.

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propaganda war on both sides.25 Without the report's unusual psychopolitical resonance it is unlikely that its effect would have been great. Beveridge's committee had been appointed under less than promising circumstances with a limited mandate. When it became clear that its chairman entertained expansive ambitions and intended to formulate controversial conclusions on the overall structure of British social policy, Beveridge alone signed and bore responsibility for the report. Active in social reform for over thirty years, Beveridge had deeply rooted opinions on which neither the other members of the committee, civil servants representing the various ministries concerned, nor the numerous witnesses heard had a decisive impact.26 What Beveridge proposed was a uniform and universal system of social insurance.27 All citizens were included, classified by groups in relation to the causes of economic insecurity and the protection required to meet them. A National Health Service (NHS) and universal family allowances were assumptions of his recommendations. Pensions were to be flat-rate, subject to no means test and sufficient for subsistence. Financing was provided by the system's members and employers, with the state covering a fraction (one-sixth) of most insurance benefits, the lion's share of the NHS and the sum of family allowances. Within each category everyone paid uniform contributions regardless of income. For the few cases not covered by insurance, there would be a modernized, humanized form of public assistance.28 Beveridge's scheme was characterized by four attributes and two attempts to avoid their worst consequences. Benefits were to be universal, flat-rate, subsistence and not conditional on need. An examination in that order is as good as any. 25 Public Record Office, Kew (PRO) T 172/2093, Overseas Planning Committee (Special Issues Sub-Committee), "Report of Beveridge Committee on Social Services: Treatment in Overseas Propaganda," 23 November 1942; Janet Beveridge, Beveridge and his Plan, ch. 14. See also Hansard, 16 February 1943, col. 1642. Unless otherwise indicated, subsequent archival references are to material in the PRO. 26 A very large proportion of the committee's time, Sir George Reid complained, had been taken up in hearing evidence and the bulk of the remainder in listening to the chairman; see A C T 1/689, "Draft Beveridge Report: Talk at Treasury on 22nd July 1942." For a good summary of Beveridge's views, see Karel Williams and John Williams, A Beveridge Reader (London, 1987). 27 The best accounts are Jose Harris, William Beveridge: A Biography (Oxford, 1977); Kenneth O. Morgan, Labour in Power, 1945-1951 (Oxford, 1984); Paul Addison, The Road 1945-51 (London, to 194$ (London, 1977); and Henry Pelling, The Labour Governments, 1984). 28 For its story, see Richard Silburn, "Social Assistance and Social Welfare: The Legacy of the Poor Law," in Philip Bean and Stewart MacPherson (eds.), Approaches to Welfare (London, 1983).

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Universalism By including all citizens on largely equal terms, Beveridge captured the social policy imagination of reformers the world over. Benefits given to all were thought to dilute the stigma of measures reserved for the poor, embodying the new wartime spirit of equality.29 In the debates over social policy that stretched back at least to the proposals put forth by Charles Booth during the nineteenth century, the left had favored an all-inclusive approach, rejected in turn by conservatives as unnecessary and wasteful. With Beveridge, such disagreements faded in intensity. While universalist reform was to generate controversy when imitated abroad, it provoked comparatively little dispute at home. Two factors explain this result. First, social groups that had formerly been excluded from social insurance, but were now targeted for integration in order to spread burdens broadly, were less available in Britain than on the Continent. The new members affected by Beveridgean universalism belonged to two categories: (i) independents and the not gainfully employed and (2) wage earners who had earlier been excluded either by the income ceiling or their special status, as civil servants for example. The self-employed were demographically a much less prominent group in Britain than on the Continent. Along with the not gainfully employed (a bureaucratic euphemism for everyone from bag ladies to barons), they numbered but one-quarter of the wage earners covered by the umbrella of social legislation.30 Nothing like the protest mobilized by independents in France or Germany could be or was threatened across the Channel. Nor did British white-collar and salaried employees cultivate to the same degree the stdndisch social self-awareness or organizational muscle that Angestellte and cadres relied on to protect their interests. Second, Beveridge's ambitions for reallocating burdens were much tamer than the contemporaneous, fiercely disputed Continental reform initiatives. The redistributionally rather bland effect of his proposals gave the newly enrolled 29 Richard Titmuss, Commitment to Welfare (London, 1968), pp. 129,191,195; Wootton, "Labour and Social Services," 66. This was a logic with a long pedigree; see Edwin Cannan, "The Stigma of Pauperism,'* Economic Review, 5, 3 (July 1895), 389-91. The concern with eradicating Poor Law stigmas may explain the particular concern among British social theorists with entitlement and their scepticism of the popular legitimacy of rights based on an abstract notion of citizenship rather than bilateral exchange; see Robert Pinker, Social Theory and Social Policy (London, 1971), ch. 4; Robert Pinker, "Social Policy and Social Justice," Journal of Social Policy, 3 , 1 (1974); a n c ^ Angus McKay, "Charity and the Welfare State," in Noel Timms and David Watson (eds.), Philosophy in Social Work (London, 1978). 30 For numbers, see Social Insurance and Allied Services, Cmd. 6404, appendix A, para. 47.

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categories little cause for worry and, indeed, allowed many among them to appreciate the advantages of inclusion. The equalization of risk among different groups inherent in insurance was a virtue of his plans that Beveridge welcomed. Beyond this residual level, however, social policy was not to be the staging ground for further assaults on inequality. Yet even such limited intentions provoked redistributive jostling. Agricultural wage earners, for example, were a group that feared the price of full membership in the new system. In 1936, agriculture had been granted its own unemployment insurance that took account of the occupation's particular circumstances (lower wages and levels of unemployment), enabling it to provide benefits for smaller premiums than would have been possible in an undifferentiated risk pool. Plans to fuse rural workers' separate and cheaper measures with those for other wage earners were rejected in the countryside. However desirable in principle including all in a common scheme might be, many thought it unfair that the nation's least-paid occupation be liable for full contributions to cover its modest risks.31 Workers in other sectors, for whom including agriculture meant a lightening of the overall burden, were unpersuaded by such special pleading and convinced Beveridge to decide the issue in favor of a unified approach.32 In a similar way, asking civil servants with job tenure to contribute for unemployment was even more obviously to their disadvantage and to the benefit of the larger risk community. The unions, accordingly, insisted that civil servants, too, be enrolled, obliged in this way to help the less fortunate.33 With the self-employed, the situation was more ambiguous. The unions anticipated the advantages of including independents with a covetousness that disconcerted Beveridge, but which he persuaded workers to disguise in the trappings of principle. The self-employed should join social insurance, the TUC insisted, since most would pay more in contributions than they received back in benefits. Beveridge's objection, that many were poor, union leaders brushed aside: perhaps they were on tax day, but not when it came to wanting the ordinary things of life. Nonetheless, his apparently 31

PIN 8/150, Donald Fergusson to T. H. Sheepshanks, 31 May 1944. PIN 8/135, "Report on the Agricultural Unemployment Insurance with Special Reference to the Question of Amalgamation with the General Scheme," 15 July 1942.; Cmd. 6404, paras. 143-48. 33 CAB 87/77, Committee on Social Insurance and Allied Services (SIC), minutes, 6 May 1942, Q 2210. The T U C also squashed pleas from within the organization from other similarly advantaged groups for special treatment; see T U C Archives, London, Joint Social Insurance and Workman's Compensation and Factories Committee, minutes, 21 May 1942; and T U C , Annual Report, 1942, p. 228. 32

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nonplussed request for the TUC not to advocate including independents only in order to collect their contributions was rewarded by the gratifyingly disingenuous reply that the unions favored a universal embrace for social insurance not for the reasons just given, but on principle, simply because all should be members.34 The TUC need not have worried. Among independents with an opinion on the matter, most favored integration, recognizing that, far from losing through membership in the social insurance system, they stood to gain. Beveridge's report covered the self-employed for disability, but proposed a thirteen-week waiting period before the start of benefit payments to discourage fraud. The well-off among them objected, refusing to permit administrative complications or their poorer colleagues' inability to afford the price of complete coverage to stand in the way of full integration on a par with wage earners.35 Hoping to dispel expectations of cheating, these independents promised that social insurance would include them to its own financial advantage. The self-employed, the spokesman of the Retail Trades' Committee insisted, were not asking for full membership because they were a class with more to gain from social insurance than others, but because they had needs similar to wage earners' and equal claims to aid. The self-employed were hard-working, virtuous citizens who did not linger ill longer than necessary.36 Although the government remained sceptical, the self-employed were unrelenting. As" the administrative problems of dealing with even the poorest among them arose equally when they, as Beveridge proposed, applied for public assistance, its resistance gradually weakened.37 A compromise reducing the waiting period to one month was the provisional result, full integration the final outcome.38 Whether to enroll wage earners formerly exempted by income was 34

CAB 87/77, SIC minutes, 14 January 1942, Q 324 to Q 326. Their organizations included the National Association of Chambers of Commerce, the National Union of Journalists and the Retail Trades and Kindred Organizations' Committee on Social Insurance. 36 A C T 1/695, minutes of a meeting between William Jowitt and the Retail Trades Committee, 9 July 1943. 37 A C T 1/695, Jowitt, " T h e Beveridge Proposals to Exclude the First 13 Weeks of Disability from Class II Benefit(s)"; PIN 8/24, Sheepshanks to Jowitt, 28 September 1943; PIN 8/104, n o t e ° f a meeting between Minister of National Insurance and National Union of Journalists, 8 February 1945. 38 A final flurry of redistributive haggling was unleashed by retailers w h o wanted their comparative infrequency of illness (apparently related to the underrepresentation of women among them) reflected in lower contributions; see PIN 8/76, minutes of a meeting between the Minister of National Insurance and the Retail Trades Committee, 9 January 1945; Retail Trades Committee, "Memorandum relating to the White Paper (Cmd. 6550) on National Health Insurance [sic] and its Relation to Class II," 5 February 1945. 35

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another issue. Beveridge had initially favored an earnings limit to avoid wasting resources on the well-off and because, in any case, modest subsistence benefits would not, he thought, interest the affluent. For health provision in kind and pensions he accepted the advantages, administrative and otherwise, of having no cut-off, while for unemployment he suggested a limit that excluded salaried employees.39 Later in the summer of 1942, however, he was persuaded by a subcommittee memorandum that neither a wage cut-off nor excepted occupations should mar the unblemished universalism of his scheme.40 Having decided to include the self-employed, it would have been difficult to keep others out because of their income or work conditions. Beveridge thus ended by being consistently universalist, taking the consequences, indeed welcoming them, of the redistribution among groups allowed by all-encompassing social protection. Obliging all to insure against each risk, even those which affected some less than the average, spread burdens equitably. Beyond this residual level, nevertheless, redistribution was not to venture. Far from seeking reallocation among the different agents of production - land, capital, management and labor - Beveridge foresaw an equalization of purchasing power largely focused within the working class itself, horizontally between individual times of varying need.41 His strict flat-rate system, with all paying the same for equal benefits, limited any vertical redistribution within the social insurance system to that achieved by the effect of tax-financing. While, in principle, the use of taxes allowed the whole community to come to the aid of the poor, the giving of benefits to all, even the well-off, undercut such redistribution by channbjing funds raised fiscally back to their source. Before they managed to win for themselves even more favorable conditions, the newly included classes were expected to pay in contributions twice what they collected as social insurance benefits during the first year. They would also permanently subsidize unemployment and industrial disability coverage for the already insured.42 Yet, counting also the NHS and family allowances (financed largely through taxes), the new classes wouldxeceive back as benefits, even in 1945, roughly half as much again as they paid in premiums.43 Similar 39 40

CAB 87/79, SIC( 4 2)2o, 10 March 1942. CAB 87/79, SIC (42)54, 28 May 1942; CAB 87/77, SIC minutes, 18 March 1942, 3 June

1942. 41

Cmd. 6404, para 449; CAB 87/79, SIC(42)3, 16 January 1942. An advantage that helped persuade the Treasury to accept universalism; see A C T 1/692, "19 November [1942] - Beveridge Report." 43 A C T 1/692, G. S. W. Epps to Sir Wilfrid Eady, 9 December 1942. 42

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trends held in the long run. Barring all with high incomes from membership threatened to deprive the social insurance system of their premiums in the short term. Gradually diminishing, however, this loss would soon have paled compared to the savings realized - had a non-universalist course been chosen - by not paying these excluded classes benefits.44 All-inclusive reform, in this sense, clearly favored even the fortunate groups that were now enrolled for the first time. Flat Rates and Subsistence Beveridge's insistence on giving all the same uniform benefits evoked an aura of formal equality that has often been associated with socialist ideology. Such connotations, however, were far from his intent.45 The concept of a national minimum embodied Beveridge's liberal goal of limiting statutory intervention.46 Unlike their earnings-related analogues, flat-rate measures did not threaten to stick in the spokes of self-help.47 The comparative retardation of domestic bureaucratic development also made a virtue of the administrative convenience of flat rates.48 Moreover, Britain's relative demographic homogeneity had long made a uniform level of benefit more feasible here than on the Continent.49 From uniform benefits, correspondingly equal premiums followed. With flat-rate financing, which rested with equal weight on rich and poor alike, Beveridge rejected more far-reaching suggestions for a complete fiscalization of social insurance or a method of staggering contributions by the ability to pay.50

44 T w o decades hence, had the wealthy been kept out, the savings of not paying them benefits were expected to exceed losses of their contributions by £25 million; see CAB 87/13, P R ( 4 3 ) n , 9 February 1943. 45 The only reference, as far as I know, to such implications in the Beveridge records is in CAB 87/79, SIC(42) 4 7 , 9 May 1942. 46 "The Beveridge Plan, though not written as a party document, is essentially liberal, designed to combine basic security (enough to live on at all times) with freedom of the citizen to manage his own life and that of his dependents and responsibility for doing so" (London School of Economics, Beveridge Papers, vm/60, Beveridge to Gabrielle Bremme, n.d. [but after 1961]). 47 Cmd. 6404, para. 304. 48 Jose Harris, "Social Planning in War-time: Some Aspects of the Beveridge Report," in J. M. Winter (ed.), War and Economic Development (Cambridge, 1975), PP- 2.50-51. 49 Stephan Leibfried, "Sozialpolitik und Existenzminimum: Anmerkungen zur Geschichte der englischen Entwicklung," Zeitschrift fiir Sozialreform, 29, 12 (December 1983). 50 CAB 87/78, SIC minutes, 17 June 1942, Q 4720; memos from PEP and the Fabian Society, in SocialInsurance and Allied Services: Memoranda from Organizations, Cmd. 6405; John Pinder (ed.), Fifty Years of Political and Economic Planning (London, 1981), pp. 92-93.

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The victory of this abstractly elegant symmetry between financing and benefits was helped along by the unions' disregard of the problems posed by flat-rate contributions for the least prosperous wage earners.51 The subsistence principle was a corollary to flat rates. While low enough not to interfere with self-help, benefits still had to meet basic needs. To determine the level thereby prescribed, Beveridge followed the poverty measurers, Booth, Rowntree and others, sallying forth in search of an acceptable standard of minimum subsistence, a sort of national Plimsoll line.52 Subsistence raised the problem of cost variations. How might benefits be both flat-rate and adequate if prices were not uniform across the country? The Scandinavian nations, deeply cleft between town and country, had solved this dilemma by grading benefits regionally or by topping uniform rates with targeted supplements.53 Beveridge's predisposition against means-testing combined with the British penchant for administrative streamlining forbade such approaches. Beginning with benefits that varied according to rent, Beveridge eventually yielded to the fears expressed by the committee's representatives from Scotland that the North would thus end up subsidizing high London prices. Although acknowledging the tension between subsistence and uniformity, the report recommended flat rates regardless of cost variations, distracting attention from this contradiction with a hopelessly ambitious call for an end to urban congestion and housing shortages that would resolve the problem of 51 The unions sidestepped these problems with the Panglossian assumption that postwar minimum wages would be much higher than before; see CAB 87/77, SIC minutes, 14 January 1942, Q 338, Q 426, Q 433, Q 439; and CAB 87/79, SIC(42)2 7 , 3 April 1942. 52 O n poverty lines in general, see Aldi J. M. Hagenaars, The Perception of Poverty (Amsterdam, 1986), ch. 1. 53 The Scandinavian variations between geographical cost-of-living areas were perceived as starker than the British, even though the differences may not have been that great. From 1939 to 1951, the rural population of Britain declined from 24% to 21% of the total, while that of Denmark and Sweden made up 52% and 57%, respectively, in 1945. Cost-of-living and wage variations are harder to pin down. A Swedish commission appointed on the topic in 1943 noted that no country, Finland excepted, had examined the question as thoroughly as the Swedes, but that whether this was due to the problem being less acute elsewhere was not known. British statistics are reticent on the subject while Scandinavian ones offer a profusion of material - an indication of the relative importance attached to, if not inherent in, the problem. Wages for workers in Sweden varied up to 60% between the cheapest and most expensive areas in 1945. Housing costs varied up to 90% in 1941, total living expenses by 31% in that year, 27% in 1944. Figures culled by Beveridge show that British rents varied as much, if not more (by over 100% in 1937—38), for industrial households. Expenses for food, clothing, fuel and light, however, varied by only 11%. See Annual Abstract of Statistics, 1938-50, table 13; Statistisk drbog, 1946, table 5; Historisk statistik for Sverige> vol. 1, table A4; Statistisk drsboky 1947, table 204; Betd'nkande angdende dyrortsgrupperingen, SOU 1945: 32, pp. 104, 114, 317; and Cmd. 6404, table 4.

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extreme disparities in rents most directly: engineering, not social engineering. 54

Means Tests and Transition Measures Beveridge had long been a Bismarckian when it came to financing welfare. The popularity of self-help convinced him that the average citizen wanted to and could pay for contributory provision.55 For the report's insurance benefits, state subsidies played a modest role, averaging one-sixth of costs. Only with the NHS, family allowances and the price of benefits for the transition generation did the public's share rise to half of total expenses. Even so, the state was now asked for less than had earlier been the case.56 One of the advantages of the contributory principle was the clarity it brought to the question of entitlement, reducing the threat of means tests. Means-testing discouraged self-help by reducing eligibility for statutory benefits among those with other provision.57 Although Beveridge wished to stimulate self-help and although the report expressed his intention to end the targeting of social insurance benefits through means tests, this was, in fact, a conclusion he reached only circuitously. Eliminating need as a condition of entitlement was but one among several priorities. Giving benefits to all used limited resources inefficiently. Beveridge's task was to provide for the elderly, encourage thrift or self-help, yet not squander funds by dispensing them regardless of need.58 Allotting subsistence benefits without a test of need promised to be popular among those who now combined statutory with private provision, but would do little for the destitute who already received targeted supplements (and would therefore not actually collect more money). Such considerations inclined Beveridge atfirstto keep means tests as a necessary evil in order to limit the expense of providing also the newly enrolled classes with pensions.59 54 CAB 87/78, SIC minutes, 28 July 1942,25 August 1942; CAB 87/79, SIC(42)3,16 January 1942; CAB 87/81, SIC(42)ii5, 23 July 1942; CAB 87/82, SIC(42)i33,18 August 1942; Cmd. 6404, paras. 197-215. 55 See also Jose Harris, "Did British Workers Want the Welfare State? G. D. H. Cole's Survey of 1942," in Jay Winter (ed.), The Working Class in Modern British History (Cambridge, 1983), pp. 213-14. 56 Cmd. 6404, appendix A, para. 83. However, the state's role promised to increase in the future as demography and transition measures took their toll. 57 For the background, see Alan Deacon and Jonathan Bradshaw, Reserved for the Poor: The Means Test in British Social Policy (Oxford, 1983), ch. 3. 58 CAB 87/82, SIC(42)i36, 20 August 1942. 59 He thought that the stigma of means-testing had been moderated by the Determination of Means Act of 1941, removing the hated household test introduced for unemployment in the

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A better solution was, however, eventually provided by the unions. To cut costs, they proposed making pensions conditional on retirement. The virtues of a retirement condition were a lesson the unions drew from mass unemployment in the 1930s: obliged to cease work before collecting a pension, wage earners would leave the labor force earlier, freeing up jobs for the young. Conversely, employers might treat unconditional pensions as an excuse to cut wages for elderly workers above the age of retirement.60 Beveridge was at first unimpressed.61 A retirement condition that deprived the still working of benefit, he insisted, implied an indirect means test.62 Spring, however, loosened his imagination at about the time the Treasury mounted a campaign to reduce the expense of his proposals.63 During the spring of 1942, he appears to have recognized that a retirement condition could achieve much the same effect as means tests without their unpleasant connotations or unfortunate consequences.64 Beveridge's version, though superficially similar to the unions', was therefore motivated by quite different concerns. The financial problems faced by the social insurance system along with anticipated postwar labor shortages were reasons to encourage prolonged working careers.65 A correctly crafted retirement condition could address both issues. Giving higher rates for postponed retirement, although limited in order to keep the total benefit sum drawn over a lifetime lower than taking the pension straightaway, would both save money and promote continued work.66 In the report, Beveridge had come full circle. A retirement condition, he now

1930s; see C A B 87/76, SIC(4i) 20, 11 December 1941; SIC minutes, 15 O c t o b e r 1941; C A B 87/79, SIC(42)3, 16 J a n u a r y 1942; a n d C A B 87/77, SIC minutes, 11 February 1942. 60 CAB 87/77, SIC minutes, 14 January 1942, Q 357 to Q 361; 6 May 1 9 4 2 ^ 2 3 2 7 ^ 2 3 5 1 . 61 CAB 87/77, SIC minutes, 14 January 1942, Q 358 to Q 360. 62 C A B 87/77, SIC m i n u t e s , 11 February 1942. 63 F o r details o n this a n d later T r e a s u r y efforts t o trim Beveridge's sails, see C A B 8 7 / 8 1 , SIC(42)ioo, 10 July 1942, SIC(42)ioo(revise) (pt. HI), I O c t o b e r 1942; T 161/1165/S48497/3, D . N . Chester, " O l d Age P e n s i o n s , " 13 M a y 1944; A C T 1/689, Epps t o Sir R i c h a r d H o p k i n s , 28 July 1942; Keynes, " T h e Plan for Social Security," 10 August 1942, N o t e o n talk in Beveridge's r o o m s , 10 August 1942; a n d A C T 1/687, N ° t e o n talk between Beveridge a n d T r e a s u r y representatives, 20 August 1942. See also H u b e r t D o u g l a s H e n d e r s o n , " T h e Principles of the Beveridge P l a n , " in his The Inter-War Years and Other Papers (Oxford, 1955), p p . 191-208; Jose H a r r i s , Beveridge, p p . 4O7ff; a n d William Beveridge, Power and Influence (London, 1953), p p . 306-09. 64 A C T 1/686, Beveridge, " P e n s i o n s F i n a n c e , " 16 July 1942. 65 F o r the b a c k g r o u n d , see Chris Phillipson, Capitalism and the Construction of Old Age (London, 1982), p p . 2 8 - 3 5 . 66 T h e T U C naturally rejected Beveridge's h o p e s of e x t e n d i n g the average w o r k i n g life; see C A B 87/77, SIC m i n u t e s , 6 M a y 1942, Q 2246, Q 2255, Q 2333.

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persuaded himself, was no more a means test than was the requirement that a recipient of unemployment benefit be unable to find work.67 The retirement condition, in effect, reintroduced a disguised means test for those elderly who continued working beyond the normal pension age. It was only one among the strategies used by Beveridge to conserve resources, limiting the blunderbuss apportionment of universal entitlement. Phasing in the system - how to treat current, and to integrate new, members of social insurance - raised similar issues. Full subsistence benefits paid immediately to all without a means test threatened unreasonable costs. As many as one-third of elderly Britons collected no statutory pension and, of those who did, just one in three had applied for need-based supplementation. The large number of the elderly who managed on their own was no reason, Beveridge admitted, not to extend the system even to those with adequate resources, but there remained the question, why bestow full subsistence pensions at once on the newly integrated who had never contributed and on those among the already insured with no need? Considerations of finance and equity spoke for a long transition period during which full premiums were collected while benefits increased only gradually to subsistence.68 Continuing to means-test supplements for the poor during the interim was necessary to prevent the recently enrolled groups from reaping benefits financed in large measure by social insurance's traditional membership.69 Beveridge proposed a transition period, along with the retirement condition, in order to limit expenses and target resources. The retirement condition excluded from pension those elderly who were still earning an income, while transition measures extended the full benefit rates only gradually to the newly included and the non-needy among the formerly 67 Cmd. 6404, para. 244. Shortly before, Bentley Gilbert had written to Keynes explaining Beveridge's reasoning on the retirement condition. Beveridge had, he claimed in an only slightly jaundiced account, started with the idea of a subsistence pension. He had then taken alarm at the prospect of paying generous benefits to those still working and introduced the retirement condition. Having thus thought of the idea, it appealed to him as a solution to postwar labor shortages, becoming an integral part of his scheme on its own-merits. Beveridge was not now, Gilbert claimed, as keen on subsistence pensions, but needed them to justify the retirement condition since one could not enforce it without adequate benefits. "Therefore," Gilbert concluded, "that which came in as a fundamental principle now survives simply as a corollary to a second fundamental principle which itself only came into being as a corollary to the first one" (ACT 1/689, Gilbert to Keynes, 6 August 1942). 68 CAB 87/77, SIC minutes, 11 February 1942; CAB 87/80, SIC(42)73,16 June 1942; CAB 87/81, SIC(42)ioo, 10 July 1942; CAB 87/82, SIC(42)i36,20 August i942;ACT 1/686, Muriel Ritson to G. S. W. Epps, 25 June 1942. 69 Cmd. 6404, para. 294. Similarly, see William Beveridge, Insurance for All and Everything (London, 1924), p. 13.

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insured, requiring that a reasonable effort had been made to merit them. Insofar as the elderly did not require pensions, the Government Actuary explained to the Treasury, anything given them was a waste. There were no real savings for the government in abolishing means tests since the needy already received targeted supplements and would gain little. Bringing in the formerly excluded classes for full pensions straightaway meant paying money primarily to the better-off. Beveridge's idea of a transition period was to give nothing at the start to such people.70 The Plan after Beveridge Despite Beveridge's attempts to restrict the wasteful apportionment of scarce resources to those who did not need them, the political attractions of treating generously even classes that had formerly been regarded as self-reliant proved irresistible. In their course through the official machinery, his recommendations were changed to reflect the influence of groups that were now the beneficiaries of social insurance for the first time. Beveridge's transition measures raised doubts in the Phillips Committee, appointed to examine the report. Although frugal, it concluded, the combination of full contributions with reduced benefits for a lengthy period threatened to be politically awkward. 71 Bentley Gilbert, the Treasury's social policy eminence grise, worried lest the promise of higher pensions in the future prompt demands for their payment forthwith and Keynes agreed that the government could not collect contributions from the newly included classes without giving them benefits in return.72 Even less promising was the fate of the subsistence principle. The committee accepted flat-rate benefits as correct for Britain with the sniffy observation that the earnings-related approach pursued in other countries reflected a lack of self-help among the affluent. Since it also rejected varying rates in tandem with rents or costs, it followed that a subsistence level could not be achieved. Rather than an absolutely determined minimum standard, benefits were now to be paid at a rate deemed generally affordable, with means-tested supplementation in a moderate number of cases. For the 70

ACT 1/686, Epps to E. Hale, 2 July 1942. PIN 8/115, Official Committee on the Beveridge Report, minutes, 23 December 1942. 72 A C T 1/689, Gilbert to Keynes, 6 August 1942. Keynes's position here contrasted with his earlier opinion that enrolling the new classes would allow the system to profit from their contributions for many years. Hopes of soaking the affluent were fading. See J. M. Keynes, Activities 1940-1946, Collected Writings, vol. 27 (London, 1980), pp. 237-38; and A C T 1/692, "19 November [1942] - Beveridge Report." 71

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actual amounts, the committee largely followed Beveridge's recommendations, accepting his proposals in practice while rejecting their theoretical justification.73 While Phillips and company had viewed universalism with some ambivalence, a subsequent Cabinet committee tried to overcome lingering doubts on the propriety of integrating even the comfortably situated in such times of scarcity.74 The Ministry of Health weighed in with an enthusiastic endorsement of uni versalist reform, especially as a sign of class unity.75 Even in its hyperbole, however, the issue's ambiguities shone through. On the one hand, why protect already sheltered classes (civil servants, for example) at taxpayers' expense rather than help the destitute? On the other, excluding independents and prosperous wage earners from generous benefits promised to be unpopular with these groups. 76 Hesitantly accepting universalism as a principle of reform, the government now rejected Beveridge's transition measures. The eventual rates of benefit could not be dangled before the insured for twenty years while pocketing all along full premiums from them. Bevin called for immediately payable pensions of 355. a couple, apparently willing to saddle current social insurance members with the cost of such generosity, even for the newly integrated.77 Public sentiment in favor of generous treatment for the elderly, as ministerial delicacy described pressure for increased benefits, would be met by larger immediate rates than proposed by Beveridge that, in turn, precluded promises of still higher ones in the future. 73 PIN 8/116, CBR 10,15 December 1942 and "Principles of a Subsistence Basis for Rates of Benefit"; CAB 123/45, RP(43)6,14 January 1943. The Phillips Committee thus followed the spirit of the ILO's recommendation to Beveridge that rejected subsistence benefits for all as wasteful, proposing instead pensions sufficient to keep two-thirds of the elderly off targeted supplementation, combined with efforts to overcome means-testing's bad reputation; see CAB 87/79, SIC(42)47,9 May 1942. See also BIT, Securitesociale: Ses principes, les problemes qui se posent a la suite de la guerre (Montreal, 1944), p. 2,4. 74 For the Phillips Committee, see PIN 8/115, Official Committee on the Beveridge Report, minutes, 22 December 1942; PIN 8/116, CBR 1,16 December 1942; and CAB 123/45, RP(43)6, 14 January 1943. For the Committee on Reconstruction Priorities and the Cabinet's deliberations, see CAB 87/13, PR(43)9, 7 February 1943; A C T 1/694, Gilbert to Epps, 5 February 1943; CAB 65/33, Cabinet minutes, 14 January 1943, 1 February 1943; and CAB 66/34, WP(43)58, n February 1943. 75 PIN 8/148, "White Paper on Social Security: General Outline for the Secretary of State." 76 The Ministry also had more mundane motives of bureaucratic self-interest at stake. A comprehensive National Health Service, based on the assumption that all contributed through the social insurance fund, would be financially undermined were other branches of social insurance not also universalized. See CAB 87/13, PR(43)7, 3 February 1943. At this time, the Ministry expected a much larger percentage of its resources than it eventually received by way of contributions. 77 A C T 1/694, Gilbert to Epps, 5 February 1943; Gilbert, "Beveridge- Rates of Benefit," 27 October 1943.

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The full Cabinet continued unravelling the interwovenfibersof Beveridge's report.78 Universalism was still sceptically regarded by some. The Lord President feared that the Commons might reject coverage even for the well-off, while the Chancellor balked at squandering subsistence benefits on the affluent. "The weekly progress of the millionaire to the post office for his old age pension," Kingsley Wood had written, "would have an element of farce but for the fact that the pension is to be provided in large measure by the general taxpayer."79 The full Cabinet, nonetheless, now quelled such anti-universalist sentiments. Social insurance should include all for two reasons: the administrative problems of selectivity and the unpredictability of need and dependence in wartime circumstances.80 Giving with one hand, however, the Cabinet took with the other when it came to subsistence.81 Beveridge had insisted on a transition period with less than full benefits and a continuation of means-tested supplements for the poor in order to provide adequate coverage for the needy while avoiding unjustifiable generosity to the newly included and the well-off among those who were already members of the social insurance system. Hoping to propitiate these last two groups by offering them higher pensions at once, the government now had to abandon an unaffordable subsistence level for all benefits in order to meet the cost of its beau geste. Labour and the unions had long supported reforms similar to those proposed by Beveridge and welcomed his report with few reservations. They favored the subsistence principle, by which the unions meant allowing recipients to "live respectably," and fought later attempts to reduce rates.82 Labour's allegiance to the insurance principle was briefly challenged by the Bevanites, who advocated what they regarded as a more "socialist" tax-financed system, but the unions remained firm backers of theflat-ratecontributory approach.83 Both Labour and the TUC rejected 78 CAB 65/33, Cabinet minutes, 12 February 1943. On the influence of American opinion vis a vis the report, see CAB 123/45, WP(43)59, 10 February 1943; PREM 4/89/2/part 2, Cherwell to Churchill, 11 February 1943; and CAB 65/33, RP(43)5, 11 January 1943, summarized in Peter Baldwin, "The Social Bases of the European Welfare State: Class, Interest and the Debate over a Universalist Social Policy, 1875—1975," diss., Harvard Univ., 1986, p. 209. 79 PREM 4/89/2/part 2, Kingsley W o o d to Churchill, 17 November 1942. 80 CAB 65/33, Cabinet minutes, 12 February 1943. 81 CAB 65/33, Cabinet minutes, 12 February 1943; PIN 8/7, minutes, meeting between Jowitt and the T U C , 8 April 1943; stenographic minutes in the T U C Archives, box 474; T 172/2093, Gilbert, "Subsistence Principle on Benefits," 15 February 1943. 82 T U C , Annual Report, 1942, pp. 224—25. 83 Labour Party, Annual Conference, 1942, pp. 133-42; Labour Party Archives, London, RDR 128/August 1942; Emanuel Shinwell, I've Lived through it All (London, 1973), p. 175.

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Beveridge's transition measures, seeking higher pensions sooner, if not at once.84 Conservatives, in turn, sounded their fanfares to the report with mutes firmly in place. Spoken for by Quintin Hogg, party backbenchers organized the Tory Reform Committee in February 1943 to rally support for Beveridge. Nevertheless, the general tone was set by the secret committee appointed under Ralph Assheton in December 1942.85 Informed by hopes of a sound economy and vaguely moral apprehensions at the prospect of overly elaborate welfare policy, its report criticized many of Beveridge's recommendations as extravagant and socially debilitating. The contributory principle was welcomed, family allowances and even the NHS were accepted. Unemployment, it regarded as an uninsurable risk. The health service should include the well-off only voluntarily, but all were to pay for and receive pensions. Subsistence was viewed with alarm as an unachievable goal and earnings-related benefits were dismissed as administratively insuperable. After the February parliamentary debate on the report, the coalition government proceeded legislatively with less than celerity, its pace set by the tension between Churchill's lack of interest in implementing reform before the peace and the political need to seem intent on fulfilling Beveridge's promises.86 Grudgingly accepted, universalism was still regarded as an administratively troublesome task that, nonetheless, was demanded by public opinion.87 Accordingly, the White Paper welcomed the principle, more fervently than the government's hesitations warranted, as an expression of the national solidarity and unity fostered by the war.88 With transition measures and subsistence rejected, lesser, but immediately payable benefits were now the aim. Having abandoned a subsistence level of benefit, the government was largely at liberty to set rates as it chose. Beveridge's suggestions were in fact adopted for unemployment and 84 Labour, R D R 185/January 1943; T U C Archives, Joint Social Insurance and Workman's Compensation and Factories Committee, minutes, 9 February 1943. 85 Hartmut Kopsch, "The Approach of the Conservative Party to Social Policy during World War II," diss., Univ. of London, 1970; J. D. Hoffman, The Conservative Party in Opposition 1945-51 (London, 1964), pp. 35-41. T h e report is in the Conservative Party Archives, Oxford, Conservative Research Department, C R D 2/28/6. 86 CAB 87/13, PR(43)41,12 July 1943; CAB 65/43, Cabinet minutes, 4 July 1944. For the background on postwar planning, see J. M. Lee, The Churchill Coalition (Hamden, Conn., 1980), ch. 5. On the debate, see Hansard 16-18 February 1943; Alan Bullock, The Life and Times of Ernest Bevin (London, 1967), vol. 2, pp. 225ft; Kenneth Harris, Attlee (London, 1982), pp. 22iff; and Bernard Donoughue and G. W. Jones, Herbert Morrison: Portrait of a Politician (London, 1973), pp. 314-16. 87 CAB 87/5, Reconstruction Committee, minutes, 24 January 1944. 88 Social Insurance: Part /, Cmd. 6550, paras. 8, 33.

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disability, while the pension rates finally announced (35s. for a married couple and 205. for a single person) were selected for their appeal as round numbers and because they had been proposed by Labour shortly before the war. They might, it was hoped, therefore command more widespread support than ones chosen even more arbitrarily.89 A final flurry of debate within the bureaucracy over the propriety of treating the system's new members generously in this way highlighted the issues at stake. D. N. Chester, the Beveridge Committee's secretary, feared that eliminating the transition period meant giving newcomers benefits for which they had scarcely contributed.90 Appealing to his memory of the role he had played in convincing Beveridge to introduce such measures in the first place, Chester won support from Keynes. Even Keynes, however, who must have been marshaling his energies for Bretton Woods at the time, was not enough. Gilbert still dismissed as financially prudent, but politically unrealizable, a transition period that delayed full benefits for two decades while charging high contributions from the start.91 In the White Paper, transition measures were rejected, despite their attractions in postponing the brunt of Exchequer costs, for two primary reasons: they failed to satisfy the public demand for increased pensions at once, while the gradual ageing of the population would make the ultimately higher Beveridge pensions too great a burden. The government thus chose a larger immediate task with political advantages to avoid later an even greater one with little tactical appeal.92 Whereas Beveridge would have collected full contributions from the transition generation on the basis of pension rates that were only gradually and often never to be attained, thus making it pay for itself to a large extent, the White Paper's constant benefits were especially advantageous for the newly enrolled.93 The Beveridge report had accepted pay-as-you-go 89 CAB 87/12, Reconstruction Committee, minutes, 1 November 1943; CAB 87/13, minutes, 24 January 1944. 90 CAB 123/244, Chester to Lord President, "Beveridge Report - Suggested Plan of Work PR(43)i9," 6 April 1943; T 161/1165/S48497/3, Chester, "Old Age Pensions," 13 May 1944. 91 T 161/1165/S48497/3, Chester to Keynes, 13 May 1944; Keynes to Gilbert and Hopkins, 15 May 1944; Gilbert to Hopkins, 22 May 1944. 92 Numbers in PIN 8/59, Government Actuary, "Comparisons of the Cost of the Government's Proposals with the Beveridge Plan," 5 June 1944. 93 A modestly paid wage earner aged fifty-five in 1945 would, under Beveridge's plans, have received a pension of 195. in 1955, rising in biannual stages to 24s. in 1965, while a newly included independent's 14s. remained unchanged until his death. The new proposals treated both to 20s. pensions, although the new classes would often have contributed for a much shorter time than workers. See also Leslie Hannah, Inventing Retirement: The Development of Occupational Pensions in Britain (Cambridge, 1986), pp. 53-54; and J. C. Kincaid, Poverty and Equality in Britain (Harmondsworth, 1973), pp. 28-29.

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financing, rejecting a funded system in order to reduce the burden of simultaneously paying benefits and amassing a capital stock.94 With the coalition government's changes, a pay-as-you-go approach now meant that higher immediate rates for the new categories, to the significant extent not covered by their own contributions, were either a gift from the Exchequer or directly underwritten by those classes traditionally subject to social insurance. Far from being disadvantaged by their inclusion, the classes formerly regarded as self-sufficient derived immediate advantage. Beveridge's proposals did not find their legislative roost until the postwar elections had brought Labour to power. Several proposed changes fell before the objections of the Chancellor, whose unenviable role - in governments of any color - as bearer of financial bad tidings to the magnanimous company of social reformers, was especially complicated by Britain's desperate economic circumstances.95 Griffiths considered a partial abolition of the retirement condition, the political consequences of which were now finally coming to light. Triggered by earned income only and ignoring other forms of wealth, its effect resembled the most regressive kind of means test. Didactic examples involving landowners eligible for pension and their disqualified coeval chauffeurs circulated in the bureaucracy. The retirement condition particularly affected the self-employed, above all those who had voluntarily enrolled after 1937 for unconditional 105. pensions at sixty-five. Since shopkeepers and other independents often continued working past this age, the retirement condition threatened to revise the terms of their entitlement and deprive them of benefit.96 Because the self-employed were considered potentially hostile to all-inclusive measures, Griffiths was concerned lest they appear to pay for benefits 94 Cmd. 6404, para. 292. So dramatic was the effect of switching to pay-as-you-go that Jowitt demanded an explanation. H o w was it, he wanted to know, that a greatly expanded pension scheme cost the government less than before. The answer, as Sheepshanks was able to report back, was the elimination of any important funding so that contributions paid by new members and the higher sums collected from old members represented a net profit swelling the system's current account and only partially absorbed by increased payments to present pensioners. By eliminating funding, the government's share of pension expenditure in 1945 was to fall from £63 million to £58 million, while income from contributions tripled from £46 to £130 million. "One would not state the matter this way," Sheepshanks's informant cautioned, "except to bring out as clearly as possible the solution to the mystery, and I know you agree that there are pretty obvious reasons for not presenting the matter publicly in this guise" (PIN 8/84, note, T. H. [Hutson] to Sheepshanks, 27 October 1944). See also Vic George, Social Security: Beveridge and After (London, 1968), p. 58. 95 For the background, see Kenneth Morgan, Labour in Power, pp. 143-51; Ben Pimlott, Hugh Dalton (London, 1985), chs. 25, 26; and Alec Cairncross, Years of Recovery: British Economic Policy 1945-51 (London, 1985), ch. 1. 96 Or in effect imposed a secondary tax. See Mike Reddin, "Taxation and Pensions," in Cedric Sandford et al. (eds.), Taxation and Social Policy (London, 1980), pp. 127-28.

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that were never actually to be received.97 He and Dalton, who balked at the expense of paying pensions to independents without any conditions, eventually compromised on requiring retirement only until age seventy.98 The contrast to the redistributive proposals reformers wished to implement at the expense of the self-employed on the Continent, discussed in the following chapter, could hardly have been more striking. On subsistence the record is ambiguous. Griffiths claimed in his memoirs to have fulfilled Beveridge's promise, but his famously vague statement in the Commons, that rates were to be fixed initially in broad relation to the current cost of living, was rather less precise.99 In theory, Griffiths undercut the subsistence principle. He agreed with the coalition government's White Paper that social insurance dealt in averages of need. Unable to relate benefits precisely to individual requirements, its proper goal was therefore reasonable, but not necessarily complete, protection.100 In practice, he also failed to achieve subsistence. In setting benefit rates, he followed official price statistics that seriously underestimated increases during the war.101 Beveridge had sought reform that aided the neediest first while, at the same time, it encouraged self-help among the more fortunate. Although he included all in social insurance, he had not, it turned out, been generous enough to the fortunate classes. The wartime coalition government, however grudgingly, was called on to remedy this defect. The ability of the groups now enrolled for thefirsttime in social insurance, and of the welloff among those who already belonged, to alter Beveridge's proposals to their own specifications demonstrated how few prospects of success initiatives had that did not welcome the formerly self-reliant as warmly as they did the poor. Reform sparked little protest because those now targeted for inclusion were comparatively few in number and the way they were drawn 97

PIN 18/6, J. Walley, "Retirement Condition and Earnings Rule," 6 June 1945. CAB 134/697, Cabinet, Social Services Committee, minutes, 3 September 1945, 22 November 1945, 26 November 1945; SS(45)i9, 9 November 1945; CAB 129/5, ^ ( 4 5 ) 3 2 3 , 5 December 1945. 99 Griffiths, Pages from Memory, p. 85; Hansard, 6 February 1946, cols. 1741-42. J. Hess, "The Social Policy of the Attlee Government," in Wolfgang J. Mommsen (ed.), The Emergence of the Welfare State in Britain and Germany, 1850-1950 (London, 1981), gives him the benefit of the doubt. 100 CAB 134/697, SS(45)i8, 9 November 1945; Hansard, 6 February 1946, cols. 1740-41. 101 Alan Deacon, "An End to the Means Test? Social Security and the Attlee Government," Journal of Social Policy, 11, 3 (July 1982), 297—98; D. N . Pritt, The Labour Government 1945-51 (London, 1963), p. 46. 98

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in promised at worst to be innocuous, at best advantageous. "The bulk of the middle class could not and would not be shut out." 102 The Middle Classes and Scandinavian Solidarity: Sweden The positive and immediate interest developed in social policy reform by the middle classes that could be discerned in Britain was confirmed with greater clarity in Scandinavia. It was during the 1930s that Sweden assumed the aura, in certain circles, of modern society's ideal type, the herald of social evolution. The Stockholm Exhibition of 1930 displayed the comforts and delights of a peacefully socialist democracy to the world, serving for the welfare state a role similar to the Great London Exhibition for the industrial era. 103 In terms of social policy, however, it was not until the Second World War that Sweden's exemplariness was recognized worldwide. Having languished since the nineteenth century in Denmark's shadow, she made the most of her profitable neutrality during the war years. 104 As the shine wore off British reforms, Sweden gained stature as a model in these respects, however hopeless the task for other nations of emulating the more unusual of Scandinavian characteristics. Postwar reform here was initiated by the Social Welfare Committee, appointed in 1938 with a sweeping mandate for change. While Beveridge had sat for eighteen months, the Swedish committee poured forth a stream of reports for over a decade, helping catapult the country into the welfare vanguard. Even Beveridge's prestige could not stem the hubris of local patriots. Generous pensions, munificent family allowances, auspicious workers' compensation and health insurance without peer: this was the modest conclusion drawn by the Minister of Social Policy, Gustav Moller,

102 The Times, 5 July 1948, quoted in PIN 19/189, "National Insurance Scheme, Departmental Working Group N o . 1, First Interim Report," September 1952. A similar middle-class argument could easily be made also for the N H S ; see, for example, Harry Eckstein, The English Health Service: Its Origins, Structure and Achievements (Cambridge, Mass., 1958), ch. 2; Vivienne Walters, Class Inequality and Health Care: The Origins and Impact of the National Health Service (London, 1980), pp. 3 5 - 4 4 , 1 0 4 - 1 2 ; and Michael Foot, Aneurin Bevan (London, 1973), vol. 2, pp. 188-89. 103 O n Sweden's career as an ideal type, see Arne Ruth, "The Second N e w Nation: T h e Mythology of Modern Sweden," in Stephen R. Graubard (ed.), Norden: The Passion for Equality (Oslo, 1986). 104 Ake Elmer, "Danmark i den svenska folkpensionsdebatten," in Festskrift til Frederik Zeuthen (Copenhagen, 1958), pp. 55-65.

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from a survey of postwar reform. The only competition he could discern to the excellence surrounding him was in far-off New Zealand and, only secondarily, in Britain.105 One of the longest strides taken in Sweden's evolution as the welfare state's exemplar was the triumph of egalitarian universalism as a quintessentially characteristic feature of Scandinavian social policy. Health insurance played an important role here, but pensions came foremost.106 The law passed in 1946 on national pensions extended the principle first broached in 1913 by granting universal, unconditional flat-rate benefits to all, however well-off, at a uniform rate throughout the country. Meanstested supplements were still paid to assure the needy of subsistence but the emphasis was now clearly on the unconditional elements of benefit, the citizen's right regardless of need. Where Beveridge had emphasized the insurance principle, Swedish reformers severed all links between premiums and entitlement. Contributions paid by the most affluent were doubled, but taxes still bore the brunt of expenses. The motives for this emphasis on state-financing had changed little from the nineteenth century. The wide span of economic circumstance, from subsistence crofters north of the Arctic Circle to Goteborg workers, madeflat-ratepremiums on the British model unfeasible, even had they been permitted by socialist principle. Independents without employers to help meet the costs of a contributory pension system remained the force behind public financing. Because contributory health and unemployment insurance already absorbed much disposable income, and since direct taxation rested more heavily even on the poorest in Sweden than was the case in Britain, the committee thought it impossible to collect large premiums. Combined with hopes of

105

Gustav Moller, Fran Fattighus-Sverige till Social-Sverige (Stockholm, 1948), p. 13. Impetus and inspiration from Britain played little role in Scandinavian reform. Claims to the contrary are t o be found in Hockerts, "Die Entwicklung vom Zweiten Weltkrieg bis zur Gegenwart"; Jean-Jacques Dupeyroux, Evolution et tendances des systemes de securite sociale des pays membres des communautes europeennes et de la Grande-Bretagne (Luxemburg, 1966), pp. 160-61; and Jean-Jacques Dupeyroux, "L'evolution des systemes et la theorie generate de la securite sociale,'* Droit social, 28, 2 (February 1966), 113. N o r w a y , perhaps because of the government in exile in London, may be the exception; see Kuhnle, Velferdsstatens utvikling, p. 155. 106 f h e claim that the "people's pensions" are among the defining characteristics o f the Scandinavian model of the welfare state is in Bent Rold Andersen, "Rationality and Irrationality of the Nordic Welfare State," in Graubard, Norden, p. 119. T h e standard work on pensions is Ake Elmer, Folkpensioneringen i Sverige: Med sarskild hd'nsyn till dlderspensioneringen (Lund, i960). For a general narrative, see Rolf Broberg, Sd formades tryggheten: Socialforsdkringshistoria, 1946-19-72 (n.p., 1973).

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administrative simplification, such considerations ruled out a shift to genuinely contributory pensions.107 One of the committee's main problems on pensions concerned the abolition of means-testing and the extension in a vertically universalist sense of benefits to all, however affluent. It considered, without choosing between them, two primary alternatives that were distinguished by the proportion of pension determined by need that each paid. While both gave the poor identical sums, the less means-tested of them treated the well-off more handsomely. The argument for the heavily targeted alternative, backed by most of the Social Democrats and the Liberal representative on the committee, was that of the pointlessness of giving equal benefits to rich and poor alike. A potpourri of considerations informed the other approach, supported by the Agrarians, the Conservatives and one Social Democrat: that heavy means-testing encouraged cheating and fraud, that pensions granted even to the prosperous would strengthen a sense of entitlement by right among all citizens, and that it was fair for those who paid high taxes also to receive benefits.108 Both sides agreed that, as pensions were raised, means-testing regrettably threatened to undermine self-help and occupational provision by disqualifying those with other resources from increasingly generous statutory benefits.109

Conservatives and Social Reform During the war, Swedish Conservatives significantly altered their inherited views on social policy. Already in 1943, the party's vice-chairman, Fritjof Domo, argued that welfare reform could be formulated in terms acceptable to the right, urging a new stance for the coming elections.110 In response to the Social Democrats' radical postwar program, Conservatives advocated spurring the birth rate and stemming urban growth with initiatives aimed at the countryside. Social insurance founded on the 107 RA/S, Socialvardskommitten (SVK), 1185/133, "Promemoria i fragan o m pensionsavgifter och grundpensioner i en reformerad folkpensionering," 26 April 1945; 1185/2, SVK minutes, 13 N o v e m b e r 1942; Ulredning och forslag angdende lag om folkpensionering, Statensoffentligautredningar(SOU)i945:46,pp. i24-25;Bernhard Eriksson, "Beveridgeplanen o c h socialforsakring i Sverige," Svensk sjukkassetidning, 38, 2 (February 1945), 4 1 ; Bernhard Eriksson, Vdr framtida socialvdrd (Stockholm, 1943), p. 10; A R A , Bernhard Erikssons Arkiv, 7, 1965/1256, speech M S , "Riktlinjer for socialvardsreformen," pp. 13-14. 108 SOU 1945:46, pp. 138-39. 109 RA/S, 1185/3, SVK minutes, 2 October 1944, Eriksson, Ostlind, Hojer; Eriksson, Vdr framtida socialvdrd, pp. 5-6. 110 RA/S, Moderata Samlingspartiets Deposition, AH: 1, Representantskapet, minutes, 1 November 1943 and Bilag 5.

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premise of individual responsibility was welcomed and many favored a clearer formulation of the party's concern for the middle classes.111 When the 1944 elections proved a disappointment, the right renovated its ideology on these points. 112 Part of their ambition to increase support among salaried employees, Conservatives' newfound interest in social policy also expressed a reaffirmed solicitude for the party's traditional constituency among the independent middle strata.113 Social benefits ought to be justly distributed and not bypass the middle classes, Domo told Stockholm's Conservative Club in 1945, adumbrating a leitmotiv of the party's new approach. 114 The party's new program, introduced in 1946 as the Swedish answer to Beveridge, illustrated the Conservatives' ability to make welfare reform their own.115 Social policy of the right sort, they agreed, was a worthwhile investment. Housing and family policy met natalist and eugenic concerns, pensions enhanced labor mobility, prevention and rehabilitation repaid the effort in the long run. 116 With broad support for their new approach to social policy, Conservatives anticipated a stronger platform from which to defend the virtues of a market economy and individual property rights. No longer, so Jarl Hjalmarsson - now head of the program committee and soon to be party chairman - reasoned, would their opponents be able to argue that a free economy was without security for the individual.117 Social policy reform, Conservatives now insisted, should neither be 111

RA/S, Moderata samlingspartiet, AI: 2, Hogerns Riksstamma, minutes, 16 June 1944, Sjoquist, Arrhen; minutes, 17 June 1944, Stjernlof, Magnusson, Bagge; "Programuttalande." See also Gunnar Heckscher, "Konservativ socialpolitik," in his Unghogern: Politiska essayer (Stockholm, 1934), pp. 121-34. 112 For the background, see Elisabeth Sandlund, Svenska dagbladets historia (n.p., 1984), vol. 3, pp. 126—28,204-07. See also Elis Hastad, En activ tnedelklasspolitik (Stockholm, 1944). 113 RA/S, Moderata samlingspartiet, AIV:2, Overstyrelsen, minutes, 8 December 1944, Bilag2, motion no. 2; RA/S, Moderata samlingspartiet, Partiledarna, Fritjof Domo/4, MS for speech, 9 December 1944. 114 RA/S, Moderata samlingspartiet, Partiledarna, Domo/5, MS of a speech to Hogernklubben, Stockholm, 3 October 1945. 115 RA/S, IgorHolmstedtsSamlingom Hogerpartiet, 2, "Mai och medel inom socialpolitiken: En diskussionspromemoria." In this sense, they continued tendencies from older Conservative ideology; see Nils Elvander, Harold Hja'rne och konservatismen: Konservativ idedebatt i Sverige 1865-1922 (Uppsala, 1961), pp. 295-97. 116 Dag W. Scharp (ed.), Frihet och framsteg: En kronika om Hogerpartiet (Nykoping, 1959), p. 112; Kurt Samuelsson, "The Philosophy of Swedish Welfare Policies," in Steven Koblik (ed.), Sweden's Development from Poverty to Affluence, 1750—1970 (Minneapolis, 1975), pp. 342-43. There is a continuity here with family policy reform in the 1930s; see Lisbet Rausing, "The Population Question: The Debate over Family Welfare Reforms in Sweden, 1930-38," Europaische Zeitschrift fur politische Okonomie, 2 4 (1986). 117 RA/S, Moderata samlingspartiet, AI: 3, Hogerns extra Riksstamma, 1-2 February 1946, Hjalmarsson's speech, appended to the minutes.

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bought at the expense of the middle classes, nor exclude them.118 Many within the bourgeoisie were not well-off and would therefore benefit from the equalization of circumstances allowed by social policy. Others would profit from those measures (family allowances, for example) that redistributed resources within income classes. In concrete terms, the problem of including the middle classes hinged on the role played by need as a condition of entitlement.119 More than just a practical matter - a disincentive to thrift and continued work - means tests, in the Conservative view, posed the problem of allocating resources fairly among all regardless of wealth, touching on the issue of democracy itself. The more generously and widespread benefits were given, the weightier the reasons to eliminate means-testing. Otherwise undemocratic distinctions threatened to divide the "favored" from those denied society's concern: a neat reversal in Conservative ideology of traditional views of self-reliance and dependence. Eliminating need as a condition of entitlement expressed a "humane communism" that rectified the injustice of giving benefits to the poor alone.120 "Why should one not see society as an organization for equalizing risks," Hjalmarsson asked, "and for providing minimum standards of security not just for the badly-off, but also for the industrious?"121 When debating the draft program, many worried lest such radicalization alienate the party's traditional constituency. Nonetheless, a majority, strongly influenced by the youth organizations, insisted that attention be paid to middle-class interests. Means tests should be abolished in order to channel the state's munificence in the direction of the bourgeoisie.122 Social policy, the final version announced, is an expression of solidarity and a necessary complement to the free market. The broad middle strata, bearers of the heaviest burdens, but recipients of the meagerest benefits, now needed attention.123 118 RA/S, Holmstedts Samling, 1, Hogerns Programkommitte, preliminary draft: of the program, section 8; Hogerns Riksorganisation, Frihet och framsteg: Kommentar till Hogerns handlingsprogratn (Stockholm, 1946), esp. pp. 110-202. 119 RA/S, Holmstedts Samling, 2, "Mai och medel inom socialpolitiken." 120 RA/S, Holmstedts Samling, 2, P. Hj. Fagerholm, "Nagra synpunkter pa inkomst- och behovsprovning inom socialvarden." 121 RA/S, Moderata samlingspartiet, AI: 3, Hogerns extra Riksstamma, 1-2 February 1946, Hjalmarsson's speech, appended to the minutes. 122 The two examples of means tests discussed at the time were for pensions and school meals. The party agreed to eliminate them for pensions (by far the more important of the two), but only radicals pressed the second issue as well. See RA/S, Moderata samlingspartiet, AIV: 2, Overstyrelsen, minutes, 31 January 1946, Jarte, Wistrand, Falla, Nylander, Ohlsson, Hjalmarsson; AI: 3, Hogerns extra Riksstamma, minutes, 1-2 February 1946; and Hogerns Riksstamma, minutes, 17-18 June 1946. 123 Q u o t e d in Scharp, Frihet och framsteg, p. 452.

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Social Democrats and Universalism With universalist reform, welfare - once a matter for the poor alone became a concern also of the broad middle classes and their parties. For the Social Democrats, on the other hand, matters were more complicated. The demographic shift from blue-collar proletariat to white-collar salariat and the growing affluence of all classes, that gave even workers the attributes and attitudes of modest prosperity, promised to leave the misery and impoverishment of the interwar Kampfjahre but a rhetorical allusion in the speeches of the party elders. As self-help became more widely possible and to the extent that statutory superannuation, granting workers pension parity with salaried employees' occupational provision, became a union goal, even the Social Democrats' core constituency acquired an interest in eliminating need as a condition of entitlement.124 In the long term, such developments eventually gave also the Social Democrats reason to adopt a new approach towards social policy, now willing to draw the consequences of an incipient coincidence of interests between blue collar and bourgeois. In the short run, however, the shift in focus from alleviating misery to not impeding self-help, from workers to groups more embourgeoises, was a wrenching one for the left. Pension reform was an issue through which Social Democrats worked out their new orientation. The center and right had obvious cause to grant even the middle classes the advantages of the welfare state.125 Social Democrats, in contrast, faced a dilemma: how to deal with generous, ideologically attractive, universalist social policy that helped most those who needed it least. At the SAP's congress in 1944, attempts were made to commit the party to all-inclusive, unconditional pensions.126 The Executive responded ambivalently. Moller, the Minister of Social Affairs, favored eliminating means 124

Moller had to intervene to persuade the unions to put aside plans for superannuation until pension reform had been resolved; see LO Archives, Stockholm, Landssekretariatet, minutes, 2 January 1945. 125 Were it not for the unexamined assumption that solidaristic social policy must have been the brainchild of the Social Democrats, there would be n o cause for the surprise sometimes expressed that the bourgeois parties, normally opposed to expensive reform, seemed n o w to have turned coats to support the most extravagant of the alternatives. Esping-Andersen's disconcertion that the bourgeois parties proved "amazingly willing t o embrace universal, non-contributory plans whenever popular opinion seemed to favor them" is understandable only given his supposition that universalism w a s an especially Social Democratic goal. See Esping-Andersen, Politics against Markets, p. 157; and, similarly, Stig Hadenius et al., Sverige efter 1900 (Stockholm, 1967), pp. 194-95. T h e only account to get matters straight is Goran Therborn, "The Working Class and the Welfare State," in Pauli Kettunen (ed.), Det nordiska i den nordiska arbetarrorelsen (Helsinki, 1986), pp 52-55. 126 Sveriges Socialdemokratiska Arbetareparti (SAP), Protokoll, 1944, pp. 4 3 2 - 3 3 .

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tests in order to encourage the development of occupational pension schemes, but also acknowledged the political costs of appearing in this way to help the affluent.127 Eriksson, the Social Welfare Committee's chairman, spoke for the party's rearguard in rejecting universalist reform as wasteful. Occupational provision, he dismissed as a concern of privileged wage earners beyond the party's ken. The Executive agreed: distributing benefits without regard to need increased costs and contradicted the party's goal of aiding the poorest.128 Social Democratic voters, Tage Erlander (soon to succeed Per Albin Hansson as Prime Minister) later noted, were unlikely to approve of such indiscriminate generosity.129 The labor movement's postwar program was less than unanimously exuberant on the issue, burying a vague reference to pensions towards the end.130 Unable to take an unambiguous position, Social Democrats downplayed reform in the 1944 elections, much to the Schadenfreude of other parties.131 Although the parliamentary group eventually decided in favor of universal pensions, Finance Minister Wigforss noted in retrospect, such hesitations had helped the party's opponents. Conservatives claimed to have been the first to support such reform and, as far as he could see, they were right.132 When the results of the opinion surveys that are an institutionalized part of the Swedish legislative process trickled in on the Social Welfare Committee's report during the winter of 1945-46, the political weathervanes all pointed in the same direction.133 With few and only half-hearted exceptions, the vast majority preferred the universalist approach. The thrifty, employers insisted, should not be punished for their efforts by reductions in statutory pensions, nor should well-paid wage earners be deprived of benefit. Salaried employees, otherwise disqualified 127 H i s account is to be found in "Inkomstprovade pensioner?" in Gustav Moller, "Hagkomster," Arbetarrorelsens arsbok (1971), pp. 180-82. 128 ARA, SAP, Partistyrelsen, minutes, 16 January 1944; SAP, Protokoll, 1944, pp. 435-37129 A R A , SAP, Partistyrelsen, minutes, 9 December 1945; Tage Erlander, 1940—1949 (Stockholm, 1973), pp. 147-48. 130 Arbetarrorelsens efterkrigsprogram (Stockholm, 1944). N o r was mention made in the party's 1944 program; see Fran Palm till Palme: Den svenska socialdemokratins program, 1881-1960 (Stockholm, 1972), pp. 160-68. 131 ARA, SAP, Partistyrelsen, minutes, 23 April 1944, Wigforss; Bondeforbundets medlemsblady 2 (June 1946); RA/S, Bondeforbundet-Centerpartiets Arkiv, AI: 4, Riksstamman, minutes, 30 June to 2 July 1946 and Bilag 30, speech by Axel Pehrsson-Bramstorp, 30 June 1946. 132 Ernst Wigforss, Minnen (Stockholm, 1 9 5 0 - 5 4 ) ^ 0 1 . 3 , p . 304; Riksdagens protokoll >AK 1948:31, 3 July 1948, p. 58. T h e Conservatives took full credit for universal pensions in their accounts of the matter; see Hogerns Riksorganisation, Politisk valhandbok (1946), pp. 150-53; and Gosta Lindskog, Med Hogern for Sveriges framtid (Stockholm, 1954), pp. 4 4 9 - 5 1 . 133 Riksdagens protokoll, Prop. 1946:220, pp. 65—99.

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because of their occupational provision, wanted means tests abolished for basic pensions as well as several of the supplements that, in the government proposal, remained targeted at the poor. Bereft - unlike their whitecollared colleagues - of any immediate motives of pecuniary self-interest in unconditional benefits, the blue-collar unions nonetheless denounced means tests for the demographic concerns they shared with others and for more ethereal considerations of stigma and status.134 Lavishing funds on the well-off was acceptable, they conceded, if pensions thereby became regarded as the right of each citizen. Difficulties of administering means tests in the countryside gave also farmers, who were frequently barred from benefit by rural inheritance practices, a stake in universalist reform.135 Private insurance companies were delighted by the state's willingness to restrict its ambitions to a flat-rate minimum and the government bureaucracy was pleased by the promise of administrative simplicity. Faced with this largely unanimous chorus in praise of universalist reform, those Social Democrats with reservations on the matter had little chance of prevailing. Admitting the political difficulties of backing means tests against bourgeois initiatives to eliminate them, their spokesmen (especially Per Albin Hansson, Wigforss and Erlander) nevertheless mounted a last stand for the party's traditional concern with the worstoff.136 The means-tested alternative promised to save the government money, they argued. More importantly, it was also the correct choice in principle. Abolishing means tests meant little for the poorest. The main effect, the Finance Minister warned, of eliminating need as a condition of entitlement would be to give civil servants and others who were already well-provisioned an additional thousand crowns. Yet, despite the efforts of important members of the party's leadership, Social Minister Moller's support of all-inclusive reform was seconded by a large majority of the 134 Demographers' forecasts of an ageing population in the postwar period prompted efforts to encourage the elderly to continue working. 135 Nonetheless, there were ambiguities to the situation. The stigma of means-testing seems to have affected urban more than rural classes (unlike the case in Denmark) and the countryside had helped itself immodestly to targeted benefits. Having done so, rural dwellers appear to have been less impressed by the virtues of eliminating conditions of need than might otherwise have been the case. See RA/S, 1185/1, "Promemoria angaende folkpensionering," 25 September 1940; Tillaggspromemoria till P.M. den 25 Sept. 1940; SVK, minutes, 23 October 1940,28 February 1939, Dahlstrom, Hojer; and Riksdagens protokoll, FK 1946: 25, 19 June 1946, pp. 98-100. 136 p o r Erlander, see also A R A , Erlanders Arkiv, BI: 7, M S for speech, Kalmar and N y b r o , 3 February 1946, p p . 2—4; a n d M S speech, Stockholm, 9 M a y 1946, " B a r n k o s t n a d e r n a s fordelning," pp. 14-16.

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parliamentary group, allowing him to formulate policy according to his instincts.137 Administrative, labor-market and demographic arguments in favor of universalism did duty in his bill, undergirding the general concept of entitlement regardless of means.138 Need-blind generosity was restricted, however, by doubling the premium ceiling so as to collect from the affluent contributions approximately covering the benefits they received.139 In the parliamentary debate, unanimity carried the day. All facets of the political constellation hailed the bill as a major advance, the Communists welcoming the Conservatives in what they chose to interpret as the right's newfound support for reform. A Conservative, S. A. A. Hagard, wondered aloud whether it was not the equality he perceived in giving the same benefit to both landowner and laborer that permitted such agreement. Dissonant notes to this chorus of good will were sounded only by those on the left who sought to uphold traditional socialist efforts to help the poorest first. The Conservatives' attitudes were especially interesting, one noted. They had never before favored abolishing means tests, but perhaps pensions were now granted with such largesse that all social groups wanted them.140 Pension reform of this ilk was born to the broadest political backing. Hurting no one, helping all, especially those groups traditionally hostile to generous social policy, universalist measures gave to the well-off (whether wage earners or independents) what had formerly been reserved for the poor.141 Even though the expense of including all might eventually be 137 ARA, SAP, Riksdagsgruppen, minutes, 29 January 1946,5 March 1946; A R A , Per Albin Hanssons Arkiv, i b , Dagbocker och minnesanteckningar, 2 March 1946. 138 Riksdagens protokoll, Prop. 1946:220, pp. 107-22; iSa'U 1946:1, p. 32. 139 This corresponded to the Conservatives' willingness to have flat-rate benefits financed by premiums related to income, whereby the affluent paid contributorily approximately the value of their benefits; see RA/S, Holmstedts Samling, 2, Hogerns Programkommitte, "Nagra synpunkter pa inkomst- o c h behovsprovning inom social varden," and "Social trygghet." 140 Riksdagens protokoll, AK 1946:27, 20 June 1946, pp. 3 - 4 1 . See also A R A , Erlanders Arkiv, BI: 8, M S speech, Torsby et al., 7 July 1946; "Valforedrag 1946," pp. 5-6. T h e Social Democrats' continuing ambivalence over targeting can be seen in the later debate over whether t o means-test cost-of-living supplements; see Gustaf Jonasson, Per Edvin Skold, 1946-1951 (Uppsala, 1976), pp. 5 7 - 6 1 ; and "Dyrtidstillaggen," in Arbetarrorelsens drsbok (1971), pp. 187-89. 141 T h e coincidence of wage-earning and self-employed interests here w a s incorporated by Emil Liedstrand, whose arguments advocating the abolition o f means tests circulated among both of these groups. See Tjanstemannarorelsens Arkiv, Bergendal, 5 30/6, Liedstrand, "Nagra erfarenheter rorande verkningarna av behovsprovningen inom socialforsakringen," 31 August 1945; Emil Liedstrand, "Behovsprovning inom folkpensioneringen," HanWerk och spiaindustriy 1 (1946), pp. 19-20; and Emil Liedstrand, "Behovsprovningen inom folkpensioneringen

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borne especially by the affluent, the important consideration that here determined the middle classes' concern not to be excluded from social policy seems to have been less the total sums actually given them by universalizing pensions (benefits minus future tax increases) than the welcome prospect of eliminating the disincentives for self-help generated by means tests.142 The discouragement of needs-testing was sharply felt and unconditional pensions were an immediate, tangible benefit. Prospective tax increases, in turn, were a separate issue, while financing was a matter largely divorced, in systems heavily reliant on state subsidies, from the consideration of social policy itself. While universalist reform was a feast with something for every appetite, bringing all to the table, the bill still had to be paid. Perhaps because they were likely to suffer new taxes, not simply an increase of old ones, farmers were among the first to appreciate the connection between social and fiscal policy.143 For other groups, such insights took longer. While the bourgeois parties had promised to reduce wartime tax levels, Social Democrats stressed the expense of urgent and necessary reforms and the priority of reducing burdens for the poor. A commission, chaired by Wigforss and dominated by the left, came to similar conclusions. When the government followed its recommendations, the reaction was widespread and distempered.144 The tax issue, gambit of a debate almost as intense as superannuation a decade later, was the other side of the apparent unanimity that smoothed the path of pension reform. Disputes that might have raged over social policy were displaced to the arena of taxation. That they were not even more heated is explained by the shift that took place concurrently in the Swedish fiscal structure towards indirect taxes and contributory financing, apportioning burdens regressively by consumption rather than wealth and easing the weight of direct levies on the well-off.145 och nargransande delar av den svenska socialvarden," Nordisk forsa'kringstidskrift, 2 6 , 1 (1 January 1946). 142 For indications to this effect, see RA/S, Holmstedts Samling, 2, "Nagra synpunkter pa inkomst- och behovsprovning inom socialvarden." 143 Riksdagens protokoll, FK 1946:25, 19 June 1946, pp. 106-08. 144 Nils Elvander, Svensk skattepolitik, 1945-1970: En studie i partiers och organisationers funktion (Stockholm, 1972), pp. 2 6 - 6 6 . "That pensions were not conditional on means tests was largely the work of the Conservatives, M . Skoglund and A. Hagard. This was just and right, but also expensive. A worried Conservative asked me if it was true that even Wallenberg would get a pension. 'Absolutely,' I answered. 'He may need o n e if this tax policy continues'" (Ivar Anderson, Fran det ndra forfiutna: Md'nniskor och hdndelser 1940-1955 [Stockholm, 1969], p. 197). This is a Swedish joke. 145 Enrique Rodriguez, Offentlig inkomstexpansion: En analys av drivkrafterna bakom de offentliga inkomsternas utveckling i Sverige under 1900-talet (Uppsala, 1980), pp. 40, 55-56; Enrique Rodriguez, Den svenska skattehistorien (Lund, 1981), ch. 4.

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Flat Rates and Health Insurance Pensions legislation brought out the ambiguity of universalist reform. A parallel theme of flat-rate egalitarianism characterized later debates over health insurance. The formal equality of uniform benefits for all raised more than just the issue of treating rich and poor alike. The wide geographical span of Swedish economic circumstance introduced problems that were not as apparently pressing in Britain, with its urbanized, demographically more uniform population.146 With a broad spectrum of costs, a flat-rate average necessarily did more for the least expensive areas than for the most. To the extent that class and topography coincided, with wage earners in pricey urban centers and independents in the countryside, the scene was set for a socio-geographical battle. 147 This was no postwar novelty. Only weakly differentiated, the 1913 pensions' basic rates had been especially inadequate for urban workers. Having failed to align benefits more markedly with income, Social Democrats began to advocate pensions graded by expenses, eventually settling for cost-related municipal supplements. By the Second World War, farmers were insisting that increased costs in the countryside undermined any justification for a differentiation of benefits that gave them less than urban dwellers. Although sceptical of their complaints, Social Democrats were willing to concede uniform rates across the nation in order to defuse an important issue for rural voters.148 The ensuing compromise - whereby the pension itself was made equal throughout the country, while urban residents were spared public assistance through means-tested supplements - did not wholly satisfy rural inhabitants. They resented the absence of comparable enhancements for even the cheapest areas of the countryside so persistently that their wishes were finally granted in 1952.149 Such disputes between socio-geographical groups over the differenti146

See note 53. In Sweden, cost differences pitted not only urban against rural groups, but also north against south; see Betdnkande angdende dyrortsgrupperingen, SOU 1945:32, p. 105. 148 ARA, SAP, Partistyrelsen, minutes, 23 April 1944; SAP, Protokoll, 1944, pp. 438-39. For Conservatives, see RA/S, Moderata samlingspartiet, AI:3, Hogerns extra Riksstamma, minutes, 1—2 February 1946, Wik; and Holmstedts Samling, 2 , "Social trygghet." O n Agrarians see Diane Sainsbury, Swedish Social Democratic Ideology and Electoral Politics, 1944-1948: A Study of the Functions of Party Ideology (Stockholm, 1980), pp. 57-58; and RA/S, Bondeforbundet-Centerpartiets Arkiv, AI: 3, Riksstamman, minutes, 18-19 J u n e X945> Wahlund, Ridder, Larsson, Berlin. 149 Gustaf Jonnergard, Sd blev det Centerpartiet: Bondeforbundsoch Centerideerna frdn fyrtiotaletfram till i960 (Stockholm, 1984), pp. 6 5 - 6 9 . SeeZetterberg, Liberalism, pp. 176-85, on the first phase of this debate. Complaints began immediately; see RA/S, BondeforbundetCenterpartiets Arkiv, AI: 4, Riksstamman, minutes, 1-2 July 1946, para. 46, Bilag 25. 147

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ation of benefits continued with health insurance reform. The manner in which universalism was handled here demonstrated the significance of early legislative decisions for subsequent developments. Pensions, initially targeted at the poor, had been granted also to the well-off in 1946. Universalist health reform now reversed this course and its motivations. Sickness insurance was a state-subsidized voluntary system to which only the most prosperous and urban half of the population belonged. Because it made little sense to spend millions assisting those already able to help themselves, the Social Welfare Committee agreed to make health insurance compulsory for all, thereby distributing the state's subsidies more equitably.150 Universalism in this case extended the affluent's advantage also to the poor, sidestepping most of the difficulties thrown up by the converse movement of pension reform. The real bone of contention, however, concerned the cash benefits that were intended to replace income lost during illness: were they to be flat-rate or earnings-related? The committee was of one mind. The notion that a simple minimum could be valid for all of Sweden was, as one member put it, a bureaucrat's fantasy.151 Because uniform rates could not meet geographical variations, gradation was required. Differentiation by cost of living was administratively bothersome and tying benefits to the level of income lost was therefore the answer.152 Most opinion from the pertinent interests favored the earnings-related alternative, none more so than the unions. The nation's poorest, those best served by flat rates, were largely rural inhabitants and not part of the constituency whose well-being was the LO's main concern. For the urban working class, across-the-board uniformity made little sense.153 Despite the popularity of differentiated benefits, however, Moller supported uniform rates and was backed by most of the parliamentary group for reasons not clearly revealed by its deliberations.154 His approach, presented elsewhere, followed from a general view that social policy should encompass all citizens on sufficient 150 RA/S, 1185/2, SVK minutes, 2 0 March 1941, Nordgren, Eriksson; SVK minutes, 1 October 1941,1 September 1942; Utredning och forslag angdende lag om allmdn sjukforsdkring, SOU 1944:15, pp. i45~47151 RA/S, 1185/3, SVK minutes, 20 June 1945, Byttner, Nordgren. 152 RA/S, 1185/2, SVK minutes, 13 November 1942. 153 Riksdagens protokoll, Prop. 1946:312, p. 8 7 - 9 1 ; LO, Berdttelse, 1945, P - 1 5 6 154 O n e of the few w h o spoke for the flat-rate majority brought considerations of administrative simplicity and the observation t o bear that, since the poor would not insure themselves in the health insurance's upper income categories, the state would pay higher subsidies to the wealthy than to the worse-off; see A R A , SAP, Riksdagsgruppen, minutes, 25 October 1945. This was also Moller's argument; see "Sjukforsakringen," Arbetarrorelsens drsbok (1971), pp. 190-92.

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and equal terms. Moller's argument - that the state provide only a minimum of protection, leaving each free to arrange further measures Beveridge would have recognized as liberal.155 In the parliamentary debate, Social Democrats laid bare their internal rifts. Some supported Moller's bill because flat rates gave the poor proportionally higher benefits than the better-off. Others complained on behalf of urban wage earners that uniform benefits did not match even the levels of public assistance. The appealingly democratic idea behind the flat-rate approach, they argued, was undermined by cost variations.156 Although the bill was passed, administrative and financial problems delayed and finally prevented its implementation. By the time a compulsory health insurance was finally voted through again in 1953, opinion had swiveled. The new proposals now demonstrated a concern for wage earners' interests by providing those who earned above a certain amount with contributory income-related measures to top up basic flat rates.157 The solicitude shown rural inhabitants in the old system had vanished. Uniform benefits, earlier pitched at a level sufficient only for the countryside, were significantly cut and the self-employed were not compulsorily enrolled in the differentiated supplements that aimed to provide the urban classes with sufficient income replacement. This break with flat rates merely emphasized what had always been the case. The apparent egalitarianism of uniform benefits masked a distributive advantage for the countryside. In a nation with wide cost variations, formal equality meant real inequity. Rural inhabitants had won their case in 1913 and again in postwar pension and health reform. Not until the 1950s were they sufficiently weakened that urban workers' interests finally left their mark in measures that resembled Bismarckian social insurance more than they did the supposedly socialist model of the Scandinavian welfare state.158 155

Riksdagens protokoll, Prop. 1946:312, pp. 135-41. Riksdagens protokoll, AK 1946:42,18 December 1946, pp. 7 - 1 2 , 2 3 - 2 4 ; 3SaU 1946:1; M o t i o n FK 1946:380. 157 Sjukforsdkring och yrkesskadeforsa'kring, SOU 1952:39; Riksdagens protokoll, Prop. 1953:178. 158 For a similar recognition applied to Finland see Herman van Gunsteren and Martin Rein, "The Dialectic of Public and Private Pensions," Journal of Social Policy, 14, 2 (April 1985), 133-34. In general, the Finnish case confirms a number of points made here, including the agrarian basis of universalist and flat-rate pensions; see Olli Kangas, Politik och ekonomi i pensionsforsdkringen: Detfinska pensionssystetnet i ett jdmforande perspektiv, Institutet for socialforskning (Stockholm), Meddelande, 5 (1988), pp. 1 2 - 1 5 , 2 0 - 2 2 , 2 9 - 3 1 . M o r e generally, see Matti Alestalo, Structural Change, Classes and the State: Finland in an Historical and 156

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The Middle Classes and Scandinavian Solidarity: Denmark Conducted later, over a longer period, the debate over universalism in Denmark was accented differently from the one in Sweden. In 1891, the Danes had instituted tax-financed pensions that offered all deserving poor means-tested benefits, individually graded by costs. Proposed reforms, unsuccessfully advanced mainly by the center and right during the following half century, sought to introduce some form of contributory social insurance. Why, in comparison to their Swedish counterparts, the bourgeois parties here so favored a contributory approach is unclear. Their objections to wholly targeted pensions - that means tests' disincentives to self-help were becoming intolerable - gave voice to motives familiar from the Swedish debate. Contributory social insurance, like national pensions, held out the possibility of new standards of entitlement, allowing the self-reliant to reap the full measure of their own efforts. Equally important, it promised to reduce the state's burdens by tapping resources other than general taxes. Such demands for contributory social insurance found little resonance on the left, where premiums were regarded as a regressive capitation tax. 159 At the same time, the alternative - a system of national pensions that included all citizens for benefit- appealed to Danish Social Democrats as little as it had to their Swedish colleagues.160 Abolishing means tests and universalizing pensions the left shunned as expensive and wasteful.161 The party's postwar platform (ideologically radical so as to compete with the Communists who had been active in the resistance and were untainted by wartime collaboration) demanded enhanced provision for the needy and rejected national pensions for both rich and poor alike.162 The peace thus found the parties squared off on pensions much as always, the Social Comparative Perspective, University of Helsinki, Research Group for Comparative Sociology, Research Reports 33 (1986), esp. pp. 133-37; and Matti Alestalo and Hannu Uusitalo, "Finland," in Peter Flora (ed.), Growth to Limits: The Western European Welfare States since World War H (Berlin, 1986), vol. 1, esp. pp. 2 0 9 - 1 1 , 262. Similarly for Norway, see Aksel Hatland, The Future of Norwegian Social Insurance (Oslo, 1984), pp. 48-50. 159 Henrik Pers, Velfa>rdstatens gennembrud i Danmark: Den politiske debat omkring folkepensionens indferelse (Copenhagen, 1981), pp. 27-29; Arbejderbevaegelsens Bibliotek og Arkiv (ABA), Copenhagen, Socialdemokratiets Arkiv, 899/1, Aldersrentespargsmalet, W m . Villumsen, "Aldersrente - Folkeforsikring: En Redegerelse." 160 A wartime commission had also dealt critically with such proposals; see Beta^nkning angdende udvidet adgang til at oppebare indtagt ved siden af aldersrenten (Copenhagen, i945)>PP- 79-83161 Protokoll for den 24. socialdemokratiske partikongres i Kobenhavn den 19.-22. August 1945* PP- 76-79> 96-99162 Fremtidens Danmark (n.p. 1945), p-79-

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Democrats seeking improvements but no fundamental change while Conservatives and Liberals favored a contributory approach. Only the Radical Liberals, who represented small independents, especially in the countryside, advocated national pensions, given equally to all and financed significantly by direct taxation. 163 Matters did not change until a Social Democratic minority government responded to bourgeois pressure, agreeing at the beginning of 1948 to appoint the National Pensions Commission to examine the feasibility of contributory insurance.164 The commission put in a curious performance. Interpreting its mandate, it took contributory social insurance to mean a funded system.165 Had fully funded arrangements ever existed outside the austere realm of actuarial theory, they were by now a relic of the past. Devastated during the war, funded measures also weathered inflation poorly and had the disadvantage of being unable to start up quickly without abandoning a transition generation. Investing the immense reserves they generated in the economy raised the prospect of public control and indirect socialization. The cost of building a capital stock while at the same time paying current pension obligations was prohibitive.166 Such concerns had prompted reformers throughout Europe to reject plans for anything but partial funding. Ignoring all evidence to the contrary, the Danes nevertheless sat down to demonstrate meticulously the problems besetting full funding, thus beating - bureaucratic paragraph by paragraph - a horse that was not only dead, but in an advanced state of putrefaction. The possibility of pay-as-you-go financing seems never to have been considered. Whether the commission's 163 D e t Radikale Venstres Rigsdagsgruppe, Efterkrigstidens samfund (Odense, n.d. [1945]). Denmark shares with France a tradition of political nomenclature taking only limited account of shirts in ideology since the nineteenth century, in which the parties of what is n o w the center retain names from their former position on the left. Det Radikale Venstre translates literally, but anachronistically as "the radical left." 164 Pers, Velfcerdstatens gennembrud, pp. 34-47. 165 Folkeforsikringskommissionen af 1948, Betainkning om folkepension, Betaenkning 123/1955, pp. 7 7 - 8 7 . For an English summary, see "Report of a C o m m i s s i o n o n National Pensions in Denmark," International Labour Review, 75, 4 (April 1957). 166 T h e difficulties of introducing fully funded arrangements once noncontributory measures already existed is an example of the narrowing of later choices caused by first decisions taken in social policy. In the following chapter such considerations help explain the impossibility of following the opposite course (introducing flat-rate noncontributory measures after earnings-related contributory social insurance) on the Continent. For an account of the development of Danish pensions policy that illustrates this determinism, see Betcenkning vedrorende en forsikringsmcessig overbygning pa aldersrenten, afgivet afdet under 20 August 1946 nedsatte Aldersrenteudvalg (Copenhagen, 1951), pp. i*-25*. A similar choice faced American reformers in the 1930s; see Bruno Stein, "Funding Social Security o n a Current Basis: T h e 1939 Policy Change in the United States," in Douglas E. Ashford and E. W. Kelley (eds.), Nationalizing Social Security in Europe and America (Greenwich, C o n n . , 1986).

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peculiar interpretation was the result of ignorance or clever tactics does not emerge from its records. The effect of its choice, however, and the conclusions that flowed necessarily from it, was to discourage the bourgeois parties' ambitions, eliminating any contributory approach from the discussion of reform. The difficulties of need-based entitlement nonetheless still remained unresolved and developments during the following three years recrystallized the issue around unconditional universal national pensions as the alternative. In May 1952, a Social Democratic party committee proposed a version of universalist reform. The old system was unsatisfactory, it concluded. Benefits were miserly and means tests discouraged self-help at the cost of much administrative bother. To abolish earnings rules gradually was the answer, extending value-secured flat-rate pensions set at two-thirds of the average income to all citizens. Taxes were to bear the brunt of financing, but premiums to tap new sources of revenue might be considered.167 Unfortunately, Danish archival habits hamper a thoroughly documented understanding of why the party reversed its position on pensions. The overarching motive was doubtless the search for an alternative to needbased entitlement. Although disqualification by affluence from statutory benefit still most immediately affected groups not within the Social Democrats' inner circle, postwar prosperity had, by the mid 1950s, given even workers a more direct interest in abolishing means tests than had been the case in Sweden a decade earlier.168 The Danish left could adopt national pensions without the public soul-searching forced upon the Swedes. Earnings rules were unpopular and many thought it unfair that need be the basis of entitlement for all citizens but civil servants. The solution, Kaj Bundvad, the future Minister of Labor and Social Affairs, reasoned, was therefore a uniform universal system - for the seamstress and the countess, metropolite and rustic, the worker and his boss - in short "a truly democratic pension arrangement, reasonable and just." 169 Jumping the gun on the National Pensions Commission's report, the Social Democrats publicized their proposal in 1953. I*1 t n e second round of elections that year, held to confirm the new constitution, pensions 167

Betaenkning 123/1955, pp. 130-34. T h e self-consciously provocative analyses of Jorgen Dich that identify middle-class groups most directly as the beneficiaries of universalism and attribute reform solely to their influence are therefore stimulating but insufficient; see Jorgen S. Dich, "Folkepensioneringen," Nationalokonomisk tidsskrift, 91, 6 (1953); and Jorgen S. Dich, Den herskende klasse: En kritisk analyse af social udbytning og midlerne itnod den> 4th edn (Copenhagen, 1973), pp. 59-^0. 169 Kaj Bundvad, Folkepension (Copenhagen, 1953), pp. 9-13. 168

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played a major role and allowed the party to form a minority government dependent on Radical support. The bourgeois parties' ambiguous stance on the issue had been no asset in their campaign. Once the left decided in favor of a universalist approach and demonstrated the appeal of reform along these lines, pressure intensified on the center and right to take the consequences of having abandoned contributory social insurance as a solution. Between the emergence here of national pensions as a political issue and their legislative incarnation three years later, two steps intervened: the Radicals revived their interest in universalist reform, allying with the Social Democrats, and the bourgeois parties were persuaded for a price to add their imprimatur. The Bourgeois Parties and Universalist Reform The first to endorse universal pensions after the war, the Radicals had since cooled their ardor. 170 When the left revealed the issue's electoral possibilities, however, strategies were reviewed. Opinion from the grass roots underscored the wisdom of a change. In the provinces, many complained that the party's social policy stance was not sufficiently distinct and, prompted by the issue of pensions, some of the elderly had defected to the Social Democrats. A new course seemed advisable and a return to national pensions for all became an element.171 Having once embraced the issue anew, the Radicals stuck to it with a tenacity that prevented the left from wavering, even when so tempted, from that aspect they considered most important: its universalism. The ferocious stigma of the Poor Law had left a brandmark of discrimination on even the supposedly nondeterrent old-age pensions. Many eligible elderly made do without benefits, forfeiting a right they found unconvincing.172 That such stigma did not affect all groups equally was the factor spurring the Radicals' interest in the matter. Small indepen170 R A / D , Det Radikale Venstre, 17/3, Landsmoder, 1945, "Udkast til Landsmodets Udtalelse"; 3/3, Rigsdagsgrupperne, Korrespondance m.m., 1949-1953, "Bemserkning af Kjeld Philip o m overbygning over aldersrenten" and "Udkast til betaenkning II"; R A / D , Socialministeriet,F. 19-199/68, A-io,Folkeforsikringskommissionen, "Status for Folkeforsikringskommissionen pr. 6 Juni 1952"; Det Radikale Venstre, Socialliberale tanker i dansk politik (Copenhagen, 1950), pp. 209-11. 171 R A / D , Det Radikale Venstre, 117/5/5, Partikontoret/sekretariatet, Partisekretser Bjorn Hansens Kreds- o g amtsmeder med partiets tillidsmaend, S.Bjorn Hansen, "Referat fra Kredsturen 6. Juli til 6. August 1953"; 125/6, Rejsesekretser N i c . Hurup 1948—1963, Korrespondance o g indberetninger 1953, Hurup to Bjern Hansen, 18 November ^953. 172 G. Drachmann, "Hen imod folkepension: En gennemgang af Folkefbrsikringskommissionens betsenkning," Socialt tidsskrift, 31, 5/6 (May—June 1955), 173.

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dents of the party's core constituency, living in closeknit rural communities, felt most acutely the shame of measures reserved for the poor and therefore favored fully universal benefits.173 Both Liberals and Conservatives still shied away from extending coverage also to those without need and even Social Democrats, despite their initiatives, had less of a grassroots mandate for such unfocused generosity.174 The Radicals, on the other hand, were unwavering. During the final deliberations on reform, it was their insistence on universalism that prevented Social Democratic concessions on this point to the other bourgeois parties.175 Given the minority government's precarious position and opinion from the Radicals' base that their political support be contingent on the passage of national pensions, this was a demand with effect.176 While Social Democrats and Radicals united, the bourgeois parti es began to waver. The Liberals were split. Prime Minister Erik Eriksen favored universalist reform while his Finance Minister, Thorkild Kristensen, attacked the idea with so lashing a hailstorm of criticism that he soon stood alone. The party as a whole gradually swung around, coming to support national pensions by 1953.177 Radicals had accurately predicted the welcome that all-inclusive benefits would receive in rural areas.178 Liberals were equally susceptible to such considerations, in particular to the elimination of cost gradations that made pensions equal in town and country. They eventually discovered that their voters - prosperous farmers - were well represented among those who stood to gain most from the abolition of means tests. Not to press for universal benefits, the party concluded, would mean failing those who had made efforts at self-help.179 173 Folketingstidende, 23 November 1955, cols. 1216-22; 24 November 1953, col. 1317; T h o m a s Christensen, "Hvorfor folkepension og hvordan?" Husmandsh)emmet, 6,15/16 (24 April 1956), 3; Langelands folkeblad, 5 May 1956; LJgens politik, 1 6 , 2 6 (11 May 1956); Fyns venstreblad, 21 M a y 1955; Det Radikale Venstre, Politisk drbog og almanak (1957), p. 68. 174 Pers, Velfcerdstatens gennembrud, p. 112. 175 Conservatives and Liberals opposed including everyone, it was noted at a meeting of the Social Democratic parliamentary group, where tactical possibilities for enlisting further support for reform were discussed, but all-inclusiveness was an unnegotiable demand of the Radicals. See Folketingets Bibliotek, Copenhagen, Socialdemokratisk Folketingsgruppe, minutes, 7 June 1956. 176 R A / D , Det Radikale Venstre 125/9, Partikontoret/sekretariatet, Rejsesekretasr Nic. Hurup, 1948-63, reports from Hurup, 12 April 1956, 16 April 1956, 14 May 1956. 177 R A / D , Venstre IV/31, Venstres Folketingsgruppe, minutes, 4 June 1953, 17 August 1953, 18 August 1953; Knud Larsen et al., Venstre: 50 dr for folkestyret (Holte, 1979), pp. 195-96; R A / D , Socialministeriet, F. 19-199/68, A - I O , "Status for Folkeforsikringskommissionen pr. 6 Juni 1952." 178 "Folkepensionens indforelse," Socialt tidsskrift, 37, 3 (March i960), 84-86. 179 R A / D , Venstre II/4, Venstres Landsorganisation, minutes, 19 September 1955, 2 0 September 1955. Agrarians were just warming up to embrace new public efforts on their

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Conservatives, in contrast, still wished to target benefits and proved harder to please.180 Tapping new sources of revenue other than progressive taxation through a proportional contribution was a point they pressed. Their idea of a fair trade-off was support of pension reform in return for a statutory guarantee of self-help against inflation.181 Proposing a valuesecured savings scheme to complement pensions, they won important concessions almost inadvertently. Inflation-proofed thrift and national pensions had originally been intended as alternatives to each other, one arrangement being for the affluent who wished to save, the other for the less fortunate. In fact, through one of those peculiar lapses of political negotiation in which intent and result bear little resemblance to each other, the two were allowed in combination - much to the advantage of those citizens who now pocketed government subsidies in two forms, through savings and through pensions. This boondoggle lasted until the privileged circumstances of the groups most favored by these "indexed savings contracts" and the futility of this attempt to increase overall savings led to their abolition fifteen years later.182 Complete Universalism Significant concessions to the Conservatives and a recognition among Liberals that reform was a boon for their own followers as well brought the bourgeois parties around in support of universal "people's pensions." Benefits for all were here a modest sum, equal to 6% of the average income and one-fifth of the total pension, the rest of which remained contingent on need. The quasi-unanimity with which legislation was passed left the few behalf in the mid 1950s. 1958 marked the beginning of generous agricultural subsidies. Before the war, the working class had received seven times the public monies earmarked for farmers. By 1963, this ratio had been reversed. See Henrik Christoffersen, Det offentlige og samfundsudviklingen (Copenhagen, 1978), pp. 104-06; Jorgen S. Dich, "Udviklingen af skatte- o g tilskudspolitikken siden 1939: Et bidrag til forklaring af de politiske krsefter in Danmark," Okonomi og politik, 39, 3 (1965), 243-49; and Anton Steen, "The Farmers, the State and the Social Democrats," Scandinavian Political Studies, 8, 1/2 (June 1985). 180 Betsenkning 123/1955, pp. 143-47; Folketingstidende, 2 December 1954, col. 1204; 7 December 1954, col. 1303; 14 December 1954, col. 1592. 181 Folketingstidende, 23 November 1955, cols. 1168-1205; 24 November 1955, co^s1261-62, 182

1305.

Folketingstidende 1955-56, Tillaeg B, cols. 785-1114, 1175—88; 21 June 1956, cols. 5303-15; 12 September 1956, cols. 5528-40; ^ S e p t e m b e r 1956, cols. 5645~57Oi;2i September 1956, cols. 5793-5812; R A / D , Venstre IV/49, Venstres Folketingsgruppe, minutes, 13 Septemklassesamfund ber 1956; Bent Hansen, Velstand uden velfazrd: En kritik af det danske (Copenhagen, 1973), p. 40; Folketingsdrbog, 1971-72, pp. 358—61. For more details, see Baldwin, "Social Bases", pp. 287-90.

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bourgeois deputies voting against it isolated as upholders of outmoded social policy scruples.183 Pressure from the left and a longer period of development were required to put Danish Liberals and Conservatives on the path followed by their Swedish colleagues already during the war. Although slow starters, the bourgeois parties nonetheless pulled ahead to lead the way during the second phase of pension reform, in which the full consequences of decisions taken in 1956 were drawn. Once the universalist course had been chosen, wholly abolishing means tests and allowing the middle classes full benefits became their goal. As supplementary pension schemes (the subject of Chapter 4) were put on the unions' agenda in the early 1960s, the labor movement was given additional reason to favor an end to targeting and to ensure that workers were not deprived of their claim to national pensions. Nevertheless, although an agreement to reduce the importance of need as the condition of entitlement was, by this time, shared across the political spectrum, the left now balked at the extremes of indiscriminate generosity for even the most affluent to which the bourgeois parties were willing to press universalist reform, as they now proceeded to exploit social policy unabashedly to their own advantage. After 1956, further reforms relaxed the stringency of the earnings rules that reduced the need-based part of national pensions in proportion to other means. Responding to the widespread interest in gradually abolishing need as a condition of benefit, Minister of Social Affairs Bundvad appointed a commission in 1961 to examine the possibility of completely eliminating earnings rules and means tests. Its conclusions, delivered two years later, were favorable.184 A growing concern to encourage thrift and prolong work, it reported, had replaced, as the aim of social policy, the wish to target resources where most required. The 1956 reform had broken decisively with the view that statutory efforts should be reserved for the needy. Dissent was voiced only by the Social Democrat, H. C. Seirup, and the Socialist People's Party, the former right wing of the Communists. Why, they questioned, spend money on an affluent minority by wholly eliminating need as a condition rather than improving matters for the mass of current pensioners?185 183

Folketingstidende, 26 September 1956, cols. 5877-5993; Poul Moller, Gennembrudsdr: Dansk politik i 50'erne (Copenhagen, 1977), p. 97. 184 Folkepensionslcommissionen af 1961, Betcenkning om almindelig folkepension, Betaenkning 324/1963. 185 R A / D , F.19-199/200, Udvalget vedr. Folkepensionskommissionen af 1961, 1961-63, minutes, 11 April 1962,26 April 1962. Public opinion was also sceptical; see Niels Halck and Frede 0stergard, Omkring den almindelige folkepension (Copenhagen, 1964), p. 29; and

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The commission's juxtaposition of overall agreement on complete universalism and scruples on the left continued in the parliamentary treatment of the bill based on its recommendations. Full pensions were to be gradually introduced for all, beginning in 1970. The most unreasonable effects of such largesse were moderated by a need-based supplement that reintroduced means tests through the back door as they were being escorted out the front. The Socialist People's Party nevertheless rejected complete universalism, insisting on an income ceiling for benefits and aid for the poor. Social Democrats bravely faced the consequences of increased pensions for the rich in the expectation that the affluent would pay in more than the value of their benefits.186 Fully universal and unconditional statutory provision, they hoped, would lay the organizational foundation for a superannuation system of the sort that had in the meantime been introduced in Sweden. Radicals once again celebrated the egalitarian aura of all-embracing measures. Having tasted blood, the other bourgeois parties remained insatiable. Liberals took universalism to its furthest consequence, pressing to eliminate the means-tested supplements introduced for the poorest. Conservatives rejected any reduction of national pensions because of means, even for the affluent who had invested in the indexed savings contracts that were guaranteed against inflation by the government.187 Social Democrats capitulated on the second point, but refused to give in on pension supplements.188 The bill, granting even the well-off full benefits, was passed unanimously in the final vote despite grumblings from the far left that, with such concessions, one might be excused for regarding the bourgeois parties as the motor of social policy development in Denmark. 189 Supposedly born of a wartime spirit of equality and implemented by Social Democratic governments, universalist, egalitarian social policy has commonly been considered a turning point in the development of certain welfare states, the moment at which the disfavored were able to transform their strivings for a just distribution of burdens from the claim of one class Gunnar Thorlund Jepsen, "Alderspensionering i Danmark," Nationalokonomisk tidsskrift, 102, 1/2 (1964), 61. 186 187

Interview with Kaj Bundvad, Funktion&r tidende, 49, 2 (April 1964), 26. Folketingstidende, 29 January 1964, cols. 2452-58; 13 February 1964, cols. 3088—90,

3100,3103-4,3113. 188 Folketingstidende^ 1963-64, Tillaeg B, cols. 8 6 5 - 7 6 , 1 4 M a y 1964; Folketingets Bibliotek, Socialdemokratiske Folketingsgruppe, minutes, 14 M a y 1964. 189 Folketingstidende, 22 May 1964, cols. 5367-68.

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into a goal shared by most. While attractive, perhaps inspiring, such a view has few other qualities, least of all accuracy, to recommend it. Far from being the result of demands advanced unilaterally by the left, workers or the dispossessed, universalist reform represented equally an adjustment of social policy to reflect the wishes of the middle classes not to be excluded from measures that were growing steadily more generous. The story of Beveridge's proposals and their translation into legislation hinges on a fundamental ambiguity. The war had shown that all face the ultimate risks on a similar footing. Labour's victory allowed the party of the downtrodden to press home this new sense of solidarity, embodied now in universalist social policy. Yet, at the same time, reformist pressure from below was met by self-interested acceptance from above. This was the secret of what appeared for the moment as the postwar consensus. For the formerly self-reliant, the motive for extending measures to all was a recognition of the advantages promised by statutory generosity. The bulwarks erected by Beveridge against the most extravagant consequences of paying benefits even to the middle classes crumbled in testimony to the obvious political popularity of such universalist largesse. In Scandinavia, the issues at stake were revealed more starkly. Because their constituents were the ones who stood to gain most from apportioning the state's munificence without regard to need, Swedish Conservatives were closely associated with universalist pension reform. Initially opposed to such a squandering of resources, Social Democrats were gradually persuaded otherwise. The party's traditional self-image as defender of the inherently oppressed gave way to a concern with the needs of new groups, not among the worst-off, and with those of the old constituency as it, too, partook of postwar prosperity. Because delayed, the Danish case differed. By the 1950s, workers clearly shared an interest with the better-off in not being deprived of statutory benefit by other resources and Social Democrats here therefore took more of an initiative than their Swedish colleagues had. Only as the bourgeois parties pressed universalism to its extreme did the left rediscover its original ambivalence at treating all equally when this, in fact, meant disadvantaging the destitute. Disputes over universalist reform laid bare the tensions between justice, fairness and efficiency in a world of limited resources. By being generalized, social policy expunged the taint inherited from its association with poor relief, alms, charity and dependence, becoming instead the right of each citizen. Such reform was won, however, at the cost of wastefully distributing benefits even to those who did not need them. Solidarity was

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legitimated by giving the affluent a share of what had earlier been reserved for the poor. This right was bought with resources that could have helped the worst-off, in the hope that its very existence would free up more than was otherwise available.190 Over the long run - so the theory of the social democratic welfare state goes - the needy would gain from this momentary misapplication of funds. By thus priming the pump of solidarity, an initially inefficient use of monies would eventually be paid back with interest. All classes would be given a stake in the system of risk redistribution, all would come to recognize their mutual interdependence. In many accounts, such all-embracing measures were implemented by the labor movement and the parties of the left on behalf of the destitute and disfavored. Solidarity, in this view, was won from below. In fact, however, the realpolitical situation surrounding the reforms that are regarded as embodying this transformation of the welfare state, which helped found the Social Citizenship State, was quite different. In particular, it is clear that the middle classes developed an immediate and direct interest in no longer being barred from welfare provision and thus denied the full measure of their own efforts. Only in retrospect has social democratic whiggery been able to appropriate for its own purposes universalist reform that, at the time, was prompted equally by the shortterm interests of those disqualified from statutory benefit as by any ability of the least favored to wrest solidaristic intervention on their own behalf. Like the tax-financing of social policy in the nineteenth century and universalist reform both then and after the Second World War, flat rates were also a matter determined in accordance with interests outside the left's purview: a concession to non-urban areas and groups. None of the supposed benchmarks of social democratic social insurance (universalism, tax-financing, flat rates) were initially or in any essential way determined by the left or its core constituency. Bourgeois and rural interests were the origin of what Social Democrats have later successfully claimed as their own. Once the connections between Social Democrats, workers and welfare implicit in the social interpretation are questioned, the conclusion that the middle classes were also a source of universally solidaristic measures seems almost commonsensical. Extending welfare policy even to the well-off, postwar reform was naturally associated with those groups that benefited most directly. The laborist social interpretation admits this tie backhandedly by focusing not on the immediate redistributive advantages won for 190 This logic is clearly mapped out in Anna Hedborg and Rudolf Meidner, Folkhemsmodellen (n.p., 1984), pp. 184-87.

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the poor through reform, but on the ensuing longterm consolidation of support for the welfare state that was thus achieved. Including all benefited the better-off in the short run, but ultimately the least fortunate gained from the durability of social democratic welfare policy compared to more residual forms aimed at them alone. 191 The social interpretation in this sense reverses the motivations behind the Bonapartist model of the welfare state. In that, ruling elites made immediate sacrifices for a larger goal. Here, the needy are the clever tactitioners. A recognition that indiscriminate universality was not an unambiguous boon for the poor has also encouraged a rehabilitation of targeted measures on the left, a recognition that formal equality and the privileges intended to bring the disadvantaged real parity may contradict each other. Superannuation, discussed in Chapter 4, is one example. Intellectually, Titmuss fathered this development. Initially supporting universalist measures to remove stigmas, he gradually recognized that their main purpose was to win the middle classes for statutory intervention, not to benefit the poor directly. Once broad support for the welfare state had been consolidated, selectivist policies were needed to improve conditions for the neediest.192 191 For example, Sidney Verba et al., Elites and the Idea of Equality (Cambridge, Mass., 1987), p. 40; Erik Allardt, "The Civic Conception of the Welfare State in Scandinavia," in Richard Rose and Rei Shiratori (eds.), The Welfare State East and West (New York, 1986), p. 113; Esping-Andersen and Korpi, "From Poor Relief to Institutional Welfare States," p. 70; Korpi, "Social Policy and Distributional Conflict," p. 304. 192 Titmuss, "The Role of Redistribution in Social Policy," and "Universal and Selective Social Services," in his Commitment to Welfare, pp. 191, 122; Richard Titmuss, "Welfare 'Rights': Law and Discretion," Political Quarterly, 4 2 , 2 (April-June 1971). See also C. A. R. Crosland, The Future of Socialism (London, 1956), pp. 142-46; and Kathleen Jones et al., Issues in Social Policy (London, 1978), pp. 50-54.

The Failure of the Solidaristic Welfare State: France and Germany

The victory of universalist, egalitarian social reform in Britain and Scandinavia was, in appearance, a tough act to follow. Nor did the Continental countries succeed. Social Democrats in Germany may have emblazoned Beveridgean ideals of welfare reform on their banners, and the political consensus forged within the French Resistance may initially have united the two parties of the left with the Christian Democrats in support of solidaristic initiatives. But all to no avail. In bloom elsewhere, reform on the Continent was barren. The forces behind the new vision were not powerful enough to overcome the resistance mounted from the bourgeois camp.1 Because the left in Germany never gained control and, in France, possessed it undiluted for only a brief period, reform similar to that following from Labour's six-year reign or from the Social Democrats' rule in Scandinavia was not possible here.2 Such are the contrasts often drawn between successful solidaristic reform in Britain and Scandinavia and its failure on the Continent. Yet, in fact, when examined more closely these two sets of events turn out to have been so different that it is difficult to make useful comparisons between them. Anglo-Scandinavian initiatives, far from being the unilateral demand of the left, successfully imposed on the bourgeois parties, in fact reflected the formulation of a new middle-class interest in social policy. Despite apparent similarities, Continental ambitions were far more radical than the 1 Theo Berben et al., "Stelsels van sociale zekerheid: Na-oorlogse regelingen in WestEuropa," Res Publica: Belgian Journal for Political Science, 28, 1 (1986), 128-32. 2 Wolfgang Abenroth, "Soziale Sicherheit nach dem zweiten Weltkrieg: Die sozialgeschichtlichen Ursachen der Extension der sozialen Sicherheit," in Frank Benseler (ed.), Festschrift zum achtzigsten Geburtstag von Georg Lukdcs (Neuwied, 1965); Jean-Jacques Ribas, "Securite sociale et classes sociales en France," Droit social, 15,7 (July-August 1952), 479; Guy Perrin, "Pour une theorie sociologique de la securite sociale dans les societes industrielles," Revue franqaise de sociologie, 8, 3 (July-September 1967), 317. Initial postwar reforms of a working-class, socialist bent in France could therefore not, in this view, be sustained; see Patrice Grevet, Besoins populaires et financement public (Paris, 1976), pp. 461-64; and Anne-Marie Guillemard, he de'clin du social: Formation et crise des politiques de la vieillesse (Paris, 1986), ch. 1.

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159

British and Nordic. Reformers in France and Germany attempted to assist the impoverished and needy by creating a common risk pool that included also the affluent and fortunate. They tried to achieve the genuinely redistributive measures that had supposedly been the goal in Scandinavia and across the Channel, only to fail. Several factors combined to determine the fortunes of their solidaristic aims. First, what exactly was intended? Here, superficial resemblances obscured crucial differences. Both Beveridge and the French reform plans, for example, universally included all, but they did so in very different ways. The British flat-rate contributory system restricted any vertical redistribution between the well-off and the worse-off to a minimum. The advantages that the needy derived from the fortunate, wage earners from the self-employed, and blue-collar workers from white-collar employees, came indirectly, to whatever degree the progression of the tax system rested more heavily on the affluent than the indigent. In France, economic devastation, the tasks facing postwar state finances and the perennial inefficiency of the fiscal system - the object of a national sport of evasion whose winning side always wore the colors of the self-employed - led reformers to eye social insurance with greater ambition.3 Even a partial tax-financing of welfare reform was ruled out of bounds here. Instead, not only was the social insurance system to be contributorily self-sustaining, it would also by itself have to face the task of redistributing between the fortunate and the luckless. The resources necessary to aid the needy and indigent could not come from the state in a veiled and oblique manner through the fiscal labyrinth, but were to be furnished directly from premiums paid by the better-off. All were to be included for pensions so that contributions from the affluent and advantaged could be used to finance means-tested benefits limited to the poorest. Because the social insurance system was in this way to be far more directly redistributive than anything attempted by the British or Scandinavians, resistance to such reform was correspondingly stronger than to the successful, but also more innocuous, Beveridge-style legislation. In Germany, similar redistributive jostling was complicated by the Occupation. The left briefly favored a Beveridgean approach to reform with universalist flat-rate social insurance, but hopes of its realization were undercut by several factors. Plans that had been put forth during the war by the Nazis for an all-inclusive social policy left an indelible taint on all 3 On the weakness of the French tax structure, see Carolyn Webber and Aaron Wildavsky, A History of Taxation and Expenditure in the Western World (New York, 1986), pp. 547-50.

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ambitions of a similar cast. Nor did it help that universalist reform was initially supported by the military occupiers for reasons that Germans of no class or political persuasion could accept. The Allies hoped to eliminate the state subsidies that German social insurance had long received, thereby freeing up fiscal resources for other purposes. In order to provide the funds necessary to keep the system running, they proposed to enroll all citizens, generating the monies required to maintain the needy by collecting contributions from the newly included classes. In the face of such redistributive ambitions, the formerly self-reliant independent middle classes, as well as white-collar wage earners, who now faced the prospect of underwriting workers' benefits, were given pressing reasons to resist reform. The unions, in turn, found equally little to back in plans that both reduced the rates workers were accustomed to receive and, through their overtly redistributive ambitions, also alienated potential allies among salaried employees. While Soviet fiat imposed such changes in the eastern zone, the Germans successfully blocked them in the west. Nakedly redistributive and associated both with the Nazis and the occupying authorities, solidaristic reform was never a viable proposition here. Second, not only were the emotions aroused against social policy reform strong on the Continent, the number of those objecting was legion. In Scandinavia, the inclusion of all under the state's welfare wing had been a point won by farmers for their own reasons already in the nineteenth century. In Britain, where wage earners were by far the demographically dominant class, the extension of social insurance beyond the dependently employed affected comparatively few. On the Continent, in contrast, the traditionally independent middle classes - now among the targets of reformers' redistributive intentions - were still an important group. In the decade after the war only one Briton in seventeen was self-employed, whereas a fifth of the French were. Independents constituted a political force on the Continent with little parallel across the Channel. Given good reason to resist all-inclusive measures by their traditional standoffishness and disinclination to associate with workers, but much more importantly by postwar plans to shift burdens in their direction, these groups mobilized protest vehement enough to defeat reform. In a similar way, white-collar wage earners, now also called on to help finance measures for the less fortunate, successfully set their stdndischly-organized political muscle to the task of resisting such burden-sharing. In Germany, proposed changes were vanquished without quarter. Artisans, already enrolled by the Nazis in the wage earners' pension

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insurance on irresistibly favorable terms, were allowed to remain. Other independents, however, neither wished, nor were asked, to join the common risk pool. Salaried employees, in turn, defeated attempts to redistribute from white- to blue-collar wage earners. In France, all in fact came under the umbrella of social insurance, but only on terms dictated by the newly included categories: high-ranking salaried employees (cadres) and independents. Cadres shunned all but the most minimal redistribution on behalf of manual workers. Independents, in turn, wrested from the government the right to belong to the social insurance system only as members of various occupationally defined subgroups, between and within which solidarity was limited. Finally, there were the social policy antecedents that affected wage earners' attitudes to the changes proposed. Initial legislative decisions conditioned and limited the choices that later remained available to reformers. At the behest of farmers, Scandinavia had chosen an allinclusive approach from the start and postwar reform merely extended this tradition. Britain's shift in a universalist direction was eased by her demographic homogeneity, by a partial inheritance of all-embracing legislation (the 1908 pensions) and by the comparative harmlessness of postwar reforms. On the other hand, both Germany and France had a venerable heritage of contributory workers' social insurance that could only painfully have been coordinated with the sort of significantly taxfinanced, flat-rate measures that Beveridge's prestige had now made the ideal. The Continental labor movements favored, but were unable to achieve, an all-inclusive scope for social insurance that would have spread the costs of risk widely and fairly. Other aspects of British and Scandinavian reform, in contrast, meshed only ill-fittingly with Continental traditions and found little favor among the trade unions here. Paying for provision by means of general taxes would, in Continental circumstances, have advantaged most those who had never before been members of social insurance, a move that would have threatened to conflict with the benefits workers had long paid premiums for. Taxfinancing, for all its ability to distribute burdens broadly, appeared inequitable in the eyes of an industrial working class wedded to its contributory entitlement. Workers saw no reason to give other groups publicly subsidized benefits after having long marshaled efforts on their own behalf. Nor were uniform benefits of interest to the French and German working class any more than they had been in Scandinavia. Because of social policy traditions here, however, the Continental labor movement

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had an easier time than the Nordic in defeating attempts to limit statutory intervention to such flat-rate minimalism. Neither France nor Germany could have altered its social insurance system at the expense of the contributory entitlement workers had already earned to income-related benefits, except against the wishes of the labor movement. The Continental left, in Germany especially, accepted uncritically for a time the model held up by Anglo-Scandinavian developments. Only after dispute with the unions did Social Democrats abandon attempts to fashion domestic reform after such inapplicable foreign patterns.4 Universalist, tax-financed, flatrate and - on the Continent - redistributive reform was regarded suspiciously in many respects not only by the bourgeoisie, but also by those who, in some accounts, ought to have been among its warmest supporters. To understand the disputes surrounding Continental welfare policy requires a word about financing. Until the Second World War, social insurance was largely funded, with contributions and benefits actuarially related. The destruction of both wars, the inflations and devaluations in between, wrought financial havoc and postwar measures of necessity shifted to a pay-as-you-go approach.5 Monies collected as contributions were now turned directly into benefits, the young paying for the old, the ambulatory for the disabled. The problem was no longer inflation, but demographic evolution, which at least had the advantage of greater predictability, birth rates following, as they do, less meandering paths than interest rates. Pay-as-you-go threw up a new distributive problem. Whereas strictly funded systems started up only slowly, leaving the transition generation of those too old to earn entitlement6 to the mercy of public assistance, kin or fate, pay-as-you-go offered two choices in the beginning. In one, only the contributions required to pay the benefits that had been earned could be collected. Low at first, premiums therefore grew increasingly steep as the system matured. The alternative was to collect contributions as though full benefits were due at once, leaving disposition of the surplus monies realized in the interim as a separate decision. One possibility in this respect was to treat the transition generation to benefits it did not deserve in any 4 Hence the misleading nature of the account in Gesta Esping-Andersen, "Politische Macht und wohlfahrtsstaatliche Regulation," in Frieder Naschold (ed.), Arbeit und Politik: Gesellschaftliche Regulierung der Arbeit und der sozialen Sicherung (Frankfurt, 1985), p. 475. 5 On the theory, see Rene Monin, Problemes de la retraite: De'bat capitalisation-repartition (Paris, 1958). 6 A group the Germans, with an unusually unsentimental term, call the alte Last or, if truly octogenarian, the uralte Last.

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actuarial sense. Seen from the perspective of the old funded systems, whose criteria of entitlement were often adopted, this was sheer frivolity. The first generation of full members in new pay-as-you-go systems often resented paying benefits to those who had never or only insufficiently contributed, even though this in no way diminished its own entitlement - claims that in the statutory chain letter of pay-as-you-go pensions would eventually be met from the pockets of the yet unborn. Conversely, a sufficiently powerful transition generation, including newly integrated members of formerly self-reliant groups, was often able to wrest benefits disproportional to contributions. Transition measures, affecting only the first cohort in new systems, are of only incidental importance to the theoretical construction and functioning of social insurance. Affecting the vast majority of voters when reforms are decided, on the other hand, they are politically crucial. The advantages secured by transition groups at the expense of current members and those of the future often sweetened the medicine that reformers were trying to administer. Solidarity, Social Security and Salaried Employees: France As elsewhere in Europe, plans for the postwar settlement in France included as an important element a system of universalist social security.7 This was among the promises held out by the Resistance.8 French policy makers who were to leave their mark after the end of hostilities drew inspiration from Beveridge's ideas. De Gaulle found his plan striking.9 7 The literature on French social policy is lamentably sparse. Every student of French postwar social policy is indebted to a book that also first saw the light as a Harvard dissertation: Henry C. Galant, Histoire politique de la securite sociale franqaise 1945-1952 (Paris, 1955). See also Gabrielle Bremme, Freiheit und soziale Sicherheit: Motive und Prinzipien sozialer Sicherung dargestellt an England und Frankreich (Stuttgart, 1959); Yves Saint-Jours, "France," in Peter A. Kohler and Hans F. Zacher (eds.), The Evolution of Social Insurance, 1881-1981 (London, 1982); Thomas Wilson (ed.), Pensions, Inflation and Growth: A Comparative Study of the Elderly in the Welfare State (London, 1974), ch. 6; Pierre Laroque, "Le plan francais de securite sociale: Sa conception, ses dix premieres annees," in Association regionale pour l'etude de l'histoire de la securite sociale, ier collogue regional: "Vingt ans de securite sociale," 1945-1965 (Nancy, 1979); and Guillemard, Le declin du social. The standard bibliography is Nadine Dada and Anne Proutiere (eds.), Bibliographic pour servir a l'histoire de la securite sociale, de Vassistance et de la mutualite en France, de 1789 a nos jours, 2 vols. (Bordeaux, 1980-83). The Comite d'histoire de la securite sociale, under Laroque's direction, is working on a history of French social security. 8 The CNR's Action Program (15 March 1944) is to be found in Rene Hostache, Le Conseil national de la resistance (Paris, 1958), pp. 457-63. 9 Harold Macmillan, War Diaries: Politics and War in the Mediterranean, January 1943-May 194$ (London, 1984), p. 281; Georges De Gaulle, Discours et messages (Paris, 1970) vol. 1, p. 208; John F. Sweets, The Politics of Resistance in France, 1940-1944 (Dekalb, 111., 1976), p. 74.

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Pierre Laroque, who deserves whatever honor the title the French Beveridge confers, spent part of the occupation in London.10 Alexandre Parodi, Labor Minister after the war, had been a member of the National Resistance Council's Comite general d'etudes, which took English reforms as a measure of its ambitions.11 But Britain was hardly the only example to follow and, indeed, the assumption that Beveridge's influence was universal raised hackles across the Channel.12 French reformers could also look back to native ideas for universalist reform, although whether they did is another question. In June 1940, the head of the social insurance system, Louis Doignon, presented Vichy Labor Minister Rene Belin with a proposal for change in an all-inclusive direction. Belin dismissed the plan as Utopian and Doignon from his post - a lucky symmetry that allowed him to resume his functions in September 1944, resubmitting the proposals to Parodi.13 French reformers disliked important aspects of Beveridge's report. Although following the British example of including all citizens for all risks, they rejected direct state control of social insurance in favor of a system of self-administering funds under government tutelage. Nor did flat-rate benefits, rejected as equal but not fair, find much favor.14 Quite incompatible with the psychology of the French was Laroque's verdict. They wanted the hierarchy of remuneration mirrored in welfare.15 10

See also Daniel Mayer, Les socialistes dans la resistance (Paris, 1968), p. 172. Comite general d'etudes de la France combattante, Les cahiers politiques, appendix xvi of Diane de Bellescize, "Le Comite general d'etudes de la resistance," diss., Univ. of Paris II, 1974. Otherwise, the resistance's conceptions for postwar social reform were vague; see Henri Michel, Les courants de pensee de la resistance (Paris, 1962), pp. 401-02; and Henri Michel and Boris Mirkine-Guetzevitch, Les idees politiques et sociales de la resistance (Paris, 1954), ch. 15. 12 Assemblee nationale, Archives, Paris, Commission du travail, minutes, 29 June 1945, Georges Buisson. For simplicity's sake, the parliamentary committee responsible for social policy is called the Commission du travail through a number of minor name changes. See also Cahiers francais d3 information, 73 (1 December 1946), 29-30; Institut de science economique appliquee, La securite sociale (Paris, 1945), vol. 1, pp. 170-71, vol. 2, p. 175; Marcel Tardy, "Plan francais et plan britannique de securite sociale," Le monde, 24/25 June 1945; and Romain Lavielle, Histoire de la mutualite: Sa place dans le regime francais de securite sociale (Paris, 1964), pp. 141-43. 13 Laroque, in a conversation during the early summer of 1984, denied that Doignon's plan had had any influence on the later reforms. On Doignon, see B. A. Chapuis, "Les groupements professionals et la securite sociale," memoire, Faculte de droit et des sciences economiques de Dijon, 3 November 1961, p. 28 (copy in the FNSP). As in Germany, the right and center were to use the stigma attached to plans for all-inclusive reform hatched during the occupation to damn similar attempts later; see JO Deb, 31 July 1945, p. 1688. 14 Michel Guerin et al., "La reforme du minimum vieillesse," Revue francaise des affaires sociales, 34, 4 (October-December 1980), 411. 15 Pierre Laroque, "Le plan francais de securite sociale," Cahiers francais d1'information, 51 (February 1946), 11; Pierre Laroque, "Le plan francais de securite sociale," Revue francaise du travail, 1,1 (April 1946), 16; Archives nationales, Paris (AN), SS7922, Commission chargee 11

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The plan with which the first postwar government fleshed out the Resistance's call for a comprehensive structure of social security was distinguished in its unity, universality and solidarity from the old system of social insurance.16 It rested on two principles. First, it covered all risks in one unified organization. Single funds joined all members together, abolishing the earlier right of establishing particularist insurance carriers organized by occupation, religion or social category. Second, the government aimed to cover all the French, no longer just the poorest wage earners. Reform was to be accomplished in two stages. First, well-paid salaried employees would be enrolled along with their blue-collar colleagues. Next, all economically active citizens, whether artisans, employees, peasants, workers, employers or liberal professionals, were to unite in a single risk community. As in Germany, social insurance was partially responsible for creating the distinction between salaried employees (Angestellte or cadres) and workers.17 The French law of 1930 had fixed an income ceiling above which the wage earner was assumed to be self-reliant.18 Thus freed from the statutory system, cadres had negotiated for occupational coverage, especially pensions.19 The autonomous schemes established on their behalf during the intervening years were now threatened by reforms that enrolled all wage earners in the General Regime of social insurance, allowing occupational arrangements to continue only exceptionally, and then but as supplements to statutory provision. As a group blessed by reasonable salaries and sedentary work, cadres d'etudier les modifications a apporter a Pordonnance du 19 octobre 1945, minutes, 24 November 1947. See also Claude Petit, La securite sociale en Grande-Bretagne (Le plan Beueridge) (Paris, 1953), p. 67. 16 Pierre Laroque, "From Social Insurance to Social Security: Evolution in France," International Labour Review, $j,6 (June 1948), 569ft. 17 Gerhard A. Ritter, Social Welfare in Germany and Britain (Leamington Spa, 1986), pp. 93—94. Although the category cadres has since been broadened, it is still less expansive than Angestellte. Since the comparison here is not between cadres and Angestellte as such, but between the relationship of workers to salaried employees in each country and the hopes of the former to share in the better fortunes that the latter - as a group - enjoyed, a strict analogy of social categories is unnecessary for the argument. I am indebted to Robert Darnton for this caution. Postwar reforms in Belgium distinguished, in a way more analogous to the German distinction, between ouvriers and employees; see Arthur Doucy, La securite sociale en Belgique: Le plan van Acker (Paris, 1946). 18 For details, see Henry Lion, Regime de retraites et de prevoyance des cadres (Paris, 1955); and Pierre de Baudus de Fransures, L'evolution du regime de retraites et de prevoyance des cadres de 1947 a 1969 (Paris, n.d.). 19 Antoine Prost, "Jalons pour une histoire des retraites et des retraites (1914-1939)," Revue d'histoire moderne et contemporaine, 11 (October—December 1964), 278; Roger Casati, Vorganisation d'un regime de prevoyance et de retraites en faveur des cadres de VIndustrie (Paris, 1938).

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had enjoyed the advantages of a selected risk community that permitted better benefits more advantageously than was actuarially possible for the population as a whole.20 The government now did away with such special treatment, threatening to plunge employees into a common risk pool. Worse, from their point of view, the proposed reforms also included a direct attempt at redistribution through the Allowance for Elderly Wage Earners, a form of public assistance attached to social insurance. The allowance obliged well-paid wage earners to provide noncontributory means-tested benefits for their needy colleagues. First implemented by the Vichy regime, but based on prewar Republican proposals, the allowance aided both workers whose efforts at self-help had been obliterated by currency devaluations and the transition generation, which had been largely abandoned by the 1930 law.21 While generous, the allowance was also profligate, drawing as it did on no new source of income and paying benefits out of the accumulated kitty from which the future pensions of still active workers were eventually to come.22 Relief for this economic devastation came at first in the form of ordinances that in turn raised premiums, separated the social insurance system financially from the allowance, and levied a special employer's contribution.23 With whitecollar wage earners now enrolled in social insurance, their employers would be liable for this contribution while the allowance's means test disqualified cadres from benefit. For this reason the government wished to include salaried employees and they, in turn, preferred to remain outside.24 The government's motives for universalist social insurance reform were a marbled pattern of lofty humanitarian sentiment and crafty economic realism. Invoking the wartime spirit of fraternity and class rapprochement, reformers hoped to legitimate the redistribution allowed by an all20 Generally, on such class distinctions in old age, see Anne-Marie Guillemard, La vieillesse et I'etat (Paris, 1980), pp. 89ff; and Anne-Marie Guillemard, La retraite: Une mort sociale: Sociologie des conduites en situation de retraite (Paris, 1972). 21 JO Doc, 8 March 1945,290, pp. 362-63; Hans Ziegler, Versicherungs- und Solidaritatsprinzip im schweizerischen und im franzdsischen Sozialrecht (Geneva, 1958). 22 Francis Netter, "Les retraites en France au cours de la periode 1895-1945," Droit social, 9/10 (September-October 1965), 517; Francis Netter, "La securite sociale en France," Notes documentaires et etudes, 451 (25 October 1946), 14. 23 Ordinances of 30 December 1944; see "Social Insurance Measures in France," International Labour Review, 52, 1 (July 1945), 83-84; "Wage Increases in Liberated France," International Labour Review, 50, 5 (May 1945), 610; and Assemblee nationale, Archives, Commission des finances, minutes, 12 January 1945, Parodi. 24 For example, see Assemblee nationale, Commission du travail, minutes, 17 July 1946, Croizat.

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inclusive social policy.25 Salaried employees, however, were not taken in by appeals to solidarity over self-interest.26 Singled out for what seemed like disproportional burdens, they saw no reason to join social insurance and bear the brunt of reform while other wage earners with special pension arrangements (civil servants, employees of the Paris Opera, miners, for example) were exempted from a fairer allotment of costs. Immatriculation in the General Regime, they complained, was a disguised form of taxation. Helping the poor was a task for the whole community, not merely one part of it.27 The Christian Democrats (MRP), frequently spoken for on matters of social policy by Henri Lespes and Charles Viatte, were the first party to wake to the political potential of salaried employ-, ees' discontent. They seconded the cadres9 criticism of all-inclusive measures based on single funds.28 Though in favor of reform, the MRP preferred social security organized through a plurality of insurance carriers or funds outside the state's control. Single funds, replacing the former plethora of carriers, where MRP militants had been well represented, threatened the party's influence.29 The Christian Democrats also opposed the government's plan to have the unions appoint members of the funds' administrative councils for fear that the Communist-dominated CGT would gain a firm footing in the vast social insurance bureaucracy under construction.30 The real battle over enrolling cadres in social security did not begin until the summer of 1946 and the approach of the deadline for the start of the new system. In the second Constituent Assembly the Christian Democrats, now the single largest party, were well equipped to pursue salaried employees' concerns.31 While the party worked in parliament to delay the immatriculation of cadres and preserve their occupational schemes, 25 For example, Parodi's introduction of the 4 October 1945 ordinance; see JO Doc, 5 July 1945, 507, p. 665. 26 For an example of such an appeal, see Labor Minister Croizat's press conference, Notes documentaires et etudes, 346 (6 July 1946). 27 Le creuset, 2, 35 (15 M * y !946); 1, 15 (15 July 1945); JO Deb, 31 July 1945, p. 1678. 28 Archives nationales/Fondation nationale des sciences politiques, Paris (AN/FNSP), MRP Archives, 350 AP 13, Commission des professions independantes, minutes, 13 December 194529 AN/FNSP, 350 AP 14, MRP Archives, Reunion de la Commission de politique sociale et familiale, minutes, 15 December 1945, Nhys. 30 For indications of Communist awareness of the possibilities here, see the account of Benoit Frachon's comments in the Central Committee, 27 November 1946, Harvard University, Houghton Library, Andre Marty Archive, reel 13, A M / H B 4 ex. C, 28/X1/46, C. C. du 27/X1/46. I am indebted to Nathaniel Trumbull for this reference. 31 Henri Meek replaced the Socialist Rene Peeters as head of the parliamentary Labor Committee.

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salaried employees themselves moved to more direct action.32 In June, a Defense Committee was formed by the Christian Trade Union (CFTC) and the Confederation generate des cadres (CGC), the newly founded salaried employees' organization. In July, it launched a warning strike against the government's plans.33 With public protest and parliamentary opposition, the political agreement on the left that would have been necessary to pass reform, as originally conceived, against bourgeois resistance began to crumble. When the Communists tried to coordinate strategy with the Socialists, they were rebuffed.34 Like the Christian Democrats, the SFIO worried that the PCF was aiming for administrative control of the new system.35 Disagreements within the fragile tripartite coalition were laid bare when, in mid July, the government took up the MRP's proposals to modify reform, spoken for in this case by Robert Pringent, the party's Minister of Population. Without Socialist support on this point, Croizat agreed to have the administrative councils elected rather than appointed.36 The ministers concurred that the social insurance system should begin as planned, but divided over whether to have all members join the same funds.37 During the same weeks, the CGT and the Labor Ministry were negotiating the concessions that would allow the government to integrate salaried employees. Cadres, they concluded, would be obliged to join social security, with all the redistribution this implied, for that part of their salaries below a given wage ceiling. Above this, a supplementary system would guarantee them benefits approximating those of the old occupational schemes.38 With this compromise accepted, Croizat announced the formation of a Parity Commission to work out the details of the cadres' supplementary scheme, promising that in the interim they would not be compelled to enroll in the General 32

JO Doc, 2.6 June 1946, II-22, p. 8; 4 July 1946, 11-86, p. 82. Disputes among politicians over social policy reform were mirrored within the union movement; see Edouard Dolleans and Gerard Dehove, Histoire du travail en France: hAouvementouvrieretlegislationsociale(Paris, 1955), vol. 2,pp. 290-95;GastonTessier,"La Confederation francaise des travailleurs chretiens et le plan actuel de securite sociale," Droit social, 9,5 (May 1946), 209-20; and Gerard Adam, La CFTC, 1940-1958: Histoirepolitique et ide'ologique (Paris, 1964), pp. 139-44. For the background, see R. E. M . Irving, Christian Democracy in France (London, 1973), ch. 4. 34 Le monde, 13 July 1946. 35 Office universitaire de recherche socialiste, Paris, Comite directeur de la SFIO, minutes, 10 July 1946, Gazier, Priou. 36 Organized by a law of 30 October 1946. 37 Le monde, 13 July 1946, 14/15 July 1946. 38 Le monde, 25 June 1946, 10 July 1946, 11 July 1946. See also Commission du travail, minutes, 1 August 1946; and JO Doc, 2 August 1946, II-346, p. 287. 33

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Regime.39 Shelving for the moment its objections to reform, the MRP joined once again in tripartite harmony with the left to approve Croizat's initiatives. Peace seemed to reign as the issue was swept under the carpet, whose corner was held up by Francis Netter, chairman of the Parity Commission. In the Commission Although removed from the limelight, the conflict between salaried employees and the government had by no means been resolved. In the Parity Commission, the Christian trade unions and the CGC refused to accept inclusion in the General Regime without a guarantee that cadres suffer no disadvantages and they pressed for the continuation of salaried employees' autonomous occupational arrangements.40 The impasse was broken only when the proposals put forward by the Employers' Federation for a supplementary scheme based on collective agreement were accepted by all parties.41 Consultation was proceeding apace when a government decree revoked Croizat's promise not to enroll salaried employees, shattering the truce and bringing the commission's work to a halt. With negotiations close to completion, Leon Blum's minority, and brief, allSocialist government had decided to include cadres in the social security system without further delay. Salaried employees opposed integration, the government realized, because they were convinced that a scheme limited to them alone would permit higher benefits at lower costs. This margin of advantage, Laroque argued in a report to Croizat, corresponded to the redistributive effort that could reasonably be asked of cadres on behalf of less fortunate wage earners.42 In any case, other laws had in the meantime extended social security to all citizens, making it hard to justify separatist arrangements for employees. Granting them autonomy meant tolerating the "egotism of the rich." 43 39

]O Deb, 8 August 1946, pp. 3o6zff; Lion, Regime de retraites, p. 42. The Parity Commission's records are to be found in Ministere des affaires sociales et de la solidarite nationale, Paris, Sous-direction de l'assurance vieillesse, Bureau V4.569, Commission nationale paritaire d'etude des regimes complementaires de securite sociale. See also Francis Netter, "L'elaboration de la convention collective nationale du 14 mars 1947," in AGIRC, Le regime de retraites des cadres: if anniversaire 1947/1971 (Paris, n. d.); and Lion, Regime de retraites. Lion was a CGC representative in the commission. 41 Commission paritaire, minutes, 21 August 1946; sub-commission, minutes, 14 September 1946. 42 Commission paritaire, "Note pour monsieur le ministre sur Petat du probleme des cadres," 1 October 1946. 43 Commission paritaire, Netter to the Labor Minister, 6 January 1947. 40

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Incensed by the government's apparent perfidy, salaried employees broke off negotiations.44 The dispute once again shifted to the streets as the cadres' Defense Committee held a mass meeting in support of separatist schemes at its customary haunt, the Salle Wagram.45 A fortnight later, Henri Lespes and the MRP sparked an interpellation debate and forced Croizat to grant a series of concessions, the most interesting of which concerned the Old Age Allowance.46 Although their employers paid premiums for the allowance, the cadres' supplementary arrangements would normally have disqualified them from receiving it.47 Croizat now promised to exempt supplementary pensions from the calculation of means that determined eligibility.48 On this basis, Lespes declared himself satisfied and Croizat received a vote of confidence on enrolling salaried employees forthwith. The Assembly thereby denied employees the right to exemption from the General Regime's equalizing effect that it was to concede, after vehement protest, to the self-employed a few months later. Nevertheless, the price employees exacted for their membership was far higher than the government had ever intended. They were included along with their blue-collared colleagues in social insurance, but without being asked for sacrifices proportional to their means. Untouched by the General Regime, their incomes above its ceiling financed supplementary benefits that, in turn, did not disqualify them from the allowance, once intended for the poorest. Cadres were also permitted to pay retroactive contributions in depreciated currency to earn entitlement for the period (1930-47) before their enrollment in the statutory system.49 The cadres' supplementary scheme, based on the collective agreement of 14 March 1947, was a strikingly novel reform that in many respects 44

Commission paritaire, minutes, 4 January 1947. he creuset, 48 (15 January 1947). 46 JO Deb, 28 January 1947, pp. 11 iff. They were spelled out in a letter to their organizations on 4 February 1947, printed in he creuset, 50 (15 March 1947), reprinted in Lion, Regime de retraiteSj pp. 64-65. They were formalized in the law of 23 August 1948 (48-1307). 47 Commission paritaire, minutes, 20 December 1946, de Lagarde, Netter. 48 Exempting supplementary pensions from the allowance's means test was similar to the step taken in Scandinavia and Britain when formerly targeted benefits were transformed into national pensions for all. A substantial benefit was distributed regardless of need so that the well-off would not be discouraged from self-help. The French measure, however, was only a transitory step since the allowance faded in importance as an ever increasing proportion of the population earned entitlement to full insurance pensions. See Commission paritaire, note no. 674, Netter to Croizat, 29 January 1947. 49 For a more recent example (over unemployment insurance in the early 1970s) of disputes over solidaristic redistribution between cadres and workers, see Marcel David, La solidarite comme contrat et comme ethique (Paris, 1982), pp. 85—90. 45

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anticipated Anglo-Scandinavian experiments in superannuation a decade later.50 Financing was its most innovative feature.51 Where the General Regime retained the entitlement criteria of funded systems, with benefits preceded by the requisite contributions, salaried employees tested the outer limits of pay-as-you-go, treating their transition generation with remarkable generosity. Retired and disabled employees with insufficient or no contribution records were given benefits as though they had, in fact, been full participants. Whether such intergenerational solidarity would have been possible had the system not been limited to so narrow a social category remains an open question. The salaried employees' mutual beneficence was, to be sure, facilitated by the handsome demographic figure they, as a group, cut. With economic developments rapidly increasing their numbers, many were young and working, few old and disabled. The supplementary scheme rested on contributions paid from employees' salaries above the ceiling set by the general social insurance system. The cadres' interest in keeping this limit low in order to enhance the scope of their own measures limited the General Regime to modest benefits, barely comparable to public assistance. As a consequence, even workers soon recognized the necessity of establishing similar supplements. By 1961 all wage earners were compulsorily affiliated to such schemes, blue and white collars each in their own. 52 The ultimate effect of this flight to supplementary arrangements, in which redistribution was limited - provoked as it had been by the solidaristic intent of postwar initiatives - was therefore to prevent the reformers' ambitions for significant statutory intervention from being fully realized. The battle fought by French salaried employees over universalist reform was sparked by the government's choice of a politically awkward and vulnerable way to aid the poorest: direct vertical redistribution within a social insurance system otherwise premised on the ethic of contributory entitlement and actuarial propriety. In 1945, it was still too early for the sort of positive relations that would later (in Sweden, for example) develop between Socialists and salaried wage earners. Cadres were still regarded as a comfortably well-off and politically suspect elite, not a rising class to be courted by a left that had drained its blue-collar electoral reservoir. By the time the SFIO awoke to the salaried employees' transformation from 50 For details, see Henry Lion, "La convention du 14 mars 1947 et son evolution," Droit social, 25, 7/8 (July—August 1962). 51 Tony Lynes, French Pensions (London, 1967), pp. 66ft. 52 Philippe Suet, La retraite complementaire des salaries non cadres (Paris, 1966).

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reactionary minority into potential members of a progressive majority, their role in French social insurance had been settled.53 But even if its relation to the welfare system was posed prematurely in this sense, postwar disputes heralded the coming of the salariat as a force to be reckoned with. The foundation of the CGC after the Liberation challenged both the old unions, with their presumptions to represent employees within a traditional blue-collar framework, and the government. The CGCs fight for official recognition preceded that over pension reform by mere months. 54 The social insurance dispute was the CGCs first test of its mettle, and its stridently obstructionist attitude was equally determined by the need to etch a distinct ideological profile as by any material interests.55 This gamble to stake out turf in the competition for the allegiance of salaried employees paid off handsomely as the CGC went on to establish itself as their primary organization.56 The Self-Employed and the Allure of Social Separatism In mid April 1946, the government raised the stakes of its reforming ambitions by extending social security to all citizens.57 Although social policy had originally been aimed at the neediest and in particular at wage earners, Labor Minister Croizat argued, the uncertainties of modern life afflicted all, giving each cause to seek protection.58 The self-employed were now to be included for pensions and, in return, asked for appropriate contributions.59 Since entitlement would require years to earn while many 53 See, for example, the meeting of the Socialist parliamentary group on 6 March 1961, where the question of whether a self-respecting left party could concern itself with employees' problems was still the object of a fundamental policy dispute (FNSP, Groupe parlementaire socialiste, minutes). 54 Andre Malterre, La Confederation generate des cadres: La revoke des mal aimes (Paris, 1972), pp. 26-27; Le creuset, 15 October 1964; Georges Lefranc, Le mouvementsyndicalde la liberation aux eve'nements de mai-juin 1968 (Paris, 1969), pp. 18-19. 55 Commission paritaire, Netter, notes to the Labor Minister, 16 September 1946, 6 January 1947. See also Luc Boltanski, The Making of a Class: Cadres in French Society (Cambridge, 1987), pp. 9 2 - 9 3 . 56 See, generally, Georges Benguigui and Dominique Montjardet, "The C G C and the Ambiguous Position of the Middle Strata," in Mark Kesselman (ed.), The French Workers' Movement: Economic Crisis and Political Change (London, 1984). 57 Overviews can be found in B. Faure, "Generalisation de Passurance vieillesse a Pensemble de la population," Droit social, 12, 1 (January 1949); Roger Jambu-Merlin, "Le probleme de la securite sociale des travailleurs non salaries aux lendemains de la liberation," Droit social, 3 (March 1970) and Galant, Securite sociale. 58 JO Doc, 19 April 1946, 1146, pp. 1123—24. 59 Knowing that the self-employed were more often able to conceal earnings than wage earners, the government decided to assume that none was worse off than the poorest worker, asking them to contribute accordingly.

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independents were old, impoverished and in need of immediate relief, the bill also introduced a means-tested Old Age Allowance similar to that for wage earners. The allowance was to be the expression eclatante of the nation's solidaristic sentiments - and therein lay the problem.60 Parliamentary consideration of reform began with a burst of unanimous good intention, welcoming the extension of an allowance to the selfemployed as a way of replacing the stigma of public assistance with the community's mutual generosity.61 Such harmony did not, of course, endure. The hurdle it failed to clear took the form of a disagreement over the relationship between social security and public assistance, between longterm reform and the need to help the neediest aged independents at once. More prosaically, the question was how to pay for the allowance. Significant state subsidies were out of the question. No one wished to push for the new taxes required. With workers already contributing to provide for their poor, publicly financed benefits for independents would have raised problems of equity.62 The alternative was to include the allowance as a redistributive element of the social security system, funding it solely from contributions without public monies.63 Where the political spectrum divided was over how to broaden welfare to include also the self-employed. The right and center favored extending only the allowance (or, at most, provision for old age: the allowance and pensions), the left was for generalizing all facets of social security.64 For both camps, the immediate goal was the same: to finance the allowance for the neediest without making demands on the state budget by including even the fortunate classes as members of social insurance.65 They differed, however, on how extensive a redistributive effort to ask of independents. The left and the government's hopes for broad coverage were based on financial necessity. In the absence of state subsidies, the wider the circle of the insured who were enrolled and the risks that were covered the more solvent the system would be. Enrolling all the selfemployed merely for the allowance would have sufficed only if the 60

JO DoCy 19 April 1946, 1146, p . 1124. Assemblee nationale, Commission du travail, minutes, 24 January 1946, Costes, Viatte. Commission du travail, minutes, 14 February 1946, Viatte; JO Deb, 28 December 1947, p. 6407, Adrien Renard. 63 Commission des finances, minutes, 25 April 1946, Costes. See also, A N SS7922, Commission chargee d'etudier les modifications a apporter a la loi du 22 mai 1946 portant generalisation de la securite sociale, minutes, 4 June 1947, Daniel Mayer. 64 Commission du travail, minutes, 14 February 1946, Viatte, Jean Courteois. 65 T h e right's plan, t o o , aimed to ensure the necessary redistribution; see Commission du travail, minutes, 7 March 1946, 27 March 1946, Courteois. 61

62

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government had expected to collect contributions from every independent.66 Extending all social security programs, in contrast, promised to generate sufficient funds to finance the allowance regardless of the likelihood - feared by the government reformers - that many independents would be able to shirk their share of premiums.67 Generalizing coverage of all risks, not just the means-tested allowance, from which the better-off derived no advantage, would also entice even the affluent self-employed to pay the contributions that allowed aid to the poorest. All should pay premiums for protection against every risk to ensure that each had an interest at stake, Laroque argued: the old in their pensions, the young in sickness and maternity benefits, the well-off in measures given without a means test.68 Opponents on the right of complete generalization feared lest extending all of social security at once impose excessive burdens on the self-employed and preferred to limit expansion in hopes of restricting the obvious redistributive efforts being asked of the fortunate. During the spring of 1946 murmurs of apprehension from independents at the prospect of overly ambitious initiatives began to be heard, but by this point the government had finally been able to agree on reform. The Minister of Agriculture was appeased through the special conditions agreed for farmers and peasants. Finance Minister Andre Philip's fears of price increases were stilled by postponing change until industrial production had reattained its prewar levels.69 The bill that emerged, extending social security to all the French, was hailed as a great effort of national solidarity, comparable in its grandeur to the Beveridge Plan.70 Although in committee it had generated controversy and debate, in May 1946 it passed through parliament in a unanimous and benevolently confusedflurryof last-minute approval as part of what Gordon Wright has immortalized as the revolution in a spare moment.71 By providing the law with no starting date, the Assembly had, in fact, done little more than vote a principle. Postponing reform left unaddressed the urgent needs of impoverished elderly independents. Four months later, 66

Commission du travail, minutes, 14 February 1946, Costes; 27 March 1946, Laroque. «*7 Commission du travail, minutes, 27 March 1946, 4 April 1946, 24 April 1946. 68 Commission du travail, minutes, 14 February 1946, Costes, Courteois; 7 March 1946, Costes; 24 April 1946, Costes, Meunier, Laroque. 69 Commission du travail, minutes, 17 April 1946, Peeters. 70 JO Docy 25 April 1946, 1215, pp. 1206-07; Commission du travail, minutes, 24 April 1946, Philip. 71 The law of 22 May 1946. See JO Deb, 26 April 1946, p. 2384; and Gordon Wright, The Reshaping of French Democracy (Boston, 1948), pp. 168 ff.

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several parties proposed measures to aid the poorest and a partial application of the May law in anticipation of the requisite production levels. Both Finance Minister Schuman of the MRP (who had replaced the Socialist Philip) and Croizat were persuaded to accept a premature implementation of provision for old age, although Schuman insisted on a sharp differentiation between means-tested and proper insurance benefits and that, of the total 9% contribution foreseen, only the 4% needed for the allowance be collected at first.72 The May law on generalizing social security was now to be enacted for pensions and the allowance. Schuman's proviso on contributions disappeared along the way, leaving the full 9% to be levied, while only means-tested allowances were paid for decades to come, until the first real pensions came due. Because the system was thereby made overtly redistributive, it sparked the resistance that eventually led to its failure.73 Resistance and Failure Opposition to enrolling the self-employed in social insurance welled forth at once. Administratively, the government's task - immatriculating some fifteen to twenty million independents in addition to salaried employees was hopeless. The flat refusal of many new members to cooperate did not help matters. Although ration coupons were sometimes denied resisters, the sheer scale of the problem ruled out any solution by force. Politically, the reformers' position was little better. In December 1946, a fortnight before the extension to all independents, Christian Democrats renewed their attacks, putting the issue of fund plurality once again through its paces. Integrating all, they insisted, made it imperative to abandon single funds; instead, different social and occupational groups should be allowed to allocate risks among peers. The proposed reforms were unfairly redistributive.74 Assistance and insurance should be clearly separated. The government's attempt to blur the distinction, levying - in the guise of pension contributions - higher sums than necessary to extend the allowance at once, was rejected.75 The MRP's proposal, put forth by Viatte, aimed instead to split social security into three separate systems (for wage 72

C o m m i s s i o n des finances, m i n u t e s , 28 A u g u s t 1946; JO Doc, 3 S e p t e m b e r 1946, II-634,

pp. 478-81. 73 74

T h e bill w a s passed u n a n i m o u s l y o n 11 September 1946. JO Doc, 12 D e c e m b e r 1 9 4 6 , 7 9 , p p . 5 4 - 5 5 ; C o m m i s s i o n d u travail, m i n u t e s , 20 F e b r u a r y

194775

JO Doc, 28 M a r c h 1947, 1142, p . 7 3 2 .

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earners, agrarians and nonagricultural independents), permitting a plurality of insurance carriers within each.76 The government countered with a last-ditch defense of universalist, redistributive reform. Differentiation by social group, Croizat argued, did scant justice to the amorphous complexities of French society. The self-employed were a varied lot, with a greater distance separating industrialist from artisan (joined by the MRP in the same risk category) than craftsman from worker. As a precarious risk community, independents would be favored, he attempted to persuade them, not harmed by all-encompassing national solidarity.77 During the following weeks, however, actuarially based calculations of self-interest at variance with Croizat's proved their mettle against vague appeals to the common good. In mid February 1947, Roger Millot founded the Comite national de liaison et d'action des classes moyennes to unite independents and cadres in impeding reform.78 The following month the government capitulated. Croizat unsuccessfully proposed a compromise that upheld the unity of the social security system while paying the same price for independents' membership that he had offered for employees: granting them the allowance without a means test.79 A week later the Christian Democratic proposals on socially particularist welfare policy were accepted in committee, with the Communists opposing, the Radicals for, and the Socialists playing the political weathervane, abstaining because of the economic situation and hostile opinion among the middle classes.80 Thus ended the government's ambition for universalist reform. Croizat reluctantly

76

Charles Viatte's own account is in his La securite sociale (n.p., 1947), pp. 40-43. Commission du travail, minutes, 27 February 1947. Although producing more smoke than fire at the time, the Comite was to outlast these first battles. Le figaro, 17 March 1947, 26 March 1947, 3 April 1947, 10 May 1947, 17 May 1947, 6/7 July 1947; Suzanne Grevisse et al., Succes et faiblesses de Veffort social francais (Paris, 1961), pp. 224-25. 79 Le rond-point independant, 15 March 1947; Notes docwnentaires et etudes, 583 (28 March 1947); Chambre de commerce de Paris/Bony Archives, 5"1 — 52, Comite central des institutions sociales (de Lagarde), "Situation parlementaire concernant le projet de securite sociale," 28 March 1947. This is one of a series of documents collected at O R G A N I C in Paris by Pierre Bony, w h o very kindly allowed me to consult them there. Further material from this source is labelled "Bony." On government plans to remove means tests for independents, see the transcript of a press conference, "La securite sociale a la date du l cr Janvier 1947," FNSP, Daniel Mayer Archives, 10.4. 80 Commission du travail, minutes, 20 March 1947, 27 March 1947, Moisan, Musmeaux, Viatte; Chambre de commerce/Bony, 5"' — 52, "Situation parlementaire concernant le projet de securite sociale." The SFIO was heavily dependent electorally on independents; see B. D . Graham, The French Socialists and Tripartism, 1944—1947 (London, 1965), pp. 214—15. 77 78

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promised to use the coming parliamentary recess to plan measures that would benefit the protesting groups.81 In mid April, a special commission chaired by the Conseiller d'Etat Frederic Surleau was appointed to formulate an autonomous social insurance regime for independents.82 Although Labor Minister Daniel Mayer, who had replaced Croizat, sent the self-employed to their task with the brief not to fragment welfare policy more than was necessary, they in fact insisted on four separate schemes: for liberal professionals, for industrial and commercial independents, for artisans, and for agriculture. By demanding their own social insurance system and by splitting arrangements according to such categories, independents circumvented the redistribution among classes that had until now prevented their participation in social security. At the same time, by rejecting solidarity at the national level, they abandoned each separatist scheme to the inequalities of economic change and to its own demographic evolution. Limited to the low contributions affordable by its poorest members, each particularist system was to provide pension benefits not much greater than public assistance. Because circumstances varied among the different groups of the self-employed, premiums, rates and other conditions were to be individually determined within each scheme.83 Despite objections from the nonindependents represented on the Surleau Commission, the 17 January 1948 law, creating an Old Age Allowance for the self-employed through socially separatist systems of social insurance, followed these proposals closely.84 In introducing this legislation that had been dictated by the self-employed, the government lamented the failure of 81 JO Deb, 28 March 1947, pp. 1227-28; A N , SS7920, Croizat t o regional social security directors et al., 5 April 1947. In the meantime, unwilling to front the necessary sums itself, the government was forced to engage in embarrassing loan negotiations with the General Regime in search of the funds to provide impoverished elderly independents with benefits. Wage earners, whose contributions were thereby used for purposes the young self-employed had proven unwilling to support, were understandably unenthusiastic at these maladroit maneuvers that failed to further the spirit of class rapprochement on which the official rhetoric put such emphasis. See A N , SS7921, Commission sur le pro jet de loi relatif a la reconduction de l'allocation temporaire aux vieux, minutes, 14 April 1947, Laroque, Tessier, Croizat. 82 T h e Surleau Commission's records are to be found in A N , SS7922, Commission chargee d'etudier les modifications a apporter a la loi du 22 mai 1946 portant generalisation de la securite sociale. 83 Surleau Commission, report by Bernard Lory. T h e caustic tone of Lory's report reflected accurately the deportment of the government administrators towards independents, whose deliberations, although squabbling and confused, were effectively pulling d o w n the magnificent social security edifice that reformers had planned. Lory's experiences here left an imprint on his description of the failure of French social policy reform in La politique d'action sociale (Toulouse, 1975), pp. 2 9 - 3 1 . 84 Surleau Commission, minutes, 4 July 1947.

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its ambitions. The administrative machinery had been poised to process the new beneficiaries, it claimed with a flourish of bureaucratic hubris. Economic circumstances, however, and what reformers faced with the stubborn defense of acquired privileges liked to call "the insufficiency of psychological preparation" among independents had sparked resistance.85 In a charged round of lamentation, the bill based on the Surleau Commission's deliberations became law as both parties of the left joined the government in bemoaning the breakdown of universalist reform while, at the same time, refusing to vote against the wishes of the self-employed.86 Affluent Independents and Redistribution Why independents resisted universalist reform is a question that defines the limits of social redistribution. Some reasons were incidental: the final straw of first social insurance contributions coinciding with other measures that lowered prices and raised taxes. Others concerned administrative problems: included together with wage earners in single funds, the selfemployed feared that they would have little influence.87 Like workers in the late nineteenth century, the self-employed also resented the state's intrusion through compulsory social insurance.88 The fundamental reasons, nonetheless, to judge from the issues raised and debated by independents themselves in the relative privacy of their own organizations and as decisions were taken in the commissions and committees, concerned the distribution of social burdens: who paid what to whom. These questions were more complicated than they had been for salaried employees. Among wage earners, where membership in social insurance up to 1945 had separated the well-off from the worse-off, the ambitions of the needy to share burdens with the fortunate through all-inclusive measures and, in turn, the reciprocal lack of interest among the self-reliant were clearly articulated. Independents (grouped as artisans, the liberal professions, the industrially and commercially self-employed and peasants) added a new twist. These categories united the affluent and unfortunate within each occupation, while at the same time themselves reflecting a hierarchy of social and economic circumstance. There were therefore two possibilities 85

JO Doc, 9 December 1947, 2805, p. 2206. JO Deb, 28 December 1947, pp. 6404ft. Chambre de commerce d e Paris, Les regimes sociaux des commercants et industriels independents: Evolution et reforme (Paris, 1979), vol. 1, p. 17. 88 Henri Hatzfeld, Du pauperisme a la securite sociale (Paris, 1971), pp. 242, 246. 86

87

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for resistance to the redistributive element of reform: (1) the prospering within each group might resist sharing the burdens of the poor and risk-prone in their own category; and (2) each favored category as a whole might resist compensating less fortunate ones. Distinguished for the sake of conceptual clarity, in practice these two were invariably intertwined. The first form of resistance to redistribution - by the affluent within each category - was expressed most clearly by employers, the cream of industrial and commercial independents. The level of contribution to be collected and the use of the revenues thus raised were the focal points of dispute over the redistributive implications of social security. In the parliamentary Labor Committee, the debate over whether to extend all branches of social security or merely the allowance had turned largely on these questions. The government feared that, if many independents refused to pay contributions, then limiting the generalization of the social insurance system to the allowance and collecting only its earmarked premiums would not generate enough income to grant benefits to all the needy. With state subsidies ruled out, revenue additional to that raised by the contributions intended for the allowance was required to guarantee its financing. Extending all of social security, or at least pensions, as the government proposed, would, in contrast, justify higher premiums, which could be used to cover the immediate needs of the impoverished elderly. Contributions for the allowance that some independents managed to evade would be replaced by higher sums from those who could not avoid payment. Even though the pension entitlement earned, in turn, by the latter through the premiums currently rechanneled to pay for the allowance would eventually be met from the pockets of future generations, independents who expected to pay full contributions balked at giving more than would have been necessary were all to shoulder their share. Such reasoning lay behind the rejection by employers and businessmen of universalist reform. Extending statutory provision for old age interested them little. Prosperous independents were not only barred from the means-tested allowance, they complained, they were also asked for higher premiums than required to pay for it. Assuming only a partial collection of contributions because many self-employed were poor or would simply refuse to pay, the government aimed to raise more money than theoretically necessary for the allowance by extending social security to all. Enrollment was thus, in the view of these well-heeled indepen-

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The Failure of the Solidaristic Welfare State

dents, the disguised imposition of an unfair tax, paid only by those who voluntarily submitted or could not avoid it.89 The affluent of any given category wished to limit their redistributive burden. Given the availability of means-tested provision and a fear of the high premiums necessary - in the absence of state subsidies or a solidaristic approach - for generous coverage, the less-favored could also be persuaded that restricting the scope of social security was to their advantage. Although it had initially intended to grant the self-employed a system like that for wage earners, the Surleau Commission was eventually compelled by the independents' inability and unwillingness to make the necessary sacrifices for full-scale social security to aim instead at the lowest common denominator. Artisans were a strong force in this respect, insisting on arrangements that did not make excessive demands of their limited resources. More prosperous independents, however, quickly learned to agree for their own reasons.90 The industrially and commercially selfemployed had at first been willing to pay for minimum benefits equal to the wage earners' allowance, Georges de Lagarde, the representative of the CNPF and spokesman for the employers on such matters, admitted. But the artisans, who had rejected such a solution, had been right. Many small shopkeepers could also not afford high premiums and a lower benefit was preferable.91 Pleading the plight of the poor was, in this case, an investment with handsome returns for the affluent. Extending pension insurance was of little interest to them, prosperous businessmen complained. For their contributions few would receive even the paltry benefits promised. Moreover, they continued, shifting solicitous attention to the less fortunate within their category, premiums were a heavy burden for smaller enterprises. Contributions were, in fact, a camouflaged tax, and social security stood exposed as but a system for redistributing income.92 In short, too much was asked of the poor and too little given the rich. 89 Chambre de commerce de Paris/Bony Archives, 51" - 52, dossier "Securite sociale des employeurs, 1946-1947," "Les nouvelles dispositions de la loi du 13 septembre 1946," sent by de Lagarde of the CNPF to the Paris Chamber of Commerce through his organization, the Comite central des assurances sociales, 15 October 1946. De Lagarde's complaint was echoed faithfully in Viatte's report on the MRP proposal to change the May 1946 law; see JO Doc> 28 March 1947, 1142, pp. 730-32. 90 Surleau Commission, sub-commission minutes, 12 June 1947,17 June 1947. For similar arguments, see Commission du travail, minutes, 20 February 1947, Viatte; and JO Doc, 12 December 1946, 79, p. 55. 91 Surleau Commission, minutes, 4 July 1947, de Lagarde. 92 Chambre de commerce de Paris/Bony Archives, 51" - 52, Assemblee des presidents des chambres de commerce de France, "La generalisation de l'assurance vieillesse," 23 December 1946; Chambre de commerce de Paris, Bulletin mensuel, NS, 4 (April 1947), 226. T h e

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In this manner, independents of widely varying circumstances could agree in their condemnation of reform. Relief for the destitute was unavoidable, but not the government's attempt to arrange this predominantly at the expense of the affluent and the socially conscientious. The Surleau Commission suggested limiting provision for the elderly to a minimum minimorum, allowing it, in any case, to be granted without means tests even to the better-off and permitting the self-employed to determine their own premium rates - contributions reflecting the demography and risk incidence of each separate category, not the mass of independents or all the French. In being allowed to decide the details of each particularist scheme, independents were provided with yet another forum to express the potential tension between rich and poor. The Nollet Commission was called to work out the system for industrial and commercial independents, the felicitously acronymed ORGANIC. 93 Its problems, a report by the ubiquitous de Lagarde admitted with his usual candor, reflected opposing demands of high and low. The diverse circumstances spanned within this group of the self-employed hampered any agreement on the details of a common system. Many were uninterested in a law from which they expected to gain little, while others hoped to profit from redistributive measures organized within the occupational category. The only chance of reconciling such contradictory ambitions lay in a limited scheme flexible enough to permit all to belong as they wished.94 Prosperous independents would not aid the poorest unless solidarity were sharply curtailed. On the other hand, it was impossible to limit the system to a minimal means-tested allowance alone, asking businessmen of substance to contribute for no return.95 On top of basic benefits, accordingly, a distributionally neutral insurance arrangement was to secure for the better-off a dotage in the style to which they were accustomed.96

Assemblee's conclusions were heavily influenced by de Lagarde's "Les nouvelles dispositions de la loi du 13 septembre 1946." 93 Caisse de compensation de Porganisation dutonome nationale de P Industrie et du commerce. 94 ORGANIC/Bony, Sous-commission commerce et industrie de la Commission d'application de la loi du 17 Janvier 1948, "Rapport sur l'organisation interieure de Passurance vieillesse des non salaries," 6 October 1948. 95 Assemblee des presidents des chambres de commerce de Punion francaise, Compte rendu in extenso de la reunion, Paris 19 octobre 1948 (Paris, 1948), p. 43 (copy in the Chambre de commerce de Paris Archives). 96 For practical testimony to the attractiveness of the system worked out here, see Chapuis, "Les groupements professionnels," p. 51.

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Favored and Disfavored Categories The second element of resistance to redistribution also pitted the fortunate against the less so, this time as advantage and social category were thought to coincide. To the extent that one group as a whole regarded itself as favored, it sought to avoid sharing burdens with others. 97 Although the notion was only vaguely formulated, the self-employed did assume the existence of a hierarchy of risk and fortune among their various social groups: the liberal professions and industrial and commercial independents shared the top, artisans and peasants followed, with - as everyone's whipping boy - those who belonged in no other category on the lowest rung. When the Surleau Commission dealt with these "unorganized" self-employed one suggestion grouped them alone in a fifth fund. Given a presumption of their impecunious marginality, the question was how to finance benefits for them. Taxes were broached, only to be rejected by the Finance Minister.98 The liberal professions' representative feared that, were these costs to be divided among the first four schemes, his constituency - well-to-do and conscientious in the fulfillment of its duties - would end up bearing the burden. In the ensuing flurry of horsetrading, he offered to take responsibility for artists, men of letters and priests.99 With these, the most salonfahig among the unorganized, he apparently reasoned, even doctors and lawyers might share pensions without embarrassment. Surleau, Laroque and Netter, caretakers of the government's interests, pressed the issue. A fifth fund would include many of the poorest self-employed, on whose behalf the allowance had been extended. Actuarial quarantine was not sufficient; someone had to take charge of them. Employers preferred to have the fifth fund pay for itself, but agreed, after repeated badgering from the administrators, to hold the other categories of independents responsible. Artisans were pluckier, refusing to pay for their 97 The differing abilities of groups to escape their duties also played a role. Thus employers opposed tax-financing social policy in the mid 1950s, when proposals to this effect were discussed, because of the many farmers w h o shirked their share of direct taxes and therefore the burden of social insurance. These are the same reasons that had motivated tax-financing in Scandinavia in the previous century, when farmers had sought to shift burdens to urban classes, but seen from the opposite perspective. See Chambre de commerce de Paris, Archives, 5111 — 52, Commission du travail et des questions sociales, "Le fonds national d'assurance vieillesse," 11 February 1955. 98 He opposed giving government subsidies to a group that he portrayed as better off than wage earners and one which, in any case, escaped the tax collector's net and thereby its fair share of burdens; see Surleau Commission, minutes, 4 July 1947, Rosenwald. 99 Surleau Commission, sub-commission minutes, 17 June 1947, Portes; Roger Millot in Le figaro, 9 April 1947.

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unorganized colleagues. On this point they prevailed.100 At the following meeting of the Surleau Commission, employers scuttled their promise to have the self-employed as a whole assume the cost of the unorganized among them.101 Although the government reformers protested, the ensuing law was in fact forced to leave these unfortunates to the mercy of public assistance and the good will of the taxpaying community at large.102 While artisans refused to carry the disinherited of the fifth fund, they themselves were viewed as a potential millstone by more favored categories.103 Artisans were a peculiar case. Portrayed by their representatives as poor and unable to afford more than modest contributions, they had trouble formulating a coherent position. Some saw their interests best safeguarded by a universal system, others rejected national solidarity.104 This apparently contradictory attitude perplexed the government. Why would a disadvantaged group spurn the benefits of risk redistribution? Independents stood to gain from covering all, Croizat argued before the parliamentary Labor Committee. Since they often began their selfemployed careers late, a system limited to them would be borne by disproportionally few contributors.105 That they had been misled was the only explanation the Labor Minister couldfindfor the artisans' rejection of solidaristic reform.106 At the other end of the spectrum of risk and fortune, the categories of relatively affluent independents viewed the prospect of submersion in an undifferentiated equalization pool with distaste. Liberal professionals worried lest their comparatively bountiful incomes and regular contribution habits be exploited, although the gentility of their representatives forbade the bluntness of the unabashedly separatist approach taken by industrial and commercial independents. Spared disproportional charges and permitted supplementary measures, they impressed on the government reformers, liberal professionals had too pronounced a sentiment of social 100

Surleau Commission, sub-commission minutes, 17 June 1947, Michel, Hunault. Surleau Commission, sub-commission minutes, 25 June 1947. 102 T n e government took partial revenge by defining the other four categories of independents broadly in order to reduce the number of the unorganized. The 10 July 1952 law, creating a pension scheme for agriculture, eventually established a fifth fund whose finances were levied on all organizations concerned with pensions, those of wage earners included. 103 As were farmers and peasants by the industrial and commercial independents; see JO Deb, 31 July 1945, pp. 1676-77. 104 Surleau Commission, minutes, 4 June 1947, Carrie; A N , SS7921, Francis Netter, " N o t e , " 11 April 1947; Surleau Commission, minutes, 4 July 1947, Michel. 105 Commission du travail, minutes, 27 February 1947, Croizat. 106 p r ess conference, Notes documentaires et etudes, 453 (23 October 1946). 101

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solidarity to reject universalism out of hand. 107 Blessed by an advantageous risk profile, their redistributive task was lighter than that facing other categories. When working out the details of their own schemes, as a result, minimum benefits were not reserved for the poor. No means test, they decided in most cases, should deprive even the affluent of benefit.108 It is at this point that the distinction between the two forms of resistance to redistribution fails to serve its function any longer. At the extremes of the spectrum, where one group in fact was markedly more favored than another, the disinclination of the fortunate to share the burdens of the needy was given voice for the category as a whole, just as it was for each individual within any category. In the grey middle ground, however, the two merged indistinguishably. A comparison of artisans with industrial and commercial independents demonstrates how. Significant differences distinguished these two categories. Artisans were a less heterogeneous lot than industrial and commercial independents; a greater social distance separated shopkeeper from industrialist than humble from prosperous craftsman. Why were artisans confused in their approach to reform, why did they plead their poverty and inability to bear the costs of social insurance so insistently compared to the assumptions of common affluence made among industrial and commercial circles? The answer concerns the extent to which the well-off within each group were able to impose their views as representative of all its members. Artisans, on the whole, had not been misled, as Croizat claimed to think, in rejecting the redistribution promised by universalist social security. Rather, it was their spokesmen, the prosperous with something to lose from all-encompassing reform, who tried to carry the flag for the entire category. The evidence at this point is suggestive rather than persuasive.109 A more convincing argument must await the final chapter, where the change in attitude towards solidaristic social policy that the self-employed underwent during the postwar decades is considered. In the 1960s, as economic and demographic decline took its toll, the need of small independents for redistributive measures finally prevailed over the wishes of their more affluent colleagues to curb reform. 107

A N , SS7921, Netter, " N o t e , " 11 April 1947. Les regimes sociaux, vol. 1, p. 19. Well-heeled members of the commercial and industrial group were also for abolishing means tests for fear that otherwise those who received no benefit would not contribute; see Surleau Commission, sub-commission minutes, 25 June 1947, de Lagarde (CNPF), Montaye (CGPME). 109 Artisanal leaders complained that they were being outdistanced by their rank and file on the issue; see AN, SS7921, Netter, "Note," 11 April 1947, Stephanelli. Similarly, see 108

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While artisans as a group vacillated in their approach because differing interests competed, among industrial and commercial independents the better-off articulated the common position without contradiction. The poor who stood to benefit from universalist reform's promise of redistribution scarcely had the opportunity to say so. 110 In consultations with the government, in the commissions and public debate, the voice heard belonged to prosperous businessmen from the employers' associations, especially the CNPF and the CGPME. When the disinherited of this category felt driven to the wall in the 1960s, they founded new organizations because the existing ones did not speak for them. Among artisans, on the other hand, the established fora were not hopelessly dominated by big interests, and discontent was vented here as palace revolution rather than with the spirit or tactics of the maquisard shopkeepers. Initial postwar plans for social insurance reform had aimed to create a widely redistributive community of risk. Faced with the strenuously pressed interests of the prosperous and fortunate groups that expected to lose most, they failed. The effect of the 17 January 1948 law, establishing a system of socially particularist pensions for each category of the selfemployed, was to dissolve the solidarity reformers had hoped 10 encourage. Rather than including all, reallocating burdens between rich and poor, favored and unlucky, self-reliant and needy, social insurance now broke asunder into various localized risk pools, haphazardly circumscribed by the social definitions that seemed important in 1947. Plans for a national risk community were defeated because they included a solidaristic element, the burden of which the fortunate among the categories now to be included in social insurance for the first time had no interest in bearing and were able to avoid. The government's reluctance and inability to assure veiled redistribution through taxes and state subsidies shifted the brunt of transfers nakedly to the social security system itself. By attempting to blur the distinction between public assistance and social insurance - between a right to benefits based only on need and contributory entitlement - with appeals to a nonexistent spirit of solidarity, reformers diminished the chances for significant change. Universalist reforms in France, unlike their British and Scandinavian counterparts, to which they are misleadingly compared, were motivated by Commission du travail, minutes, 24 April 1946, Bellanger, Musmeaux, Costes; and JO Deb, 28 December 1947, pp. 6405-06, Renard. 110 Although some did express their preference for single funds; see JO Doc, 28 March 1947, 1142, p. 732; and Notes documentaires et etudes, 583 (28 March 1947).

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ambitions to aid the poorest directly at the expense of the better-off. The resistance marshaled by those negatively affected was more than a match for the political muscle of reformers from the tottering tripartite coalition. With the particularist solution, that isolated various groups in their own risk communities and limited redistribution within and between them, the problem had been faced only for the moment. As economic and demographic developments during the following decades made a mockery of the social definitions agreed upon in 1947, treating some categories benevolently, others with disdain, questions of universalism and redistribution were posed again. This time they found an answer that would have surprised the combatants on both sides of the battlelines right after the war. Allies, Germans and Solidaristic Reform If events in France were the Platonic form of the failure of solidaristic welfare, German developments were the flickering image in the cave. The focus was uncertain, the contrasts less stark, but the similarities were nevertheless undeniable. 111 Because German salaried employees already had their own separate social insurance system, the problem was not finding room for them under the state's wing, but whether to fuse their institutions with those for workers, allowing a displacement of burdens across the collar line. The self-employed here were half as strong in number as their French colleagues and less able to muster resistance to reform. The practice of not including them under the state's social policy auspices had, in any case, already been broken in 1938 when the Nazis enrolled artisans in the salaried employees' pension system on attractive 1 ! ' No one studying German postwar social policy escapes a colossal debt to Hans Giinter Hockerts's magisterial study, Sozialpolitische Entscheidungen im Nachkriegsdeutschland: Alliierte und deutsche Sozialversicherungspolitik 1945 bis 1957 (Stuttgart, 198^). For briefer accounts, see Hans Giinter Hockerts, "Konrad Adenauer und die Rentenreform von 1957," in Konrad Repgen (ed.), Die dynamische Rente in der Ara Adenauers und heute (Stuttgart, 1978); "Sozialpolitische Reformbestrebungen in der friihen Bundesrepublik,'** Vierteljahrshefte fur Zeitgeschichte, 25, 3 (July 1977); "Integration der Gesellschaft: Griindungskrise und Sozialpolitik in der friihen Bundesrepublik," Zeitschrift fur Sozialreform, 32, 1 (January 1986); "Ausblick: Biirgerliche Sozialreform nach 1945," in Riidiger vom Bruch (ed.)> "Weder Kommunismus noch Kapitalismus:" Biirgerliche Sozialreform in Deutschland vom Vormd'rz bis zur Ara Adenauer (Munich, 1985); and "Sicherung im Alter: Kontinuitat und Wandel der gesetzlichen Rentenversicherung 1889-1979," in Werner Conze and M. Rainer Lepsius (eds.), Sozialgeschichte der Bundesrepublik Deutschland (Stuttgart, 1983). Also useful are Florian Tennstedt, Geschichte der Selbstverwaltung in der Krankenversicherung von der Mitte des 19. Jahrhunderts bis zur Griindung der Bundesrepublik Deutschland (Bonn, n. d.), section E; and Gaston V. Rimlinger's classic study, Welfare Policy and Industrialization in Europe, America and Russia (New York, 1971), ch. 5.

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terms. Efforts to reform social insurance, fragmented as it was according to class and risk, in a comprehensive, all-inclusive direction stretched back to the nineteenth century. Proposals generated from within the bureaucracy to streamline the structure of welfare policy had been seconded by demands from the labor movement for a fairer distribution of burdens. Cut off from the international developments in this direction in the 1930s and 1940s, the German left rallied enthusiastically after the war to the principles of solidaristic welfare. Although Germany had once been a model for social policy, the torch of progress had since passed to other countries. German welfare needed urgent reform - so went common opinion on the left - and should follow the lead taken elsewhere.112 Social Democrats and the unions were among the strongest proponents of a universalist and comprehensive social security system, an Einheitsversicherung, principally for the distributive advantages it promised workers. Because cities had been more miserably affected by the war than the countryside, a broadly inclusive system of health insurance, for example, was attractive for its ability to spread burdens widely.113 The devastation and dislocation of the immediate postwar period threatened to make wage earners out of many who had been self-employed and to turn white collars blue. The formerly independent middle classes and salaried employees, the latter a social group glutted by Nazi labor policies and threatened with downward mobility, would become charges of the workers' social insurance system, to which they had never paid a Pfennig.114 This practical realization of an Einheitsversicherung brought on by the war encouraged the labor movement to renew calls after the end of hostilities for solidaristic reform. Workers recognized their advantage in fusing the white- and blue-collar risk communities, for example, and in removing the sharp class distinctions still reflected in their separate systems.115 They hoped to use the higher standards of the salaried employees' insurance as a lever for 112 Zweiter ordentlicher Bundestag des Bayerischen Gewerkschafts-Bundes: Protokoll (23-26 August 1948), pp. 225-27, Gustav Schiefer; SPD, Ptfrte/tegProtokoll, 1950, pp. 196-97. 113 Archiv der sozialen Demokratie (AdsD), Bonn, Walther Auerbach papers, 208, Anton Storch to Paul Otto, 5 November 1947. 114 Protokoll der Gewerkschaftskonferenz der britischen Zone vom zi. bis 23. August 1946 in Bielefeld, p. 40, Storch; Ludwig Preller, Sozialpolitik: Kernfrage des Aufbaus, 2nd edn (Stuttgart, 1947), pp. 2.3-2.5; Michael Prinz, Vom neuen Mittelstand zum Volksgenossen: Die Entwicklung des sozialen Status der Angestellten von der Weimarer Republik bis zum Ende der NS-Zeit (Munich, 1986), pt. 4, esp. pp. 236, 273. 115 Salaried employees, for example, with the right to six weeks' sick pay, enjoyed the advantages of their own insurance funds: these were able to pay higher doctor's fees because they were less burdened by the expense of replacing wages lost. Many physicians at the end of the war still maintained two waiting rooms to reflect this caste system.

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improvement. Social hierarchies were no longer to be reflected in welfare. The well-off, Anton Storch, Adenauer's future Labor Minister, warned, could not continue to equalize risks with their peers alone. All should be included in social insurance, risks were to be spread far and fairly, no separate or special treatment would be tolerated.116 The concept of universalist social security did not, unfortunately, come unblemished to postwar Germany. Plans that superficially resembled Beveridge's had been formulated by Robert Ley and the Nazi labor organization (the DAF) as part of an attempt to wrest control of the social insurance apparatus from the Labor Ministry's more traditional administrators.117 One result of this clash had been the 1938 law that enrolled artisans in the salaried employees' pension insurance, put forward as the bureaucracy's counterbid to Ley's ambitions for all-embracing reform. Although Ley's bid for influence had failed, this bastard heritage made life difficult for plans that bore any family resemblance to the Nazi version of universalist social policy.118 The first successful attempt at all-inclusive reform came, nonetheless, from the other end of the political spectrum during the summer of 1945 in wartorn Berlin.119 In the Soviet-sponsored Berlin Municipal Council, a group of former Weimar Socialists, led by Ernst Schellenberg (who was later to be prominent in SPD social policy making), founded the Versicherungsanstalt Berlin (VAB).120 A savvy mix of emergency measures and 116 Anton Storch, "Was erwarten die Arbeitnehmer von der Neuordnung der deutschen Sozialversicherung?" Arbeitsblatt fur die britische Zone, 1, 4 (April 1947), 139; GrundungsKongress des DGB. 1. Bundes-Kongress des Deutschen Gewerkschaftsbundes der britischen Zone vom 22. — 25. April 194-/ in Bielefeld: Protokoll, pp. 142—45, Storch. 117 Marie-Luise Recker, Nationalsozialistische Sozialpolitik im Zweiten Weltkrieg (Munich, 1985), pp. 98-121. 118 For dispassionate and even positive evaluations of Ley's plans, see Frederik Zeuthen, Social Sikring (Copenhagen, 1948), pp. 42,137; and Martin Broszat, "Plea for a Historicization of National Socialism," in Peter Baldwin (ed.), Reworking the Past: Hitler, the Holocaust and the Historians' Debate (Boston, 1990). 119 Although there had been an analogous improvisation in the Generalgouvernement in occupied Polish territory; see Petra Kirchberger, "Die Stellung der Juden in der deutschen Rentenversicherung," in Sozialpolitik und Judenvernichtung: Gibt es eine Okonomie der Endldsung?, Beitrdge zur nationalsozialistischen Gesundsheits- und Sozialpolitik^ 5 (1983), pp.127-30. 120 Reinhart Bartholomai et al. (eds.), Sozialpolitik nach 1945: Geschichte und Analysen (Bonn-Bad Godesberg, 1977), Baker, Foggon, Noetzel, Rosenberg and Orda; Eckart Reidegeld, DieSozialversicherungzwischen NeuordnungundRestauration.SozialeKrdfte, Reformen und Reformpldne unter besonderer Berucksichtigung der Versicherungsanstalt Berlin (VAB) (Frankfurt, 1982); Eckart Reidegeld, "Die 'klassische Sozialversicherung' in der Entscheidung: Deutsche und alliierte Krafte und Interessen vor und nach 1945," Zeitschrift fur Sozialreform, 30, 11 and 12 (November and December 1984). Accounts by Schellenberg and Dobbernack of the VAB in 1945-46 are to be found in PRO, FO 1012/527. Schellenberg's papers in the AdsD contain nothing on this period.

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major reform - change in the guise of necessity - the Berlin arrangements united all wage earners and small independents in a comprehensive, uniform system of social insurance.121 On the surface, the VAB fulfilled union and left demands for an Einheitsversicherung.122 In other respects, however, this was reform tainted by the requirements of the moment, above all of the need to provide aid in devastated circumstances. By cutting off all sources of income other than contributions, the Soviets forced the creation of a system that laid bare the necessity for redistribution. Normal municipal revenues were hopelessly insufficient to help care for Berlin's ill and disabled and social insurance therefore had to pay for itself.123 Bereft of state subsidies and asked to alleviate misery on a vast scale, the VAB faced three problems: much money had to be raised, few benefits could be paid and aid had to be delivered as cheaply and efficiently as possible. To drum up funds, almost all residents were compulsorily enrolled, due to pay income-related premiums at once. Drawing in formerly exempted categories like the self-employed tapped new resources. Hovering between the merciful and the mercenary, the motive here was presented ambiguously. On the one hand, it was argued, after two wars and several rounds of inflation, independents should appreciate the uncertainty of their status and their need for protection. On the other, the system needed them. The new members had incomes above the average.124 For their large premiums, they received only minimum benefits, leaving a surplus to finance measures for the less favored.125 To simplify the bureaucratic machinery and cut administrative expenses, the VAB replaced the former plethora of insurance carriers as a single fund.126 To balance income and expenditure, 121 For an attack on this elision between stopgap necessities and ambitions for significant change, see Rudolf Wissell, Zur Gestaltung der Sozialversicherung (Hamburg, 1947), pp. 6-14. 122 AdsD, 01978, SPD Parteivorstand, Sozialpolitischer Ausschuss, minutes, 11 April 1948, Schieckel. 123 Magistrat der Stadt Berlin, minutes, 18 June 1945, Schellenberg, in Berlin: Quellen und Dokumente, 1945-1951 (Berlin, 1964), pp. 619-21; Paul Zocher, Neuaufbau und Leistung der Berliner Sozialversicherung (Berlin, 1948), pp. 10-11. 124 R e i d e g e l d , Sozialversicherung, p . 136. 125 Bundesarchiv, Koblenz (BA), Z40/101, fo. 1, Zentralamt fiir Arbeit in der britischen Zone, Hauptabteilung IV, "Bemerkungen zum Entwurf eines Gesetzes iiber die Sozialversicherung der werktatigen Bevolkerung von Gross-Berlin"; Peter Even, "Sozialversicherung fur alle?" Blatter fur Steuerrecht, Sozialversicherung und Arbeitsrecht, 2, 17/18 (September 1947), 182. See also "Dr. Wilhelm Dobbernack zum 80. Geburtstag," Zeitschrift fur Sozialreform, 28, 8 (August 1982) 468-69. 126 Necessity also mothered inventions like the use of psychotherapy to reduce costs; see Geoffrey Cocks, Psychotherapy in the Third Reich: The Goring Institute (New York, 1985), p. 232.

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benefits - only barely exceeding public assistance in any case - were means-tested and subject to stringent eligibility requirements. Reform in the West For the rest of Germany, welfare policy was a matter decided within the Allied military government by the Control Council's Manpower Directorate. 127 In March 1945, a Soviet proposal for universal, comprehensive social insurance reform was approved as the guideline for legislation throughout the country. Each occupying power drafted a bill in consultation with the appropriate German agencies. The British zone's version was formulated at the Central Labor Office in Lemgo by Wilhelm Dobbernack and Georg Tietz, both men with close union connections who advocated far-reaching changes. Proposals in the American zone were also influenced by union interests and resembled both the Soviet draft and the measures implemented in Berlin. As the Soviets, by rotation, chaired the Control Council's Social Insurance Committee in July 1946, their text became the basis for negotiations among the Allies. The draft bill that emerged that December radically changed the inherited German social insurance system. Fusing its three primary branches (health, pensions and workers' compensation) into single funds, it eliminated distinct arrangements for white- and blue-collar wage earners. Prewar benefit rates were reduced. With health and pension insurance financed exclusively by contributions, state subsidies were eliminated in principle and permitted only exceptionally. Compulsory membership was extended to formerly exempted salaried employees and civil servants, as well as to all independents. The Control Council's initial decision in favor of a universalist approach was encouraged both by the influence exerted from the labor movement over those Germans who helped formulate plans and by the worldwide trend in favor of such reform. Nonetheless, as in the French case, the interesting point was not the apparent similarities between all-inclusive social security, as implemented in Britain and Scandinavia, and the Continental version, but the differences that here led to its failure.128 In Germany, too, the crucial issue 127

Hockerts, Entscheidungen, pp. 21-27. Hockerts {Entscheidungen, pp. 28-33) gives four reasons for the universalist ambitions of the initial reform plans: (i) the VAB set a precedent, (2) the labor movement had close ties to the Germans in the military bureaucracy, (3) the goals of the German reformers agreed with worldwide reform plans, and (4) the Allies wanted to save money and lessen the burden of the regular Land budgets by streamlining social insurance, including new members and 128

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was the connection between universalizing measures and financing social policy. Again, the goal was to shift a burden from the state, displacing it directly to the social insurance system, which, in consequence, now had to bear the brunt of reallocating risk. Once again, universalist reform had redistributive ambitions that far surpassed the initiatives taken in Britain and Scandinavia. Social insurance was left devastated in 1945 by the ravages of war, inflation and economic disaster. Enlisted by the Nazis in their military effort, its capital stock had been dissipated.129 The Allies now proposed not only to deny the system compensation for its losses, but also to eliminate the significant state subsidies to normal operating costs it had long enjoyed. Social insurance was to stand on its own feet financially, covering the entitlement once guaranteed by its capital reserves from the income now raised in a pay-as-you-go manner.130 Despite arguments that reform favored the newly included classes, the immediate goal, as in France, was to lay hands on their contributions. The Allies were intent on enrolling a broad cross-section of the population in order to keep social insurance in the black.131 With pay-as-you-go financing, including all even bad risks - drummed up new premiums and promised to keep the system solvent. The aim was to cover immediately pressing financial needs by universalizing social security to encompass all citizens. Longterm change would have to come later.132 Ruling out state subsidies and restricting social insurance to the income realized by generalizing it was only half the Allied plan. Reducing earlier lowering benefits. The fourth reason is the important one. The first is self-defeating because the VAB requires the same sort of explanation and cannot be adduced as a reason. The second is undoubtedly true, but is contradicted, as Hockerts himself admits, by the fourth. It is precisely the reason why the unions and the left could not support the Allied plans that is interesting. The third reason is superficial; again, the important issue is what distinguished Beveridge from the Allied proposals. 129 Karl Teppe, "Zur Sozialpolitik des Dritten Reiches am Beispiel der Sozialversicherung," Archiv fiir Sozialgeschichte, 17 (1977), 236-37. 130 Horst Schieckel, Gegenwartsprobleme der Sozialversicherung (Munich, 1947), pp. 89—90. Beyond the obvious necessities of introducing pay-as-you-go, the Allies may have favored the absence of a capital stock precisely because Hitler had dipped into this to finance his war; see J. Wetta, Etude sur la securite sociale en Allemagne, Haut commissariat de la Republique francaise en Allemagne, Direction generale des affaires politiques, Division travail (n. p., 1951), p. 12; Erster ordentlicher Kongress der Landesgewerkschaften Bayerns: Protokoll (27-29 March 1947), p. 123, Christian Stock; and Zocher, Neuaufbau undLeistung, p. 15. 131 Zonenbeirat der britisch besetzten Zone, minutes, 14-15 August 1946, in Akten zur Vorgeschichte der Bundesrepublik Deutschland 1945-1949, vol. 1 (Munich, 1976), p. 682. 132 DGB Archives, Diisseldorf, dossier "Britische Zone. Zonenbeirat. Ausschuss fiir Sozialpolitik," Landerrat [of the US zone], Unterausschuss Sozialversicherung, minutes, 9-10 October 1946, Geiger, Bloch.

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rates of benefit to correspond to straitened postwar circumstances was the complement. Rather than extending measures at the level of the salaried employees' scheme, the lowest common denominator of the blue-collar system set the standard and it, too, was worsened. Salaried employees were to receive only workers' pension rates and be held to their stricter criteria of disability. White-collar widows lost their unconditional right to benefit, while workers received lower sickness payments for shorter periods. With this austerity program - generalization combined with benefit reduction - the occupiers managed to repel all groups, including those who might otherwise have been happiest for an Einheitsversicherung.133 Universalizing social insurance alienated the interests with a stake in the old Bismarckian system: the formerly separatist institutions of welfare, private insurance that thrived in the gaps left by statutory coverage and, above all, the social groups threatened by integration.134 As in Berlin and across the Rhine, independents in the Western zones of Germany resisted inclusion. Given a choice in 1938 between statutory and private pension insurance, artisans - especially the young and actuafially unblemished - had often contracted out. When the British abolished such exemptions in October 1945, artisans were resolutely unimpressed by their explanation that financial problems required an expansion of social insurance to all.135 Nor did agrarians respond enthusiastically to the Allies' invitation to a chilly dip in the communal risk pool. Economic adversity might prompt an interest in coverage among some farmers, they admitted, but it also made it harder to pay contributions. In any case, agriculture demanded a system separate from that of wage earners.136 Lowering benefits, in turn, set both workers and the unions too against reform. The proposal to eliminate state subsidies was the debating point since rate reductions were only an outcome of this more fundamental problem. Opinion varied among the occupation zones. In the French and American spheres, Social Democrats agreed with the unions that, although m

BA, Z40/50, fo. 1, Scheuble to R. W. Luce, 4 October 1947. BA, Z40/49, fo. 1, Zonenamt des Reichsaufsichtsamtes fur das Versicherungswesen to Zentralamt fur Arbeitsverwaltung und Sozialversicherung, 22 October 1946. 1 vs - BA, Z40/177, fo. 1, Walther Heyn to W. Dobbernack, 24 August 1946, Dobbernack to Cole, 3 September 1946, and other letters here; AdsD, Kurt Schumacher papers, J74, Vereinigung der Handwerkskammern in der britischen Zone to the SPD, 12 November 1946. For other opinion from independents against an Einheitsversicherung, see J. Eckert, Offentliche Meinung zur Reform der Sozialversicherung (Schliersee, n.d. [1948?]), pp. 3iff. 136 AdsD, Auerbach papers, 206, "Stellungnahme der Landwirtschaft zur Sozialversicherung: Ergebnis einer Besprechung bei Dr. Schlange-Schoningen am 25.10.1946." 134

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benefit reductions were unacceptable, social insurance should be financed by contributions alone, with state subsidies being replaced by drawing in and collecting premiums from formerly excluded groups.137 Strong resistance to the Control Council's plans was mounted, however, by blue-collar unionists in the British sector.138 Their opposition was marshaled by Anton Storch, the Christian Democratic union leader, who was later to become Adenauer's first Labor Minister.139 Unionists here rejected the Allied version of reform because it deprived workers of claims to the capital stock amassed from their contributions. He did not blame his Berlin colleagues for supporting the VAB, Storch admitted, for they had little choice. The military authorities there and in the Soviet zone as a whole had eliminated other possible sources of financing.140 In the West, however, the revenue of the social insurance system was controlled less strictly.141 Although tempted by the austere Soviet model of reform, the Western Allies might still be persuaded to relent and to permit subsidies. Universalizing social security to replace subsidies was only one aspect of the occupiers' plans that the labor movement found objectionable. Extending the system to all risks and financially unifying its various branches raised similar problems. Resting on a purely pay-as-you-go approach, health insurance and workers' compensation remained solvent so long as contributions were collected. Pensions insurance, on the other hand, was the sick man of the system. Once partially funded, it in particular had suffered from the war and the loss of its capital assets. Fusing it financially with the other branches, as the Allies proposed, would permit health insurance to underwrite pensions, surreptitiously defusing subsidies from the state and the loss of the capital stock as issues. The three main arms of 137 Erster ordentlicher Kongress der Landesgewerkschaften Bayerns: Protokoll (27-29 March 1947), p. 119, Christian Stock; "Stellungnahme zu den Grundsatzen des Kontrollrates fur die Neugestaltung der Sozialversicherung," 5 September 1946, in Reidegeld, Sozialversicherung, pp. 430-34. 138 Clashes among the zonal representatives is documented in DGB, Sozialpolitischer Ausschuss der Gewerkschaften in der britischen Z o n e , minutes, 4-5 March 1947; "Britische Zone. Zonenbeirat. Ausschuss fur Sozialpolitik," Storch t o Hans Bockler et al., 17 January 1947; Horst Schieckel, Material zu den Gegenwartsproblemen der Sozialversicherung (Munich, 1948), pp. 73-76; and Albert Behrendt, Die Interzonenkonferenzen der deutschen Gewerkschaften (Berlin, 1959), p. 202. 139 Protokoll der Gewerkschaftskonferenz der britischen Zone vom 21. bis 13. August 1946 in Bielefeld, p. 40; Protokoll derersten Gewerkschaftskonferenz der britischen Zone vom iz. bis 14. Marz 1946, p. 44. O n Storch in general, see Hans Giinter Hockerts, "Anton Storch (1892-1975)," in Jurgen Aretz et al. (eds.), Zeitgeschichte in Lebensbildern (Mainz, 1980), vol. 4. 140 Griindungs-Kongress des DGB: Protokoll, p. 155. 141 For examples of piecemeal subsidies to social insurance funds in the British zone, see PRO, FO 1046/314.

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social insurance were therefore, in the union view, to be united organizationally, but with separate book-keeping.142 The Allies Relent Storch and the British-zone trade unionists impressed their views on the Allies.143 Enlisting Beveridge's support when - now a Lord and out of the reform business at home - he visited Germany in August 1946, they won a hearing for their opinions.144 The result was a report from the Zonal Advisory Council that reflected the moderate labor movement's ambivalence: hopes for universalist reform, coupled to a rejection of Allied intentions of having social insurance face the task of redistribution alone and unaided.145 Welfare reform, so the council's overall conclusion, should only follow other basic decisions on Germany's future. Why, it wondered, should state subsidies be permitted in Labour's reforms at home, yet eliminated in Germany? Reduced benefits, it rather cheekily threatened, raised the danger of political radicalization. Although the proposed measures might distribute burdens more justly, enrolling new members would not suffice to guarantee the financial stability of social insurance and, in any case, posed troublesome problems. The council nevertheless favored including even the well-off in the system, welcomed the unification of salaried employees' and workers' pensions, but rejected the financial fusion of all social insurance branches.146 142 P R O , FO 1051/294, MP/SI/42004/1, G.W. Cole to Public Expenditure Branch, Finance Division, 20 February 1947; DGB, "Britische Z o n e . Zonenbeirat. Ausschuss fur Sozialpolitik," Storch to Hans Bockler et ah, 17 January 1947. 143 DGB, "Britische Z o n e . Zonenbeirat. Ausschuss fur Sozialpolitik," Storch to the Zonenvorstand of the Allgemeine Gewerkschaft, 26 November 1946; to Werner Hansen, 30 November 1946. 144 DGB, "Britische Z o n e . Zonenbeirat. Ausschuss fur Sozialpolitik," Storch to Major A. E. Bramall, 23 November 1946; Protokoll der Gewerkschaftskonferenz der britischen Zone vom 21. bis 23. August 1946 in Bielefeld, p. 41. 145 Schieckel, Material zu den Gegenwartsproblemen, pp. 4 2 - 7 2 ; P R O , F O 1005/1573, Z A C / M ( 4 6 ) 9 , minutes, 6 December 1946; A d s D , Auerbach papers 206, Storch to R. W. Luce, 25 November 1946; Die Gewerkschaftsbewegung in der britischen Besatzungszone: Geschd'ftsbericht des deutschen Gewerkschafts-Bundes (britische Besatzungszone) 1947-1949 (Cologne, n. d.), p. 320; Walther Heyn, "Die Sozialpolitik in Adenauers Memoiren," Deutsche Versicherungszeitschrifty 8/9 (August-September 1966), 208-10; Annelies Dorendor, Der Zonenbeirat der britisch besetzten Zone: Ein Ruckblick auf seine Tdtigkeit (Gottingen, 1953), pp. 106-11. 146 That the council's report reflected moderate union opinion was demonstrated by the arch-conservative position taken by the Central Economic Office in the British zone. For it, the Allied bill was reminiscent of the Ley Plan, its contributions outrageously high and the fusion of employees' and workers' arrangements but a measure to burden the former for the benefit of the latter. See A d s D , Auerbach papers, 207, "Stellungnahme des Zentralamtes fur

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In the American zone, where unionists were less influential and conservatives powerful, German opinion was more critical of the Allied plans. Social insurance, according to the dominant attitude here, should be restricted to those unable to provide for themselves. Immatriculating even the formerly self-reliant promised to replenish the system's coffers only if the affluent were unfairly asked to shoulder disproportional burdens. Fusing together pensions insurance for salaried employees and workers was acceptable, but further attempts to finance one branch covertly with funds from another were not.147 For opposition of this caliber from the unions, salaried employees and independents, the tepid political support mustered among the Germans for the Allied reforms was no match. In the Parliamentary Council of the American zone, the parties of the center and right objected because the Control Council's legislation would enroll also the self-sufficient classes, worsen benefits, eliminate state subsidies and encourage a hypertrophied bureaucracy. Potential supporters on the left lamented the bill's many faults, accepting it only as the least of evils.148 Largely in response to objections from the Germans, an initial agreement among the occupiers on universalist reform began to fragment. The virtue of the Allied version of an Einheitsversicherung, appreciated at first by all the military authorities, was that, under the cloak of humanitarian and enlightened policy, itfinancedwelfare without the state's help, freeing fiscal resources for other purposes and shifting the brunt of redistribution directly to the insured themselves. Discovering that reform threatened their privileges or worsened their benefits, independents and salaried employees, joined by workers, pressured the occupiers to relent. All Germans, from shop floor to corner office, agreed in rejecting the Allied proposals. A split gradually opened between the Soviets, determined to impose change, and the Western powers, more willing in this, as in other respects, to humor the Germans. The dispute between the Allies sent off to their respective corners the Soviets, in favor of a streamlined, uniform, all-inclusive and self-financing Einheitsversicherung as in Berlin, and the British, who, although reformers Wirtschaft," 22 October 1946; DGB, "Britische Zone. Zonenbeirat. Ausschuss fur Sozialpolitik," Storch to Central Economic Office, 23 January 1947. 147 Report by Wilhelm Polligkeit et al., 21 October 1946, reprinted in Fritz Curschmann, Jederrnannund die Sozialre form (Niirnberg-Mimberg, 1947), appendix i , p p . 13 5 ff. Similarly, see A d s D , Auerbach papers, 208, "Richtlinien 'Zur Reform der Sozialversicherung'," 13 September 1947. 148 Landerrat of the US zone, minutes, 7 October 1947, in Akten zur Vorgeschichte der Bundesrepublik Deutschland, vol. 3 (Munich, 1982), pp. 581-85. Cf. Storch in Erster ordentlicher Kongress der Landesgewerkschaften Bayems: Protokoll, p. 119.

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at home, were unwilling as occupiers to impose far-reaching change. The Americans and French vacillated, at first backing the Soviets and dismayed by British hesitations, but eventually swinging around. Initially radical reform ambitions were gradually diluted. Civil servants, for example, whom the Soviets wanted to integrate on a par with others to undercut their caste consciousness, were spared by the Western Allies. The British and Americans thought that including them on the same terms as other wage earners would be unfair because civil servants were entitled to higher benefits, would be injudicious because civil servants were likely to object, and would be unavailing because the pay raises necessary to meet their new contributory responsibilities would shift burdens to the state in any case.149 From the outset, the British declared themselves unable to accept a radical version of an Einheitsversicherung. Geographical factors played an important role in their willingness to pay particular attention to German opinion on reform. Coal from the Ruhr in the British zone was crucial for reviving economic activity and this, in turn, was a precondition for any hopes of cutting the expense of the occupation. Miners had for centuries enjoyed their own separate social insurance coverage.150 As economic misfortune and demographic decline whittled away at the profession, their provision became increasingly reliant on public monies. An Einheitsversicherung threatened to deprive miners of their autonomous arrangements, disadvantageously aligning their benefits and contributions with those of the larger community. Dissatisfaction with such reform, the British feared, threatened to inhibit coal production. 151 The issue of state subsidies for social insurance was, in their eyes, a general instance of the specific problem posed by miners and their Knappschaften: would reform antagonize or propitiate the Germans?152 The Allies' first reform proposals were based exclusively on contributory financing. After British protests to the effect that discontinuing subsidies would threaten to cause serious unhappiness, public funds were again permitted, but even then only to pay benefits in line with the Control Coun149 PRO,FO1005/770, DMAN/memo(47)39,appendixB,6August 1947;FO1035/226;FO 1005/761, DMAN/M(47)i7, 5 August 1947. 150 Joseph Hoffner, Sozialpolitik im deutschen Bergbau (Miinster, 1956). 151 PRO, FO 1005/769, DMAN/memo(46)95, appendix B, 15 November 1946; FO 1046/314, minute to Director of Public Finance from JRH[ynd?]; FO 1005/760, DMAN/ M(46)33, 15 November 1946. 152 PRO, FO 1051/295, minute G. W. Cole to Rouse, "Subsidisation of Social Insurance Funds," 14 August 1945.

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cil's new and reduced rates.153 The Finance Directorate, nonetheless, later supported the Soviet position that subsidies were, in fact, prohibited by the reform principles jointly agreed on by the victors.154 The issue had not been resolved when the Allied reform bill failed and provided the excuse that was seized on by the Western powers to bury the legislation.155 With the beginning of the cold war, the context of reform changed. Getting along with the Germans became more important for the Americans and British than cooperating with the Soviets. The Western Allies saw diminishingly little reason to assume what seemed to them more properly a German responsibility and from the autumn of 1947 they actively impeded change in the social insurance system.156 When the Soviets quit the Control Council at the beginning of 1948, ending its brief reign, the Allies were no longer in the business of social reform, at least in that part of Germany to become the Federal Republic.157 After the failure of Allied reforms in the Western zones, the Germans here were allowed increasing legislative sovereignty.158 With a majority of Christian and Social Democrats, the Frankfurt Economic Council passed the Law on the Adaptation of Social Insurance (Sozialversicherungsanpassungsgesetz [SVAG]) in December 1948. Drafted by the council's Labor Administration with its extensive union connections, the SVAG was a radical piece of legislation that coupled major reforms to urgent emergency measures. It increased pensions, introducing a minimum level of benefit. As a boon for workers, but also to avoid dissatisfaction among those superfluous salaried employees who were expected to descend to a blue-collared status, benefit rates in the two separate pension insurances were equalized.159 Links of financial compensation were introduced between the blue- and white-collar schemes and among the various health insurance funds. Employers' contributions were increased and a state 153 PRO,FO 1005/763,DMAN/P(4 6)n, 17 January 1946,DMAN/P( 4 6)n (secondrevise), 7 March 1946; FO 1005/760, DMAN/M(46)z, 22 January 1946; FO 1005/393, CORC/ P(46)io9, 23 March 1946. 154 PRO, FO 1005/766, DMAN/P(47)3o; FO 1005/770, D F I N / P ( 4 7 ) I 7 6 / I . 155 PRO, FO 1005/389, CORC/M(48)i, 19 January 1948, Brownjohn, Lukianchenko. 156 PRO, FO 1005/389, CORC/M(48)i, 19 January 1948, Brownjohn; FO 1005/375, CONL/M(48)2, 30 January 1948, Robertson; DGB Archives, Zonenbeirat, Sozialpolitischer Ausschuss, minutes, 11 October 1947; BA, Z40/50, fo. 1, Beveridge, "Social Insurance in Germany," BBC transcript, 1948. 157 Hockerts, Entscheidungen, pp. 51-85; Tennstedt, Selbstverwaltung, pp. 241-42; PRO, FO 1005/375, CONL/M(48)2, 30 January 1948. 158 On what follows, see Hockerts, Entscheidungen, pp. 85-106. 159 AdsD, Auerbach papers, 214, Ausschuss fur Arbeit des Landerrates, minutes, 21 December 1948, Storch.

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subsidy, although less than half that enjoyed earlier by the social insurance system, was reintroduced. Because the SVAG's approach was more solidaristic than the painfully zero-sum Allied proposals, the military authorities' approval came only reluctantly. Especially perturbing were the bill's generous disability and widows' benefits, both features without compare among the occupying states. Since Britain and the United States were aiding Germany economically, why, the authorities wondered, should they permit such extravagances?160 After the failure of social policy reform in the West, however, the Soviet zone stood unrivalled in these respects. The Allies recognized the political points to be scored by too unfavorable a comparison with the East. The Germans, for their part, portrayed the SVAG as the sort of initiative necessary to help the Western zones face such challenges.161 Considerations of this nature eventually won for the SVAG the occupiers' nihil obstat. Taken over as a federal law, it became a cornerstone of the first West German parliament's social policy. Allied reforms failed in the West because independents resisted, but equally because the dependently employed were at odds with each other. Bereft of subsidies, forced to finance itself without assistance from the state and to reduce benefits, an Allied Einheitsversicherung inspired no common wage earner position. Whatever the worst-off gained was won at the expense of the more fortunate. Tensions generated in this zero-sum redistributive haggle were reflected in relations between workers and the most uniformly privileged group of wage earners - civil servants. It seemed unreasonable to many that the generous provision of civil servants be maintained while others made sacrifices and, in principle, the unions wished to include them on the same terms as other wage earners in a

160 Earlier, these sorts of objections had weighed less since, unsubsidized, social insurance - even if generous - w a s a matter the Germans could decide for themselves out of their disposable income. With tax monies implicated, the situation was n o w different. See PRO, CAB 134/595, ORC(46)6 (Overseas Reconstruction Committee), annex B, 19 January 1946. 161 O M G U S , Manpower Division, "Social Insurance and Occupational Costs," quoted in p. 368; BA, Z40/322, Zentralamt fur Arbeit in der britischen Reidegeld, Sozialversicherungy Zone, Bizonale Arbeitsgemeinschaft fur Sozialversicherung, minutes, 13-14 July 1948, Dobbernack. The relationship between reform and the internal political and social solidification of the Federal Republic w a s a leitmotif - not only for Adenauer and the C D U , as Hockerts shows {Entscheidungen, pp. 284-85), but also for the SPD. This theme colored the public meeting of the SPD's Social Policy Committee in Hanover in January 1953, especially Ollenhauer's emotional speech: see AdsD, 01982, SPD, Sozialpolitischer Ausschuss, 23-24 January 1953.

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common social insurance system.162 Yet workers also worried that unrestrained redistributive demands might alienate the support of civil servants, especially during the delicate months up to 1949 when the possibility of founding a union to enroll all wage earners was still open. The British Zonal Advisory Council was reluctant to take a firm position on the matter and the Allgemeine Gewerkschaft, the forerunner of the DGB, preferred not to press the issue in public lest civil servants abandon the union.163 Similar ambivalences were generated between blue- and white-collar wage earners. To exempt salaried employees from subsidizing workers' benefits had been a motive for creating the separate white-collar insurance scheme in 1911.164 Once the illusion had passed that postwar disruptions gave even salaried employees an interest in solidarity, they quickly rediscovered the disadvantages of universalist reform. Their unions had at first favored uniting workers' and employees' pensions and health insurance.165 As it became clear, however, that the Allied Einheitsversicherung was aimed at the lowest common denominator rather than the highest, they changed course to seek the preservation of their particularist arrangements.166 Salaried employees might support a unification of the two systems, their representative warned blue-collar trade unionists in March 1946, but not their complete equalization.167 As in France, the formation of unions catering exclusively for salaried employees was partially a function of relations between wage earners within social insurance. White-collar support for universalist reform fragmented in tandem with the demise of hopes for an inclusive union of all wage earners,finallyburied in 1949 with 162 Relations between civil servants and other wage earners had been poisoned late in the Nazi period; see Ian Kershaw, Popular Opinion and Political Dissent in the Third Reich: Bavaria 1935-1945 (Oxford, 1983), pp. 325ff. 163 Zonenbeirat, minutes, 14-15 August 1946, 2 3 - 2 4 October 1946, in Akten zur Vorgeschichte^vol. i , p p . 6 8 0 - 8 2 , 9 7 8 - 7 9 , Franz Spliedt; DGB Archives, SozialpolitischerAusschuss der Gewerkschaften in der britischen Zone, minutes, 4 - 5 March 1947; Curschmann, Jedermann und die Sozialreform, appendix 4, p. 149. 164 Heinrich Braun, Motive sozialer Hilfeleistungen (Frankfurt, 1955), pp. 4 2 - 4 3 . 165 BA, Z40/50, fo. 1, Angestellten-Kongress der britischen Z o n e , 12-14 February 1947. However, disagreement o n this w a s already public; see Grundungs-Kongress des DGB: Protokoll, pp. 152—53. 166 p o r complaints by salaried employees, see BA, Z40/53, fo. 1; Protokoll des Gewerkschaftstages der Angestellten-Gewerkschaften der amerikanischen und der britischen Zone am 12. und 13. April 1949, pp. 113-14; and Versicherungswissenschaft und Versicherungspraxis, 2, 6 (1948), 187 and 2, 8/9 (1948), 234. 167 Protokoll der ersten Gewerkschaftskonferenz der britischen Zone vom 11. bis 14. Mdrz 1946, p. 45. In 1946 salaried employees were associated with the so-called Hamburg Plan that advocated welfare provision solely for the economically weak, with redistributive efforts provided only voluntarily; see Wilhelm Dobbernack, "Zur Neuordnung der deutschen Sozialversicherung: Reformen und Reformplane," Arbeitsblatt fur die britische Zone, 1, 3 (March 1947), 99.

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the foundation of separate umbrella organizations for workers and salaried employees, the DGB and the DAG.168 Relations between their respective pension insurances were finally decided during the first administrative council elections in May 1953. Campaigning for unity, the DGB was trounced by the DAG's insistence on a separatist approach. An Einheitsversicherung met its final defeat as the two pension systems were now reestablished with their traditional class divisions and no financial compensation between them. Much of the dispute's intensity nonetheless dissipated after the pension reform of 1957 eliminated all material differences between the white- and blue-collar systems and as the DGB's increasing membership among salaried employees moderated its willingness to press the issue of an Einheitsversicherung. As in France, one of the primary reasons for the failure of Allied plans was their obviously redistributive intent. The reforms sought to apportion social burdens through the insurance system in a painfully apparent manner that required additional sacrifices from the new groups now to be drawn in. In the zero-sum predicament created by eliminating subsidies to social insurance, redistributive antagonisms alienated independents from wage earners and drove a wedge between salaried employees and workers. From every German's point of view, the occupiers' initiatives were lamentable. Even the left feared the taint that the Allied version would impart to universalist social security. Squeezed between the Amis and the Nazis, it seemed, an Einheitsversicherung would never be realized. The Western occupiers might have insisted on reform, as did the Soviets, displacing burdens from the state directly to its citizens and (assuming undiminished taxes) freeing resources for other purposes. Their choice not to do so says more about relations with the erstwhile enemy, now being groomed for rehabilitation, than about social policy in a narrowly defined sense. Parallels for the different approaches taken in East and West should be sought in other areas - in demontage, expropriation and reparations policies. What the Americans and British allowed German industrialists they could hardly deny the social insurance system that kept their workers happy. Radical change in this case, too, was limited to the East. 168 Jiirgen Kocka and Michael Prinz, "Vom 'neuen Mittelstand' zum angestellten Arbeitnehmer: Kontinuitat und Wandel der deutschen Angestellten seit der Weimarer Republik, "in Werner Conze and M.RainerLepsius{eds.),SozialgeschichtederBundesrepublik Deutschland (Stuttgart, 1983), pp. 239-47.

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A Farewell to Beveridge: Social Democratic Social Policy We should expect a major Social Democratic initiative, Anton Storch, now Labor Minister, warned his fellow Christian Democratic social policy experts in 1951. The left, he predicted, would argue that the German approach to social insurance was outmoded and required reform on the British model.169 Storch was right. Preparing for elections in 1953, the SPD advocated measures reminiscent of Beveridgean welfare statism. What he could not have known, however, was that the Social Democrats' position was far from unanimous. Much as some sought to imitate Beveridge, their social program was decidedly a German compromise. The SPD admired postwar reforms in Scandinavia and the Commonwealth countries, especially their Volkspensionen - the flat-rate, often tax-financed benefits paid to all generally without a means test.170 Hopes of including everyone in an Einheitsversicherung evaporated quickly iri Germany. But if universalism slipped through the Social Democrats' ringers, some within the SPD maintained that much firmer a grasp on the goal of flat-rate egalitarianism. In so doing, they came into conflict with the interests workers had developed in the social insurance system bestowed on them by Bismarck. Regularly employed wage earners had a vested stake in the contributory income-related benefits they had earned entitlement to. Their concern to maintain the insurance principle, the correspondence between duration and level of both premium and benefit, put them in potential conflict with irregular social insurance members and those who had never before belonged.171 Each of these latter groups, with contributory claims to only meager benefits, required disproportional aid to secure the level of provision wage earners had already achieved for themselves. The flat-rate principle therefore posed the possibility that equal benefits for all (especially if paid for by taxes) might privilege groups formerly excluded from, or only recently enrolled in, social insurance while not justly rewarding the efforts marshaled by workers on their own behalf. Given a 169 Archiv fur Christlich Demokratische Politik, St. Augustin, VII/004, C D U , Bundesausschuss fur Sozialpolitik, minutes, 18 O c t o b e r 1951. 170 O n G e r m a n Social D e m o c r a t s ' romanticization of Sweden after the w a r , see Arne R u t h , " T h e Second N e w N a t i o n : T h e Mythology of M o d e r n S w e d e n , " in Stephen R. G r a u b a r d (ed.), Norden: The Passion for Equality (Oslo, 1986), p . 253. 171 For an example, see DGB, "Britische Zone. Zonenbeirat. Ausschuss fur Sozialpolitik," Storch to Industriegewerkschaft Eisen und Metall, 14 March 1947. A similar logic is suggested for American trade unionists in Eveline M. Burns, "Social Security in Evolution: Toward What?," Social Service Review, 39, 2 (June 1965), 140. See also Kjeld Philip, "Social Legislation and Political Power," ZeitschriftfurdiegesamteStaatswissenschaft, 106,1 (1950),

32.

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The Failure of the Solidaristic Welfare State

venerable tradition of income-graded contributory social insurance, such Beveridgean uniformity broached threats of a leveling that longterm members found unfair. Within the SPD, reactions to the initial defeat of an Einheitsversicberung crystallized only slowly. Proponents of a traditional, socially divided system jostled with supporters of universalist reform. The general consensus on administration favored a "three pillars" approach, with provision for health, employment policy and social insurance organized separately.172 Losses in the first federal elections in 1949 left the Social Democrats temporarily with no pressing need for a clear social policy conception. The governing Christian Democrats were equally uninspired by a coherent view and, in any case, the first parliament's attention was occupied by matters more urgent than longterm welfare reform. When, at the end of 1951, in time for the coming elections, the SPD did thrash out a position, it quickly became clear that politicians and unionists were heading in different directions. Social Democratic social policy experts advocatedflat-ratepensions and unemployment benefits, with voluntary graded supplements and a national health service. With the Bismarckian approach outmoded, they concluded, Germany ought to follow the nations in the reforming vanguard, abandoning the venerable principles of contributory social insurance. The party should not promise to recognize unconditionally all acquired rights and entitlements to benefits. With the breakdown of the old system and new models elsewhere, Social Democrats had the chance to begin afresh. They should bring the moral pressure of developments abroad to bear on the government, persuading it to follow a course similar to that taken in Britain and Sweden. Trade unionists, on the other hand, disagreed strongly. Social Democrats, they warned, could not ignore the inherited structure of social insurance - the fruit of a century-long tradition without alienating their supporters. Basic flat-rate pensions were insufficient and should be supplemented by markedly differentiated measures that accurately reflected the hierarchy of wages. Equal benefits for skilled worker and scullery maid, young and old, were unjust.173 In response, the social policy experts rewrote their draft during the 172

AdsD, 01978, SPD Parteivorstand, Sozialpolitischer Ausschuss, minutes, 11-13 April

1948. 173 AdsD, 01980, Sozialpolitischer Ausschuss, minutes, 17-18 November 1951. T h e Social Democratic politicians were Ludwig Preller, Walther Auerbach and Schellenberg; the unionists were spoken for by Franz Lepinski.

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summer of 1952 to meet union concerns.174 Because millions of German wage earners had already earned entitlement to income-graded benefits, they now agreed, uniform pensions on the British or Swedish model were impossible. The party's revised plan proposed a dual arrangement that walked the line between reform and tradition. Tax-financed basic pensions, set at the level of public assistance, would spare the elderly the shame of means-testing, while contributory, earnings-related benefits reflected performance in the labor market.175 With the exception of one later and final flurry of debate, German Social Democrats ceased to be tempted by the flat-rate model at this time. In the 1950s, they joined the British and Scandinavian left in rediscovering the advantages of a more Bismarckian, earnings-related approach that allowed statutory intervention a greater role than was possible with a uniform minimum.176 Only during the formulation of the Bad Godesberg program in 1959, when the Executive once again wanted the party to advocate Volkspensionen, was there debate on the issue. Although such a flat-rate Beveridgean approach had once been the goal of the social policy experts, they had in the meantime come full circle. As even Britain and Sweden were by now introducing earnings-related arrangements reminiscent of the German system, they warned, the bourgeois parties could depict flat rates as a step backwards. Proposing instead graded pensions, undergirded by minimum benefits, they managed to defeat this attempt to turn back the welfare clock to Beveridge.177 Securing Wage Earners' Social Insurance The difficulties faced by the German left in reconciling a stance as good socialists, attuned to the latest evolution of welfare reform, with its role as the representative of the unionized working class underscored the effect of previous social policy developments in narrowing later choices. Eager to make up for their wartime isolation, German Social Democrats tried more concertedly than the French left to follow the lead they thought had been 174

AdsD, 01981, "Vorlaufiger Entwurf, Grundlagen eines Sozialplans der SPD." A means test for the flat-rate pensions was discussed, but did not survive into the program; see AdsD 01980, Sozialpolitischer Ausschuss, minutes, 5 - 6 July 1952. 176 See, for example, Ernst Schellenberg, "Unser Weg zur Sozialreform," in M a x Richter (ed.), Die Sozialreform (Bonn, n. d.), G112; Bundestag, Stenographische Berichte 2/187, 2.1 January 1957, p. 10550. 177 AdsD, 01987, Preller to the Sozialpolitischer Ausschuss, 3 August 1959; 01988, Sozialpolitischer Ausschuss, minutes, 2 5 - 2 6 March i960; SPD, Protokoll, 1959, pp. 250-59, 595175

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The Failure of the Solidaristic Welfare State

taken in Britain and Scandinavia. They were not to succeed. As in France, postwar reform was tainted by its obviously redistributive intentions and defeated. With these initiatives sidetracked, the task nonetheless remained of setting back on course arrangements for wage earners, traditionally the constituency of Continental social insurance. Even here, however, would-be reformers' ambitions were hampered, this time by choices taken when social policy had first been implemented. The attempt to aid the neediest that was undertaken by postwar initiatives created a tension between minimum, means-tested provision, granted with few contributory requirements, and social insurance benefits, properly speaking. Inflation, devaluation and currency reform had narrowed the gap between the contributory rates (hitched to debased coinage, calculated on surpassed wages) that workers had long labored to earn and targeted, noncontributory, perhaps subsistence benefits, given on the basis of penury alone. When these latter, assistance-like measures were made part of social insurance, as with the French Old Age Allowance or the SVAG's minimum pension, the problem was exacerbated. Those who had never, or only intermittently, contributed to social insurance now received benefits comparable to the rates given regular members, and that without even any stigma. The solution to wage earners' dissatisfaction on these points was to reestablish the insurance principle in psychological if not actuarial fact, to emphasize the advantages of contractual entitlement and contributory right. After the war, France had a de facto flat-rate pension system.178 With entitlement earned only since 1930 and the value of contributory benefits hollowed out, elderly wage earners received pensions lower than the Old Age Allowances. Even given special supplements, longterm members received no more than those who had only briefly or - in the case of independents - never before belonged. Such problems were resolved by the .23 August 1948 law that reestablished the hierarchy of reward in social provision, paying pensions equal to 40% of workers' wages after thirty-five years of premiums, and gradually required a longer career as wage earner for receipt of the Old Age Allowance. The question faced with this reform was how to apportion the resources available to improve benefits. There were two possibilities. Either pensions could be raised in proportion to the contributions paid or the means-tested Old Age Allowance, for which only a short stint as a wage earner was required, could be increased. The first solution rewarded longtime members of social insurance while 178

See, for example, Louis Alvin, Salaire et securite sociale (Paris, 1947), p. 63.

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the second benefited those who had belonged only with interruption or hardly at all. Pensions should again be given the character of a real insurance, Laroque impressed on the commission in charge of preparing the reform. Economic fluctuations had turned benefits into a hand-out that bore little relation to the effort made for them. Although pay-asyou-go financing in theory allowed the state to dispense pensions without taking account of the premiums paid, those who had contributed only a little should not receive the same rates as members of long standing.179 Swayed by such testimony, reformers chose to improve the circumstances of regularly employed social insurance members in proportion to their performance, rather than channeling resources to newly enrolled groups. Sponsored by Henri Meek, a representative of the Christian workers' movement of Alsace-Lorraine, the law that resulted benefited these two provinces in particular, where, thanks to Bismarck, workers had earned entitlement for much longer than their compatriots. 180 In Germany, the 1957 pension reform modernized the traditional social insurance system. Limited to modestly paid wage earners (and the artisans forced on them by the Nazis) and divided chastely between workers and salaried employees, it was now founded on a sophisticated pay-as-you-go, value-secured basis that - although not quite the unicum sometimes claimed - represented a pathbreaking step towards solving the problems of inflation and devaluation.181 Conceptions for reform had differed little between left and right. Both built on orthodox notions of contributory correspondence that continued the German social insurance tradition. It was this return to many of the principles of the older system that tempted one East German observer to sum up developments in the Federal Republic

179 AN, SS7922, Commission chargee d'etudier les modifications a apporter a l'ordonnance du 19 octobre 1945, minutes, 24 November 1947, Laroque; report by Daniel Pepy; minutes, 4 December 1947; JO Doc, 32.67,5 February 1948, p. 116; 4347,27 May 1948, pp. 1051-58; 4817, 1 July 1948, pp. 1468-69; JO Deb, 16 July 1948, pp. 4674-94. 180 p o r a n o t unbiased account, see CFTC, 70 Jahre Securite Sociale in Elsass und Lothringen: Verdienst der Christlichen-Sozialen Bewegung, Versagen der Marxisten (Strasbourg, 1955), pp. 24-32. 181 What was not novel was its pay-as-you-go financing, glorified by German reformers as a contract between generations. Beveridge had abandoned funded financing on Keynes's advice. In France, because state monies had never been forthcoming, pay-as-you-go had long been the system of choice. See Hans Giinter Hockerts, "German Post-War Social Policies against the Background of the Beveridge Plan," in Wolfgang J. Mommsen (ed.), The Emergence of the Welfare State in Britain and Germany, 1850-1950 (London, 1981), p. 323; Netter, "Les retraites en France," 449,

zo6

The Failure of the Solidaristic Welfare State

as "All Quiet on the Western Front."182 But if the apparently retarded state of social policy at home embarrassed the Continental left, it was soon to be relieved. In the supposedly banner-bearing countries to the north and west, changes would shortly reverse leader and led as Scandinavia and Britain broke with Beveridge's heritage to return to Bismarck.183 Postwar reforms in France and Germany posed social insurance's redistributive possibilities in their classic terms: the least favored and most needy sought to alleviate burdens by immersing all in a common risk pool. Conversely, both the groups that had earlier been allowed to equalize risks with only their peers and those which had neither wished, nor been forced, to do so at all resisted this threat to their prerogatives. Various secondary considerations helped hinder successful reform. The left in France was internally at loggerheads over issues like administrative council elections and its strength was correspondingly sapped. In Germany, Social Democrats atfirstmisunderstood the importance of the social policy status quo for the unions and wasted energies laying plans that were unacceptable to the labor movement as a whole. In both countries, proposals for change were tactically undercut by the reformers' inability or unwillingness to rely on the state and its powers of taxation and veiled redistribution. More importantly, however, universalist initiatives failed because they aimed to shift the cost of maintaining the unfortunate away from the state and openly to the social insurance system, which was, for this reason, extended to include all. With such unmistakably solidaristic intentions, those who stood to be hurt objected. Cadres and the self-employed mounted sufficiently powerful resistance that their interests prevailed in France. In Germany, the redistributive losers' campaign against reform was helped by the way in which proposals from the occupying authorities managed to alienate even the working class and the left. The effect was to cripple the initial ambitions of the postwar reforming crusade. Risk redistribution was limited to clearly defined and circumscribed categories of social and actuarial peers in France and, in Germany, was not extended beyond the classes traditionally subject to social insurance. The redistributive challenge thrown down on the Continent was never even posed in Britain and Scandinavia. Changes there were successful 182 Paul Peschke, Geschichte der deutschen Sozialversicherung: Der Kampf der unterdruckten Klassen um soziale Sicherung (Berlin, 1962), p. 43 3. Irony and allusion c o m e through better untranslated: Im Westen nichts Neues. 183 That is a story pursued in Chapter 4.

Securing Wage Earners' Social Insurance

207

because the bourgeoisie derived at least as much benefit from them as did the less fortunate classes. In France and Germany, in contrast, the bare-knuckled intensity of the fight over reform testified to the importance of the issues at stake. Postwar initiatives promised to benefit workers and other needy groups at the expense of the middle classes. With no redistributive allies, the disadvantaged stood little chance of prevailing. Solidaristic arrangements from which favored and powerful groups only lost had little prospect of success. Not until those classes which in 1945 were still the champions of a socially particularist approach later discovered that they had cut the ground from beneath themselves by rejecting risk redistribution at the national level, while limiting it to their own narrow and demographically vulnerable categories, did their interests swing around behind solidaristic policies. They now sought to shift the burdens they had inadvertently saddled themselves with to a larger community, embracing for reasons of immediate self-interest reform of the sort they had earlier rejected. That development is a story continued in the final chapter.

4

From Beveridge back to Bismarck: The Superannuation Issue

If you could get the pension issue right, Swedish Prime Minister Tage Erlander confided pre-prandially at the London embassy to Richard Crossman, craftsman of a British version of superannuation, it was an enormous electoral help.1 Getting it right was precisely the nub of the matter. Although sharing obvious similarities, Scandinavian and British supplementary pension schemes differed in their goals, the political functions they served and the social forces that shaped their formulation. The state's role in a realm formerly left to the individual was the issue decided by the dispute over superannuation. The benign liberalism of postwar pension reform, limiting statutory intervention to a minimum and leaving untamed inequalities beyond this scope, had won broad political backing by threatening few interests. Superannuation now called into question this placid consensus. Should stark inequalities be tolerated above the flat-rate minimum then drawn as the boundary for public control? Or ought the state to legislate to correct imbalances here as well?2 By threatening to socialize what had earlier been left free, superannuation reversed the innocuously liberal solution achieved after the war. The superannuation issue whipped to a froth the normally pacific waters of Swedish politics during the late 1950s. The flat-rate universalist minimalism of postwar reform had satisfied the urban middle classes and rural inhabitants. With little reason to rest content with these sorts of measures, the left and the unions soon pressed for further change. Manual workers had long demanded some form of national superannuation that would grant them pension parity with salaried employees who had private and occupational provision. As yet prompted by no other motives, Social Democrats initially considered remedies to bridge this gap for the bluecollared. Matters changed, however, when losses in the 1956 elections 1

Richard Crossman, The Diaries of a Cabinet Minister, vol. 3 (London, 1977), p. 2.06. Leif Lewin, Ideology and Strategy: A Century of Swedish Politics (Cambridge, 1988), pp.204-18. 2

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209

foreshadowed the political fate faced by the party and its Agrarian coalition partners were they passively to sit out demographic developments that threatened to reduce the strength of workers and farmers. Superannuation coincided with the political choice presented Swedish Social Democrats between remaining the representatives primarily of the industrial proletariat or seeking to recruit and enlist the rising class of salaried employees too. Out of an issue originally aimed at workers, they therefore forged one to win white-collar votes. To attract the salariat, Social Democrats were prepared to offer concessions. With the blessing of the industrial unions, interested in broad political support for superannuation and willing to pay its price, the left tailored proposals to suit the interests of salaried employees, even at the expense of manual workers. The use made by Social Democrats of pensions was partly a result of chance and partly of savvy strategy. Coincidence brought the pension issue to the fore in Sweden at the time the question of the party's relations to white-collared groups was posed. That the SAP recognized its possibilities, engineering a solution that satisfied manual workers while also appealing to their salaried colleagues, was good tactics. In the Nordic countries, the Social Democrats could rarely manage only with blue-collared support and had from early on learned to forge cross-class alliances, first with farmers, now with salaried employees. The structure of union representation also helped focus Social Democratic attention on the white-collar issue in a way that was to take the left in Denmark and Britain longer. The organization of salaried employees in two main umbrella unions separate from the LO allowed them to formulate their interests with precision, facilitating an awareness on the left of what was required to attract them.3 In Denmark, the elegant example set by the Swedes was not followed. Initial superannuation reforms here produced a limited flat-rate system that, in effect, raised national pensions for most wage earners. This inability to break the mold of uniform benefits was due partly to the stranglehold in which the principle of flat-rate egalitarianism held the 3 While the social presence of white-collar wage earners was similar in the three countries, the manner in which they were represented differed significantly. Of Swedish organized salaried employees 70% belonged to the main white-collar union, the TCO. The other primary union was the SACO. In Denmark, 55% were organized outside the blue-collar union umbrella, the LO, but split among three main organizations. In Britain, all employee unions were members of the TUC and the 34% of white-collar wage earners not thus organized belonged to a wide scattering of unions not affiliated in any effective pressure group with a power comparable to that of the TCO. See Statistiskdrsbok, 1963, table 23; 1958, table 252; Statistisk drbog, 1963-64, table 19; 1958, table 208; and George Sayers Bain, The Growth of White-Collar Unionism (Oxford, 1970), tables 2.1, 3.1, 3.3.

no

The Superannuation Issue

Danish social policy imagination. Social Democratic arguments that earnings-related benefits perpetrated a minor inequality to eradicate the more regrettable injustice dividing the elderly with only statutory coverage from those with further provision and other means made little impression on the center and right, where limiting the state's intervention to a minimum and leaving a free hand for the individual above this level had by now become dogma as the proper approach to social insurance. On the far left as well, among the splinter parties that nipped at Social Democratic heels, earnings-related reform was regarded with suspicion as a continuation of market inequalities into old age. On the Danish left, attention to the concerns of salaried employees only followed extensive cultivation of this electoral soil by the bourgeois parties and the first formulation of superannuation reform. Pensions and whitecollar wage earners were brought together conceptually, as issues to be dealt with in terms of each other, only too late. The slightly redistributive flavor (compared to the Swedish example) with which the Social Democrats spiced reforms in order to avoid charges of anti-egalitarianism leveled from both right and left won them few friends within the salariat. The bourgeois parties, forewarned by the Swedish precedent, effectively marshaled their opposition. The trade unions were allowed to conduct a hetz campaign against the disproportional costs that would have been incurred by including independents too for superannuation and thereby provoked resentment from this camp. Unnecessarily radical in tone, tailored to suit mainly manual workers, while strongly rebuffing the self-employed, superannuation in Denmark was never an issue that helped Social Democrats break out of their electoral ghetto. British developments were distinguished from the Scandinavian above all by the failure of Beveridge's ambitions for national pensions. Unconditional universal benefits, hobbled by his insistence on flat-rate contributions that were limited to what the poorest could pay, had never been adequate to live on without supplementation. Superannuation, evolving in British circumstances primarily as a means to achieve a subsistence level of pension for the neediest, therefore faced at least two tasks here. Before the considerations of social justice, the plans for democratized economic control and the hopes of modern, standard-securing social policy that characterized the debate in Scandinavia could be invoked as merits of superannuation, an earnings-related supplementary pension system in Britain had as itsfirstand foremost goal the reapportioning of funds from the well-off to the worse-off so as to allow the poor sufficient benefits.

The Superannuation Issue

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Such redistributive ambitions were not the only reason why reform here took so long and circuitous a route to implementation. Although superannuation in the British version promised to help manual workers most, the unions were persuaded only with difficulty to support Labour's plans for change. They remained loyal defenders of the old Beveridgean system for a number of reasons. Flat rates in Britain had fulfilled a venerable tradition on the left; they were not as obviously the outcome of struggles between town and country as in Scandinavia and they more closely satisfied the needs of a working class that was better supplied with additional provision than was the Nordic. While Swedish Social Democrats had little reason to back social insurance based on uniform benefits, circumstances here differed. Reasons of both interest and ideology, not mere obstinacy or ignorance, gave the British labor movement cause to support the flat-rate system faithfully.4 Only reluctantly did the unions abandon the goal of flat-rate subsistence paid for by uniform contributions and Exchequer subsidies. Labour's plans for new methods of contributory financing to circumvent the political difficulties of raising funds fiscally were initially rejected both as regressive and because, by shifting the burden of redistribution from taxes to the social insurance system, they threatened to spark antagonisms between wage earners and to embarrass the unions. The reluctance of both Conservatives and Labour to face the tax increases required by heavier Exchequer financing of social insurance eventually persuaded the TUC of the need for a new solution to reduce the disparities between pensioners. Labour, in turn, accepted the consequences of the unions' resistance to the overt redistribution inherent in a system of income-dependent financing for flat-rate benefits, proposing instead a superannuation scheme. By granting earnings-related benefits in order to collect graded contributions that asked more of the rich than of the poor and by invoking considerations of justice, economic control and the social policy needs of affluent societies, Labour's proposals sugarcoated the redistribution circumstances required with the glaze of a pension reform that had no necessary bearing on the subsistence problem. The need to resolve with one blow the subsistence and superannuation issues, separately addressed in Sweden, distinguished British plans from the Scandinavian. Because of this redistributive intent inherent in both Tory and Labour initiatives - the need first and foremost to solve the subsistence problem - superannuation here was skewed in favor of the poorest wage 4 Pace Hugh Heclo, Modern Social Politics in Britain and Sweden: From Relief to Income Maintenance (New Haven, 1974), pp. 2.63-68.

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The Superannuation Issue

earners. Beyond the advantages of transferability and value-securing possible in a statutory scheme, skilled and white-collar wage earners' interests found primarily negative expression: in the manner they were permitted to contract out and exempt themselves from the consequences of redistribution. In Sweden, hopes of attracting new white-collared voters prompted Social Democrats to use the pension issue as bait. The British version, necessitated by Beveridge's inability to raise the poorest to subsistence, was, in contrast, a matter of particular concern to manual workers. Danish measures were located somewhere between these two extremes. Apparent similarities between reforms in these three countries were contradicted not only by widely varying institutional, administrative and political contexts, but also by the social goals they sought to achieve. Wage Earners, Social Equality and Superannuation: Sweden Abolishing need as a condition of entitlement for social benefits after the war had been a reform in which workers were, at best, secondarily interested. Pension equality to salaried employees, with their occupational provision, was a more pressing concern for the working class and compulsory supplementary arrangements seemed the best route to this goal. A contributory earnings-related approach to social policy, first introduced for health insurance in 1953, helped urban workers meet the costs they faced as a flat-rate minimum could not.5 Starting as a reform motivated by similar concerns, superannuation was nonetheless soon shifted by political tactics in new directions. Where health insurance (as it was finally implemented) had been an expression of blue-collar politics, superannuation, though beginning as a measure aimed at manual workers, was eventually refashioned in accordance with the Social Democrats' need for fresh electoral blood so that it would suit salaried employees.6 5 In health insurance reform employers abandoned their opposition to helping finance social policy, and various technical preconditions for further change in a contributory earnings-related direction were created; see Nils Kellgren, "LO i ATP-striden," in Steg for steg: 1945-1973 (Stockholm, 1973), p. 94. 6 On the superannuation dispute Bjorn Molin's Tjdnstepensionsfrdgan: En studie i svensk partipolitik (Goteborg, 1965) is a minor classic in afieldwith no major ones. Molin's analysis, to which all students of the subject are indebted, is based on a sophisticated system of complementary causes in which purely interest-determined motives tend to play a secondary role to considerations of political tactics. This disemphasis on the interest factor is partly the result of Molin's insufficient notion of interest. Thus, for example, for reasons he fails to explain, he assumes that Conservatives and Liberals would - had their interests alone led the way - have supported the earnings-related measures backed in fact by the Social Democrats,

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Workers had the most immediate interest in statutory superannuation. During the 1940s and 1950s, the LO had advocated an extension to all wage earners of the sort of supplementary pensions usually enjoyed only by salaried employees.7 A government commission agreed with the unions and recommended improving workers' circumstances through statutory superannuation.8 Although its mandate was limited to wage earners, at Agrarian insistence the commission decided to circumvent the administrative problems of drawing the appropriate social distinctions by including the self-employed as well. Employers' contributions were used to help finance benefits for independents and wage earners alike. A modest capital accumulation fund was envisaged to smooth the path over shortterm economic fluctuations. So as not to leave behind a disinherited generation, transition measures were to benefit the elderly disproportionally to their efforts. In the government's survey of opinion, the unions welcomed superannuation for all, but rejected the injustice of apportioning employers' contributions equally among all social classes.9 Satisfied with the principle of grading benefits by income, the LO nonetheless favored transition measures crafted with a more egalitarian touch. 10 It also welcomed the accumulation of an investment fund. Other interests presented a bouquet of opinion. 11 Industrial employers wished to limit intervention to needy workers, feared lest reform undermine private savings and capital formation, and were worried by the government-controlled fund. Agricultural and commercial employers as well as independents were more favorably while the left ought to have been for flat-rate, minimum, supposedly egalitarian benefits. Given this assumption, he finds it necessary to introduce a series of other - partially superfluous - factors to explain why, in fact, the positions were reversed. For similar criticisms, see Stig Hadenius, "Partiers beslutprocess och tjanstepensionsfragan," Statsvetenskaplig tidskrift, 69, 4 (1965), 348. Studies making use of Molin's work include Gesta Esping-Andersen, Politics against Markets: The Social Democratic Road to Power (Princeton, 1985); Heclo, Modern Social Politics-, Larry Hufford, Sweden's Power Elite (Washington DC, 1977); and Birgitta Nedelmann, Rentenpolitik in Schweden: Ein Beitrag zur Dynamisierung soziologischer Konfliktanalyse (Frankfurt, 1982). For an all too seldom, if rather cranky, taste of infighting and libel behind the scenes in the pensions world, see Leon Rappaport, ATP-sveket: Determinantiva och ekonomiska aspekter (Stockholm, 1980). 7 Favoring a statutory solution, the LO gave overtures from employers on arranging provision through collective agreement an unenthusiastic reception; see LO Archives, Arbetsmarknadskommitten, minutes, 24-26 February 1944, 31 May to 1 June 1944. 8 Allmd'n pensionsforsa'kring, SOU 1950:33, pp. 57-58. 9 LO, Bera'ttelse, 1951, pp. 212-15. 10 Strictly grading benefits by income during the transition period had the peculiar effect of granting generous benefits for proportionally little effort to the most affluent. Similarly, the LO wanted to hitch the mechanism of value-securing benefits to prices rather than wages so as to reward most modestly those with the least need. 11 Allma'n pensionsforsdkring, SOU 1955:32, pp. 37-66.

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The Superannuation Issue

inclined, being pleased that the self-employed were included and delighted that employers' contributions were to benefit them as well. White-collar wage earners, many of whom already had occupational provision, demanded the right to contract out and wanted, in any case, benefit rates to be determined in relation to earnings at retirement. As a group with supposedly sharply rising wage curves they stood to profit from such calculations, while the whole-career approach recommended by the commission suited manual workers best.12 A second commission took such criticisms into account. 13 It now decided to reserve employers' contributions for wage earners alone, but at the same time introduced separate measures as a substitute to help small independents. Wage earners who already had occupational pensions were still included and relations between statutory and private arrangements were left to collective agreement. With a definite proposal, opinion crystallized.14 The blue-collar unions were generally pleased. Graded benefits reflected market inequalities, but a statutory scheme promised to moderate the expression of wage differentials in old age. Sidestepping potential disputes with the salaried employees, the LO agreed to use the twenty best-remunerated years of earnings rather than the last or all in calculating benefits. Where independents had at first been welcomed into the superannuation system, the unions now preferred to offer them increased national pensions and voluntary supplements.15 Conservatives, on the other side, were less satisfied. They called for the complete removal of means tests in national pensions so that self-help and occupational provision would not be undermined by disqualification from those elements of benefit still contingent on need.16 The dangers of large funds and a centralized control of capital formation also began to dominate their concerns. Independents' initial enthusiasm for superannuation faded once it became clear that they were expected to carry their own weight. Salaried employees, in turn, continued to suffer the agonies of indecision. They remained adamant on contracting out and 12 That wage curves differed between workers and salaried employees was considered a truism on which the professional organizations based their stand at the time. Later investigations revealed the differences to be less distinguishable and the issue evaporated. See Folke Schmidt, Allmdnna och privata pensioner: Mdl och medel (Stockholm, 1974), P- 1^113 s o u 1955:32.. pp. 72.-2.9514 Remissyttranden over pensionsutredningens slutliga forslag till allmdn pensionsforsdkringy SOU 1956:31. 15 See also ARA, Tage Erlanders Arkiv, F XV: 2, LO:s utredningsavdelning, "Diskussionspromemoria angaende forslagettill allman pensionsforsakring," 20December 1955, pp. 2-4. 16 This would have approximated to the solution achieved by the bourgeois parties in Denmark in 1961 with the introduction of full universalism.

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wished to reduce the years of membership required for full benefit in order to accommodate their long educations and comparatively attenuated active lives.17 At the beginning of 1956 two alternatives were worked out by a committee at the Ministry of Social Affairs:18 Its majority proposed compulsory, income-related superannuation, covering all wage earners with value-secured pensions calculated on the fifteen best years of earnings. Although financing was to be primarily pay-as-you-go, substantial funds were envisaged to promote investment, economic rationalization and increased production. A minority on the committee, representing employers and Conservatives, countered with a plan for voluntary occupational arrangements, to be encouraged by making national pensions wholly unconditional. By this point the interest groups had generally taken a clear position on the issue.19 Manual workers remained superannuation's most steadfast supporters, but were willing to compromise in hopes of making reform more palatable for their salaried colleagues. White-collar wage earners, in turn, were the wild card in the hand played for superannuation. All salaried employees agreed that, as formulated in the government's proposal, superannuation did not meet their demands. To qualify for a full pension, they thought, contributions should not be required for longer than thirty years. The LO's compromise of determining benefits in relation to the years of highest wages was acceptable, but only ten should be used so that white-collar peak earnings could be accentuated. They also welcomed the complete abolition of means tests, but feared that a generous expansion of national pensions (discussed by the bourgeois parties as an alternative to superannuation) would be a boon for independents bought at their expense.20 But if salaried employees could agree to limit such increases in tax-financed, redistributive measures, the question of apportioning 17 On this point, too, the LO proved flexible. As a boon to those who switched between a wage-earning and an independent status, to working women, and to those with extensive educations, full pensions were to be granted after 35 years of contributions rather than the 48 spanned by the average worker's career. 18 Forbattrad pensionering, SOU 1957:7. 19 Kemissyttranden over Allmdnna pensionsberedningens betdnkande om forbattrad pensionering, SOU 1957:16. 20 For SACO, the organization of professionally trained employees, on this point, see ARA, Erlanders Arkiv, F XV: 2, ACO, "PM om folkpensioneringens kostnader och inkomstomfordelande verkningar," 1957, appendix to "SACO:s remissyttrande over Allmanna pensionsberedningens betankande om forbattrad pensionering"; and Arne H. Nilstein, "White-Collar Unionism in Sweden," in Adolf Sturmthal (ed.), White-Collar Trade Unions (Urbana, 1966), p. 298.

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The Superannuation Issue

burdens among themselves proved more nettlesome. The main division within the group cut between civil servants and the privately employed with occupational provision, on the one hand, and those who were wholly reliant on national pensions, on the other. The interests of the first were largely determined by the advantages of statutory over private measures: the value-securing of benefits and the transferability of entitlement.21 The latter shared with workers a concern for pension parity with those who already enjoyed supplementary coverage. When the main white-collar union, the TCO, attempted to reconcile these contradictions, its efforts were valiant but unsuccessful.22 The already provisioned opposed a form of superannuation that bestowed advantages especially on blue-collar workers and unpensioned salaried employees.23 Since occupational and civil service benefits had been bought partially at the expense of otherwise possible wage hikes, it followed in the calculations of these well-heeled employees that, were supplementary pensions compulsorily introduced, then already covered wage earners deserved compensation in return. Statutory arrangements, they feared, could not reflect earnings differentials as accurately as private measures and might eventually be fused with national pensions in a single flat-rate scheme, unable to reward the well-paid as they deserved.24 Split into two almost equally large camps, the TCO was unable to take a position on the government's superannuation proposal.25 Apart from such disputes, there was one demand so basic to salaried employees' interests and so unanimously taken for granted that the infrequency of its mention was matched only by the absence of any expressed intention to this effect among reformers. It went without saying, employees were convinced, that 21

Also advantageous were the proposed transition arrangements with their earningsrelated overcompensation that treated the well-paid especially handsomely. 22 Tjanstemannarorelsens Arkiv, Bergendal, 612/9, "Protokoll fort vid extra sammantrade med TCO:s representantskap lordagen den 16 mars 1957," Thord Wallen, Valter Aman. For SACO, see SACO-tidningen, 3, 1 (February 1956), 2; 3, 2 (April 1956), 27, 33; and ARA, Erlanders Arkiv, F XV: 2, SACO, "Redegorelse for den allmanna pensionsfragans behandling inom S A C O . " For an excellent account of the T C O and superannuation, see Christopher Wheeler, White-Collar Power: Changing Patterns of Interest Group Behavior in Sweden (Urbana, 1975), ch. 6. 23 The already-provisioned were represented in particular by the Svenska industritjanstemannaforbund (SIF); see ARA, Erlanders Arkiv, F XV:4, "SIF-ledningens mobilisering for 3:an utan motstycke i SIF:s historia." 24 Tjanstemannarorelsens Arkiv, 612/9, Lennart Johansson to Otto Nordenskiold, 9 March 1957; T C O , Representantskapet, minutes, 16 March 1957, Filip Anger, Harald Adamsson. 25 For the government's and the Social Democrats' slightly hapless response to this, see ARA, Erlanders Arkiv, F XV:3, "De fackliga organisationerna och avtalslinjen," 12 April 1957-

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deliberate redistribution from rich to poor within superannuation was anathema.26 Enter the Politicians While the positions of those groups able to formulate one was clear by 1956, their translation into political terms was less immediate. In the general election that year, the Agrarian and Social Democratic coalition partners suffered a setback, while the bourgeois parties registered gains. The Social Democrats, eager to preserve the government, allowed superannuation to play an important role in negotiations.27 The Agrarians, in turn, were in a quandary. Conservatives and Liberals rejected a statutory solution to superannuation in favor of increased national pensions and voluntary supplements. The Agrarians had no pressing interest in superannuation, but hopes of preserving their political condominium with the left forbade outright rejection of the Social Democrats' proposals. At the same time, the Agrarians' losses - confirming demographic prognoses indicating the wisdom of appeals to new electoral groups - suggested that recasting the party take precedence over governmental responsibility in a weakening coalition. Torn between the concerns of their supporters (small independents mindful of superannuation's expense), which spoke for a voluntary solution, and the political advantage of not toeing the bourgeois line and thereby remaining a government party, the Agrarians tried for tactical reasons to etch a distinct profile with their own variation on a nonstatutory approach to pension reform.28 With the popular appeal of their alternative demonstrated in the referendum held on superannuation in 1957, the interest factor achieved renewed importance. The coalition with 26 Tjanstemannarorelsens Arkiv, 530/6, " P . M . angaende T C O : s stallning till pensionsfrag a n , " 28 December 1955; 801/33, "Forslag betraffande T C O : s installning till vissa problem angaende allman tjanstepensionering," 30 December 1955. 27 Olof Ruin, Mellan satnlingsregering och tvapartisystem: Den svenska regeringsfrdgan 1945—i960 (Stockholm, 1968), pp. 224—46; Gustav Jonasson, / vdntan pa uppbrottf BondeforbundetlCenterpartiet i regeringskoalitionens slutskede 1956-1957 (Uppsala, 1981); ARA, SAP, Partistyrelsen, minutes, 12-13 October 1956. 28 M o l i n , Tjd'nstepensionsfrdgan, p p . 159-64. Political tactics on the left also played a role. Realizing that the Agrarians could not be won for the statutory solution, the Social Democrats attempted t o drive a wedge between supporters of a voluntary a p p r o a c h , preventing the Agrarians from adding their voice t o a h a r m o n i o u s bourgeois chorus. See Eckerberg t o Erlander, 8 April 1958, quoted in T a g e Erlander, 1955-1960 (Stockholm, 1976), p p . 141-42. See also ARA, A Ia:5, SAP, Riksdagsgruppens fortroenderad, minutes, 19 N o v e m b e r 1957, Erlander; Olof Ruin, / vdlfdrdsstatens tjdnst: Tage Erlander 1946-1969 (Stockholm, 1986), pp. 322-23.

2i8

The Superannuation Issue

the Social Democrats was dissolved as the Agrarians decided to reform and rebaptize their party in hopes of avoiding terminal decline.29 The Social Democrats, too, faced a political dilemma that coincided with superannuation. The party did eventually make use of the pension issue to help break its demographic and political stalemate by appealing to salaried employees, but this was not at first an obvious solution. In its initial formulation, superannuation had few immediate attractions for the salaried circles where the left might seek new support. Crafting the issue so as to win white-collar employees, getting it right as Erlander was to tell Crossman, was the task. Before the 1956 elections, the SAP had been reluctant to formulate a position on superannuation. 30 In the early phases of the dispute, the party gave voice to a traditionally Social Democratic preoccupation with the concerns of manual workers. Coverage for old age, it agreed, was fraught with class distinctions. Raising national pensions still left yawning the gap between groups with additional provision and those who were wholly reliant on statutory measures. Superannuation was one manner of bringing the proletariat to parity. This blue-collar slant to the party's early considerations was contradicted only by isolated concerns for the interests of salaried employees.31 The electoral setback the following year, however, changed the picture. Many voters - according to Erlander's analysis - had defected, including disgruntled civil servants and others who feared disadvantages from the party's superannuation plans. Their loss had been counterbalanced by a more consistent backing from industrial workers. While this was desirable, Social Democrats should realize that, in the long run, political power hinged on support from both white-collared and agrarian voters. In this regard the election had been a step backwards. The party's aim should be to smooth class distinctions so that not every improvement for workers hurt salaried employees.32 As part of their attempt to win salaried votes, Social Democrats did what they could to enhance superannuation's appeal for white-collar 29 Hans Albin Larsson, Partireformationen: Fran Bondeforbund till Centerparti (Lund, 1980), pp. 138-40; Jorma Enochsson and Roland Petersson, Gunnar Hedlund (Stockholm, 1973), p. 102; Lars Nilehn, "Agrar intressepolitik: Fran Bondeforbund till Centerparti," Scandia, 46, 2 (1980); Gustaf Jonnergard, Sd blev det Centerpartiet: Bondeforbundsoch Centerideerna frdn fyrtiotalet fratn till i960 (Stockholm, 1984), pp. 137-45.1° their attempt not to be hitched to farmers* declining fortunes, the Agrarians now became the Center Party. 30 A well-documented account of Social Democratic superannuation policy can be culled from the pertinent sections of Bjorn von Sydow, Kan vi lita pa politikerna? Offentlig och intern politik i Socialdemokratins ledning, 1955-60 (Stockholm, 1978). 31 ARA, SAP, Riksdagsgruppen, minutes, 1 November 1955. 32 ARA, SAP, Partistyrelsen, minutes, 25 September 1956; Riksdagsgruppen, minutes, 16 October 1956.

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employees. They proposed using only the fifteen best years of earnings to calculate rates. The forty years of contributions required in the party's earlier drafts for entitlement to full pension were reduced in the government bill to a scant thirty, allowing extensively trained and correspondingly well-paid salaried employees to reap maximum graded benefits for a total contribution sum often no larger than that paid by their longerworking, more modestly remunerated blue-collar colleagues for lower pensions. Although such changes benefited salaried employees at the expense of manual workers, the LO accepted them in hopes of securing broad support for reform.33 Above all, as a fundamental precondition of the left's ability to lure white-collar votes with the bait of statutory superannuation, no redistribution was attempted within the system itself.34 The Social Democrats' tactics proved successful. Erlander was delighted with the results of the 1957 referendum. Although losing votes from small independents and some of those who already had occupational coverage, the party had made inroads among groups formerly in the bourgeois camp. Dissolving the coalition with the Agrarians and forming a minority government to implement reform without compromise was the new goal.35 Final fine-tuning of superannuation in hopes of winning broad support followed. Independents were now included, but with the right of exemption.36 As later developments in Denmark demonstrated, such apparent equality of treatment was, in fact, a concession. Older, demographically imperiled and permitted to contract out, independents as a group were a disadvantageous risk category for which wage earners would foot the bill. To be fair, the party also allowed salaried employees to exempt themselves from membership in superannuation. For the LO, Social Democrats reasoned, few of whose members would seek exclusion, the matter was one of indifference and contracting out was therefore an easy concession that could be partially retracted by making the procedure administratively 33 O n the advantages for salaried employees at the workers' expense, see Agnete Kruse and Ann-Charlotte Stahlberg, Effekter av ATP: En samhdllsekonomisk studie (Lund, 1977),

pp. 23-44; and Ingemar Stahl, " S w e d e n , " in Jean-Jacques Rosa (ed.), The World Crisis in Social Security (Paris, 1982), p p . 116-17. See also RA/S, Bondeforbundet-Centerpartiets Arkiv, Riksdagsgruppen, F:4, "ATP-avgifterna och de lagre inkomsttagarna"; and Nedelm a n n , Rentenpolitik, p p . 259-64. 34 For other Social Democratic arguments as to why even already pensioned wage earners might be attracted by superannuation, see ARA, Erlanders Arkiv, F XV:3, Gosta Rehn, " K o m m e n t a r till Adamssons framstallning av motiven for SIF:s stallningstagande i pensionsfragan," 22 M a r c h 1957. 35

A R A , SAP, Partistyrelsen, minutes, 25 October 1957; Ulla Lindstrom, / regeringen: Ur min politiska dagbok, 1954-1959 (Stockholm, 1969), pp. 170-77. 36 Skold, Erlander and others had been for including independents as well; see A R A , SAP, A Ia:5, Riksdagsgruppens fortroenderad, minutes, 9 April 1957.

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bothersome. Generous transition measures that benefited salaried employees most were also discussed as a means of attracting the white-collared.37 Passing the Bill

During the debate on the government's bill in 1958 the bourgeois parties opposed reform, although the Agrarians (now the Center) again torpedoed attempts at building a united front against the Social Democrats.38 Conservatives sought to portray themselves as defenders of workers' interests, attacking the bias in favor of salaried employees they claimed to detect in the proposals. Many from the center and right singled out for lambasting the dangers of large investment funds.39 When the bill failed to secure a majority in the lower chamber, the government was dissolved. The following elections proved the worth of the Social Democrats' new strategy. While Conservatives and the Center profited from the losses Liberals had to pay for their last-minute attempt at a compromise strategy, Social Democrats not only mopped up Communist votes, but also gained elsewhere.40 Pensions were the main cause of the electoral gains, Erlander celebrated. Civil servants had been appeased with wage increases and salaried employees attracted by superannuation. These victories were equally important for the party's development as the breakthrough to the self-employed had been in the 1930s.41 When the government reintroduced its bill, it passed in the lower chamber by what the official account pithily

37

ARA, SAP, Partistyrelsen, minutes, 10 February 1958; Riksdagsgruppen, minutes, 11 February 1958, 25 March 1958. 38 Riksdagens protokoll, Prop. 1958:55. 39 Riksdagens protokoll, AK 1958:17, pp. 31-33, 37—40, 84—85, 173—74. 40 For Liberal self-flagellation in the post-mortem, see Folkpartiet, Riksdagsgruppens Arkiv, Stockholm, Riksdagsgruppen, minutes, 24 June 1958, Gustafsson, Christenson, Malmborg; minutes, 19 January i960, Ohlin; and Herbert Tingsten, Mitt liv: Tio dr 1953—196} (Stockholm, 1964), pp. 22iff. O n the Liberals in general, see Bjorn Molin, "Folkpartiet och ATP-fragan," in Liberal ideologi och politik 1934-1984 (n.p., 1984). 41 ARA, SAP, Riksdagsgruppen, minutes, 16 October 1958. The degree of breakthrough into new classes should not, however, be exaggerated; see Bo Sarlvik, "Political Stability and Change in the Swedish Electorate," Scandinavian Political Studies, 1 (1966), 217—18. For more general tactical considerations along these lines at the time, see Ingemar Lindblad, "Socialdemokratien i medelklassamhallet," in Tage Erlander et al. (eds.), Ideoch handling (Stockholm, i960). Considerations among Social Democrats on how to win over salaried employees g o back to the early 1950s at least; see ARA, Erlanders Arkiv, F 1:17, "Medelklassen och tjanstemannen," 8 November 1953; "Stig Lundgrens utkasttill tjanstemannakonferensen den 21 febr. 1954." For a more critical attitude on the party's concern to mobilize employees, see B 1:43, speech MS, "Partiet och tjanstemannen," 9 January 1958, Stockholm.

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recorded as the smallest possible majority, courtesy of the abstention of a disgruntled Liberal.42 The success of the pitch Social Democrats directed to white-collar wage earners with their superannuation proposals may be judged by the aftermath. Already provisioned employees were granted their demands for compensation in negotiations with employers over coordinating occupational with statutory arrangements. They were guaranteed undiminished benefits and higher salaries in return for the advantages now bestowed on the unpensioned.43 With such favorable treatment, no union, whatever the color of its collar, chose to contract out of the system. In the i960 elections, the Social Democrats won almost 48% of the vote and abandoned the Center to form a government only occasionally dependent on Communist support. Because defeat was attributed among Conservatives to the unpopularity of their stance with salaried employees, the party's opposition to superannuation faded once reform was in place.44 The new Social Democratic policy of courting salaried employees even at the expense of the party's traditional constituency nevertheless exasperated others in the bourgeois camp. The Center Party in particular discovered a coincidence of interests between small independents and workers with which it attempted to pry apart the new synthesis of wage earners forged by the left. Motions introduced and rejected in an almost annual legislative ritual during the following decades objected to the best-earnings rule and the scant thirty years of contributions required for full pensions as means by which resources were transferred from workers to their well-educated, well-paid, white-collared betters.45 They met with little sympathy. The thirty-year rule, the relevant parliamentary committee decided, laudably benefited 42 Lurid descriptions of efforts by even the sickest and lamest deputies to be present and not upset this delicate balance are t o be found in Lindstrom, / regeringen, p p . 319-24. T h e legislative progress of the bill is recorded in Kiksdagens protokoll. Prop. 1959:100, SaU 1959:1, AK1959:16,13-14 M a y 1959. This Liberal's retrospective ruminations are to be found in Ture Konigson, ATP-striden: Ett tiodrsminne (Jakobsberg, 1968). O n e of the aspects of the bill that did not find Konigson's favor was also what he saw as its bias against workers. For a defense of Konigson, see Lennan Garheden, Folkpartiet och arbetarna (Stockholm, 1974),pp. 94-101. 43 Molin, Tjdnstepensionsfrdgan, pp. 115-18. 44 RA/S, Moderata Samlingspartiets Deposition, A II: 1, Partiradet, minutes, 11 October i960, Brundin, Bohman, Heckscher, Turesson, Nilsson, Sandstrom, Wallmark, Holmdahl; A IV:3, Partistyrelsen, minutes, 10 October i960, Torfgard, Agerberg, Heckscher; minutes, 23 February i960, Walhgren; A IV:3, Partistyrelsen, minutes, 17 October 1957, Svard, Kyling. T h e Liberals refused to join them in an all-out attack on superannuation after it had become law. 45 For examples, see Kiksdagens protokoll. M o t i o n AK 1961:586, AK 1961:30, FK 1961: 30; Motion AK 1963:655, 2LU 1963:5, AK 1963:11; Motion AK 1975:2128, SfU 1975:15.

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those with long educations, married women and the handicapped. The best-years rule disadvantaged no group. That it helped some more than others, it concluded with classic Paretian logic, was no reason for complaint.46 Concessions to salaried employees had been introduced with the LO's blessing. When it became clear how little superannuation did for the worst-off, the unions feared lest poorly paid wage earners become, in old age, an underpensioned subclass.47 Such concerns eventually helped prompt the introduction of pension supplements that aided the neediest retirees and lessened the span of benefit differentials. They were counteracted, at the same time, by collective agreements that introduced, with a certain wedding-cake effect, further benefits supplementing supplementary pensions. The need for pension reform and the white-collar problem presented themselves to Swedish Social Democrats in sufficient proximity that they could be resolved in terms of each other. With superannuation, the SAP met workers' demands while also appealing to salaried employees, reversing the benign liberalism of postwar universalist reforms. The state now moved into a realm that had previously been curtained off for the disparities of civil society, accepting the regulated inequality of earningsrelated benefits in return for the larger goal of locating all citizens within a common framework of provision. Not only was superannuation reformulated during its legislative gestation so as to appeal to new groups not initially within its obvious constituency, it also heralded a novel development in the Nordic approach to welfare. Breaking the old flat-rate mold, supplementary pensions won for income-related benefits that secured in times of old age, disability or sickness the standard achieved while economically active a role as the benchmark of Swedish social policy. It was the capital funds created through the introduction of superannuation, however, that allowed the most daring new venture into uncharted welfare territory. Although Social Democrats were at first wary of the political risks of promoting funds, once superannuation was on the books the party quickly formulated positive reasons of economic democracy and centralized planning for having such state-controlled pools of investment capital.48 Sparked by superannuation, the question of funds has since then 46 Although those who did not benefit thought that, in fact, they were paying for others' advantages; see Riksdagens protokoll, 2LU 1961:56, pp. 35-36. 47 LO, Kongressprotokoll, 1971, pp. 976, 992. 48 Kruse and Stahlberg, Effekter av ATP, p. 11.

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gradually acquired a momentum of its own in the hands of Rudolf Meidner and his successors that has made them an issue in their own right.49 Wage Earners, Social Equality and Superannuation: Denmark In Denmark, too, it was postwar affluence that allowed a farewell to merely flat-rate standards in social policy and it was the disparity between the otherwise provisioned and those reliant wholly on national pensions that prompted discussion of statutory superannuation. The postwar universalist, uniform, minimalist system of national pensions fettered the state's intervention at the same time as occupational arrangements, which mirrored inequalities yet were publicly subsidized through the tax deductability of premiums, flourished, thus making increasingly plausible a revival of Disraeli's Victorian image of Two Nations. 50 As in Sweden, it was union interest that started matters. First proposed by workers and their employers, superannuation in its initial Danish formulation was aimed only at wage earners.51 When the government entered the picture, however, reformers were instructed to encompass as much of the labor market as possible. Whether to extend initiatives also to salaried employees, civil servants and independents was one of the main problems faced by the first Supplementary Pensions Committee.52 Employers insisted that, if white-collar wage earners were to be enrolled in superannuation, they be allowed the choice of contracting 49 O n the Social Democrats' fund strategy, see Folke Schmidt, Allmanna pensioner, pp. 62-69, 2 O 7- O n new directions in Social Democratic social policy, see Erik Asgard, LO och lontagarfondsfrdgan (Uppsala, 1978); the final chaptersof Leif Lewin, Planhushdllningsdebatten (Stockholm, 1967); Walter Korpi, Fran undersdte till medborgare: Om fonder och ekonomisk demokrati (Stockholm, 1982); Berndt Ohman, Fonder i en marknadsekonomi (Stockholm, 1982); Ulf Himmelstrandetal., Beyond Welfare Capitalism (London, i98i),pt. 4; William E. Paterson and Alastair H. Thomas (eds.), The Future of Social Democratic Parties in Western Europe (Oxford, 1986), pp. 200-09; Hugh Heclo and Henrik Madsen, Policy and Politics in Sweden (Philadelphia, 1987), ch. 6; and, for an optimistic account, John D. Stephens, The Transition from Capitalism to Socialism (London, 1979), pp. 177-94. 50 Carsten Vestero Jensen, Det tvedelte pensionssystem i Danmark (Roskilde, 1982). In Britain, it was Richard Titmuss w h o drew attention to tax subsidies for private pensions and their effects, most notably in " T h e Social Division of Welfare," in Essays on 'The Welfare State', 2nd edn (London, 1963). 51 For an excellent account of superannuation in Denmark, see George R. Nelson, ATPs historie 1964-8) i hovedtrcek (Hillerod, 1984). There is a brief account in English in Gosta Esping-Andersen, Social Class, Social Democracy and State Policy: Party Policy and Party Decomposition in Denmark and Sweden (Copenhagen, 1980), pp. 334-43, slimmed down to a paragraph in Politics against Markets, p. 163. 52 Arbejdsmarkedets tillcegspension, Betaenkning 341/1963, pp. 19-26.

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out. 53 From the blue-collar perspective, however, salaried employees should not have been there in the first place. The point of initial proposals had been to grant workers pension parity with more favored groups.54 Including even salaried employees who had other provision was, from this perspective, counterproductive. Unskilled laborers already resented the complete abolition of means tests for national pensions (championed by the bourgeois parties) as a squandering of resources. Now to add supplementary pensions to the full basic benefit given even the affluent would only exacerbate matters.55 Nonetheless, since many low-level, unpensioned salaried employees with an obvious interest in reform were its members, the LO ignored unskilled workers' objections and favored the enrollment also of whitecollar wage earners.56 Employees without occupational coverage were naturally delighted to be included.57 Even those who were already provisioned did not object, although, like their Swedish colleagues, they demanded compensation for the advantages now to be bestowed on the formerly unpensioned.58 The nature of the proposed arrangements explains this hospitable reception. The committee quickly agreed not to emulate the Swedish version of superannuation. Employers feared its far-reaching ambitions and the unions initially rejected its weighty premiums.59 With modest flat-rate benefits and contributions, two-thirds paid by the employer, the Danish alternative was accepted even by wellprovided white-collar wage earners as a supplement to existing arrangements, not rejected as their substitute.60 Whether also to integrate independents was a question answered less harmoniously, provoking even in Scandinavia the sort of redistributive 53 A T P s Arkiv, H i l l e r o d , Tillsegspensionsudvalget af 1963, m i n u t e s , 2 S e p t e m b e r 1 9 6 3 , 2 1 O c t o b e r 1963. 54 Nelson, ATPs historie, p . 33. 55 "Tillaegspension til a l l e ? , " Arbejdsmcendenes og specialarbejdernes fagblad, 6 8 , 23 (16 D e c e m b e r 1963), 569. 56 Of organized white-collar wage earners 4 1 % were affiliated to the L O in 1963, of w h o m 8 0 % belonged to H a n d e l s - og Kontorfunktionasrernes F o r b u n d (HK), the union of clerical and commercial personnel; see Statistisk arbog, 1965; HK-bladet, 6 3 , 8 (October 1963), 249. 57 H e n n i n g Friis et al., Omkring tillcegspensionen ( C o p e n h a g e n , 1963), p p . 16-19; J 0 r g e n Alexandersenet a\., Den privatealderdomssikring ( C o p e n h a g e n , 1965), p p . iS-zy,Fcellesrddet, 7, 10 (December 1963), 147. 58 Fcellesrddet, 7, 6 ( J u n e - J u l y 1963), 8 3 - 8 4 ; 7, 10 (December 1963), 156. 59 Tillaegspensionsudvalget af 1963, m i n u t e s , 27 M a y 1963. 60 Nevertheless, t h e c o m m i t t e e included all wage e a r n e r s , b u t e x e m p t e d t h o s e w h o already h a d o t h e r coverage a n d p o s t p o n e d a final decision o n civil servants. In a dissenting o p i n i o n ,

the two white-collar representatives argued the case for bestowing the advantages of employer contributions to superannuation on all wage earners by enrolling even salaried employees.

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bickering between social groups familiar from Continental reforms. To avoid a selection against the fund, the proposed generous transition measures, that were to be borne by younger members, made it necessary for independents to be incorporated compulsorily, if at all. But even so, because of their skewed age structure, the self-employed as a group threatened to saddle the wage-earning risk community with a disproportionally heavy burden, a burden that workers shunned. As a result, only independents who had once worked as wage earners were permitted to continue their membership, having now to pay the full contribution that had formerly been split with their employers.61 Other issues caused less commotion. The unions supported the accumulation of a capital fund to enhance production and democratize economic control, while employers were rather more cautious.62 While the Danish LO did not heed unskilled workers' demands to exclude salaried employees, the unions here did express more concern than they had in Sweden for those wage earners with least to gain from supplementary pensions. They rejected the earnings-related approach as well as the fifteen-best-years rule in the Swedish arrangements that gave salaried employees benefits disproportional to their contributions. The Danes also opposed the sort of bottom limit, introduced by the Swedes, that excluded the poorest, for whom national pensions supposedly provided adequate security.63 Although the unions were increasingly attracted by the Swedish precedent as deliberations proceeded, their change of heart came too late to affect the committee's conclusions.64 It proposed modest, non-valuesecured, flat-rate supplementary pensions for all wage earners not already covered by occupational schemes, financed contributorily and administered independently of the state. All parties welcomed the bill based on these recommendations.65 In parliament, even salaried employees who already had other provision in addition to national pensions lobbied successfully for membership, while the bourgeois parties, especially the agrarian-based Liberals, protested against the exclusion of independents

61

Tillaegspensionsudvalget af 1963, m i n u t e s , 2 September 1963. LO,Protokoll, 1 9 6 3 , p p . 59-6o;Tillaegspensionsudvalgetaf 1 9 6 3 , m i n u t e s , 2 7 M a y 1963, " S a m t a l e 6 September 1963 m e d d i r e k t e r V i l n e r . " 63 Tillsegspensionsudvalget af 1963, m i n u t e s , 27 M a y 1963. 64 Tillaegspensionsudvalget af 1963, " A r b e j d e t i Tillaegspensionsudvalget: F o r s o g p a en orientering," 11 October 1963. 65 Folketingstidende, 16 January 1964, cols. 1990-95, 2002-07, 2011-18, 2021-24, 2027. 62

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from such advantageous measures.66 Taking account of ambitions to broaden the scope of superannuation and growing opinion on the left in favor of a more far-reaching scheme along Swedish lines, the government shortly thereafter appointed a committee of officials to examine the possibility of including the self-employed and of following the example set across the Kattegat. The Battle Shapes Up, the Issue Dissipates As in Sweden, the parties scrambled to differentiate their social policy positions at the time superannuation was first broached. The bourgeois camp was dismayed by the radicalization of the Social Democrats as the party responded to pressure from its left, increasingly exerted after 1959 with the formation of the Socialist People's Party as a salonfahig nonMuscovite alternative to the Communists.67 Liberals revised their stance intervention for the needy, freedom for the rest - as new political vistas opened up among groups that were now left politically awash in the Social Democrats' wake. At its congress in 1963, the party had to choose between two social policy programs that posed widely differing solutions to the issue of state intervention. In thefirst,increasing economic prosperity was reason to hold individuals more than ever responsible for their own circumstances and to limit the state's purview. The second proposed to draw the full implications of the social policy course charted in postwar universalist reforms by extending a statutory guarantee of minimum standards to all cases of income loss.68 The former alternative reflected opinion among the party's parliamentary deputies, while the challenger was the work of its grassroots organizers.69 Two motives in particular encouraged a modernized and increasingly interventionist liberalism. The party was gradually impelled by economic 66 Folketingstidende, 1963-^4, Tillseg B, cols. 269-372; Nelson, ATPs historic, p. 73; J. O. Krag and K. B. Andersen, Kamp og fornyelse: Socialdemokratiets indsats i dansk politik I I I 955~ 97 (Copenhagen, 1971), pp. 261-62. 67 Erik Eriksen's speech at the Liberal Party congress, Aktuel orientering, 1 (1963-64), 7—9; Aktuel orientering, 2 (1960-61). On Danish Social Democrats' ideological vacillations, see Nils Elvander, Scandinavian Social Democracy: Its Strength and Weakness (Uppsala, 1979),

pp. 21-22. 68 Venstres Landsorganisations Arkiv, Sellered, "Udkast til program for Venstre"; Ernst Andersen, "Venstre og den socialetryghed," Venstres mdnedsblad, 16,5 (October 1963), 226; Aktuel orienteringy 6 (1963-64), 25-27. 69 Conversation with Ernst Andersen, then spokesman for the second alternative, Copenhagen, 10 November 1983. According to Andersen, Sven Reiermann was the motive force behind his alternative.

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developments in the countryside to recognize that small independents with long hours, low incomes and few organizational bulwarks were equally worthy of the community's solicitude as workers.70 Demographic decline among the Liberals' traditional rural constituency also spurred reformers in the party to court new members.71 With the updated version of the social policy program victorious, the party inaugurated a phase of renewed interest in reform the following year by joining the Conservatives in appointing a commission to recommend sweeping changes of coordination and decentralization in welfare policy. For the Social Democrats, this wave of bourgeois initiative eventually caused concern.72 How successful the Liberals' tactics were, however, is unclear. The first election under the new banner brought a shift from rural to urban support, but no overall increase in votes. Nevertheless, Liberals were able to retain their customary followers more consistently than the Social Democrats, at least up until the deluge of the early 1970s when a series of protest movements undermined all the traditional parties.73 In this polarized atmosphere the second Supplementary Pensions Committee dealt first with the self-employed. The relative redistributive advantages envisaged by competing social groups once again blocked solidaristic reform. Workers refused to underwrite the costs of also including independents, remaining unmoved by the argument that the age structure of the self-employed as a group was skewed because most had been dependently employed when young and had thereby helped lighten burdens for wage earners.74 The self-employed, in turn, showed little interest in joining superannuation on the unfavorable terms offered them.75 The second half of the committee's mandate, the overall feasibility of 70 Venstres Landsorganisation, Social tryghed i et moderne samfund (n.p., 1964), pp. 52-53. 71 Knud Larsen et al., Venstre: 50 ar for folkestyret (Holte, 1979), p p . 229-30; Venstres Landsorganisations Arkiv, mimeographed material sent t o the press for the 1963 congress, Ernst Andersen's contribution. 72 ABA, Kaj Bundvad papers, B. Rold Andersen, " O p l a e g " for a meeting of the party's Social Policy Committee, 12 December 1967. 73 Christian P. Fogtmann, Pa frihedens vilkdr (Copenhagen, 1970), p. i n ; T o r b e n W o r r e , "Forandringer i det danske partisystems sociale g r u n d l a g , " in M o g e n s Pedersen (ed.), Dansk politik i 1970'erne (Copenhagen, 1979), p . 74. 74 R A / D , Socialministeriet, F.19-199/206, A - I , Tillaegspensionsudvalget af 1964, minutes, 26 August 1964, Schlebaum; minutes, 27 April 1964, the chairman; Betcenkning om en udvidelse af Arbejdsmarkedets tillcegspension til ogsd at omfatte selvstazndige erhvervsdrivende> Betaenkning 373/1965, p p . 18-19, 2 4 - 2 5 . 75 Friis et al., Omkring tillcegspensionen, p p . 16-19; Alexandersen et al., Private alderdomssikring, pp. 18-23.

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ambitious Swedish-style reform, was treated inconclusively.76 Deliberations revealed the extent to which the petty-bourgeois structure of Danish society prevented an emulation of Sweden's neo-Bismarckian lead in contributory social insurance for the working class, limiting her instead to a continuation of the sort of universalist, publicly subsidized measures that had characterized Scandinavian developments since the late nineteenth century. Where the costs of Swedish superannuation were paid significantly by the employer, Danish interests feared any violent shift away from the traditional principles of tax-financing. A contributory approach threatened to burden exporting occupations, least able to pass on increased expenses, and small labor-intensive enterprises. While this was fine for Sweden with its large, specialized, heavily capitalized firms, able to compete on the world market, Danish businesses feared similar initiatives at home. Independents, in agriculture especially, whose tax burden did not accurately reflect their production and whose labor costs were disproportionally high, had long opposed shifting burdens from the state to their wage bills and saw no reason to change now. 77 The committee's labors produced no legislatable proposals. Circumstances conspired to prevent any imitation of the Swedish example. The unions were too selfish and powerful for independents to be included. Conversely, the small-scale nature of the Danish economy and the continued power of the petty bourgeoisie made sure that venerable but still vital traditions of interest among independents in a tax-financed approach to social policy kept burdens off small employers and hampered any major shift to a contributory basis.78 With only half-hearted and fragmented backing, superannuation on the Swedish model was easy prey for the bourgeois parties' attacks. Whatever sympathies the center and right may earlier have harbored for earnings-related contributory arrangements of social insurance had evaporated with their conversion to a flat-rate 76

Betcenkning om principperne for en altnindelig tillcegspension, Betaenkning 452/1967. R A / D , F.19-199/206, A - I , Tillaegspensionsudvalget af 1964, minutes, 6 M a y 1965, Drachmann, Agbo; 15 December 1965, Larsen; 9 February 1966, Drachmann; 24 February 1966, Larsen; H. Vitting Andersen, "Den mislykkede tillaegspensionsordning," Sammenslutningen, 17, 8 (August 1964); Folketingstidende, 1963—64, Tillaeg B, cols. 349-52. See also Betaenkning 341/1963, pp. 271"; R A / D , Det Radikale Venstre, 1980 Aflevering/2, "Informationsbrev." 78 Because of the failure to shift burdens from the community at large to employers, state financing retained a more important role in Danish social policy than elsewhere in Scandinavia; see "Sammenligning af de sociale udgifter og omfanget af de sociale foranstaltninger i de nordiske lande," Socialt tidsskrift, 4 3 , 8/9 (August-September 1967), 278-79; and Soren Rishoj Pedersen, "Det offentliges udgifter til sociale formal," in Pedersen (ed.), Fagbevcegelsen og socialpolitikken (Copenhagen, 1976), pp. 87-88. 77

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minimalist approach in the 1950s.79 Income-graded measures, they could now argue as plausibly as the Social Democrats once had, were socially in just, treating the unskilled, low-earning, but long-laboring classes unfairly to the advantage of the comfortably situated, well-paid and extensively educated.80 The bourgeois parties acted from an enviable tactical position: emphasizing the apparent egalitarianism of flat-rate measures to their advantage in the public debate, they made sure at the same time to limit statutory intervention to a uniform minimum.81 The parties of the center and right also worried lest superannuation's capital funds shift rather than augment total savings and threaten indirect socialization. The wholeheartedness with which the Socialist People's Party supported the build-up of such funds, willing to abandon its hostility to income-differentiated social policy for their potential investment power, only encouraged bourgeois suspicions. The center and right now confirmed the shift in position revealed by the debate over pension universalism, when they had supported full benefits for all against the left's objections to such a disregard for the well-being of the neediest.82 Their counterproposal to Social Democratic supplementary pension initiatives envisaged a flatrate, value-secured, tax-financed addition to national pensions that perpetuated all the problems inherent in the old system.83 When the Social Democratic government fell in late 1967, the skirmish for superannuation on the Swedish model had been lost. Social Democrats retreated to the same flat-rate supplementary pensions position favored by the bourgeois parties, now careful not to insist on superannuation's most radical possibilities. Support on their flank disintegrated as the Socialist People's Party's own radical wing, the Left Socialists, refused to accept earningsrelated benefits or contributory financing.84

79

Social Democratic and Conservative opinion had each reversed completely on this point, the left now in favor of a Bismarckian solution, the bourgeois parties having become the strongest supporters of the tax-financed, flat-rate, minimalist approach that was once regarded as especially socialist; see Politiken, 1 November 1967. 80 Folketingstidende, 1 November 1967, cols. 885-92. 81 On Conservative tactics against the Social Democrats, see Poul M0ller, Politik pd vrangen (n.p., 1974), pp. 114-16. 82 83 See Chapter 2. Folketingstidende, 1 November 1967, cols. 843—932. 84 Folketingstidende, 6 December 1968, col. 2219; 30 January 1969, cols. 3433-34. A degree of targeting and needs-testing for flat-rate benefits also reentered Social Democratic considerations; see Nelson, ATPs historie, pp. 107-08; and ABA, Socialdemokratisk Pensionspolitisk Udvalg, "Ens pension til alle," 13 March 1980.

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Social Democrats and Salaried Employees Danish Social Democrats differed from their Swedish colleagues in continuing to pay particular attention to manual workers and in ignoring salaried employees until after the pension issue had been settled. Their efforts convinced the government to press for a form of superannuation that favored workers by including even the poorest wage earners and by introducing an element of redistribution wherein the lower the pay, the higher the proportion of pension to wages.85 While the bourgeois parties successfully recruited from within the salariat, Social Democrats long remained wedded to inherited notions of class development.86 In 1958, their Program Commission remained unpersuaded that the rise of salaried employees as a new social group presented a challenge to the party's self-perception. With the demand for administrative personnel soon peaking, it blithely assumed, a white-collar proletariat would arise with interests similar to those of most workers.87 The idea of tailoring superannuation to salaried tastes was at first foreign also to the unions. Only gradually, as the LO began to enroll increasing numbers of salaried employees, did it come to appreciate the value of reform on the Swedish example.88 The unions watched bourgeois success among white-collar wage earners with dismay, but only in 1964 could they prevail on the Social Democrats to ponder strategies for attracting them.89 While some pointed to pensions as a pertinent issue, by the time the party awoke to this possibility, superannuation had already started on its course with little regard for salaried employees. When Social Democrats finally presented proposals on the Swedish model, their political effect for the party was minimal. Successful bourgeois resistance, already implemented reform and the redistributive factor necessitated by the Social Democrats' concern to avoid charges of injustice towards manual workers were not the variables of a formula with much appeal for salaried employees. Support for earnings-related social policy of any sort was weak and 85 Folketingstidende, 12 October 1967, cols. 394-404; M o g e n s Lykketoft, Kravet om lighed (Copenhagen, 1973), pp. 126-28. 86 For numbers, see Erik H o g h and M o g e n s N y h o l m (eds.), Funktioncerene 1964 - hvor star de? (Copenhagen, 1964), vol. 1, p. 14; and Politisk mdnedsnyt, 8 (30 April 1964). O n Liberals' efforts t o attract salaried employees, see Venstres mdnedsblad, 13, 6 (November i960); 15, 5 (October 1962), 242. 87 ABA, Socialdemokratiets Arkiv, 2 2 / 1 , Programkommissionen, minutes, 31 March 1958. 88 LO, Protokoll, 1967, pp. 27-29. 89 ABA, Socialdemokratiets Arkiv, 549/1, Funktionaer- og Tjenestemandsudvalget, minutes, 23 May 1964.

Denmark

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fragmented in Denmark. A flat-rate approach to superannuation was favored by the bourgeois parties as well as by the private insurance companies, which were thus granted free rein in all but a limited field.90 On the left, opinion was divided. Many Social Democrats had by now been convinced that pension parity was best assured by intervening to provide also the needy with "unequal" graded arrangements. Yet both the far left and other Social Democrats, though accepting income differentials in active life, thought that the state had no business perpetuating inequalities after retirement. This continuing attraction of the old ideas of flat-rate egalitarianism for many on the left helped undermine the united front that would have been necessary to overcome the bourgeois parties' insistence on limiting in this way the state's intervention to a minimum. The strong influence of the least-paid unskilled workers in the LO, who shared the interest of independents in generous tax-financed national pensions and saw little advantage in earnings-related superannuation, also contributed to making the Social Democrats' position ambivalent. Conversely, the comparative neglect of white-collar concerns on the Danish left did little to rectify matters. Native social policy traditions with their emphasis on formally egalitarian flat-rate minimalism were also important. The dispute over incomegraded benefits in superannuation was but one facet of a broader concurrent, but inconclusive, examination of the problem. The Social Reform Commission, appointed at Conservative and Liberal behest at the beginning of the supplementary pensions debate, also discussed differentiated measures. Although chaired by a Social Democrat with strong personal reservations on the idea, the commission eventually recommended daily cash benefits for several risks that were to be related to the income lost.91 When superannuation on the Swedish model was decisively rejected by most parties, the commission's mandate to examine graded social policy in 90 For the insurance companies this position was the outcome of a gradual development that can be traced in Assurandoren, 6 1 , 2.5/26 (20 June 1956), 419-21; 68, 48 (28 November 1963), 763; 68,50 (12 December 1963), 805; 71,1/2 (6 January 1966), 48; and Dansk forsikrings tidende, 7 1 , 16 (4 M a y 1964), 272. 91 R A / D , F.19-199/212, 4/21, Socialreformkommissionen, minutes, 13 October 1965, 14 December 1965, Seirup; Preben Wilhelm and Ebbe Reich, "Ulighederne skal bevares: Interview med H . C. Seirup," Politisk revy, 3, 61 (26 August 1966), 13-14; Det sociale tryghedssystem: Struktur og dagpenge, Betaenkning 543/1969; Socialreformundersogelserne (Socialforskningsinstitutets publikationer nos. 43, 44, 49, 53). In general, see Terkel Christiansen, Synspunkter pa lyyo'ernes socialreform (Odense, 1974); Henrik Liebetrau, Dansk socialpolitiky 1974-1982 (Copenhagen, 1983); and Lars Nerby Johansen, "Denmark," in Peter Flora (ed.), Growth to Limits: The Western European Welfare States since World War U (Berlin, 1986), vol. 1.

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general weakened.92 Despite attempts to follow examples set elsewhere, Danish pension policy remained largely fixed at the point that the adoption of universal, minimal, flat-rate measures in 1956 had left it. Milestone to Millstone and Beyond: Britain's Road from Beveridge to Titmuss Despite their preeminence, Beveridge's reforms got off to an inauspicious start.93 The subsistence principle had not been implemented in a way pensioners could take to the bank. The transition generation's admission on easy terms, an aging population and inflation all conspired to exacerbate the weaknesses of flat rates hitched by a convoy effect to premiums the poorest could afford. Even Minister of National Insurance James Griffiths had sent reform on its way with a father's curse, promising in 1946 to seek new methods of relating contributions to means.94 Such unhappy circumstances dampened the Labour government's enthusiasm for benefit increases during the following years. Just before defeat in the 1951 elections, the Chancellor's reduction of Exchequer subsidies to the National Insurance Fund threatened to make future improvements even more difficult and helped provoke Labor Minister Bevan's resignation, crystallizing the party's left wing as an identifiable group associated with his name.95 In the opposition, Labour had the leisure to ponder the problems of Beveridge's heritage that had stumped it in power. How to improve matters for pensioners in response to rising costs and in tune with more generous conceptions of subsistence without, at the same time, resorting 92

R A / D , F.19-199/212, 60, Bilag 30, "Notat o m arbejde i Socialreformkommissionen"; Detsocialetryghedssystem: Serviceogbistand, Betaenkning664/1972, pp. 336-37; Principper for en reform af de sociale pensioner, Betsenkning 799/1977. 93 On the connection between the failure to implement Beveridge's vision after the war and the difficulties of later reform, see Michael S. Lund, "The Politics of a National M i n i m u m Income: The Poor Law Coalition in Postwar Britain," in Douglas E. Ashford and E. W. Kelley (eds.), Nationalizing Social Security in Europe and America (Greenwich, Conn., 1986). For a competent account of pensions policy, see Eric Shragge, Pensions Policy in Britain: A Socialist Analysis (London, 1984). 94 Hansard^ 30 May 1946, col. 1456, repeated in Labour Party, Annual Conference, 1946, p. 117. 95 Hansard, 10 April i95i,cols. 847-53523 April 1951,001. 39; 26 April i95i,cols. 639-44; Alan T. Peacock, The Economics of National Insurance (Edinburgh, 1952), ch. 8. For the background, see Philip M. Williams, Hugh Gaitskell (London, 1979), ch. 8; Kenneth O. Morgan, Labour in Power, 1945-1951 (Oxford, 1984), pp. 441-61; David Howell, British Social Democracy: A Study of Development and Decay (New York, 1980), ch. 6; and Jonathan Schneer, Labour's Conscience: The Labour Left 1945-51 (Boston, 1988), ch. 8.

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either to unacceptably high Exchequer subsidies or unaffordable increases in flat-rate contributions was the dilemma. There were at least three possible solutions: more generous benefits could be targeted at the neediest by means tests, the resources available for distribution might be augmented by heavier reliance on tax-financing and, finally, the contributory system could be weighted by the ability to pay. Considered a step backward, the first was never a serious contender.96 During the early 1950s, attention focused instead on the possibility of shifting from contributory financing to tax-financing. Although Labour politicians favored a social security tax - paying for uniform benefits with a source of money graded according to income - trade unionists were unconvinced.97 They clung to the flat-rate contributory principle for its clarity of entitlement, preferring to resolve the financial problems of the pension system with enhanced Exchequer subsidies.98 The TUC and the Labour Party disagreed, in other words, over how to increase resources, the unions looking to general taxes, the party proposing an earmarked proportional levy. The TUC's ambitions were based on a faith in the progressivity of the fiscal system, reinforced by a fear that the overt redistribution of a social security tax threatened to sow divisions between wage earners as the well-paid reacted jealously to advantages bestowed on poorer workers, hurting the unions and possibly encouraging demands for correspondingly earnings-related benefits that would undermine what many on the left still regarded as the original egalitarian aim of flat rates. Although Labour and the unions were sharply at odds in the mid 1950s over how to reform pensions, the TUC's insistence on flat-rate contributory insurance was gradually being undermined by the impossibility of raising the premiums of the poorest enough to achieve subsistence.99 At the same time, the unions were encouraged to reconsider their position by pressure applied from the party. The spread of occupational and private 96 Although targeted benefits later resurfaced in the form of an income guarantee and a negative income tax. 97 L a b o u r Party Archives, L o n d o n , R 107/April 1952, R 133/June 1952, R 2 0 8 / J a n u a r y 1953, R 2 2 7 / F e b r u a r y 1953; Social Services S u b - C o m m i t t e e (SSSC), m i n u t e s , 10 F e b r u a r y

195398 T U C , Annual Report, 1954, p p . 141, 342; T U C Archives, L o n d o n , Social Insurance and Industrial Welfare C o m m i t t e e (SIIWC), 10/2, 11 M a r c h 1953; General Council, minutes, 25 M a r c h 1953; SIIWC a n d L a b o u r Party 1, 11 M a r c h 1953; L a b o u r , SSSC, minutes, 11 M a r c h 195399 O n t h e controversy, see T U C Archives, b o x 160.3, David Ginsbury t o C. R. Dale, 19 M a r c h 1953; SIIWC 11/2, 10 M a r c h 1954; SIIWC 14/4, 9 J u n e 1954; T U C , Annual Report, 1954, P- 143; L a b o u r , Joint meeting of SSSC a n d SIIWC, minutes, 13 April 1954; a n d T U C Archives, SIIWC 12, 14 April 1954.

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supplementary schemes and the difficulty of freeing up new resources for improvements in national pensions were making a mockery of the old system. Sinceflat-ratecontributions could not be increased, Labour social policy reformers wondered, should the Exchequer be asked to pay subsistence benefits even to those with other provision?100 How were the poor to be helped without, on the one hand, the stigma of targeting and without, on the other, an extravagant and unnecessary across-the-board increase in all statutory pensions, even for those who could afford private supplementary measures? Once again, the dilemma of universal entitlement had to be confronted: applying scarce resources efficiently where most needed without contradicting the principle of a right to benefit based on the fact of citizenship alone. While Labour disagreed with the unions on a solution, it did not yet clearly know its own mind. Bevan's attempt to commit the party to wholly tax-financed pensions squared off within the labor movement against the TUC's reluctance to abandon the contributory principle.101 The party conference of 1955 arrived at an almost haphazard breakthrough in this stalemate. A series of motions, including E./an's proposals, were to be rejected. Hoping to humble the party's left wing in case of defeat, former Minister of National Insurance Edith Summerskill asked the fledgling Bevanite, Richard Crossman, to represent the Executive. Crossman, the man who claimed publicly to know nothing about pensions in 1945, had used the intervening decade only modestly to his advantage on this point. In spite, or perhaps because, of this, he seems to have retained a remarkable capacity for a subject not usually credited with quickening the pulse.102 Worried by the prospect of humiliation, Crossman retired to bed the evening before he was to make his speech with a recent pamphlet on national superannuation, there understanding the new concept in (as he claimed with an image uncommon in the pensionsfield)a "blinding flash." With Margate his Damascus, he now demanded of the assembled politicians an examination of supplementary pensions before the party made any commitment to seek increased flat-rate benefits.103 100

Labour, R 458/January 1955. Labour Party, Annual Conference, 1955, PP- 195-2.00; T U C , SIIWC 1/4, 13 October 1954; SIIWC 4, 8 December 1954. 102 H i s earlier ignorance is recorded in Philip M . Williams (ed.), The Diary of Hugh Gaitskell, 1945-1956 (London, 1983), p. 13. 103 Labour Party, Annual Conference, 1955, pp. 200-03. " I ' m n o t s u r e what it is," he claims to have said of superannuation. "I've got a pamphlet on it. It's marvellous" (Richard Crossman, The Politics of Pensions [Liverpool, 1972] pp. 10-13). O ° superannuation 101

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While the unions continued to hold out forflat-ratesubsistence, Labour did its best to force an admission that the principle was no longer viable and, in fact, an obstacle to further developments. Differential contributions that rested according to the ability to pay - new sources of financing neither limited by the flat-rate straitjacket, nor dependent on the Exchequer - were necessary.104 To formulate policy, a study group was appointed whose members included Griffiths, Summerskill and the LSE professor Richard Titmuss, led (some said because Gaitskell wanted to keep his mind off politics after the party's recent internal disputes) by Crossman.105 The study group combined destruction with construction. In contrast to the politicians' earlier deference, it now launched a fuming attack on the union faith in the Beveridgean canon. Giving to each according to need was good socialist principle, but a universal subsistence level of benefit lavished resources on the well-off rather than applying them most usefully. He was quite prepared to allow the unions to retain their principles, Crossman announced, if they in turn permitted some reality in practice.106 From there, the study group formulated an alternative. Insufficient national pensions accentuated inequalities among the elderly. Occupational provision frequently covered only salaried employees, doubly privileging them by calculating benefits in relation to pre-retirement rather than wholecareer earnings. Tax deductability favored private schemes with covert state subsidies in direct proportion to income, while their capital funds were a powerful investment force beyond society's control. Within the next decade, Titmuss announced in the actuarially apocalyptic tone favored by pension politicians with a point to make, the flat-rate system begotten of Beveridge would break down. Provision for old age would shift to occupational schemes for the fortunate, to public assistance for the unfortunate. The alternative lay with national superannuation, policy within the party at the time, see Labour, R 458/January 1955, R 460/January 1955, R 508/April 1955. 104 Labour, Joint meeting of the SSSG and SIIWC, minutes, 28 January 1955. 105 The LSE professor Brian Abel-Smith was also closely associated with its work. O n the study group, see Labour, N E C , minutes, 23 November 1955; and Douglas Jay, Change and Fortune: A Political Record (London, 1980), p. 250. O n Titmuss and his school, see David Donnison, "Social Policy since Titmuss," Journal of Social Policy, 8,2 (April 1979); David A. Reisman, Richard Titmuss: Welfare and Society (London, 1977); Paul Barker (ed.), Founders of the Welfare State (London, 1984); David Watson, "Richard Titmuss: Social Policy and Social Life," in Noel T i m m s (ed.), Social Welfare: Why and How? (London, 1980); and Fred Inglis, Radical Earnestness: English Social Theory, 1880-1980 (Oxford, 1982), ch. 7. 106 Labour, Re 49/April 1956; T U C Archives, 160.3, Labour, Study Group o n Security and Old Age (SGSOA), minutes, 4 July 1956.

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encompassing the entire community in a genuine earnings-related, contributory insurance system, eliminating the white-collar bias of occupational arrangements and regulating their investments.107 One of the main difficulties concerned differentiating contributions and benefits according to income. The TUC maintained its official opposition to the earnings-related principle while unionists admitted privately that graded sources of financing seemed necessary. Griffiths feared lest Labour sympathizers reject staggered benefits, and Crossman's impatience with wits less nimble than his own comes through even the abbreviation of the minutes in his argument for differentiation as a perfectly consistent principle for a movement that accepted wage inequalities.108 There are three points of particular interest to the study group's proposals: the priority of their motivations, their social orientation, and the intersection of economic and welfare policy on the issue of fund accumulation.109 The most important impetus behind superannuation was the failure of Beveridge's ambitions. The financial straitjacket laced up by his insistence on a flat-rate contributory system was the factor that had necessitated a search for other sources of income to allow the poorest adequate provision. Whatever considerations of social justice and economic control also prompted reform, it was the need to finance subsistence benefits without either burdening the poor themselves or foisting politically embarrassing tax increases on a Labour Chancellor that first put the issue on the party's agenda. Labour envisaged using earnings-related contributions and state subsidies thrice their level then to provide a scale of graded benefits in which a subsistence, value-secured, uniform minimum rate gave the poor proportionally more than the better-off. The aim was finally to achieve Beveridge's goal of flat-rate subsistence by introducing redistributively financed uniform national pensions on the Scandinavian model in the same fell swoop as superannuation in a strict sense. Second, Labour paid greater attention to blue- than white-collar interests in other respects as well. Occupational pension schemes favored the middle classes. National superannuation, in contrast, promised to recognize the salary structure of both groups by weighing income earned early and late twice as heavily as mid-career wages for benefit calculations and 107

Labour, Re 83/June 1956. 108 X U C Archives, 160.3, Labour, SGSOA, minutes, 27 June 1956, 4 July 1956. 109 Labour, Re n o / N o v e m b e r 1956, R e 122/December 1956, Re 130/January 1957, R e 152/April 1957. T h e final version was National Superannuation (1957).

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by requiring a working life of forty years for full pension.110 Although Labour's proposals would not have made the overall British pension structure more redistributive than the Scandinavian, this combination of disproportional minimum rates for the poorest and a consciously articulated concern for workers gave superannuation here a more pronounced working-class flavor than the Swedish or even the Danish plans. On funds, British considerations also differed from the Nordic. Under Titmuss's influence, the study group emphasized the danger of occupational schemes' capital accumulation and the investment power wielded by private insurance companies.111 Unlike the Swedes, who were at first discreet about their intentions, Labour flaunted the statutory control promised by funds. While publicly regulated capitalization was a radicalizing move for the Swedish left, for Labour such indirect intervention in the economy was a step back in a more moderate direction.112 The party's platform on nationalization, Industry and Society, was debated and accepted at the same conference as superannuation. Shifting the party partially away from its traditional demand for direct state ownership of basic industries, it advocated backdoor socialization through the purchase of equity shares. This dovetailing of social and economic policy allowed by superannuation funds represented a victory for the party's moderate Gaitskellite wing.113 Crucial for the success of Labour's plans was the unions' reaction. Though still wary lest superannuation excuse a neglect of Beveridge's pensions, they were slowly coming to realize that, for benefits ever to outstrip mere inflationary adjustment, new sources of financing were 110

Labour, Re 43/April 1956, Re 83/June 1956. The earnestness with which the concern for manual workers with long working careers was invested may be gauged indirectly by the slightly ludicrous tone of the argument in the final document against a best-years rule (taken from the American example rather than from Sweden, where the SAP was at about this time coming to the opposite conclusion than Labour) that lambasted the advantages thereby conferred on radio, film, TV and stage personalities, authors and professional sports players with high short-term earnings. 111 Richard Titmuss, The Irresponsible Society (Fabian Tract 232, April i960), reprinted in Brian Abel-Smith and Kay Titmuss (eds.), The Philosophy of Welfare: Selected Writings of Richard M. Titmuss (London, 1987). See also Richard Titmuss, Income Distribution and Social Change (London, 1962), ch. 7. 112 On the moderation of Swedish nationalization, see Timothy A. Tilton, "Why Don't the Swedish Social Democrats Nationalize Industry?" Scandinavian Studies, 59, 2 (Spring 1987). 113 Richard Crossman, The Backbench Diaries of Richard Crossman, ed. Janet Morgan (London, 1981), pp. 579-80. Abel-Smith was apparently worried lest the public think the Labour government was gambling with its savings for old age and Crossman, rather disingenuously, a few months later instructed Labour MPs to deny that the trustees of the funds would have any interest in buying control of industries; see Parliamentary Labour Party, minutes, 21 May 1957, on microfilm at the LSE.

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unavoidable.114 Flat-rate contributions could squeeze no more out of the poorest, politicians in both camps were reluctant to saddle the Exchequer with greater burdens and, in any case, increased reliance on the state raised the disagreeable prospect of renewed means-testing.115 Despite previous resistance, the TUC was therefore gradually adopting a position that would allow agreement with Labour.116 That this was not a one-way street was demonstrated by the concessions with which Crossman was willing to meet the unions halfway: a larger fund to encourage the appearance of actuarial rectitude, a choice of alternative provision for new entrants, a minimum level for all benefits.117 Further compromises to the party's right wing, in turn, were also necessary to appease Gaitskell, who wanted the plan uncontroversial, less egalitarian and more ambiguous.118 With the haggling settled, Labour's superannuation proposals were given a cautious welcome at the TUC conference in Blackpool. Earningsrelated benefits were undesirable in themselves, the trade unions agreed, but the inability of a flat-rate approach to achieve subsistence justified a new solution. Frank Cousins, the militant TGWU leader, welcomed reform, supported by another group of low-paid, in this case agricultural, workers. With little debate, only the engineers raised objections, insisting on the need for tax-financed "real socialism."119 Thus armed with the unions' blessing, Crossman faced the Labour conference the following month with confidence. Socialist principle was ill served by a system that treated all in an inadequately uniform manner, he argued. The proper 114 TUC Archives, 160.3, Economic Committee, "Inquiry into Occupational Pension Schemes," 11 April 1956; SIIWC 5/3, 12 January 1956; TUC, Annual Report, 1956, p. 378. 115 As the TUC had already noted in SIIWC 6/1, 10 December 1953. 116 The process of gradual acceptance is documented in TUC Archives, SIIWC 6, 10 January 1957; SIIWC 10, 13 March 1957. 117 Labour, Home Policy Sub-Committee, minutes, 29 January 1957; Crossman, Backbench Diaries, pp. 571-72; TUC Archives, Report attached to SIIWC minutes, 13 February 1957; SIIWC 10,13 March 1957; Labour, NEC, minutes, 17 April 1957; LSE, Titmuss Papers, Acton Files 12, Peter [Townsend] to Titmuss, 8 April 1957, giving an account of the Home Policy Sub-Committee of that day. Crossman had to mediate on several points between his LSE theoreticians and the unions, who were equally suspicious of each other. Abel-Smith, for example, was for scrapping the attempts at actuarial rectitude favored by the unions, while Crossman recognized their political necessity. The public believed in actuarial propriety, Crossman thought, and a Labour Party policy statement was no place to alter general opinion on the subject. "If we openly condemn the actuarial approach," Abel-Smith grudgingly agreed, "then the Life Offices would probably manage to convince the country that we were asking the community to commit its savings to a scheme which was far from safe — to a scheme, in short, which Mr. Crossman has thought up in his bath" (Titmuss Papers, 12, Abel-Smith to Titmuss, 4 April 1957). 118 LSE, Titmuss Papers, 12, Abel-Smith to Titmuss, 29 March 1957; Crossman, Backbench Diaries, pp. 580-83. 119 XUC, Annual Report, 1957, pp. 351-57; Crossman, Backbench Diaries, pp. 601-03.

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approach to privilege was to grant it to all. Superannuation leveled up and reemphasized the contractual entitlement allowed by contributory financing. A Labour Chancellor would be spared the unfortunate predicament of tax increases and benefits would be protected from the predations of his Tory colleague. The funds collected would be large and extensively invested.120 Tories Steal the Thunder With Beveridge's flat-rate straitjacket determining Labour's planning, it is not surprising that the Tories were similarly preoccupied, nor that the first British reforms, imposed by the Conservatives, had as their goal breaking the inherited economic deadlock of the national pension system rather than superannuation in any real sense. Some on the right favored a social security tax as a solution, but the party on the whole did not seriously consider abandoning a contributory approach.121 Not until Labour presented its supplementary pension proposals were Conservatives goaded into action.122 Though also prompted by the financial plight of the social insurance system, their plans, unlike the left's, went little beyond this first concern.123 Envisaged was a superannuation scheme that reduced the need for greater reliance on the Exchequer, "a good bargain for the taxpayer," as John Boyd-Carpenter, the Minister of National Insurance, later described it.124 Three considerations were important for the Conservative approach: the growing deficits of National Insurance had to be cut, the widespread demand for earnings-related pensions was to be met in such a way that the superannuation system also redistributed to the poorest and, finally, occupational schemes were to be protected and encouraged.125 Ignoring the self-employed and leaving the least-paid two-fifths of all workers to unchanged pensions (although with reduced contributions), the 120

Labour Party, Annual Conference, 1957, pp. 106-24. Iain Macleod and Enoch Powell, The Social Services: Needs and Means (London, 1951); Conservative Party Archives, Conservative Research Department (CRD), Oxford, 2/30/7, National Insurance Policy Sub-Committee, minutes, 18 March 1952, 18 November 1952,25 February 1953,31 March 1953; CRD, 2/30/12, Health and Social Security Committee (HSSC), minutes, 24 July 1956. 122 Conservative Party, Annual Conference, 1957, p. 97. 123 Provision for Old Age: The Future Development of the National Insurance Scheme, Cmnd. 538 (October 1958). 124 CRD, 2/29/8, Policy Committee on the Future of the Social Services (PCFSS), minutes, 23 May i960. For John Boyd-Carpenter's recollection of events, see his Way of Life (London, 1980), pp. 130-35. 125 CRD, 2/30/13, HSSC, minutes, 22 July 1958, 5 November 1958. 121

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government plan asked wage earners within a limited income range for graded premiums, giving them in return only disproportionally meager earnings-related benefits and thereby releasing funds to meet the deficits of the social insurance system. Contracting out to occupational schemes was not only allowed, but encouraged by superannuation's low contribution ceiling and its marked reallocative aim. 126 While both the Labour and Conservative reform proposals sought to drum up resources for redistributive purposes, they each affected different groups. Labour would have levied contributions on income up to quadruple the average wage while the Tories taxed a much narrower band of earnings, freeing the wealthier to invest in less hopeless causes. With its differentiated, but miserly pensions, the Conservative plan in effect approximated a system of graded contributions for flat-rate benefits. The government justified its aims with the argument that growing prosperity made equal Exchequer subsidies for all unwarranted. In an earnings-related system subsidies could be concentrated on the poorest while the better-off paid a higher proportion of their own benefits, thus allowing the polite fiction that graded contributions themselves were not actually used for redistributive purposes.127 In these respects the Conservatives' plan represented less of a shift in the party's thinking than did Labour's. Statutory minimum provision, embellished with voluntary supplements, had been and remained the party's goal even in superannuation.128 With their unvarnished attempt at redistribution, the Conservatives had few expectations of making new friends. Superannuation would neither win nor lose votes, Boyd-Carpenter warned. The party should stress the need to ameliorate the sad financial circumstances of the social insurance system, dampening expectations of large and early benefit increases.129 Tory reforms undercut the universality of pensions, displacing the Exchequer's obligations to the middle strata of working-class incomes, 126 C R D , 2/30/15, HSSC, minutes, 14 February 1961. Contracting out of course spared those lucky enough from much of the redistributive effort and reduced the funds the government could realize in this manner. 127 A disingenuous argument that Labour also made analogous use of, as when representatives of the National Federation of Professional Workers were solemnly informed that not the employees' contributions but their employers' were t o be used in Labour's scheme for redistribution; see LSE, Titmuss Papers, 80a, Labour, SGSOA, minutes, 3 February 1959. 128 C R D , 2/30/13, HSSC, minutes, 17 June 1958; C R D , 2/30/14, HSSC, minutes, 5 November 1958; C R D , 2/30/15, HSSC, minutes, 14 February 1961; C R D , 2/29/6, Brendon Sewili, "Pensions: Where W e Are and Where We Are Going N e x t , " PCFSS/60/25, 19 M a y i960; C R D , 2/31/8, John O . Udal, "Principles and Social Services," PCFSS/60/5, 21 March 1960; C R D , 2/31/8, "Report of Pensions Committee," January 1957. 129 C R D , 2/30/13, HSSC, minutes, 22 July 1958.

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Labour charged in the parliamentary debate. 130 Undaunted, the government pressed ahead and the first round of the superannuation battle ended, much as in Denmark, with the introduction of what in the eyes of the left— focused on the Swedish plans and the German reform of 1957 - seemed a hollow mockery of its ambitions. Defeat and Regroupment Labour, in turn, had high hopes riding on the ability of superannuation in its version to win votes. The party's sceptics rekindled an interest in reform once the Tories had taken the lead. Gaitskell returned from a visit to Sweden convinced that pensions were the right sort of issue for a modern social democratic party. 131 Crossman's pension circus - the backroom boffins of his LSE troika, Titmuss, Abel-Smith and Peter Townsend - was sent back to the drawing board to modify Labour's proposals before the election. Criticized for substantial capital accumulation, Crossman began a retreat he was to continue over the following years.132 The scheme's redistributive element, combined with an individual right of exemption, threatened a selection against the fund among the well-paid. Despite the unions' insistence on individual contracting out, the Conservative example of restricting the option was now followed by requiring a collective workplace decision.133 Even as altered, however, superannuation did not help Labour to victory. "Everyone knows I'm cooking this wonderful vote-winner," Crossman had noted in the privacy of his diary. "I hope to God it is." 134 The deity, nonetheless, was unimpressed and did not deliver. The 1959 elections saw Labour consigned once again to the opposition. Labour regarded superannuation as an issue of particular importance 130

Hansard, 28 October 1958, cols. 57-128; 29 October 1958, cols. 151-67; 11 November 1958, cols. 197-310; 27 January 1959, cols. 888-1014; 8 June 1959, cols. 6 7 0 - 7 3 ; 9 June 1959, cols. 838-929; C R D , 2/30/13, HSSC, minutes, 22 July 1958. 131 LSE, Titmuss Papers, 34, Abel-Smith to Titmuss, 1 M a y 1959. 132 T h e size of the fund was a major bone of contention between the Wilson—Crossman wing and Gaitskell, w h o , for reasons of electoral popularity, preferred reducing contributions to amassing funds; see LSE, Titmuss Papers, 3, Abel-Smith, "Dinner with Dick Crossman on Wednesday M a y 13th"; 34, Abel-Smith to Titmuss, 1 M a y 1959; 80a, Labour Party, Joint meeting of the Finance and Economic Policy Sub-Committee and the SGSOA, 21 July 1959; Labour Archives, Re 588/July 1959. 133 LSE, Titmuss Papers, 3, Abel-Smith, "Meeting with the Representatives of the Co-ops, June 25th"; 80a, Labour Party, SGSOA, minutes, 25 June 1959; 3, SGSOA, minutes, 14 July 1959; 7, untitled note by Duval, Chief Actuary of the Cooperative Movement; Labour Archives, R e 579/July 1959. 134 Crossman, Backbench Diaries, p. 581.

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for the blue-collared working class.135 As in Denmark, a concern on the British left with salaried employees only followed the first legislative treatment of supplementary pensions. In the organizational self-analysis after the electoral defeat, the party criticized its overly close identification with manual workers, old-age pensioners and the poor. Insufficient attention had been paid to the young, the white-collared and the middle classes. Advocating economic planning and control, removing status and class obstacles to social mobility and, in general, aiming at improvements for all while recognizing that differentials must and should widen were objectives, Labour concluded, with which the party might woo salaried employees.136 Even after it had first been broached, superannuation was not treated by Labour as a possible bait for a broader white-collar strategy. This was not the result of neglectful tactics. The subsistence problem made statutory supplementary pensions in Britain a matter of interest primarily to the poor and otherwise unprovisioned. Legislation, the main task of which was raising funds to increase basic benefits without recourse to the Exchequer, could not be attractive to well-paid wage earners. Their stake remained limited to the relationship between superannuation and private arrangements, to the opportunities for exemption from the redistributive ambitions of reform. The less effective organization of white-collar employees in Britain, compared to Sweden, and their relatively better prior provision with occupational arrangements also made superannuation an issue harder and less rewarding to tilt in their favor than was the case in Scandinavia. The TUC, generally sceptical of superannuation to begin with and heavily influenced by unskilled manual workers, was unlikely to approve reforms that made extensive concessions to the salariat. Furthermore, because British white-collar employees were generally members of organizations covered by the TUC umbrella, when they belonged at all, rather than of separate ones as in Sweden, battles over superannuation between different groups of wage earners were mediated already within

135 On the blue-collar focus of other proposals for earnings-related social policy, see Labour, RD 198/June 1962, SGSOA, minutes, 19 December 1961, Re 513/January 1959, RD 211/February 1962, SGSOA, minutes, 14 February 1962. 136 Labour, RD 80/July i960, RD 174/October 1961, RD 194/January 1962, RD 250/April 1962, RD 270/May 1962. For the background, see Alan Warde, Consensus and Beyond: The Development of Labour Party Strategy since the Second World War (Manchester, 1982), pp. 59-61; and Stephen Haseler, The Gaitskellites: Revisionism in the British Labour Party, 1951-64 (London, 1969), pp. 143-49.

Britain's Road from Beveridge to Titmuss

2.43

the union movement, not presented as contrasting positions for the politicians to span. 137 Only in 1965, with Labour in office by a slender majority and Crossman given Cabinet rank for the purpose of putting superannuation on the books, was the time for implementing long-maturing plans nigh.138 Differences between the party's new and its earlier proposals reflected both the sobriety of power and developments during the intervening years.139 The order of Labour's priorities remained unmistakable. Because Beveridge had been unable to achieve subsistence, a graded system was necessary to tap new resources. The primary function of earnings-related benefits was to make acceptable a levy of the differentiated contributions that were needed to increase pensions disproportionally for the poorest. Only with this problem solved were the intrinsic advantages of superannuation broached. The earlier plan's emphasis on economic investment and control had vanished during the interim.140 Crossman's interest in funds was now motivated by their aura of actuarial orthodoxy, their usefulness in convincing the insured that Labour's proposals were not like the "Tory swindle," whose pay-as-you-go financing had approximated a new form of taxation. 141 Contracting out was another important feature. Helped along by the Conservative reforms, prompted by general economic prosperity and the failure of the flat-rate system, nonstatutory coverage now commanded the foreground of the pension landscape.142 National superannuation could no longer hope to replace occupational schemes, but at most to cooperate with them in a symbiosis lubricated by the right to exemption from the statutory system. Lowering the wage ceiling on contributions for 137 See note 3. It has been argued that, by covering both white- and blue-collar wage earners, the T U C was unable to represent the interests of the latter as effectively as the LO was able t o . T h e evidence in this case suggests the opposite. See Richard Scase, Social Democracy in Capitalist Society: Working-Class Politics in Britain and Sweden (London, I 977)> PP- 37~3^; Richard Scase, "Inequality in T w o Industrial Societies: Class, Status and Power in Britain and Sweden," in Scase (ed.), Readings in the Swedish Class Structure (Oxford, 1976), p. 297; and Richard Scase, "Relative Deprivation: A Comparison of English and Swedish Manual Workers," in Dorothy Wedderburn (ed.), Poverty, Inequality and Class Structure (Cambridge, 1974), pp. 2 1 0 - 1 1 . 138 Crossman, Politics of Pensions, pp. 17-19. 139 National Superannuation and Social Insurance: Proposals for Earnings-Related Social Security, Cmnd. 3883 (January 1969). For a lucid account, see Tony Lynes, Labour's Pension Plan, Fabian Tract 396 (London, 1969). 140 Crossman, Backbench Diaries, p. 985. 141 Crossman, Diaries of a Cabinet Minister, vol. 3, pp. 153-54, 17^- See also Barbara Castle, The Castle Diaries, 1964-70 (London, 1984), p. 751. 142 For details and the background, see Leslie Hannah, Inventing Retirement: The Development of Occupational Pensions in Britain (Cambridge, 1986), ch. 4.

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superannuation also gave private and occupational arrangements more room to maneuver. If account was taken in such ways of those who already enjoyed alternative coverage, they were nonetheless still called on to help the poorest. Superannuation's redistributive element assumed a new visage. Gone was the basic flat-rate minimum that had shifted resources downwards in Labour's earlier plan. Yet, while all pensions were now graded, the formula for relating contributions to benefits weighed heavily in favor of lower incomes, and whole-career earnings, not peak ones, were taken as the basis of calculations. How the redistribution envisaged compared to the previous proposals is hard to measure. What can be said is that the groups disadvantageously affected had in the meantime become more vocal in their objections. The clarity of solidaristic intentions in Labour's new scheme was one factor, a sensitivity to any reapportionment of costs, that had been heightened by the Tory legislation's unabashedly redistributive ambitions, was another. Salaried employees and skilled workers rejected disproportional burdens, threatening to strike were their wishes not heeded. Wage differentials should not be undermined to correct hardships that could better be assuaged by other means, was their view.143 Such white-collar disgruntlement emphasized the extent to which the British and Swedish versions of superannuation concealed different social agendas behind similar facades. Higher Exchequer subsidies to take the sting out of redistributive efforts and measures to ensure that the wealthy self-employed did not escape their share - a return, in other words, to its traditional demand for more tax-financing - was the TUC's rather hapless response to the salaried unions' protests.144 When the government decided for other reasons to call elections early, in June 1970, returning the opposition to power before reform had passed, Crossman's disappointment must have been especially bitter. The final chapter of the interminable superannuation saga was a last round of legislative bickering, culminating in a weary compromise hammered out again by Labour. A year after their victory, the Conservatives proposed reforms that laid out explicitly what had only been implied in Boyd-Carpenter's legislaC, Annual Report, 1969, pp. 528-38; Labour, Annual Conference, 1969, pp. 286—87, 292. 144

TUC, Annual Report, 1970, pp. 250-51, 588-89. On differences between the TUC and Labour on pensions in 1972, see Michael Hatfield, The House the Left Built: Inside Labour Policy-Making, 1970-75 (London, 1978), p. 263.

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tion. 145 Reaching back to earlier suggestions from among their ranks, Tories now advocated flat (but not subsistence) rates paid for by contributions related to income.146 With basic benefits thus secured, their consistently pursued goal of encouraging self-help was to be given expression in occupational arrangements and a so-called state reserve scheme for those otherwise left unprovisioned. Conservatives aimed for a minimum of statutory intervention and a maximum of personal choice. Thirty years after its launch, the Beveridge system was to be repaired, modified and set on its course again by giving Britain an approximation of the Scandinavian systems of national pensions.147 Labour attacked the plan for condemning many pensioners to public assistance, for its reliance on an outmoded flat-rate approach and for its vulnerability to inflation. Earnings-related premiums for uniform benefits the left rejected for fear that white-collar and skilled wage earners would protest even more than they had to the redistributive element in Crossman's scheme.148 As though to fulfill a legislative symmetry, the Labour government that returned to power in 1974 decided to scrap the Tory scheme and implement its own. Within the party's research machinery, the pension pundits had spent their time in the opposition back at the drawing board with a vengeance. Fund formation of grand proportions and capitalsharing were discussed and the traditional fall-back remedy of Exchequer financing was dusted off once again for reconsideration.149 Actual proposals were, in contrast, a moderate compromise. As in the earliest plans, the new system's flat-rate minimum pensions ensured the poorest a disproportionally favorable treatment.150 Above this, earnings-related benefits tapered off on a scale that produced almost the same downward 145 Strategy for Pensions: The Future Development of State and Occupational Provision, Cmnd. 4755 (September 1971). A critical contrast between these and Labour's preceding plans is drawn in Richard Titmuss, Social Policy: An Introduction (London, 1974), ch. 8. 146 C R D , 2/29/8, PCFSS/60/25,19 May i960; PCFSS/60/26,19 May i960; Lynes, Labour's Pension Plan, p. 4. 147 Heclo's reasons for thinking that the Conservative plan was a product of the party's isolation from the preceding pension debate, that it w a s inconsistent with Conservative principle or that it included elements the party did not intend are unclear; see Heclo, Modern Social Politics, pp. 2 8 0 - 8 1 . 148 Hansard, z$ November 1972, col. 265. See also Hansard, 19 January 1970, cols. 162-63, David Ennals. 149 Labour, R D 202/December 1971, R D 222/December 1971, R D 237/January 1972, R D 250/February 1972, R D 364/May 1972; LSE, Titmuss Papers, 11, Labour Party, Social Policy Sub-Committee, Working Group on Pensions ..., "Note for the Chairman for Meeting on January 5th [1972]." 150 Better Pensions Fully Protected against Inflation: Proposals for a New Pension Scheme, Cmnd. 5713 (September 1974).

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redistribution as Crossman's scheme. An agreeable compromise between manual and white-collar wage earners was found in calculating benefits on the best years of income. Following the Tory example, contributions were somewhat more heavily loaded on employers than wage earners. The Exchequer subsidy remained at the magic figure of 18% that had graced the Crossman, the Conservative and now the Castle proposals. Again following the right's initiative, the affluent self-employed paid higher premiums than under Crossman. Contracting out was so formulated that statutory superannuation did not directly compete with occupational schemes, which were, in addition, guaranteed against inflation. Such concessions helped appease Conservatives,finallyallowing, as in 1946, the genteel and moderate upheaval that Beveridge had then aptly described as a British revolution.151 Approached from one angle, superannuation seems an example of social policy's lengthening remove from the arena of political controversy, an issue increasingly given over to professionals to decide on in accord with the ever more complex requirements of modern society. The interestgroup politics of a simpler age no longer left much trace. Waiting time, cost-of-living adjustments, value-securing, transition periods, postponement adjustments: these were the stuff of administrative arbitration, not heated debate. The clash of interests in the parliamentary forum appears to have given way to an exchange of inter-office memoranda, at best enlivened by the backstage interventions of sophisticated lobbies. Yet, while it is true that administrators and government reformers did play the main roles in what drama superannuation had to offer, they acted only on a stage set by larger political and social forces. Examinations that rest content with apparent similarities among the reforms adopted in various countries miss the distinctly different agendas here masked by superficial resemblances. Superannuation was an issue in Britain and the Nordic nations, not on the Continent, because of theflat-rate,universalist minimalism of postwar Anglo-Scandinavian reforms. These had served the interests of the selfreliant and well-off, who had sought not to be deprived of statutory benefit, and of rural inhabitants, who gained from uniform measures paid for by others' taxes. Superannuation, in contrast, at first addressed the 151 Harold Wilson, The Final Term: The Labour Government i^y^—if)j6 (London, 1979), pp. 125-28; Hansard^ 18 March 1975, col. 1502; David Pianchaud, "Social Security," in Nick Bosanquet and Peter Townsend (eds.), Labour and Equality (London, 1980), pp. 177—78.

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concerns of precisely those groups ignored by the supposedly so socialist reforms of the postwar era: urban, blue-collar workers. It was their demand for parity with the private provision enjoyed by the affluent and with the occupational pension schemes of salaried employees, coupled to their need for benefits meeting real costs rather than a standard set for rural areas, that initially gave impetus to neo-Bismarckian earnings-related measures for the working class. Beyond this common denominator, each of these countries adopted superannuation in specific incarnations determined by a combination of factors - institutional, political and social. While reform began in Sweden as a boon for manual workers, Social Democrats gradually realized that they might attract salaried employees by tilting it in their direction. Postwar pension initiatives had taken especial account of the middle classes; superannuation now played to the white-collared. Once again in Social Democratic Sweden, that group by and for which the welfare state supposedly existed won reform only on the coattails of measures aimed at more favored classes. In Denmark and more obviously in Britain, superannuation remained a matter of particular concern for the manual working class. Danish Social Democrats were unable to follow the lead set across the Kattegat. The flat-rate approach proved irresistible, both because many on the left still considered it particularly egalitarian and because the bourgeois parties correctly recognized their stake in thus limiting the state's intervention. Social Democrats could or would not rein in hostility between the unions and the self-employed. White-collar employees were ineffectively organized and the left was slow to recognize the political rewards of catering to their needs. Petty-bourgeois interests in tax-financing prevented the adoption of more than a very modest contributory system. British reformers, in turn, faced two problems in the guise of one. Beveridge's flat-rate deadlock had to be broken. Both Labour and the Tories agreed that superannuation's first duty was redistributive financing to provide adequate benefits for the poorest without recourse to the Exchequer. Only with this first task behind it was the British system of supplementary pensions free to address the sorts of questions that in Sweden were the primary concern. Because of this inherent concern for the poorest wage earners, reform here could not serve as part of a strategy aimed at salaried employees.

5

Solidarity by the Back Door

Having rejected welfare reform of an all-inclusive, comprehensive kind during the immediate postwar period, France and Germany found themselves ushering in solidaristic social policy, almost surreptitiously, by the mid 1970s. Coming full circle, neo-universalist legislation brought to provisional closure one of the major disputes in the history of Continental social insurance. The new measures were in many respects a mirror image of the initiatives attempted in the immediate postwar period. The needy, on whose behalf redistribution promised to work, were no longer workers, but declining independents. The self-employed, opponents of reform in 1945, became its chief advocates now that they stood to gain. Conversely, the left and the labor movement's earlier aspirations to solidarity turned out not to have been universal. Once it became clear that risk reallocation worked to their disadvantage, that wage earners - as a group blessed by comparative demographic and economic good fortune - had become potential redistributive losers, workers proved as determined to maintain acquired privileges as independents had been earlier. In the period immediately following the war reformers had been unable to include all equally under the state's wing and were forced by protest from white-collared and self-employed groups to rest content with social insurance fragmented by class and category. Independents and salaried employees had sought a separatist solution for fear that they would otherwise be called on to share burdens with less fortunate groups, in particular with workers. Nonetheless, however heated the arguments advanced at the time in its favor by those who stood to be redistributive losers in a solidaristic system, socially particularist provision did not prove satisfactory for very long. Economic and demographic developments altered, indeed reversed, many of the assumptions underlying the initial rejection of universalism. Many among the self-employed, earlier too self-reliant to need or want the state's attention, now found themselves adversely affected by economic concentration and the expansion of 248

Solidarity by the Back Door

249

dependent employment.1 Wage earners as a group, in contrast, rode the crest of postwar prosperity. While measures of social insurance limited to them flourished, independents faced hard times either unprotected or as members of particularist arrangements that shared their constituency's fate. Statutory protection, once a mark of dependence, became a privilege. The self-employed, who had refused inclusion out of standisch pride and eminently rational self-interest, found themselves on the outside looking in and gradually came to recognize their mistake. Conversely, wage earners, rebuffed in their attempts at all-inclusive reform after the war, now saw little reason for more magnanimity than the self-employed had earlier shown them. Declining independents initially sought aid from their more prosperous colleagues. These, in turn, were able to displace the burden of providing for the least fortunate self-employed to the rest of the nation, prompting, once again, solidaristic reform for selfish reasons. The socially fragmented welfare systems created or continued after the war had been motivated by those independents who were satisfied that economic circumstances favored them, that their category's future was reasonably assured and that the best course was to arrange minimally redistributive measures among themselves. Little did they suspect that the impoverished of their group were about to become the nation's poorest and that the wage earners whose lot they had refused to share would soon set sail to favorable economic winds. It did not take long, however, for it to become apparent that social separatism had been a miscalculation. The well-off in each category of independents found themselves locked in, for the purposes of reapportioning risk, with their poorer colleagues. As the declining selfemployed sought aid and began to eye their betters with unmistakably redistributive intentions, change became imperative. The particularist approach to social insurance taken after the war had served the interests of affluent independents only on the assumption that the self-employed were on the whole more prosperous and less risk-prone than wage earners. As economic and demographic evolution gradually undermined such inherited certainties, the well-off within each limited and circumscribed risk community of independents discovered that, in fact, 1 Although, of course, circumstances varied widely, with some self-employed sectors prospering and adapting, others falling behind. On artisans, for example, see Steven M. Zdatny, "The Artisanat in France: An Economic Portrait, 1900-1956," French Historical Studies, 13, 3 (Spring 1984); Marc Durand and Jean-Paul Fremont, Vartisanat en France (Paris, 1979), pt. 2; and Joseph Hoffner, Die Handwerkerversicherung im Hinblick auf die berufsstdndische Eigenart des Handwerks (Stuttgart, 1959), pp. 54—61.

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they stood to benefit from spreading costs and burdens more widely. The solution to their dilemma, it turned out, was a full retreat: to admit the bankruptcy of the separatist solution, praising the virtues of that national solidarity only recently castigated as an assault on the comfortable status enjoyed by the affluent.2 Were prospering independents themselves not to be asked for greater redistributive efforts, then the problem now was that national solidarity threatened a reallocation of burdens at the expense of wage earners. Since the dependently employed were, in fact, profiting from the migration of independents to wage-earning occupations, swelling their ranks and enhancing the actuarial outlook of the group, the opportunity was provided to demonstrate that they, too, could act selfishly in defense of acquired privileges - a chance that was again extended and seized when the question was posed of a reapportionment of burdens within the class, between workers and salaried employees. Redistribution at their expense was not the only reason for objections raised by the dependently employed to neo-universalist reform. Because it was aimed at impoverished independents, the new legislation provided limited, often flat-rate and partially tax-financed benefits that contradicted wage earners' interests. In Britain and Scandinavia, national pension systems, either largely noncontributory or financed by universally affordable premiums, were feasible because they preceded all but rudimentary or strictly private arrangements of contributory social insurance. In France and Germany, where a system of earnings-related social insurance financed by premiums had inaugurated developments, it was difficult to insert tax-financed measures between it and public assistance without now giving independents generous nonstigmatizing benefits on easy terms that would dismay a working class long accustomed to provide for itself. Neo-universalist legislation posed the confrontation over social policy between left and right in reverse of its postwar articulation. As in 1945, conflicts were sharper and more distinctly profiled in France. Numerous declining independents, inequities of the tax system, the government's reluctance to grant the subsidies needed to blunt the edge of redistributive antagonisms, and smarting memories of postwar confrontations, made disputes here keen and protracted. Regarding such reform as a direct assault on hard-won rights, wage earners and the left did their best to block 2 Raymond Aron was of course making a generalization of broader national validity when he wrote that "The French have a tendency to favor the expansion of social security to the extent they benefit, while, as contributors, wishing to limit it" ("Problemes de la securite sociale," Le figaroy 9 June 1948).

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it. In Germany, the situation, though largely similar, was more pacific. Postwar battles, pitting all Germans against the occupiers, not just left versus right, had been less envenomed. Independents were not as powerful a presence and dealing with them was a less controversial issue. When raised, the question of providing for the self-employed came up piecemeal. The artisanal issue was the first, long-simmering expression of redistributive antagonism within social insurance. By the 1970s the problem had been reduced to manageable proportions. Since most self-employed were already satisfactorily provided for, universalist reform, which made declining independents beneficiaries of the wage earners' social insurance system, could be passed in a quarrelsome compromise between left and right. Although those countries that had chosen an all-inclusive approach to begin with did not, of course, escape the economic and demographic changes that bedeviled Continental developments, their social security arrangements were less painfully affected. Whereas the Anglo-Scandinavian systems treated each participant as an individual, the French and German ones took them as members of a class. Demographic shifts passed almost unnoticed in the nations that had initially selected a universalist approach, flourishing groups underwriting declining ones, but without their knowing it. On the Continent, in contrast, redistribution became an articulated political dispute, sending social categories to battle in the interstices of a fissiparous welfare edifice. The eventual outcome, fulfilling piecemeal the solidaristic vision of 1945, was the result of a painful process df battle and negotiation. The groups most implacably at odds were declining independents, demanding redistribution, and the trade unions, who resisted such claims on wage earners' prerogatives. Between these polar interests, the politicians attempted to mediate. The center and right straddled internal disputes. On one side were those who spoke for the interests of the beleaguered self-employed. Opposing them were old-fashioned liberals, still wishing to exclude the state from the affairs of the independent middle classes, economic modernizers, who actively sought to prevent any unjustified coddling of outmoded social groups, and Christian Democratic trade unionists with workers' concerns at heart. The parties of the left, in contrast, more consistently followed wage earner opinion in its swing against a universalist approach, although the politicians' hopes of broadening their appeal to the self-employed as well helped introduce a moderating element. While the left did what it could to protect wage earners' interests, it was forced to be more receptive to

252

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solidaristic reform, which now benefited independents, than the center and right had been during the Beveridge era to analogous initiatives, then proposed on behalf of workers. Independents, especially in France, remained a numerous, important and powerful group. Alienating them was risky, while winning their allegiance with concessions promised to be politically profitable. Social policy reform in this new context was but one of many concessions that declining independents were able to barter their support for.3 With such mixed and ambiguous motives on both sides of the political spectrum, enmities were not absolute. In the end demands were moderated, the unions accepted compromises, the right split over how generously to treat independents, and a grumbling agreement on some form of all-inclusive, redistributive social policy was reached. A failure after the war, solidaristic reform succeeded on the Continent three decades later. Redistribution on behalf of declining independents seemed a less onerous burden than helping wage earners had then and the possibilities of a political compromise were less polarized. But solidarity was now achieved, most importantly, because powerful groups among the elites here saw their interests best served. In 1945, affluent independents, speaking for all in their social category, had managed to avoid sharing workers' burdens, shouldering instead what appeared to be the lesser weight of their own poor. As economic and social developments made a mockery of such calculations, they gradually discovered what could be gained from a broader solidarity that shifted the expense of the unfortunate self-employed to wage earners as well.4 In 1945, the disfavored and needy (then workers) had fought for solidarity alone, with little chance of prevailing. In the 1960s and 1970s, some among the otherwise prosperous and privileged elites had cause to switch sides and join the unfortunate (now declining independents) in their quest for redistributive aid, thereby creating the politically critical mass that made solidaristic reform possible. A final word is required about the particular redistributive problems raised by health insurance. On the surface, sickness benefits in kind appear 3 Social policy was in this sense a particularly striking aspect of the broader symbiosis of political and economic interests between peripheral sectors and elites, a sort of modern marriage of iron and rye, used by the center and right to counterbalance the growing power of urban wage earners, although also the left was tempted by the political possibilities that opened up here; see Sidney Tarrow, Between Center and Periphery: Grassroots Politicians in Italy and France (New Haven, 1977), intro. and ch. 1; Suzanne Berger and Michael J. Piore, Dualism and Discontinuity in Industrial Societies (Cambridge, 1980), esp. ch. 4. 4 There is a real-world version here of the alliance between rich and poor against the middle that Gordon Tullock develops as a theoretical possibility in "The Charity of the Uncharitable," Western Economic journal, 9, 4 (December 1971).

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253

to be uniform for all, at least within a given risk group. Financing measures according to ability to pay therefore seemed to ask disproportional sacrifices of the well-off and provoked greater resistance than flat-rate or risk-related contributions. This popular sense of equity has scarcely been modified by investigations revealing that, in fact, consumption of medical benefits varies by class, often increasing with income. While the ultimate redistributive effects of sickness insurance are only murkily known, it is possible that uniform contributions with an insufficiently sophisticated categorization of risk may therefore reallocate upwardly from poor to rich.5 French Independents, Decline and the Dissolution of Separatism In France, it was among farmers and peasants that the new, favorable attitude towards social solidarity, soon to be shared by most selfemployed, could first be detected.6 Agrarians, whose demographic and economic perspectives had been bleak enough already in 1945 to rule out going it alone, were that group of independents least impressed by the separatist course then charted by their colleagues, and their conversion to a universalist approach to social insurance that promised to alleviate burdens was quick and easy. Agriculture's misfortunes were so pronounced that even the most altruistic efforts of medium and large farmers alone could not have provided for the huge mass of subsistence peasants.7 While other independents, still convinced that the relation between welloff and worse-off was sufficiently equilibrated that at least minimal provision could be arranged within the separatist social category itself, had 5 J. Brunet-Jailly, "Note sur les effets redistributifs de Passurance-maladie," Revue d'economie politique, 86, 5 (September-October 1976); J. Regnier and J.-Cl. Sailly, France, pays des ine'galites? (Toulouse, 1980), pp. 90—99; Jean-Michel Belorgey, La politique sociale (Paris, 1976), pp. 276-77; A. J. Culyer, The Political Economy ofSocial Policy (Oxford, 1980), pp.124-27. 6 Accounts of recent developments in French social policy include Jean-Pierre Dumont, La securite sociale toujours en chantier: Histoire - bilan - perspectives (Paris, 1981); and Jacques Fournier and Nicole Questiaux, Traite du social: Situations, luttes, politiques, institutions, 2nd edn (Paris, 1978). Good on the Fifth Republic especially is Douglas E. Ashford, Policy and Politics in France (Philadelphia, 1982), ch. 6. The standard account of French social policy institutions is Jean-Jacques Dupeyroux, Droit de la securite sociale > 8th edn (Paris, 1980). 7 Reformers after the war had already then recognized the difficulties of including agrarians in social insurance; see Assemblee nationale, Archives, Commission du travail, minutes, 24 January 1946, Costes, Viatte, Delacheval, Landry; 27 March 1946, 21 February 1947. For an overview of agrarian problems, see Sally Sokoloff, "Rural Change and Farming Politics: A Terminal Peasantry," in Philip G. Cerny and Martin A. Schain (eds.), French Politics and Public Policy (New York, 1980).

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constructed their particularist insurance schemes, agrarians passively resisted any threats to their meager resources and awaited the state's initiative.8 The government, in turn, proposed a pension system for agriculture based on contributions - assessed proportionally to cadastral income that redistributively financed flat-rate benefits reserved for the poor by stiff means tests.9 Vague account of the farmers' inability to bear burdens alone was taken in the form of subsidies from a special fund, supplied by the agricultural family allowance system and possible advances from the Finance Minister.10 The parties of the center and right objected to initiatives that attempted in this way to redistribute within the occupation. A proper social insurance scheme, with benefits proportional to contributions, they thought, should also be introduced to ensure that larger farmers, who paid most but received least in the government's proposal, did not threaten the success of reform.11 The parliamentary Labor Committee compromised by levying two forms of premium: a per capita rate weighing equally heavily on rich and poor alike, supplemented by one proportional to income. In return, farmers were to receive both meanstested allowances and an income-related pension.12 In plenum, the Radicals opposed differentiated benefits in favor of flat rates paid to all regardless of means, financed by graded contributions and topped by voluntary supplements - the postwar Scandinavian system. Their efforts eliminated the income-related element, leaving the law a curious half-breed that resembled the government's original proposals and satisfied few. A flat-rate means-tested allowance was now financed partly by the nation as a whole and partly in a redistributive manner within the occupation by contributions, half proportional to income with no upper ceiling.13 The resistance provoked by this law among farmers foreshadowed similar movements among small independents a decade later. Henri Dorgeres, at the peak of a long and distinguished career of impeding government attempts to apply social legislation to peasants, founded the 8 Their representatives had resisted integration into the separatist pension system created by other independents; see AN, SS7922, Surleau Commission, sub-commission minutes, 25 June 1947. 9 The means test for the government-financed Temporary Allowance had been undertaken by local mayors, many of whom apparently regarded the allowance as a welcome addition to total municipal revenues, approving applications indiscriminately. The new means tests were therefore tightened up. See Le tnonde, letters to the editor, 28 January 1947. 10 JO Doc, 8715, 14 December 1949, pp. 2236-38. 11 JO Doc, 11334, 17 November 1950, pp. 1998-99. 12 JO Doc, 3454, 27 May 1952, pp. 1113-14. 13 JO Deb, 6 June 1952, pp. 2687-2719. The law was that of 10 July 1952.

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Defense paysanne.14 Small and medium-sized proprietors, Dorgeristes spent their political careers in the grip of an anti-statist passion, blaming their troubles on, at the same time as seeking satisfaction from, the Paris authorities. Dorgeres rejected what he portrayed as an expensive system with derisory benefits, demanding instead that peasants be pensioned off like civil servants. Urging his followers not to pay contributions, he gained support in several departments in the west of France with venerable traditions of grassroots resistance, the Calvados especially.15 Although well-heeled farmers of the grande culture to the north wrinkled their noses at such plebeian rumbling, they were equally unenamored of the 1952 law. Much like other prosperous independents, they were unwilling to bear disproportional burdens. Reform had given agriculture the only pension scheme for the self-employed that entailed significant redistribution, putting large farmers in the unenviable position of paying considerable contributions for no return. In response, they demanded that the allowance go without means tests to all, that incomerelated contributions be capped, that a proper insurance system bring premiums and benefits into equivalence and that agriculture's particular difficulties be met by shifting to the nation at least half the cost of providing the occupation with pensions.16 Here was the theme, sounded first by agrarians, whose variations and repetitions would be carried by other independents during the coming years: redistribution within the narrow social group could no longer accomplish the tasks set for it. Now unsupportable by their prosperous colleagues, the poor self-employed were to be helped by the larger community. Lent impact by that particularly fervent sentiment evoked in the French parliamentary breast by reference 14

On Dorgeres in general, see Gordon Wright, Rural Revolution in France (Stanford, 1964); Pascal Ory, "Le Dorgerisme: Institution et discours d'une colere paysanne (1929-1939)," Revue d'histoire moderne et contemporaine, 22 (April-June 1975); and Malcolm Anderson, Conservative Politics in France (London, 1974), pp. 222-23. F° r Henri Dorgeres's own account of the prewar years, see his Au XXe siecle: 10 ans de jacquerie (Paris, 1959). Robert Paxton is at work on a study of Dorgeres. 15 Solange Goldman, "L'allocation de vieillesse agricole: La loi du 10 juillet 1952 a travers la presse agricole et les reactions de la profession," unpubl. MS to appear in Comite d'histoire de la securite sociale, Colloque sur Vhistoire de la securitesociale. See also La gazette agricole, 14 March 1953, quoted in the MS of the section dealing with agriculture, prepared by UCCMA, of what is to become the Histoire de la securite sociale par les textes, to be published by the Association de Phistoire de la securite sociale, which Mme Goldman and Catherine Gross at UCCMA kindly allowed me to examine. 16 Goldman, "L'allocation de vieillesse." This was the position of the Union des caisses centrales de la mutualite agricole (UCCMA) and the Federation nationale des syndicats d'exploitants agricoles (FNSEA), the postwar farmers' organization (with close personal connections to the Vichy Peasant Corporation) that in this period spoke predominantly for the interests of the grande culture of the north.

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to la terre and her noble inhabitants, large farmers' complaints did not pass unheard.17 Three years later, further reforms limited redistribution within the occupation by halving the contributions due on cadastral income above a ceiling. In addition, for those otherwise disqualified by affluence from benefit, the contributory insurance scheme dropped from the 1952 law was reintroduced.18 Testimony to the influence still exerted by declining yet populous classes came from both ends of the parliamentary spectrum in their solicitous approach to the problem of provisioning agrarians. Where postwar reforms had assumed that farmers could afford to pay substantial contributions for social protection, the left now generously offered to have the nation assume most of the charge.19 Applauded from the right, the Radical Andre Liautey, in turn, advocated measures suspiciously reminiscent of Beveridge or the postwar Scandinavian reforms. Separatist social policy, he claimed, contradicted equality before the law. Instead, all citizens should receive minimum subsistence benefits, financed by proportional taxes.20 Moderate opinion among large farmers accepted the compromise embodied in the government's reforms. Since agriculture was the sole occupation to enjoy aid from the whole community, it was only fair, they agreed, to ask an extra effort of affluent farmers. While the original law had reallocated excessively between large and small, prosperous and poor agrarians, the tapered solidarity introduced in 1955 w a s acceptable. The issues at stake here were pushed to their extreme, however, by those large farmers least willing to shoulder any redistributive responsibilities whatsoever. They were represented most prominently by Jacques Le Roy Ladurie, formerly Vichy Minister of Agriculture, later a resister, now a deputy from the Calvados and father of the soon to be celebrated historian Emmanuel, who, in an act of filial rebellion, was at work writing his book on the small peasants of Languedoc.21 Le Roy Ladurie pere rejected even 17 For example, Roland Boscary-Monsservin's intervention; see JO Deb, 21 July 1954, pp. 3488-90. 18 These changes were part of the 5 January 1955 law. For an overview of the new system, see Georges Callebat, Le regime vieillesse des exploitants et artisans ruraux (Lons-le-Saunier,

1955)19 The Communists, endowed with elaborate institutional representation of agricultural interests, were well on their way to a position of firm support for the small family farm and the legislation necessary to cushion it against economic reality; see Genevieve Bastid-Burdeau, La genese de Vinitiative legislative: Un cas: U agriculture 1958-1968 (Paris, 1973), pp. 32-35. 20 JO Deb, 21 July 1954, p p . 3488, 3501; 28 July 1954, p p . 3670-77; JO Doc, 8954, 22 July 1954, p . 1484. 21 The question of filial rebellion is pure speculation. On father-son relations, see Emmanuel Le Roy Ladurie, Paris-Montpellier: P.C.-P.S.U., 1945-1963 (Paris, 1982), pp. 21, 74-75-

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the limited solidarity of the current bill in favor of an actuarially correct, unredistributive system. Not compensation within the social group, he insisted, but national solidarity should provide for poor farmers.22 Although losing this particular battle, the idea embodied in his proposal that the whole community bear the burden refused by affluent independents - would eventually win the war as merely occupational solidarity continued to disintegrate. Peasants into Patients Similar redistributive issues, testing the limits of solidarity organized only within the separatist social category, were raised by agricultural health insurance during the Fifth Republic.23 Should health insurance be compulsory? Were the poor to be helped by their more favored colleagues or by the nation? Whose interests was the system to reflect? These were the main questions. If entirely neutral in redistributive terms, then arrangements might as well have been voluntary. Compulsion implied at least the possibility of solidarity and therefore worried large farmers. Divisions among agrarians over these issues reflected geographical peculiarities in an almost Siegfriedian manner. To the north (one account used the Loire, another the axis bisecting Bordeaux and Metz), in the grain-producing regions of the grande culture, farmers favored a system limited to serious risks, financed by unredistributive uniform contributions, with a pluralist organizational structure. To the south, the areas of small, family-run subsistence agriculture preferred income-related contributions that weighed most heavily on the affluent, a unified and comprehensive administration and complete coverage.24 At its congress in 1958, the main agricultural interest organization, the FNSEA, only closely avoided a major split over the issue by narrowly approving the principle of compulsion.25 This outcome was determined 22

JO Deb, 21 July 1954, pp. 3498-3501. For an overview, see Centre d'etude des relations sociales de PUniversite d'Aix-Marseilles, Securite sociale et conflits des classes (Paris, 1962), ch. 5. See also Roger Montagne, "La loi du 13 decembre i 9 6 0 relative a Passurance maladie des exploitants agricoles," Droit social, 24, 4 (April 1961). 24 Among the organizations supporting arrangements in the southern sense were the CNJA and the Comite de Gueret; see JO Doc, 557, 26 April i960, pp. 2 0 - 2 3 . 25 In November 1951 Rene Blondelle, president of the FNSEA, w a s said to have told Alexandre Bonjean, president of the U C C M A , that his organization's National Council included a large majority in favor of a compulsory agricultural health insurance. Why the change is unclear. See Bulletin d'information de la mutualite agricole, 104 (January 1961), 3424. 23

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largely by the Centre national des jeunes agriculteurs (CNJA), the recently founded organization of young, modernizing proprietors of small- and medium-sized farms who were attempting to reconcile the occupation's increasingly sharp divisions between rich and poor.26 While they had been bruised by this partial victory for small agrarians, however, large farmers were not yet bleeding. Though compulsory, agricultural health insurance was not - it soon became clear - to be financed at their expense. The FNSEA rejected the demand of small farmers for contributions proportional to cadastral income or at least the half-and-half system worked out for pensions, calling instead forflat-rate,per capita premiums. Solidarity should play not merely among agrarians, the organization insisted, but within the nation as a whole.27 Although the proposals of large farmers were, in fact, eventually rejected within their own organization, the government's bill much resembled them.28 In parliament, committee advocated a significant redistribution within the occupation, but the final legislation proved less ambitious.29 Health insurance covered only serious risks for adults. Financing was by slightly income-graded per capita contributions, but the brunt of redistribution rested with the state subsidies that were granted the agricultural system.30 Over the objections of the relevant committees and the left, the bill became law with the backing of the Gaullists and their allies.31 Health insurance represented a further step in the dissolution of agrarian separatism. For pensions, an initially solidaristic solution had had its wings clipped by 1955. When attention turned to health, those against whom redistribution threatened to work did not allow the same mistake. From the first, large farmers successfully kept burdens localized on their smaller 26 Michel Debatisse, Le projet paysan (Paris, 1983), pp. 73-75. O n relations between the FNSEA and the CNJA, see Louis Lauga, Centre national des jeunes agriculteurs (Paris, 1971) pp. 97ff; Pierre Muller, "Comment les idees deviennent-elles politiques? La naissance d'une nouvelle ideologic paysanne en France, 1945—1965," Revue francaisede science politique, 32, 1 (February 1982), 99-103; Pierre Muller, Le technocrate et le paysan: Essai sur la politique francaise de modernisation de Vagriculture, de 194s a nos jours (Paris, 1984), ch. 3; and John T. S. Keeler, The Politics ofNeocorporatism in France: Farmers, the State, and Agricultural Policy'-Making in the Fifth Republic (New York, 1987), chs. 1, 2. 27 JO Doc, 557, 26 April i960, p. 22; Michel Debatisse, La revolution silencieuse: Le combat des paysans (Paris, 1963), pp. 165-71. 28 Informations sociales agricoles - Bulletin mensuel, 10 (24 October 1958). This and a substantial collection of other cuttings from the agrarian press o n the subject are in the U C C M A Archives, Paris, A 1200/9787. 29 JO Doc, 557, 26 April i960, pp. 23-26. 30 JO Doc, 560, 26 April i960, pp. 32-33. 31 JO Doc, 605,6 May i960, pp. 141-43. For an overview of the system, see L.-P. Delestree, Vassurance maladie obligatoire des exploitants agricoles (Paris, 1966).

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colleagues, except to the extent that the whole community agreed to step in. Agriculture was the first occupation to suffer the breakdown of a particularist approach to social policy. Its economic and demographic imbalance, the successfully articulated reluctance of large farmers to bear disproportional costs and the help forthcoming from the rest of the nation - prompted by a mixture of necessity, guilt and sentimentality - dissolved what thin glue bound the profession together when it came to apportioning risk. In this process, both large and small farmers eventually identified similar interests. Once the zero-sum quality of redistributive jostling had been surpassed by the possibility offinancingfrom outside the occupation, high and low united to exploit the opportunities. Agriculture's peculiar situation made it possible to draw on the aid of society as a whole. When it came to the turn of other independents, things were not as simple. Les Non-Nons Once farmers had been provided for, others among the self-employed also insisted on comparable treatment. The introduction of health insurance for non-agrarian non-wage-earners, les non-nons as they are called, at first resembled the situation in 1945. Rejecting a universalist solution, well-off independents - represented by the Confederation generate des petites et moyennes entreprises (CGPME) and Roger Millot's Comite national de liaison et d'action des classes moyennes - mimicked their position of two decades earlier: in order to ensure that solidaristic demands on the well-off would fail, the details of a minimalist, unredistributive health insurance were to be elaborated in a separatist manner within each of the three categories of non-nons that had been immortalized in 1948 for pension purposes (liberal professionals, industrial and commercial independents, and artisans).32 Free choice was to be allowed among self-administering insurance carriers, coverage would be limited to serious risks and voluntary supplementation was to be permitted.33 The specter of redistribution at their expense still haunted comfortable independents.34 This time, however, the apparent harmony that reigned after the war was not to be. Small and hard-pressed independents rebelled, overturning their superiors' 32

See Chapter 3 for the 1948 legislation. Chambre de commerce de Paris, Les regimes sociaux des commercants et industriels independants: Evolution et reforme (Paris, 1979), vol. 1, p. 24-25; Roger Millot, "La position des travailleurs independants face aux problemes de l'assurance-maladie avant I'adaption de la loi du 12 juillet 1966," Droit social, 3 (March 1970). 34 Les informations confederates, 448 (March 1965), 8-9. 33

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blithe assumptions of a standisch consensus on separatist and unreallocative measures.35 The better-heeled, in turn, managed to deflect the poor's redistributive ambitions to the nation, setting in motion a development that eventually consummated the solidaristic vision of 1945. The most striking example of this turnabout among small non-nons their realization of a need for solidarity and their newfound ability to put muscle behind these wishes - was provided by the Confederation de l'artisanat et des petites entreprises du batiment (CAPEB). Founded and led by the irrepressible and ubiquitous Marcel Lecoeur, the CAPEB organized artisans in the construction and building trades. Its initial stance on health insurance was scarcely distinguishable from standard independent opinion. Although not members, artisans at first agreed to the Millot committee's guidelines, supporting a unanimously separatist non-non position on the issue.36 It did not take long, however, to undermine this consensus. Small artisans, the CAPEB discovered, were ill served by a redistributively neutral system that provided only the limited coverage they could afford unaided. Two considerations prompted their leaders to reexamine matters. First, to cope with financial difficulties, the government at the time was considering a partial fiscalization of the General Regime.37 Were they, as consumers and taxpayers, to underwrite workers' benefits, it seemed only fair that artisans also enjoy reciprocal efforts. Second, various parliamentary initiatives on independents' health insurance had brought to the artisans' attention the advantages of redistribution.38 With income-related contributions, the poorest among them could be given complete coverage otherwise beyond their reach.39 When the CAPEB reversed its original approach, now supporting solidaristic reform, it was at the behest of its weakest members, who had come to realize what they stood to gain from an all-encompassing risk pool. Summing matters up, Lecoeur attacked the 35 Generally, on relations between the two in this battle, see Francois Gresle, "Les travailleurs independants et la protection sociale," Droit social, 4 (April 1983). 36 Lebailmentartisanal, 7,61 (April 1959); 9,79 (February 1961); 9, Si (April 1961); 11,107 (December 1963); 13, 118 (January 1965). 37 The Fonds national de solidarite, first discussed in the late 1950s, was to provide a tax-financed old-age benefit, guaranteeing all the French at least a minimal level of provision. The Laroque report of 1962, Politique de la vieillesse: Rapport de la commission d'etude des problemes de la vieillesse, suggested similar measures, and the government indicated in 1963 that it might fiscalize certain social policy measures. 38 Especially that by Jacques Hebert of the U N R - U D T , JO Doc, 1058, 30 June 1964, discussed below. 39 CAPEB Archives, Issy-les-Moulineaux, Commission administrative confederate, minutes, 10 October 1964.

French Independents

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Comite national and prosperous independents for refusing solidarity among the non-nons. The very essence of social security, he argued, was mutual compensation and redistribution, as realized in the wage earners' scheme where the chief executive paid higher contributions than his janitor for the same benefits in kind. 40 With the conversion of artisans from separatism to solidarity, the latent struggle among the self-employed for redistributive advantage had flared up once again. As the representative of one of the most disfavored groups of non-nons, the CAPEB was among the first to recognize the benefits of a reallocative approach. Artisans had more pronounced interests in a reapportionment of risk and its costs than other independents because they tended to be older and needier. They were, at the same time, more familiar with its virtues, having often belonged to the General Regime as apprentices.41 Although CAPEB leaders personally, as comfortable members of the occupation, would gain least from a solidaristic system, their overriding concerns were still well served.42 Limited to artisans alone, redistribution would be a heavier burden for the well-off among them than if all three groups of non-nons were united in a single risk pool. 43 The artisans' pursuit of solidarity among all non-nons was therefore critically received by their colleagues among the self-employed. What artisans hoped to gain, the CGPME realized all too well, would require higher contributions from other independents.44 Divisions between small independents in search of solidarity and the better-off who resisted was reflected within the governing coalition of Gaullists and Independent Republicans. On the Gaullist side, Labor Minister Gilbert GrandvaFs hopes for a new social policy orientation had been given teeth by Pompidou's fondness for the original idea of universalist social security, extending measures to all.45 For the Grandval camp, only selfish independents with something to lose rejected solidarity. The solution was to force redistribution among all non-nons, attaching their health insurance to the wage earners' General Regime without, however, 40 The way in which the CAPEB's leaders responded to grassroots pressure for a change is clearly evident from the records of the meeting at which the organization's new stance became policy; see CAPEB Archives, Assemblee generale, 8-9 March 1965, minutes, esp. pp. 69-126; Inter—CAPEB: Bulletin deliaison des militants, 14; hebdtimentartisanal, 14,133 (June 1966). 41 he bdtiment artisanal, 17, 165 (September-October 1969). 42 CAPEB Archives, Assemblee generale, 8-9 March 1965, minutes, p. 122, Lecoeur. 43 Le bdtiment artisanal, 13, 118 (January 1965); 13, 121 (April 1965). 44 Les informations confederates, 449 (April 1965), 13-14. 45 L'annee politique, 1962, p. 253. Later ruminations by Pompidou on social policy as a boon for declining independent and white-collar groups are to be found in his he nceud gordien (Paris, 1974), pp. 151, 162-63.

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merging the two systems.46 The opposing position, supported by Finance Minister Giscard d'Estaing and worked out by the technicians of the Rue de Rivoli, reflected the Comite national's proposals for a separatist approach, autonomously organized for each group and providing only minimal coverage.47 Such ministerial opposition was resolved in 1966 when Jean-Marcel Jeanneney assumed the portfolio for Social Affairs and negotiated a compromise. His bill took two decisions. National solidarity, so generously extended to agriculture, was not to play on behalf of even the poorest non-nons.4S The funds necessary for non-nons' health insurance were to come from the self-employed alone. At the same time, the redistribution thus threatened would be restricted. Contributions were to be proportional to income, but would taper quickly at the higher end. Benefits were to be inferior both to those of wage earners and to those received by farmers in their system, subsidized by now to over 70% by the nation.49 Provision was to be limited to only serious risks, while others could be covered by supplementary measures within each non-non category. Liberal professionals, for example, were to pay for the minor risks of only their peers, not for those of all independents. Other means of compensating the less favored were also strictly limited. In the absence of national solidarity, the government was forced back to the parsimonious redistribution acceptable to affluent non-nons and proposed correspondingly restricted arrangements.50 In parliament, the interesting development was the increasing support mustered on the center and right for the sort of reform formerly the province of the left.51 Deploring the government's inadequate and truncated measures, Socialists and Communists were also echoed by others on the opposite side of the Assembly. Spokesmen from the bourgeois parties for the interests of small independents now challenged those within their 46 JO Doc, 1895,3 J u n e 1966, p p . 1216-17; he monde, 7 August 1965; N o t e by G r a n d v a l o n his position, 30 April 1965, Inter-CAPEB, 14. 47 JO Doc, 1895, 3 J u n e 1966, p . 1218. 48 C o n c u r r e n t reforms t o reduce the General R e g i m e ' s deficits a n d force wage earners to a s s u m e m o r e of its financing left t h e g o v e r n m e n t unlikely t o r e s p o n d sympathetically t o calls non-nons. for subsidies o n behalf of 49 As a result, rural artisans, suspended between t w o of social i n s u r a n c e ' s categories a n d savvy e n o u g h t o see w h e r e their best a d v a n t a g e lay, chose m e m b e r s h i p in the agricultural system; see Assemblee n a t i o n a l e , Archives, C o m m i s s i o n des affaires culturelles, familiales et sociales, m i n u t e s , 9 J u n e 1966. 50 Even this degree of solidarity w a s challenged as excessive. Assemblee n a t i o n a l e , Archives, C o m m i s s i o n des affaires culturelles, familiales et sociales, m i n u t e s , 31 M a y 1966. 51 JO Deb, 9 J u n e 1966, p p . 1824-80.

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own camp (represented by the Finance Minister) who advocated a modernizing, technocratic, business-oriented conservatism that did not view with much favor the claims of the declining self-employed for special consideration. Jacques Hebert of the Gaullists personified this new trend, demanding a solidaristic system on behalf of the poorest independents to assure parity and equality among all citizens. Even the eloquent and emotive oratory of this deputy, whose very name evoked a long tradition of advocacy for the downtrodden lower middle classes and suggested a form of modern sansculottism, nevertheless failed to bring down the bill. With some improvements, it cleared the first reading in the small hours of the morning, unchallenged by the abstention of the left.52 The bill's passage determined only the bare skeleton of the non-nons* health insurance, requiring seventeen decrees to finalize the details. These were prepared in a lengthy and unusual process that delayed implementation for two years and gave prosperous independents ample opportunity to leave an imprint on the still soft clay of the law. The result was an elaborate administrative structure that limited contact between the different categories oinon-nons. Delegates appointed on the recommendation of the traditional independents' organizations elected the system's central administrative council, where the CGPME's vice-president, Gustave Deleau, and Millot of the Comite national, both representatives of the self-employed mandarinate, resurfaced as leaders.53 War is Declared Although the prosperous self-employed managed to tailor health insurance to their measure, they were soon challenged by the less fortunate. Many factors combined to spark violent protests from small independents, above all the shopkeepers mobilized by the CIDUNaTI (Comite d'information et de defense - Union nationale des travailleurs independants), whose guiding light was the precociously young cafe owner from La Batie-Montgascon, Gerard Nicoud.54 These groups felt pushed to the wall by fiscal reform, 52 Although, in view of the forthcoming elections, the Socialists considered voting for the bill, with a promise t o improve t h e l a w when in power. See FNSP, G r o u p e parlementaire socialiste, minutes, 21 J u n e 1966. T h e law was that of 12 July 1966. 53 T h e National Fund was the C A N A M : Caisse nationale d'assurance maladie et maternite des travailleurs n o n salaries des professions n o n agricoles. 54 For the background see Francois Gresle, Independants et petits patrons: Perennite et transformations d'une classe sociale (Lille, 1980), vol. 2, pp. 752-801; Andre Bonnet, "Un nouveau groupe de pression: Le CID—UNaTI," Revue politique et parlementaire, 75, 843 (June-July 1973); Georges Lefranc, Les organisations patronales en France (Paris, 1976); and

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especially by the introduction of the VAT, by other onerous tax burdens and by competition from large retailers, able to drive the less efficient to bankruptcy by the thousands.55 Health insurance came only as the proverbial last straw. Where small independents had earlier accepted their more comfortable colleagues' prerogative to speak* for the group as a whole, they were no longer content to watch passively. From the events of 1968 they learned the lesson that the Fifth Republic's closed bureaucratic arenas gave those excluded little choice but to take to the streets.56 Unwilling to concede pride of place in these respects to students and workers, CIDUNaTI activists used every disruptive tactic in the book: besieging social insurance and tax offices, destroying records, organizing contribution strikes.57 As a result, Nicoud spent several months on the run from the authorities, successfully eluding all but selected newspaper correspondents. While health insurance reform detonated the shopkeepers' protest, pensions raised similar problems and responses. The CIDUNaTI was concerned with the same issues that had prompted artisans to reconsider their position on solidaristic social policy. Small independents were being squeezed both by longterm evolution that favored wage-earning sectors and by deliberate government attempts to hasten change. To ensure the redistribution necessary to compensate for their hardships was the CIDUNaTI's goal. The leaders of the traditional independents' organizations had ignored their neediest colleagues when formulating health insurance, thereby forcing the poor to take matters into their own hands.58 The CIDUNaTI misleadingly regarded even Lecoeur and the CAPEB as representative of the self-employed mandarins. In fact, the real difference between the responses of artisans and shopkeepers lay with the varying abilities of the established leaders of these two groups of non-nons to deal with the emerging solidaristic ambitions of their poorest followers. Protests from small artisans were quickly reflected in changed Roger Eatwell, "Poujadism and Neo-Poujadism: From Revolt to Reconciliation," in Philip G. Cerny (ed.), Social Movements and Protest in France (London, 1982). 55 Maurice Roy, Les commercants: Entre la revoke et le modernisation (Paris, 1971), pp. 75-84. See also Jean Cluzel, Les boutiques en colere (n.p., 1975). 56 Gerard Nicoud, Les dernieres liberte's: Menottes aux mains: Les premieres anne'es du CIDUNATI, 1969-1971 (Paris, 1972), p. 52; Suzanne Berger, "Regime and Interest Representation: T h e French Traditional Middle Classes," in Berger (ed.), Organizing Interests in Western Europe: Pluralism, Corporatism and the Transformation of Politics (Cambridge, 1981); Suzanne Berger, " D ' u n e boutique a l'autre: Changes of Organization of the Traditional Middle Classes from the Fourth t o Fifth Republics," Comparative Politics, 10, 1 (October 1977). 57 Details on o n e of the more imaginative shopkeeper protests, the "villes m o r t e s " campaign, are in Dernieres nouvelles d'Alsace, 8 November 1970. 58 Nicoud, Les dernieres liberte's, pp. 26, 82.

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attitudes at the top. The unusually democratic flexibility of the CAPEB helped encourage this happy result.59 The profession's structural peculiarities - its position as an occupation generally among the least favored of the non-non groups - put it as a whole on the potential receiving end of any system of risk redistribution and gave not only poor artisans, but also their more prosperous colleagues a stake in solidarity. Among the industrially and commercially self-employed and the liberal professions, in contrast, the leadership realized all too clearly that a solidaristic system threatened to have them pay for artisans as well as for their own poor. Because the affluent non-nons and their interests still dominated here, small independents in these categories were forced to oppose the institutions that should, in principle, have spoken for them.60 Both shopkeepers and artisans demanded solidarity on behalf of the least favored members of the petty bourgeoisie. They differed in that, while CAPEB favored attaching independents to, perhaps even enrolling them in, the General Regime, the CIDUNaTI shared traditionally stdndisch middleclass fears of overly familiar relations with the dependently employed. Integration, it worried, meant submersion among wage earners. Bereft of employers, independents could not afford the premiums necessary for membership. Finally and most frankly, the organization admitted, because the wages on which workers contributed to social insurance were accurately known to the authorities, inclusion in the General Regime threatened an unwelcome scrutiny of the self-employed's income.61 Instead, CIDUNaTI activists demanded solidarity for the beleaguered self-employed from prospering non-nons and the state. The division of independents into separate and rival regimes for the purposes of social provision it rejected as corporatist nostalgia in favor of a unified scheme that included all self-employed. Its redistributive intentions, needless to say, won the

59 A comparison between the undiluted verbal vitriol with which Nicoud poisoned opponents in writing and speech and Lecoeur's supple response reveals the difference: for Nicoud, the independents' traditional leaders were mandarins, Poujade was a jackass, CANCAVA was GESTAPO, and government policies towards small independents were genocide; see L'objectify 1 (August 1970); Nicoud, Les dernieres libertes, p. 52; and interview with Nicoud, Lui (November 1971), 16. 60 For example, "Nicoud parle!," supplement to Vie des metiers, 286 (September 1970). 61 "Assurance vieillesse: Notre position," attached to a letter from Georges Vignal of the CIDUNaTI to Robert Boulin, Minister of Social Security, 24 November 1971, in the collection of material on the CIDUNaTI gathered at CANAM, Paris, to which the organization's director, Jean Grob, kindly gave access. Even at this point, however, the CIDUNaTI suffered internal disagreement on the issue: at Boulin's 1969 round tables, UNaTI was for integration in the General Regime; see Le monde, 7 August 1969.

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CIDUNaTI no friends among other non-nons.62 Enmities between the poor and the prosperous were also accentuated by CIDUNaTI demands for greater administrative representation, intended to end the dominance of the traditional self-employed leaders. Solidarity among the various groups of independents was, in turn, but one step towards the shopkeepers' longterm goal of fiscalizing minimum levels of social provision. Taxfinancing promised to shift burdens from wage bills, relieving the weight of contributions on the labor-intensive, unmodernized sectors of the French economy for which they spoke.63 In the late 1960s, impoverished French independents arrived at the point that their more statist-oriented Scandinavian colleagues had reached long before. Finally realizing the insufficiency of their traditional pretensions to self-reliance, the lower middle classes now sought aid from the larger community and demanded universal, minimal, oftenflat-ratemeasures of social policy, financed both by taxes and redistributively through contributions paid mostly by others. The next steps were to convince the prosperous self-employed that they, too, stood to gain, and then to overcome workers' hostility to the prospect of solidarity on behalf of independents. The government's response to non-non protest was comparatively swift. Two meetings with independents held in August 1969 by Robert Boulin, Minister of Public Health and Social Security, degenerated into social policy Babels where competing opinions brooked no compromise, leaving the initiative with the government. They did, however, reveal that other self-employed notables had in the meantime undergone the same evolution as Lecoeur and the artisanal leaders. Deleau, the CGPME vice-president and the CANAM'sfirstpresident, had called in March for a health insurance system based on national solidarity. Now, after sustained revolt from the bottom up, the CGPME confirmed its acceptance of a redistributive approach. Occupational self-reliance, the individual group's proud claim to owe nothing to the state, once the battle cry of the French middle classes, had been vanquished. Were solidarity unavoidable, better that it burden all, not just independents.64 62

CANAM, CIDUNaTI to the President and Administrators of the Caisses retraites des commercants, 3 June 1971; Deprez to Vignal with attached minutes of the Rhone administrative council meeting, 30 October 1973, 12 November 1973. 63 C A N A M , "Assurance vieillesse: Notre position"; CIDUNaTI to the Caisses retraites des commercants, 3 June 1971; Nicoud, Les dernieres libertes, pp. 69ft, 75-76, 117-18. 64 Roy, Commercants, pp. 68-70. Generally, see Francois Gresle, "Independance professionnelle et protection sociale: Practiques de classe et fluctuations ideologiques du petit patronat," Revue francaise de sociologies 18, 4 (October-December 1977).

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The law that eventually emerged changed health insurance in accord with the wishes of small independents.65 Coverage was extended, to some degree merely formalizing concessions already forced by CIDUNaTI protest. In order to allow redistribution between the well-off and the worse-off, insurance funds were organized regionally, no longer by occupation. In practice, however, only artisanal, commercial and industrial independents were included in this amalgamation, leaving untouched the liberal professionals, who, as a group, were more secure in their ability to meet risk unaided than their non-non colleagues. Elections replaced appointment to the administrative councils, elevating Nicoud to the presidency of the CANAM for several months.66 To increased contributions were added further sources of extra-occupational financing. The state now paid the premiums of the poorest independents, a measure gratefully accepted by the liberal professions as unburdening them especially.67 Solidarity was accentuated within categories by extending the scale of contributions and between them by requiring the National Fund to assist local insurance carriers in financial distress.68 In the parliamentary debate, the old, shopworn arguments in favor of particularist social policy were gone. All the parties now competed to affirm their support for some variety of universalist measures covering all the French equally, although in certain cases separately.69 In 1972, once again prompted by grassroots protest, the government turned to pensions with a bill that aligned coverage for artisans and commercial and industrial independents with the wage earners' General Regime. Financing was assured by means of contributions as well as funds levied from those businessmen who would still have been self-employed if not transformed into wage earners by grace of the laws on incorporation. State subsidies compensated for demographic imbalances among independents. The various non-non categories were allowed, like wage earners, to establish supplementary arrangements for additional benefits.70 A reformed system of administrative council elections assured small 65

The law of 6 January 1970. ^ Dumont, La securite sociale, p. 123. Louis Allione, L'assurance maladie obligatoire des travailleurs independents (Paris, 1969)* p. 51. 68 JO Doc, 893, 15 November 1969, p. 949; 915, 2.8 November 1969, pp. 1002-06. 69 JO Deb, 2 December 1969, pp. 4460-4507. 70 A measure rejected by the CAPEB because supplementary arrangements limited to artisans threatened to be as precarious as their basic system. The complete collapse of occupational separatism is demonstrated by a comparison with its position t w o decades earlier when artisanal leaders had considered establishing a supplementary scheme. See CAPEB, Commission administrative confederate, minutes, 21-22 July 1972; Le bdtiment artisanal, 7 (December 1953). 67

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independents a fair representation.71 The law aligned the non-nons' pension insurance with the General Regime rather than fusing the two. Liberal professionals opposed any form of integration and shopkeepers still feared inundation in a common system. Artisans' support for full amalgamation was not sufficient and the government feared opposition from wage earners to direct redistribution on behalf of independents. There was no point in mincing words, Boulin warned, integration would be solidarity at the expense of the dependently employed.72 In the parliamentary debate all parties once again sang the praises of solidaristic social security. The Gaullist Claude Peyret went so far as to welcome the coming universalist regime as the fulfillment of Fourier's prophecy of "le garantisme," while other deputies set precedents for a French parliament by invoking foreign examples, Sweden in this case. Socialists were forced to tread gingerly between the calls for solidarity expected of them and the possibility that wage earners be asked to foot the bill for such generous treatment of the self-employed. The height of official solicitude for small independents was expressed the following year when Jean Royer, once the conservative mayor of Tours and now a minister, affixed his signature and name to the Orientation Law for Commerce and Artisanry. The measures granted here went far beyond CIDUNaTI's demands in protecting small independents from competition with modernizing sectors.73 A Distributive Hot Potato: German Artisans between Workers and Employees Thanks to the Nazis, Germany was among the first Continental nations to include the self-employed in social insurance. Point fifteen of the twentyfive that passed for a National Socialist program promised an expansion of statutory provision for old age. Robert Ley, head of the Nazi labor organization, elaborated plans for a Staatsburgerversorgung that would have departed from native traditions by including all citizens in taxfinanced measures.74 The ensuing dispute with the Labor Ministry, 71

T h e law of 3 July 1972; see JO Doc, 2228, 25 April 1972; 2300, 10 M a y 1972. JO Deb, 16 M a y 1972, p p . 1529-32. 73 Berger, "Regime and Interest Representation"; John T. S. Keeler, "Corporatist Decentralization and Commercial Modernization in France: T h e Royer Law's Impact on Shopkeepers, Supermarkets and the State," in Philip G. Cerny and Martin A. Schain (eds.), Socialism, the State and Public Policy in France (New York, 1985). 74 O n Nazi social policy, see Marie-Luise Recker, Nationalsozialistische Sozialpolitik im Zweiten Weltkrieg (Munich, 1985); Wolfgang Scheur, "Entwicklung und Massnahmen der 72

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defender of a more customary approach, produced two moderate reforms intended to deflect Ley's grandiose ambitions. One allowed all Germans, wage earners or not, voluntarily to join either the workers' or the salaried employees' pension insurance. A year later, the Handwerkerversorgungsgesetz of 1938 introduced compulsory pension coverage for artisans.75 Although generally treated like workers when apprentices, artisans, as members of the independent middle classes, were now given a socially more appropriate perch in the white-collar system. While only salaried employees who earned below a certain wage ceiling belonged, all artisans were compulsorily enrolled. In return, however, they were allowed to contract out privately. The immediate result of this reform was to augment the income of the social insurance system that, invested largely in state bonds, stood at the Nazis' disposal, and to provide a windfall for private insurance companies, into whose hands was delivered a captive audience of artisans.76 In the longer term, the law set up a redistributive dilemma that pitted craftsmen against salaried employees. The choice between private and social insurance that the Nazis offered artisans allowed a selection against the white-collar system.77 While salaried employees' contributions had been raised in 1942 to meet the costs of such skewed solidarity, artisans were asked for no equivalent sacrifice.78 After the war, artisans were sozialen Sicherheit in der Zeitdes Nationalsozialismus," diss., Univ. of Cologne, 1967; Karl Teppe, "Zur Sozialpolitik des Dritten Reiches am Beispiel der Sozial versicherung," Archiv fiir Sozialgeschichte, 17 (1977); Heinz Lampert, "Staatliche Sozialpolitik im Dritten Reich," in Karl Dietrich Bracher et al. (eds.), Nationalsozialistische Diktatur, 1933-1945: Eine Bilanz (Diisseldorf, 1983); Riidiger vom Bruch, "WederKommunismus noch Kapitalismus": Burgerliche sozialreform in Deutschland vom Vormdrz bis zur Ara Adenauer (Munich, 1985); and Stephan Leibfried, "Bedarfsprinzip und Existenzminimum unter dem NS-Regime: Zu Aufstieg und Fall der Regelsatze in der Fiirsorge," in Hans-Uwe Otto and Heinz Siinker (eds.), Soziale Arbeit und Faschismus: Volkspflege und Pddagogik im Nationalsozialismus (Bielefeld, 1986). Despite its title, Timothy W. Mason's Sozialpolitik im Dritten Reich: Arbeiterklasse und Volksgemeinschaft (Opladen, 1977) does not concern social policy except in the broadest sense. 75 Thorough, but with a bias from the artisanal point of view, is Walther Heyn, "Der Wandel der Handwerkerversicherung bis zum Gesetz vom 8. September i960: Ein Beitrag zur Versicherungspflicht von Selbstandigen," Zeitschrift fur die gesamte Versicherungswissenschaft, 49,3/4 (i960). See also the relevant sections of Klaus Guderjahn, Die Fragedes sozialen Versicherungsschutzes fur selbstdndig Erwerbstdtige vom Entstehen der deutschen Sozialversicherung bis zur Gegenwart (Bonn-Bad Godesberg, 1971). 76 Arthur Schweitzer, Big Business in the Third Reich (Bloomington, 1964), p. 385. 77 Friedrich-Bernhard Haussmann, Das Handwerk im Haushalt der Sozialversicherung (Gottingen, 1962), pp. 83-92.. 78 "Memorandum zur Begriindung von Anderungen des geltenden Rechts der Handwerkerversicherung," in Zentralamt fiir Arbeit in der britischen Zone, Vorldufiger Referentenentwurf eines Gesetzes uber die Neuordnung der gesetzlichen Rentenversicherung im

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treated variously in the different occupation zones.79 In Berlin and the East, the possibility of contracting out was abolished and all artisans were drawn into the universalist system along with other independents. While the Americans left the 1938 law unchanged, the British temporarily forbade exemptions. More drastic was the effect of the 1948 currency reform, whose conversion rates from the old to the new coin sharply cut the value of the life insurance policies held by artisans who had contracted out.80 Those who remained statutorily insured were, in turn, hit by premium increases. Immediate postwar circumstances only allowed a situation to rot that was already ripe for reform. Resolving the structural problems of artisanal pension insurance took the following fifteen years and gave occasion to spirited disputes. Although many artisans adapted well after the war, as a group they faced widely varying economic circumstances.81 Often mechanized and capital-intensive, with a need to reinvest earnings rather than pay premiums, the most successful enterprises had reason to favor greater freedom of choice in social insurance.82 Their main interest organization, the Zentralverband der Deutschen Handwerk (ZDH), advocated giving artisans a choice between the blue- and white-collar pension systems, tempered by a right to contract out, and wished to treat them like salaried employees by exempting the wealthiest.83 The parties of the center and right tried to hold the political mirror to artisanal wishes in the early 1950s by abolishing the 1938 law's compulsion to insure, but opinion was still too contradictory to permit immediate legislation. During the following years, a rectangular relationship of interests evolved: prosperous artisans sought freedom from the obligation to insure and were supported by some among the bourgeois parties; government reformers hoped to provide for poor independents and were therefore reluctant to exempt the better-off; wage earners wished to avoid redistribution at their expense; Social Democratic politicians and Christian

Vereinigten Wirtschaftsgebiet nebst vorlaufigen Kurzbegriindung und sonstigen Materialen (Lemgo, July 1948), copy in the DGB Archives, Diisseldorf. 79 Walther Heyn, Die Handwerkerversicherung in den westlichen Zonen Deutschlands, 2nd edn (Bremen-Horn, 1949). 80 This disadvantageous situation was improved somewhat by laws in 1952 and 1956 allowing a better conversion rate for private insurance entitlement. 81 Hoffner, Die Handwerkerversicherung pp. 54-61. 82 Giinter Elo, "Die Altersversorgung im selbstandigen Handwerk," diss., Univ. of Freiburg, n.d., pp. 73~7483 Heyn, "Wandel der Handwerkerversicherung," 336-37.

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Democratic trade unionists walked the line between solidaristic measures for the self-employed and the concerns of their primary constituency.84 In specific terms, the issue was whether to isolate artisans as a risk community, laying bare their demographic andfinancialimbalance and calling attention to the redistribution necessary to pay for their benefits. Artisans, on the whole, were pleased to be integrated anonymously among salaried employees. Wage earners, conversely, saw no reason to bear by themselves a burden that they regarded as more rightly the nation's. A bill put forth by the Labor Ministry attempted to strike a balance between artisans and employees. Only by isolating the artisanal risk pool within the white-collar pension insurance scheme, it conceded, could the special rights demanded by the ZDH be granted equitably. On the other hand, the government refused to relieve employees altogether of a responsibility for artisans in need.85 When the trade unions and the wage earners' social insurance carriers bitterly opposed giving artisans the right to contract out, the bill died in committee.86 In the period preceding the 1957 pension reform, the trenches for thefinalbattle were dug deeper. The convincing majority won by employees in 1953 for their refusal to share workers' burdens and for their insistence on the autonomy of the white-collar pension insurance system was followed by demands that artisans be ejected from it.87 In 1956, a CDU bill attempted a compromise, granting the white-collar pension insurance system credits to meet the extra costs of covering artisans and introducing separate book-keeping for them. At the same time, an income limit was to excuse the most prosperous among them from the obligation to insure. Social Democrats, however, were not appeased and complained that artisans were unwilling to bear their own risks. The unions were more insistent, seeking to have them excluded from the wage earners' social insurance altogether. Artisans, in turn, countered that, with redistribution within the occupational group no longer sufficient, broad solidarity was required. The left won a partial victory by blocking the right of affluent artisans to exemption from membership.88 This provisional 84 See, for example, the positions of the C D U , Labor Minister Storch and the Social Democrats during a parliamentary discussion in Bundestag (BT), Stenographische Berichte, 1/199, 19 March 1952, pp. 8527-32. 85 BT, Drucksache 1/3598, 9 July 1952. 86 Deutscher Bundestag, Parlamentsarchiv, Bonn, Ausschuss fur Sozialpolitik, minutes, 1/154, 10 October 1952. 87 Heinz Busch, "Der Gedanke der Altersvorsorge im deutschen Handwerk," diss., Univ. of Cologne, 1959, pp. 6 0 - 6 1 . 88 Deutscher Bundestag, Ausschuss fur Sozialpolitik, minutes, 2 / 1 7 4 , 2 February 1956; BT, Drucksache 2/1479, 21 June 1955; 2/2486, 4 June 1956; Stenographische Berichte, 2/154, 2 7 June 1956, pp. 8388-89.

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solution of leaving artisans with salaried employees while maintaining separate accounts was confirmed when the 1957 pension reform gave craftsmen a separate capital fund within the white-collar system. Following protest, artisans were allowed exemption after fifteen years of membership in a concession that balanced between freeing only the wealthy and requiring all always to insure.89 Although the ZDH approved these compromises, relations between wage earners and artisans remained strained. Not only did the left, the labor movement, Christian Democratic trade unionists and employers by now favor extracting artisans from the salaried employees' pension insurance and giving them their own separate system, several of Adenauer's colleagues, his Labor Minister especially, agreed.90 Storch, the former union leader, was unsympathetic to the artisans' hopes of shifting burdens to wage earners. Plans to abolish their separate capital fund and transfer artisans' membership to the blue-collar system came close, he thought, to a form of expropriation.91 This increasing polarization posed a particularly complicated dilemma for the Christian Democrats. Consensus on the left favored provision for artisans, but not exclusively at the expense of wage earners. The Christian Democrats, in contrast, were split along one axis between representatives of the independent middle classes, organized in the Diskussionskreis Mittelstand, and supporters of wage-earning interests, gathered in the party's Sozialausschiisse.92 Along another, the contradiction within the government between the liberalist conservatism of Finance Minister Ludwig Erhard, who saw no reason for the state to meddle with the independent middle classes, and Adenauer's more paternalist concern for the declining among the self-employed was resolved at the beginning of the third legislative period. The sorry fortunes of many independents required action and in the Chancellor's inaugural address of October 1957 a new concern for their problems was given voice.93 The Labor Ministry was renamed the Ministry for Labor and the Social Order 89

Biisch, "Altersvorsorge," pp. 7 1 - 7 3 ; Heyn, "Wandel der Handwerkerversicherung," 346-56. 90 Sozialer Fortschritty 5, 7/8 (1956), 157. 91 Bundesarchiv, Zwischenarchiv (BA/Zw), St. Augustin, B149/464, note by Ministerialrat Dr. Meier on "Neuregelung der Handwerkerversorgung," 18 February 1957; Regierungsrat Dieter Schewe report Gs-6521-604/57, April 1957; Meier note GS-6521-601/57, 4 July 1957. 92 O n the Sozialausschiisse, see Rolf Ebbinghausen, "Arbeiterinteressen in der CDU? Zur Rolle der Sozialausschiisse," in Jiirgen Dittbergner and R. Ebbinghausen (eds.) Parteiensystem in der Legitimationskrise (Opladen, 1973); and Ferdinand Breidback and Riidiger M a y (eds.), Das soziale Feigenblattf Die Sozialausschiisse in der Union (Diisseldorf, 1975). 93 BT, Stenographische Berichte, 3/3, 29 October 1957, p. 19.

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in recognition that wage earners were not alone in their need for attention, and a new head, Theodor Blank, was installed. In Blank, the rebaptized ministry received a leader able to unite his predecessor's concern for wage earners with a more traditionally conservative view of social policy that rejected whatever sympathies Storch, in Adenauer's suspicions at least, may still have harbored for the postwar reformers' universalist ambitions. Reconciling the liberalism and paternalism that coexisted in the Christian Democratic breast, Blank's proposals took account of the weakened position of once proudly independent classes with full respect for their stdndisch particularities. He wished to prolong the obligation to insure in order to guarantee small craftsmen adequate coverage and was concerned to treat workers and artisans separately. Worse, from the perspective of the better-off among the self-employed, he favored moving artisans out of the wage earners' arrangements and into their own. 94 Defender of a socially particularist approach, Blank was drawn into battle with his party's Mittelstandler, who were by now keenly aware of the disadvantages that independents stood to suffer from risk redistribution limited to a single group. He and the party's social policy experts tried unsuccessfully to negotiate a tactical modus vivendi with the selfemployed.95 Although insisting on the right to exemption after fifteen years, artisans would not - the ministry optimistically miscalculated - be able to prevail against wage earners' interests by removing the separate book-keeping that isolated their deficits within the white-collar pension insurance system and spared salaried employees the cost of underwriting independents' risks.96 Tired of waiting for the Christian Democrats to resolve their internal differences, artisans in the meantime sought new allies. Prevailing on the ever malleable Liberals, they convinced the party to reverse course so that it now supported the CDU's Mittelstandler. Stiffening resistance among the artisans, the FDP bill that resulted from this volte-face was the beginning of the end for the government's hopes of not giving in on all points.97 With Adenauer's support, the Christian Demo94 B A / Z w , B149/464, note by Schewe, GS-6521-139/58,21 January 1958; GS-6521-2345/58,1 December 195S. 95 B A / Z w , B 149/464, note by Schewe, Gs-6521-139/58, 21 January 1958. 96 B A / Z w , B149/464, note by Schewe, GS 11/3-6521-2180/58, 12 N o v e m b e r 195^. 97 T h e bill w a s B T , Drucksache 3 / 6 3 4 , 7 N o v e m b e r 1958. Again, social policy w a s but o n e e x a m p l e of the surprising concessions wrested by otherwise imperiled social groups after the war; see Heinrich August Winkler, "Stabilisierung durch Schrumpfung: D e r gewerbliche Mittelstand in der Bundesrepublik," in Werner C o n z e and M . Rainer Lepsius (eds.), Sozialgeschichte der Bundesrepublik Deutschland (Stuttgart, 1983).

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crats were forced to work out a counterproposal that corresponded closely to the wishes of the ZDH.98 In the parliamentary committee, dispute raged anew. Artisans insisted on being included within the workers' pension insurance system, but with a right to exemption after limited membership. His flank covered by shock troops of numbers and statistics, their spokesman valiantly battled the common opinion that artisans threatened wage earners with disproportional burdens, but went on to undermine his position in summing up. Separatist arrangements had been weakened by demographic evolution, he admitted. Since the ranks of wage earners swelled with occupational migrations, redistribution should play within the whole population, not among artisans alone. Lined up in the opposite trench were wage earners and their institutions of social protection. The spokesman for the salaried employees' pension insurance carrier demonstrated a rather rudimentary understanding of wage earner unity, relieved that artisans preferred membership in the blue-collar system. The DGB, joined by the white-collar unions, rejected any abolition of the separate artisanal capital fund and supported the sort of separatist arrangements that had earlier been the province of the center and right." Some changes followed. The insurance compulsion for artisans was limited to eighteen years in the workers' system. Their contributions were made equal to the average wage earner's and assessed without an individual determination of income, thus reducing the sums collected from the wealthiest artisans. The parliamentary committee agreed that workers should suffer no disadvantage on artisans' behalf, but nevertheless abolished the separate capital fund, although insisting on distinct bookkeeping, the last fragile bulwark against a complete submersion of craftsmen among wage earners.100 During the following months artisans lobbied the government intensively. The issue of separate book-keeping and the general problem of solidarity dominated the bill's second reading. The CDU's Mittelstandler pushed successfully to eliminate distinct accounts, fusing artisans completely with the workers' system. Social Democrats countered in vain with an attempt to shift the burden of artisanal risk from wage earners to the state, predicting that such direct redistribution otherwise threatened to spark class struggle within the social insurance system. The left emphasized class antagonisms and outmoded 98

Heyn, "Wandel der Handwerkerversicherung," 366. Deutscher Bundestag, Ausschuss fur Sozialpolitik, minutes, 3/34, 29 April 1959. 100 g f , Drucksache 3/1379, 29 October 1959.

99

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stdndisch conceptions, Kurt Schmiicker, a future CDU Finance Minister, charged in an eloquent plea for the sort of Einheitsversicherung once opposed by the right. Social distinctions had become more fluid. Since one group profited from another's decline in demographic shifts among occupations, redistribution should take place directly between the unfortunate and the prospering without the state's mediation.101 Despite vehement protests from the left, the bill became law with the backing of the center and right. Mopping Up: Other German Independents Providing for other German independents was a less antagonistic process. After the failure of postwar attempts at an Einheitsversicherung, the self-employed were long left alone. Only in the mid 1950s were Christian Democrats prompted by a fear of losing their political support, as independents declined, to focus social policy attention on them.102 As in France, farmers were the first to suffer demographic and economic misfortune and accordingly the first to merit intervention.103 In the countryside traditional views of a proper relationship between the state and independents, and therefore of social protection, evolved only slowly. Agricultural organizations like the Deutscher Bauernverein, led by wealthy farmers personally uninterested in statutory provision, were at first suspicious of welfare initiatives. But gradually, as comparisons with wage earners' ever improving advantages became starker, opinion changed. Storch, the Free Democrats and the Social Democrats favored a system of agricultural pensions organized within the occupation. The Christian Democrats were also eventually persuaded to agree and a law to this effect was passed shortly after the pension reform in 1957. Although the CDU insisted on purely contributory financing, it soon became apparent that agriculture's economic problems made generous subsidies unavoidable.104 After 1963 the Bauernverein resolved its lingering doubts and came out in 101

BT, Stenographische Berichte, 3/111,29 June i960, pp. 6966-7018; 3/123,1 July i960, pp. 7113-18. 102 BT, StenographischeBerichte> 3/3,29 October 1957, p. 19; TheodorBlank, "Arbeitund Sozialordnung," Sozialer Fortschritt, 7, 1 (January 1958). 103 Excellent accounts are t o be found in Guderjahn, Frage des sozialen Versicherungsschutzes\ and Wilfried Bertram, "Die Alterssicherung der selbstandigen Landwirte unter besonderer Beriicksichtigung des Strukturwandels in der Landwirtschaft der Bundesrepublik Deutschland," diss., Univ. of Cologne, 1970. 104 O n farmers' handsome treatment, see Giinther Schmitt and Harald von Witzke, Zielund Mittelkonflikte sektorspezifischer Systeme sozialer Sicherung (Berlin, 1975), pp. 28—38.

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support of expansive social protection, campaigning eagerly for statefinanced parity with wage earners. After farmers, other hardpressed independents also demanded statutory coverage. With artisans already provisioned, battalions of the footsoldiers who would otherwise have poured their firepower into this campaign had been demobilized before the battle even began. The independents of modest circumstances left behind - especially shopkeepers and other small retailers - took longer, under their own steam and generally deprived of their French colleagues' more extravagant tactics, to achieve their goal. German shopkeepers played a role similar to artisans in France as barometers of the interest developed by impoverished independents in solidarity. The largest group of the self-employed without compulsory protection, shopkeepers sought either voluntary membership in the wage earners' pension insurance schemes or treatment similar to that granted artisans.105 With their unfavorable demographic and economic prospects perfectly obvious by this point, socially separatist welfare was never even a temptation.106 The redistributive advantages of an all-inclusive approach were no longer los^on independents, the most prosperous among them included.107 While the comfortably situated French self-employed at first had redistributive reform forced on them by the less fortunate, many well-off independents in Germany discovered the virtues of a solidaristic approach by themselves. Unlike the self-employed with capital investments, liberal professionals, for example, shared with wage earners a dependence on their labor and, consequently, on means of income maintenance. By wiping out earlier attempts at self-help, the inter- and postwar currency inflations, devaluations and reforms had undermined hopes of sparing their older generation recourse to public assistance in retirement and created the need for intervention. Liberal professionals were also attracted by statutory arrangements, pulled by its strong centripetal force into the orbit of the wage earners' pension insurance.108 Shortly after the war, they had been 105 Guderjahn, Frage des sozialen V ersicherungsschutzes, p p . 2 2 9 - 3 0 . This was the position taken by the Hauptgemeinschaft des Deutschen Einzelhandels (HDE) in 1964. 106 Giinter D a x , "Die Selbstandigen vor der Entscheidung," Die Angestelltenversicherutrg, 1 5 , 4 (April 1968), 121; Giinter D a x "Altersversorgung auch fur den Einzelhandelskaufmann," ID: Informationsdienst der HDE, 10/11 ( O c t o b e r - N o v e m b e r 1967), 135-39; H D E Archives, Cologne, Giinter D a x office, "Ergebnisprotokoll der Sitzung der ad-hoc-Kommission Altersversorgung der Selbstandigen [of the C D U Mittelstandsvereinigung] a m

11.11.1970," Dax. 107

Conversation with Giinter D a x , H D E , Cologne, 24 N o v e m b e r 1983. T h e o Schwerfel, "Probleme der Absplitterung freier Berufe v o n der allgemeinen Versicherungswirtschaft," diss., Univ. of Cologne, 1956, p. 52. 108

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unimpressed by the prospect of having the state cover them for old age.109 Already a year after the successful 1957 pension reform, however, their tune had changed. A majority now wished to join the wage earners' system, many sought some form of statutory arrangement and only a few wished to be spared the government's attentions. 110 Among independents, it was often the prosperous who were especially attracted by statutory measures. Early attempts to create particularist arrangements for lawyers, for example, failed. Proposals for wage earners' pension reform in the mid 1950s, however, with promises of value-secured, national wealth-indexed benefits and state subsidies, opened new vistas before the legal profession. Since lawyers were no longer socially more secure than workers or salaried employees, the Deutscher Anwaltsverein (DAV) now reasoned, liberal professionals were also entitled to aid from the community.111 It was the young among them in particular - often former salaried employees who had had the opportunity to appreciate wage earners' privileges - who undermined any hope of a separatist solution for barristers' pensions.112 Nonetheless, not all liberal professionals agreed with lawyers. Doctors in particular proved stubborn, preferring to continue their own well-functioning autonomous systems of provision. While welcoming the prospect of state subsidies, they saw no reason to merge with other groups. 113 Independents were not alone in their solidaristic disharmonies. The fragmented structure of social insurance left relations between workers and salaried employees vulnerable to similar demographic influences, encouraging tournaments of distributive jousting. The growth of tertiary sectors in the economy benefited white-collared social insurance at the expense of the blue, undermining the strict financial separation of the two wage earners' pension systems.114 A preliminary solution in 1964 ended the compensation that had been paid salaried employees to cover the entitle109 Deutscher Bundestag, Ausschuss fur Sozialpolitik, minutes, 1/8,27 January 1950; 1/9,1 February 1950; BT, Stenographische Berichte, 1/40, 23 February 1950, pp. 1362-65. 110 Dierk Hahn, Die offentlich-rechtliche Alterssicherung der verkammerten freien Berufe (Berlin, 1974), pp. 36-40. 111 Anwaltsblatt, 1 (1957), reprinted in Max Richter (ed.), Die Sozialreform (Bonn, n.d.), H vii 3a; "Der Entwurf eines Rechtanwaltsversicherungsgesetzes," Sozialer Fortschritt, 10, 3 (March 1961), 56 112 Hahn, Alterssicherung, pp. 111-13; Deutscher Bundestag, Ausschuss fur Sozialpolitik, minutes, 3/112, 21 June 1961. 113 "Rentenversicherung fur die freien Berufe," Sozialer Fortschritt, 6, 4 (April 1957), 88; Deutscher Bundestag, Ausschuss fur Sozialpolitik, minutes, 5/43,11 May 1967, Stockhausen. 114 Hans Giinter Hockerts, Sozialpolitische Entscheidungen im Nachkriegsdeutschland (Stuttgart, 1980), pp. 167-68; DGB, Geschdftsberichty 1962—65, pp. 172-75.

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ment earned by former workers joining the salariat and now differentially apportioned state subsidies between the two systems in order to compensate for the demographic handicaps of the blue-collared. Introduced over the objections of employees, such reform gave wage earners the opportunity to demonstrate that independents were not alone in their capacity for selfish bickering.115 It now seemed unfair that only poorer employees be called on to help workers through these sorts of indirect subsidies and the compulsion to insure for pensions was extended to even the best-paid in 1967, eliminating need as a condition of membership. The final regulation of relations between the two systems joined white- and bluecollar pensions by a directfinanciallink, shifting the brunt of redistribution from the state to the internal workings of the social insurance system itself.116 It is necessary to open a parenthesis, as the French say, to mention that analogous measures across the Rhine mediated relations between wage earners there as well. Since the cadres9 supplementary pension scheme rested on their income above a ceiling, high-ranking salaried employees had a successfully pressed interest in limiting the General Regime to low contributions and benefits. As white- and blue-collared fortunes diverged, workers required help. To the extent that the government could not cut into the cadres' scheme from below by raising the General Regime's contribution rates disproportionally to wage increases, salaried employees had to come more directly to the assistance of the supplementary arrangements instituted for workers. Given the cadres' obvious financial and organizational interests in avoiding any form of fusion, they eventually agreed to a compromise, aiding workers by joining the blue-collar systems in addition to their own. 117 Parenthesis closed. 115

Deutscher Bundestag, Ausschuss fur Sozialpolitik, minutes, 4/93, 7 October 1964. Hartmut Hensen, "Zur Geschichte der Rentenfinanzen," in Reinhart Bartholomai et al. (eds.), Sozialpolitik nach 1945: Geschichte und Analysen (Bonn-Bad Godesberg, 1977). Workers tried to force compensation from employees in health insurance as well; see IG Metall, Geschd'ftsbericht, 1977—79, PP« 362.-63; 1980-82, pp. 371-72; IG Metall, Gewerksch aftstag Protokoll, 1977, pp. 428ft; and IG Metall, Entschliessungen, Antrdge, Materialen, 1977, PP- 335-38. 117 This was formalized in the collective agreement of 6 June 1973; see Pierre Begault et al., "Le financement du regime general de securite sociale," Revue francaise des affaires sociales, 30 (July-September 1976), 50-51. 116

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Solidarity by the Back Door Plans for universalist social insurance flourished in Germany during the mid 1960s.118 A government commission reported in 1966 that the impoverishment of many independents undermined hopes for self-help and recommended all-inclusive reform instead.119 Liberals now caught up to Beveridge two decades late with proposals of tax-financed, flat-rate benefits for all. For the Social Democrats, Schellenberg worked out the party's so-called Volksversicherung plan and even within the CDU, where Mittelstandler had long battled liberalists and trade unionists, a position reflecting the success of the lower middle classes began to emerge. Despite what seemed like an opportunity to push for the universalist system their hearts should in theory have been set on, calls for the sort of reform popular on the left after the war now evoked at best an ambiguous response among Social Democrats. In a country where wage earners were well served by contributory, earnings-related arrangements, Scandinavianstyle provision raised the disquieting possibility that other groups be given generous benefits in return for little effort. The unions already complained that the insurance benefits workers had long contributed for were not much higher than the tax-financed public assistance rates.120 If all were now given coverage paid for by the community at large, the left faced the prospect of dissatisfaction among its followers. Within the party, reference to universalist flat-rate, tax-financed social policy had always hung uncomfortably suspended between ritual paeans to the heroic triumph of Social Democracy in Sweden and the suspicion that, at home, similar measures would be a boon more for the independent middle classes than for workers. 121 Such ambiguities were expressed when reform of this ilk was debated in 1959 at Bad Godesberg, during the party congress at which Social Democrats made official their ambition to rally groups other than the industrial working class.122 A Volkspartei, the party leaders now reasoned, required a Volkspension. At the congress, the call for universalist initiatives came from the Frankish hinterland on behalf of 118

For an overview, see Guderjahn, Frage des Versicherungsschutzes, pp. 234-44. Soziale Sicherung in der Bundesrepublik Deutschland: Bericht der SozialenqueteKommission (Stuttgart, n.d.). 120 IG Metall, Geschaftsbericht, 1962-64, pp. 243-44. 121 See, for example, the logic of the argument in SPD, Soztalplan fur Deutschland (Berlin, 1957), PP-109-10. 122 A transformation with a long and arduous history; see Horst Heimann and Thomas Meyer (eds.), Reformsozialismus und Sozialdemokratie: Zur Theoriediskussion des demokratischen Sozialismus in der Weimarer Republik (Berlin, 1982), pt. 4. 119

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small and impoverished independents. Schellenberg, representing the party's social policy experts and their reservations on the tax-financed universalism that had now caught the party executive's fancy, defeated it. His nimble linguistic footwork - enabling the SPD to go on record for a statutory minimum pension, topped by earnings-related benefits, rather than a Volkspension - was continued as Social Democratic social politicians later sought formulations and proposals that would allow the party to attract a new constituency without angering its traditional followers.123 While attractive, the experts agreed, the Volkspension model was impossible in Germany where historical developments had been the reverse of the Swedish. In Scandinavia, universalist, publicly financed, flat-rate measures had come first, leaving room for private arrangements and, later, differentiated contributory social insurance. Now introducing the Scandinavian system to Germany, where wage earners had already assured their own provision, threatened to benefit especially groups other than the dependently employed and would, in fact, represent an expropriation of workers and a subsidy to the middle classes.124 With their 1965 Volksversicherung plan the Social Democrats hedged their bets, concealing doubts over social policy that aided independents at the expense of wage earners behind a veneer of solidaristic terminology.125 All Germans were to be included in social insurance, but not together. A curious linguistic ambiguity provided a socially specific Volksversicherung each for the Volk who were salaried employees, for workers, for miners and finally for independents. These last, in turn, were special folks. Membership for them was voluntary, the administration and financing of their system was autonomous, and they were given state subsidies comparable to those of wage earners. Provision for artisans and farmers was left untouched. Wage earners' benefits were bottomed out by a lowest rung, below which they would not fall. Thus, behind a sleek modern facade, lay little that was new in the Social Democrats' plan. Minimum rates, abolished in 1957, were reintroduced for workers and salaried employees, while independents could protect themselves with the aid of public

123

SPD, Parteitag Protokoll, 1959, pp. 2 5 0 - 5 3 , 594-95. AdsD, 01988, Sozialpolitischer Ausschuss, minutes, 25/26 March i 9 6 0 ; 01989, minutes, 26 M a y i960; SPD, Parteitag Protokoll, 1964, pp. 141, 521-22; Alexander Riistow et al., Das Problem der Rentenrefo rw,AktionsgemeinschartsozialeMarktwirtschart,Tagungsprotokoll 6, 26 June 1956 (Ludwigsburg, 1956), pp. 101-02. 125 T h e plan is in Richter, Die Sozialreform, G II 16. See also Reinhart Bartholomai, "Der Volksversicherungsplan der SPD," in Bartholomai, Sozialpolitik nach 194s, pp. i6iff. 124

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subsidies whose value they would have to compare to the tax deductability of private insurance premiums. The impetus to expand provision to independents abated after the elections in 1966, which produced the Great Coalition of Social and Christian Democrats. Although claiming to support an opening of the wage earners' social insurance system on behalf of the self-employed, the Labor Minister took no initiative. The fundamental division of opinion still pitted wage earners defending acquired rights against independents staking a claim to redistributive aid.126 For the moment, expansionary ambitions were stymied by the financial problems of the pension insurance systems and by what seemed a renewed Social Democratic commitment to workers' interests.127 Universalist initiatives finally bore fruit, however, during the following legislative period in a series of measures that mirrored the 1957 pension reform. This time, the political initiative had been reversed. Social Democrats ruled in coalition with the Liberals while the opposition Christian Democrats forced their hand with proposals very similar to the government's. The Pension Insurance Reform Law of 16 October 1972 brought together three measures. Thefirsttwo met long-standing union demands, sweetening the redistributive medicine wage earners were being asked to swallow: a flexible retirement age and minimum benefits for longterm contributors with abnormally low incomes.128 The last contradicted their interests: a voluntary, temporary opening of the wage earners' pension insurance schemes to other classes as well.129 With these measures, Social Democrats had abandoned the hopes of separate arrangements for independents expressed in their Volksversicherung plan. In large part, their reversal reflected the dimensions of the problem. Two-thirds of the self-employed were already covered by pension insurance. Charmed by the attractions of the wage earners' systems, they were increasingly taking advantage of claims to continued membership earned as apprentices or while otherwise dependently employed. Because few were completely untouched by social insurance, it seemed preferable to include the 126 Deutscher Bundestag, Ausschuss fiir Sozialpolitik, minutes, 5/37,8 March 1967; 5/38,9 March 1967; 5/43, 11 M a y 1967. 127 For example, SPD, Farteitag Protokoll, 1968, p. 402. 128 Deutscher Bundestag, Ausschuss fiir Arbeit und Sozialordnung, minutes, 6/80, 17 January 1972. 129 For a g o o d overview, see Dieter Schewe, "Ursprung und Entstehung des Rentenreformgesetzes," Bundesarbeitsblatt, 24, 3/4 (March-April 1973); and Dieter Schewe, " V o n der ersten zur zweiten Rentenreform, 1957-1976," in Bartholomai, Sozialpolitik nach 1945.

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remaining independents along with wage earners rather than create yet another separatist scheme.130 The unions, for their part, did not hold their peace at this shotgun marriage of independents to wage earners. The self-employed should be protected, they agreed, but matters ought to be arranged through a separate system that made it clear who paid for their benefits. The state was welcome to underwrite the disproportional costs of covering independents' risks, but not at the expense of wage earners. Including the self-employed would work well, the DGB leader Gerd Muhr concluded, if Germany had had a tax-financed Volksversicherung. But it was unfair to introduce universal noncontributory benefits for newcomers so long as the old system of financing was kept for wage earners.131 When the details of the law were debated, wage earners' fears that the costs of redistributive reform were to be debited against their account turned out to have been justified. The right wished to treat independents much like wage earners, requiring that they join the pension insurance system permanently or not at all. The Social Democrats, in contrast, were less restrictive, allowing them voluntary membership with a choice of when, how long and for what amount to sign up. The CDU's approach was a compromise, with Mittelstandler making significant concessions to trade unionists.132 Voluntary membership, on the other hand, the Social Democratic position that had been adopted with an eye to their Liberal coalition partners, awoke fears among the unions of a selection against the fund.133 On the strength of the slight majority won in the interim by the Christian Democrats, both forms of membership were allowed in the end. Government and opposition also differed on how generous an offer to make independents. The CDU, the party most directly responsible for keeping the self-employed out of pensions in 1957, against the wishes of the left (but 130

For numbers, see BT, Drucksache 6/2916. Deutscher Bundestag, Ausschuss fur Arbeit und Sozialordnung, minutes, 6/83, 2 0 January 1972; Gerd Muhr, "Leise durch die Hintertiir," Welt der Arbeit, 12 February 1971; Hans Katzbach, "Die Angestelltenversicherung ist keihe Volksversicherung!" Die Angestelltenversicherungy 15, 2 (February 1968), 4 1 - 4 2 . 132 T h u s the C D U Mittelstandler had thought they could requisition the contributions paid by the self-employed as wage earners before becoming independent. This proposal barely got beyond the party's Mittelstand circles, killed t o help disarm trade union criticism of independents' deficits by renouncing claims t o these contributions for the benefit of the risk community as a whole. See H D E Archives, Ad-hoc {Commission "Offnung der Rentenversicherung fur Selbstandige" of the C D U / C S U Mittelstandsvereinigung, minutes, 21 January 1971, 9 February 1971; Der Mittelstandsbrief (January 1971), 5. 133 Deutscher Bundestag, Ausschuss fur Arbeit und Sozialordnung, minutes, 6/83, 2 0 January 1972, Muhr, Schupeta. 131

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with the unions' blessing), now atoned by welcoming them back in style.134 Independents who could afford it were allowed to pay retroactive contributions back to 1956 at the old premium rates valid for the years covered. The Social Democrats countered ambiguously.135 Although the Labor Ministry's original draft had extended a similarly lavish offer, the final bill specifically allowed retroactive payments only at the currently valid rates lest the self-employed otherwise be unfairly advantaged. In committee, however, the generosity of the CDU bid proved to be politically irresistible.136 Retroactive contributions were an offer whose attractions were not lost on affluent independents. Lawyers, for example, were quick to exploit its possibilities. Because payments were counted at the value of the year for which they were paid, the legal profession was advised, independents could earn entitlement at the old rates even though premium levels had since quadrupled. 137 Wage earners, on the contrary, were galled by such concessions. The unions complained that, while few self-employed had joined compulsorily, many paid retroactive contributions, undermining solidarity by reaping only advantages from the system. Social insurance, they warned, was not a cow grazing in heaven while milked on earth.138 Nonetheless, despite such infelicities of implementation, the law was passed unanimously after an unusually shrill round of political bickering, played out before the television cameras recently installed in parliament for the coming elections. Thanks to the desertion of a few coalition deputies, the Christian Democratic opposition was able to reintroduce and pass most of the changes rejected in committee, leaving an imprint on the law comparable to that of the governing parties. 134 For the DGB, see Deutscher Bundestag, Ausschuss fur Sozialpolitik, minutes, 2/93, 5 September 1956, Lepinski. 135 BT, Stenographische Berichte, 6/139, 1 October 1971, p. 8052. 136 Deutscher Bundestag, Ausschuss fiir Arbeit und Sozialordnung, minutes , 6/83, 20 January 1972, Wassmann; BT, zu Drucksache 6/3767. The government bill is BT, Drucksache 6/2916, the C D U bill, 6/2153. 137 Under certain circumstances, lawyers able to afford 45,000 D M in back contributions would recoup their investment in under four years, while the same benefits arranged privately would cost well over thrice this amount; see Jiirgen R. Koch, "Die Alters- und Hinterbliebenenversorgung des Rechtsanwalts nach einem Jahr Erfahrung mit dem Rentenreformgesetz," speech held at the Hauptversammlung der Bundesrechtsanwaltskammer, 27 October 1973, printed copy at BRAK. "8 DGB, Geschdftsbericht, 1972-74, p. 47; DGB, Bundeskongress, Protokoll, 1975, pp. 57-58.

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Neo-Universalism Triumphant in France The centripetal attractions of the German wage earners' pension insurance schemes gave many independents there an interest in joining them. In France, on the other hand, the sharper fragmentation of the social policy system obliged reformers seeking an improvement of welfare balkanization to knit together the existing patchwork of provision in response to the varying fortunes of different groups. Though it was the most important institution, the wage earners' General Regime was still only a primus inter pares with which the non-nons, even when needy, refused fusion. The compensatory financial links established piecemeal (between the General Regime and the deficient special schemes for various wage earners, among the different non-nons3 systems, and between wage earners and farmers) to redistribute social costs were regularized and extended and the foundations of a universalist system were laid in the early 1970s. In distinction to the postwar era, solidaristic reform was now inaugurated by the center and right, and resisted by the left. A bill introduced in October 1974 envisaged family allowances and provision for health, maternity, and old age common to all the French, realized by gradually harmonizing the existing systems of social insurance.139 Because the various separatist schemes refused to be welded together, but also for a number of technical reasons, the first step towards a universalist system allowed them to remain autonomous while redistributing costs among each other.140 Two levels of compensation were planned.141 Among wage earners, whose income was known with accuracy, the different social insurance, schemes were to compensate each other, taking into account not only demographic imbalances and disparities in risk incidence, but also variations in their members' ability to contribute. Not only were mechanics to pay for miners, but the prosperous were to help the destitute. For independents, in contrast, few precise figures on income and contributory ability were available. Compensation between their schemes and those of wage earners was therefore to be based only on demographic differences, leaving relatively untouched the affluent 139 JO Doc, 1177, 2 October 1974. For a lucid overview, see Michel Chabanon et al., "L'harmonisation des regimes francais de securite sociale: Application de la loi du 24 decembre 1974," in Revue francaise des affaires sociales, 30 (July—September 1976). 140 JO Doc, 1227, 10 October 1974. 141 Jean-Francois Chadelat, "La compensation," Droit social, 9/10 (September-October 1978).

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of categories in overall decline.142 The crux of the matter was the redistribution proposed. The government used the General Regime to provide, or at least to channel, most of the funds reapportioned to independents because demographic shifts from the self-employed to the wage-earning sectors were working in its favor.143 To pay for such interoccupational transfers, the bill earmarked the income from an alcohol tax, but nevertheless threatened direct redistribution from wage earners by not guaranteeing that the sums raised in this manner would in fact suffice. Like Bismarck's legislation a century earlier, welfare was impolitically financed by the bad habits of the protected.144 The left reacted with suspicion to these proposals. Redistribution through the General Regime, it feared, was an attempt to shift burdens onto wage earners. While accepting a certain responsibility to compensate for the demographic imbalances of independents, wage earners nevertheless felt little moved by altruism to the extent that the disproportional expenses of covering the non-nons' risks were not the result of economic pressure alone. Why should wage earners underwrite the extra cost of pensioning the self-employed, who tended to live longer than workers? Why help meet their expenses when independents paid lower contributions? Redistribution among the various socially particularist insurance regimes, workers argued, should not precede their harmonization and this, in turn, presupposed ascertaining the incomes of the self-employed as accurately as those of wage earners and setting their premiums at corresponding levels. As in Germany, representatives of a French working class already endowed with contributory social insurance also shunned proposals for basic or flat-rate, universalist, publicly financed measures.145 Many of the government's supporters were equally unhappy and concessions were eventually wrested from Labor Minister Michel Durafour. Among the most important was the promise that the redistributive burden 142 T h e effect for health insurance was to transfer funds from both the wage earners' and non-nons' systems to agriculture's. For pensions, all independents' arrangements, excepting the liberal professionals', received money from wage earners. See Ministere des affaires sociales et de la solidarite nationale, Livre blanc sur la protection sociale (Paris, 1983), pp.66-6S. 143 It was also argued that channeling state subsidies through the General Regime w o u l d please the traditional middle classes by removing the stigma that tainted monies received directly from the state; see JO Deb, 15 October 1974, p. 5062. 144 T h e alcohol t a x was severely criticized in committee, but adopted nonetheless; see Assemblee nationale, Archives, Commission des affaires culturelles, familiales et sociales, minutes, 8 October 1974. 145 JO Deb, 15 October 1974, pp. 5 0 4 8 - 6 4 , Gau, Leenhardt, Andrieux. For the orthodox PCF view, see Jean-Louis Archail, "Les projets du gouvernement contre la securite sociale et les salaries," Economie et politique, 232 (November 1973), 5 2 - 5 3 .

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imposed on the General Regime would not, for the time being, exceed the funds allotted it for this purpose. Opposed by the left, the bill became law with the support of the center and right. Two further measures on generalizing social security were comparatively tame. 146 Mopping-up operations, they extended coverage to the last few percent of the French not already provisioned - a motley assortment of private detectives, dowsers, fortune tellers, prostitutes, freelance teachers, clochards and the porters of Les Halles. The center and right welcomed this replacement of charity by solidarity that spared the poor and marginal of the traditional middle classes the shame of public assistance, integrating them into the framework of social insurance.147 Wage earners once again resisted, loath to bear the brunt of expenses and unpersuaded by the government's promise of increased state-financing to alleviate the responsibilities of national solidarity. Reform, they feared, threatened to degrade social insurance to a basic system with minimal benefits, leaving the field open for occupational schemes and private insurance companies in search of profit. Where the 1945 initiatives had attempted to unify social provision at the highest common denominator, these aimed at the lowest.148 As solutions to the problem of distributing social burdens go, the idea of separatist solidarity was not bad. But- like Saki's cooks - as such solutions go, it went. A mere two decades passed between the apex of the socially particularist approach and its downfall. In 1945, workers expected to gain from a common risk pool while affluent independents, fearing that they stood to lose, blocked reform. The qualities wage earning, impoverished and risk-prone may have coincided at the dawn of social insurance legislation on the Continent and even still at the end of the Second World War, but there was no necessary connection between them. In the 1960s, with other groups weakened and unable to meet risk unaided, these characteristics were disassociated as the identity of those in need changed.149 The equilibrium achieved in postwar France had traded social protec146

147 Laws of 4 July 1975 and 2 January 1978. JO Deb, 29 April 1975, p. 2207. JO Deb, 15 October 1974, p. 5057; 16 October 1974, p. 5122; 29 April 1975, p. 2207; 6 December 1977, pp. 8315-17. 149 Jean-Jacques Dupeyroux, Evolution et tendances des systemes de securite sociale des pays membres des communautes europeennes et de la Grande-Bretagne (Luxemburg, 1966), p. 59; Jean-Jacques Dupeyroux, "L'evolution des systemes et la theorie generale de la securite sociale," Droit social, 28, 2 (February 1966). 148

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tion for the self-employed in return for the promise of each scheme's autonomy and the right of the most influential members to determine its character. It was a fragile trade-off, soon disrupted by economic and demographic changes that ravaged the position of the modest middle-class independent who had long been a hallmark of French society. Migrations to dependent employment left the non-nons' particularist regimes with ever more unfavorable actuarial perspectives. Sharpened antagonisms within each marred relations between the successfully adapting and their disinherited colleagues. Increasing impoverishment and social differentiation, both within each category and between them, necessitated efforts of redistribution that mushroomed beyond what the prospering selfemployed were willing and able to shoulder alone. As in 1945, national solidarity, a sharing of burdens among all, was the solution in theory, but this time the new perspective brought to bear by affluent independents made it also an attainable reality. Because important and powerful elites among the self-employed now also stood to profit from redistributive social policy, shifting their burdens to wage earners and society as a whole, solidarity was possible. German developments were similar, although spared the sharpness of Gallic confrontations. The dominating position of the wage earners' systems of pension insurance made integrating the self-employed a more obviously sensible solution than demographically imperiled autonomous arrangements. With few exceptions, a separatist approach never tempted German independents. The modest scope of the numbers involved made all-inclusive reform at the expense of wage earners a solution the labor movement might lament, but could not successfully resist. The universalist solution in France provoked greater controversy. The size of the problem, difficult questions of equitable financing and lingering memories of bitter postwar confrontations made universalism here an issue that now had to be forced through against the wishes of wage earners and their representatives. Yet, because declining independents were still a social group with political and electoral importance, their pursuit of redistributive reform commanded attention across the political spectrum in both countries. Not even the left could afford to alienate the self-employed by defending wage earners' concerns unconditionally. The newfound interest among the center and right in a solidaristic approach, the left's inability to resist such initiatives wholly, eventually combined to allow the fulfillment, however backhandedly, of the solidaristic vision first heralded during the Beveridge era.

Conclusion: The Social Bases of Solidaristic Reform

Social interpretations of European history have taken a beating over the last decade. The French Revolution in particular has been the scene of a historiographical battle over the usefulness of accounts that tie ideology and political aim to particular classes, as though they grow necessarily from such social soil.1 Reactionary aristocrats, rising bourgeois, incipiently proletarian sansculottes, all have been driven from the stage as historical actors. Part of the same class-based reading of modern European history, the social interpretation of the welfare state must also answer for similar methodological shortcomings. Observers commonly draw a direct link between workers, their disadvantaged position in the social hierarchy and their interest in solidaristic welfare policy. Redistribution was a demand made from the bottom up. Those who especially suffered risk and misfortune were the most obvious forces behind ambitions for solidaristic reform. The industrial proletariat was this group. Such logic, underpinning the social interpretation, rests on an elision between two sorts of groups: social class and risk category. Redistributive winners naturally favor solidarity, a helping hand from the fortunate; losers, conversely, resist. Whether these categories, determined by social insurance's actuarial zero-sum calculus of risk redistribution, always intersect consistently with particular social classes, as framed by quite different and vastly more nebulous factors, is another question. At particular times in certain countries, workers were especially attracted by redistributive social policy. But, as a class, they have not always coincided uniformly with categories of high risk and low fortune to maintain their 1 Conveniently summarized in William Doyle, Origins of the French Revolution, 2nd edn (Oxford, 1988) and the introduction to Lynn Hunt, Politics, Culture and Class in the French Revolution (Berkeley, 1984). More generally, but exaggeratedly, see William M. Reddy, Money and Liberty in Europe: A Critique of Historical Understanding (Cambridge, 1987), ch. 1. For an overview of another field where similar methodological revision is at work, see Baldwin, "Social Interpretations of Nazism: Renewing a Tradition," Journal of Contemporary History, 25, 1 (January 1990).

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interest unequivocally. In nineteenth-century Scandinavia they could not have been the ones whom social policy concerned. On the Continent in the late twentieth century, they were outflanked in terms of poverty and risk by members of the formerly independent middle classes, who now became that group most covetous of social policy bought at others' expense. Nor have workers always or even largely been those who gained most from the welfare system. If the inherited laborist social interpretation has shortcomings, however, the alternatives offered so far serve better as criticisms than replacements. At the most general level - analyzing industrialization or political mobilization - they fail to explain variations between countries. Concerned with more proximate causes, they contribute little to a comparative approach. Even when concentrating on so important a factor as state structures, they focus on possibly necessary but scarcely sufficient reasons for differences between nations. Above all, postsocial interpretations forfeit the unparalleled power of their predecessors to explain the causes of change - the socio-economic development to which welfare policy responds. Yet, to criticize the social interpretation is not necessarily to abandon a social interpretation. The account here has attempted to address certain weaknesses of such an approach while pursuing its strengths. It has tried to elaborate and develop the logic inherent, but too narrowly applied, in the laborist approach. It has sought to develop a social explanation of the welfare state that is applicable to a broad variety of national experiences, arguing that the welfare state was shaped by an interplay among the interests of many different groups whose concerns cannot invariably be fitted into the binary logic of the laborist interpretation: working-class pressure confronting middle-class resistance. Three predominant factors in the fluctuating fortunes of solidaristic welfare policy have been identified. (1) First, and most obviously, the concerns of particular social groups did determine social policy in an immediate sense. Dominant interests were reflected in the nature of the welfare systems implemented. Despite anachronistic readings of the solidaristic approach taken to social insurance in Scandinavia already during the nineteenth century, neither the working class nor the left was here the motor of reform. The unique features of the Nordic welfare states were determined by the interests of the politically emergent agrarian middle classes neither to be excluded from the benefits of social policy, nor to bear more of the costs than could be displaced to their urban opponents. In a similar way, solidaristic measures in Britain and Scandinavia after the war reflected not only the

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interests of the poor, but equally so the middle classes' desire to be favored by statutory generosity. On the Continent, in contrast, legislation did aim to benefit the unfortunate at the expense of the well-off, but precisely for this reason it failed as the bourgeoisie mobilized to protect itself against the reformers' redistributive predations. With no immediate interests in a reallocation of risk, the self-reliant here still sought to leave each social group to its own devices. Later, in the 1960s and 1970s, however, the bourgeoisie was prompted by demographic and economic evolution to develop solidaristic interests and accordingly changed its stance in favor of a redistributive approach. Class interests did determine the outcome of battles over welfare policy, but these varied. The laborist social interpretation suggests a particular and static connection between one class and redistributive reform that is not borne out with much consistency. Those with most to gain from solidaristic legislation have differed both between nations at any given moment and within each over time. Two further factors make the identification of any particular class with redistributive social policy even less convincing. First, the necessary developments following from initial choices that restricted later reformers' freedom of movement. Second, the battles between shifting constellations of interests that determined the fate of solidaristic reform - an element of social logic. (2) Once made, choices in social policy exerted a determining influence on the course of events later possible. Decisions taken easily in certain circumstances eliminated later disputes. After the implementation of universalist systems that granted the poor of all classes tax-financed benefits already in the nineteenth century, subsequent changes in Scandinavia necessarily differed from developments on the Continent, where contributory social insurance limited to wage earners had come first. Entitlement already earned by French and German workers prevented these nations from imitating the flat-rate, tax-financed egalitarianism of Anglo-Scandinavian developments during the Beveridge era. Only later, in the 1960s and 1970s, when the self-employed recognized their interest here, was reform along these lines possible. Neo-universalist legislation on the Continent was eventually necessitated by the choice made after the war in favor of socially fragmented arrangements that tied together for the sake of risk redistribution both the rich and poor of a single group. Separatism had been the demand of affluent independents and white-collar wage earners who refused to share burdens with workers. Once the self-employed began to decline, however, and wage earners, as a group, to flourish, well-off

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independents recognized the advantages of immersion in a broader risk pool and reached to grasp the helping hand of solidarity that they had earlier spurned. Conversely, the flat-rate approach to social insurance that had characterized early measures in Britain and Scandinavia later required a painful reorientation towards earnings-related arrangements of a Bismarckian bent as the inadequacy of state intervention limited to a minimum became increasingly apparent. One consequence of this evolutionary logic was that the changes which determined interests in or against solidaristic social policy reform were as often developments in the welfare system as in society at large. A triangular relationship evolved between social insurance, society and class. Only after social and demographic (or in Titmuss's case, foreign policy) developments revealed to the bourgeoisie its potential need for redistribution did it formulate an interest in solidarity. But by themselves, such changes were insufficient. Not until also the workings of the social insurance system reinforced the middle classes' potentially redistributive interests were solidaristic initiatives possible. Universalist reform in Britain and Scandinavia after the war was prompted not just by widespread feelings of vulnerability, but more specifically and prosaically by the threat means tests posed to middle-class efforts at self-help. The desire among French and German independents to share their burdens with workers in the 1960s was sparked not only by economic decline, but more concretely by the socially separatist formulation of postwar reforms that had locked together for the purpose of redistributing misfortune all from the same occupational category, thereby sending the fortunate, who would otherwise have resisted solidarity, in search of ways to spread costs beyond their own shallow risk pool. (3) Finally, and most importantly, there was an element of social logic. While the laborist interpretation mistakenly links one specific class with solidaristic welfare, it correctly emphasizes the search by the needy and disadvantaged for compensation from the better-off in the redistributive logic that underlies the association of particular groups with reform. Pressure from below was important, but the classes at the bottom varied: workers in Britain and Germany during the late nineteenth century, peasants, smallholders and agricultural laborers in Scandinavia. Because social insurance redistributes primarily in terms of risk categories, only indirectly in those of class as framed outside the actuary's tables, the specific class identity of redistributive winners and losers has differed between nations and over time. Socially speaking, risk categories have been largely indeterminate in anything but a limited historical context.

292.

Conclusion

But even a social interpretation modified so as to take account of the changing identity of those with immediate interests in redistribution that were born simply of misfortune would be inadequate. Pressure from below was by itself not sufficient to achieve solidaristic reform. The left and the labor movement were unable to win it on the Continent after the war against resistance from the right, independents and salaried employees. The triumph of solidaristic measures in Britain and Scandinavia, supposedly the classic example of change from the bottom up, was in fact equally a victory for the middle classes. Not until otherwise privileged groups discovered that they shared a common interest in reallocating risk with the disadvantaged was a real redistribution of burdens possible. This happened at least twice during the development of the European welfare state. Although the historian is naturally cautious in drawing extravagant comparisons between places and times far removed, the similarities here are notable. In nineteenth-century Scandinavia, agrarian elites wished to improve the lot of their workforce, whether laborers or cottagers, while, at the same time, themselves seeking to be included under the state's welfare wing. Their solution (all-inclusive, state-financed measures) shifted the costs of such reform to the urban, bureaucratic and mercantile classes, constituting but part of the larger political victory farmers won at the turn of the century. Solidaristic legislation that helped the needy was born of a battle that also displaced burdens from one set of elites to another. Solidaristic and genuinely redistributive reform was also implemented on the Continent three-quarters of a century later. The socially separatist solution achieved here after the war had quarantined each group within its own arrangements, unaided (in the case of the disadvantaged) or unburdened (in that of the favored) by redistribution among all. As economic developments wrought havoc with the social definitions that had seemed important then, weighing heavily on the formerly self-reliant, favoring the dependently employed, the configuration of interests behind the postwar separatist approach dissolved and recrystallized. As prospering independents discovered their stake in shifting the costs of the neediest selfemployed to the community as a whole, previous opponents became solidarity's most eager supporters, powerful enough to turn an ideal into reality. Wage earners, in turn, though formerly the solidaristic class, now acted in a miserly way towards those who had earlier spurned them. In both these cases, the unfortunate won redistributive reform only because politically decisive groups of elites also stood to gain.

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Solidarity expressed in the terms of social insurance drew upon motives, causes and concerns that potentially affected all groups. The logic of redistributive interest prompted the demographically and economically disfavored to apply for membership in a broad community of risk. Those threatened with loss, on the other hand, had the power to blackball the unfortunate, as on the Continent in 1945, or to tailor solidarity after their own design, as in postwar Britain and Scandinavia. Only when power and interest coincided, as some among the favored recognized their advantage, was significantly redistributive reform a practical possibility. This new solidaristic vision - justice formulated in terms of need, yesterday's charity become today's equity - was not the result of a broad, underlying social change, the manifestation in welfare policy of the rise of new classes whose interests as the disadvantaged and downtrodden spoke for redistribution. Nor was it the fruit of an enlightened Marshallian realization among the middle classes that all mortals ultimately share common concerns. Rather, solidaristic reform was the outcome of narrowly based battles between antagonistic interests, a change occasionally able to clothe itself in the vestments of high principle and lofty ideals, yet undisguisably the child of factional conflict and horsetrading. It succeeded only when sufficiently powerful elements within the bourgeoisie also stood to profit from measures that may have helped the poor, only when a coalition of solidaristic interests that was strong and motivated enough to shift burdens to other groups was negotiated in social insurance's redistributive calculus. Like any other social change, solidaristic reform was the outcome of a haggle. Because the welfare state has been founded on such ambiguous motives - on a shared interest between the uniformly needy and those who, except for certain risks, were otherwise among the fortunate - examinations that focus either on what elites won over the long term by making immediate sacrifices in the shape of social policy or on the advantages wrested in certain circumstances by the unfortunate are both unsatisfactory. To understand the development of the welfare state, an analysis is required of the role played by the middle classes, with their varying and internally divergent fortunes, prospects and therefore interests. Redistribution is ultimately a zero-sum exercise. Economic growth, an expansion of the pie, has dulled the edge of disputes over reapportionment. Yet, to judge from the debates consistently sparked by social insurance reform over the course of a century, no contestant ever lost sight of the narrowly redistributive aspects of spreading risk. Solidarity in the real

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world, after the veil of ignorance has been lifted, shifts burdens between identifiable groups of the disfavored and the fortunate. As long as social class and risk category coincided consistently to benefit some and disadvantage others, solidarity was unlikely. When power, fortune and low risk were all attributes of the same group, those so blessed had little interest in solidaristic measures and were able to avoid them. In such circumstances, when the favored and fortunate faced the poor and risk-prone across the gulf of social distinction, charity, but not solidarity was possible. In the absence of an outside force, like the state, able to allocate according to criteria other than political muscle, only two kinds of explanations can account for whatever redistribution did take place. Despite immediate reasons to avoid it, the favored may nonetheless have accepted some redistribution either (i) because prompted by motives other than the most narrow-mindedly selfish (whether the longterm gains of continued privilege or the satisfaction of humanitarian concern) or (2) because under certain circumstances the disfavored won the power to compel them. The first possibility cannot, in the absence of an irrational and improbable wave of elite beneficence, explain redistribution beyond a certain minimum - what is needed to preserve the status quo or maximize total utility. The second alternative could, in theory, account for a real reapportionment of burdens, but raises new questions. Given a complete revolution, the disfavored might restructure the hierarchy of allocation, both primary and secondary. Attention in this case would turn to the major change embodied in the new structure of reward, of which social policy reform would be but one element. Put even more consistently, given broad and radical change in the primary distribution, social policy would now need to serve only less pressing redistributive functions. However, precisely because solidaristic welfare, even where most successful, has not been part of such thoroughgoing change, this caliber of explanation faces difficulties. Either redistributive social policy reform is evidence of a significant shift of power from favored to disadvantaged (the laborist, Social Democratic view), or it is part of a sophisticated Bonapartist ploy (the orthodox Marxist approach), the concession that allows elites to maintain their position. In the first case, cause and effect have been reversed. Radical change does not precede and thereby allow solidaristic social policy; welfare reform is a constituent element of this significant change. The problem, then, in the absence of any larger revolution to which social policy reform belongs, is how to defend the laborist view

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against the Marxist version of Bonapartism. Without the revolution, how do we know that even generous social policy is not just the price of stability and order? How plausible is the conclusion that, without upheaval, the favored classes only reacted to pressure from below, without themselves leaving a mark on reform? These two explanations (the Marxist/Bonapartist and the Social Democratic/laborist - the welfare state as a manipulation of, or as a real victory for, the oppressed) are, at their most extreme, mutually contradictory. They cannot be reconciled except by qualifications that weaken their force: reform may uphold the status quo, yet also help the disfavored; elites may sometimes object to reform because they are unaware that ultimately they benefit, not because real concessions are being offered. The middle ground between the two is not a stronger argument than either extreme, but a logically vitiated version of one outlier or the other. What is needed instead is an argument with the empirical verity of the middle-ground explanations and the logical momentum of the extremes. Both the Bonapartist and the Social Democratic approaches ultimately assume only two actors, fortunate and needy, pitted in combat with each other. Their particular identity has varied. The advantaged, once Junkers and industrialists in Wilhelmine Germany, are today Thatcher's constituency. The disfavored, earlier the industrial working class, now include also ethnic minorities, the handicapped, single mothers and other - from a traditional blue-collar point of view - marginal groups. Nevertheless, this basic dualistic mold persists in social explanations of the mystery of how the have-nots ever get more than a pittance from the haves. It is frustration with the inability of social interpretations to break this polar model that has prompted the search for other agencies, above all the state, with interests and aims transcending such trench warfare. Nonetheless, an appeal to this sort of deus ex machina, though tempting, is not yet necessary. Socially based interpretations have tended to elide between class and risk category. If these are freed of any necessary identity, however, a different caliber of social explanation is unsheathed, one that is able to account for how genuinely solidaristic reform was possible without a major victory of the disfavored, how redistribution may well have represented a real concession from some among the fortunate while still buttressing the power and privileges of others. Such an unravelling reveals the circumstances in which subgroups from among both the disfavored and those who in other senses were advantaged held solidaristic goals in common that they were able to realize against equally heterogeneous, but

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politically less powerful, coalitions of redistributive losers. Actors from each side have on occasion shared sufficiently coincidental interests to constitute a solidaristic quorum. A social explanation of the center of what is usually seen as an irreconcilable polar conflict between fortunate and ill-starred is possible. In fact, it is not until one examines the middle between the have-alls and the have-nothings that solidaristic social policy and its vacillating fortunes can be explained. In highly stratified societies, what redistribution took place played between rich and poor, channeled through the institutions of charity and public assistance. Disputes here pitted disfavored against fortunate, low against high. As extremes of poverty and affluence gave way to a flourishing of the middle strata, the bourgeoisie could not remain unconcerned by redistributive measures. Because royal bureaucrats had on occasion assisted the poor courtesy of a taxable, but still disenfranchised bourgeoisie and because the middle classes, confident in their own selfreliance, were eager for others to follow their example and reluctant to help those who did not, reallocation was at first restricted to a minimum. This liberalist bourgeois solution to the need for a reapportionment of risk was, however, only transitory; nor, in any comparative account of the welfare state not locked in an Anglo-centric orbit, has it been particularly characteristic. Risks multiplied in extent and effect with the growth of modern economies, necessitating some form of redistribution. Self-reliance became an increasingly untenable ambition, even for the bourgeoisie. Workers, confronted daily with industrial technology's dangers and bereft of personal resources beyond their labor, were in certain countries the first clients of a system that promised to spread the consequences of new risks. But they did not long remain the only ones. Solidaristic measures quickly began to appeal also to groups once proud of their ability to take on fate and circumstance singlehandedly. To the extent that redistributive measures began to concern a significant class at the fulcrum of society, and were no longer a matter exclusively for the extremes of high and low, they of necessity redirected the flow of resources within a group distinguished as much by risk as social position. Social insurance, especially of a solidaristic bent, was possible only given a certain degree of homogeneity. In highly stratified populations, class and risk ran too parallel to each other for there to be any common agreement to redistribute burdens without at the same time restructuring the status quo. The large, impoverished, needy mass would profit, the small, favored, prosperous minority only lose from a system of reallocation with

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ambitions greater than charity. The possibility of reciprocity was a precondition for social insurance, especially as it aimed beyond a limited group to cover much of the population. Those not among the poorest but nevertheless prone to certain risks had to be convinced that, potentially vulnerable, they too stood to gain. This was not possible unless class and risk were conceptually distinguished. At the least, the redistributive pool had to be sufficiently homogeneous that risk, not class, was its primary differentiating characteristic. Nor would it have been possible for the middle classes to recognize their interests in reform were social insurance not limited to reapportioning merely the effects of risk, and restrained from any further ambitions also to correct underlying social imbalances. Unpacking the solidaristic welfare state's partially middle-class baggage does not reveal why this route was chosen in the first place. Bourgeois interests can be and have been served in many other ways, some involving different forms of statutory intervention, others, conversely, an attempt to limit the state's role. In some cases, an all-embracing risk pool addressed middle-class concerns for reasons that in the broader scope of things seem fortuitous or at least unpremeditated. Continental independents sought universalist measures in the 1960s to resolve the dilemma inadvertently created by the separatist approach taken in postwar reform. In others, the middle classes discovered immediate pecuniary motives for welcoming the embrace of statutory concern, as when pensions were extended even to the well-endowed in Britain and Scandinavia. Most overarchingly, however, the decision taken by the bourgeoisie in certain nations for statutory intervention in the guise of social policy, rather than other means of pursuing its concerns, was determined by much broader motives of an ideological cast. For a member of the middle class, average in both fortune and risk, social insurance of sufficient actuarial orthodoxy was not especially distinct from private efforts at risk redistribution. It offered no particular advantages beyond certain considerations of efficiency and administration, and threatened no fearsome disadvantages. For such a person, it mattered little whether public risk redistribution was limited to the poorest, leaving the self-sufficient to their own devices, or whether statutory intervention broadened in scope, with the bourgeoisie both the main source and primary recipient of reallocation. For the average middle classes the distinction was largely a matter of indifference: whether they insured themselves or paid taxes for statutory provision was materially inconsequential. The reasons behind a choice between these alternatives should

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therefore be sought in the ideological realm. Where reliance on the state was accepted and commonplace, the second was the obvious solution. In other nations, long and troubling battles over the virtues of statutory intervention were and continue to be fought. Where the state was regarded as the appropriate agent for such matters, social policy had to embrace also the middle classes as it evolved from a means of keeping the poorest afloat to a wide-spanning system of risk redistribution.2 For the needy, on the other hand, the difference between these alternatives was much greater. Where the state was excluded from or restricted in the management of personal risk, they were left to the last resort of public assistance. In nations where the state became the main insurance broker of the bourgeoisie, in contrast, the disadvantaged gained from clinging to the coattails of the favored. The middle classes arranged things first and foremost for themselves, the unfortunate were the beneficiaries of a comparatively successful trickle-down. Thanks to such self-interested motives, social legislation aimed also at the middle classes has been more stable and firmly supported than measures reserved for the needy. Even perhaps especially - the cutbacks of the 1970s confirm the point here, having hit most harshly those programs and policies addressed particularly or only to the poor, while largely sparing middle-class entitlements.3 In the long run, the unfortunate have gained most from those welfare states securely anchored in the interests and affections of the bourgeoisie.4 The middle-class orientation of the most successful social policy, the most stable welfare states, can be variously evaluated, differing according to political standpoint. For some, it may confirm a belief that piecemeal reform can never transcend the limits of existing society, that, once again, 2 Conversely, given a sufficiently liberalist ideology, universalist social provision that asks the state to duplicate for the middle classes what they otherwise would acquire on the market, may in fact undermine itself by encouraging a return to private services. The effect therefore depends on the ideological context. See Neil Gilbert, Capitalism and the Welfare State: Dilemmas of Social Benevolence (New Haven, 1983), pp. 72-74. 3 Robert E. Goodin and Julian Le Grand (eds.), Not Only the Poor: The Middle Classes and the Welfare State (London, 1987), chs. 8,9; Ramesh Mishra, The Welfare State in Crisis: Social Thought and Social Change (Brighton, 1984), pp. 50-51. 4 Hence reformers of more residual systems, like the American, where much of social policy remains targeted at the poor and regarded with disdain by the average citizen, have suggested giving the middle classes a direct stake in its fortunes. See William Julius Wilson, The Truly Disadvantaged: The Inner City, the Underclass and Public Policy (Chicago, 1987), pp. 118-24, 152-57. See also Margaret Weir et al. (eds.), The Politics of Social Policy in the United States (Princeton, 1988), chs. 7, 8,12. For a less sophisticated approach, see Alfred J. Kahn and Sheila B. Kamerman, Not for the Poor Alone: European Social Services (Philadelphia, 1975). In the same spirit, see Robert Kuttner, The Economic Illusion: False Choices between Prosperity and Social justice (Boston, 1984), ch. 6; and Kirsten A. Gronbjerg, Mass Society and the Extension of Welfare, 1960-1970 (Chicago, 1977).

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social policy has been unmasked as a bourgeois ploy of only incidental use to those most in need.5 For others, in contrast, it may indicate how reform can best be made effective and durable, what tactics are able to link the interests and fate of the poor with the fortunes of the better-off, how solidarity is a notable achievement even though a compromise and not an absolute, even though the product of coalition, not coercion. Solidarity the group's decision to allocate resources by need - is only misleadingly analogous to altruism. An individual sentiment, altruism is generally confined to narrow circles of the like-minded. Solidarity, in those few instances where it has been realized, has been the outcome of a generalized and reciprocal self-interest. Not ethics, but politics explain it. 5 This is not a criticism only from the left. The right too can reject supposedly solidaristic social policy as an unadmitted boondoggle for a middle class that ought, in its view, to be self-reliant. See Gordon Tullock, "Income Testing and Politics: A Theoretical Model," in Irwin Garfinkel (ed.), Income-Tested Transfer Programs: The Case For and Against (New York, 1982); and F. A. Hayek, The Mirage of Social Justice (Chicago, 1976), p. 141. From the liberalist left, see David G. Green, The Welfare State: For Rich or for Poor?, Institute of Economic Affairs, Occasional Paper 63 (London, 1982).

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Index

Alderdomsforsakringskommitten, see Old Age Pensions Commission, Sweden Abel-Smith, Brian, 235 n. 105, 237 n. 113, 238 n. 117, 241 actuarial profile, 16, 20 Adenauer, Konrad, 188, 193, 272, 273 agrarian classes, and welfare state, 141", 63ff agrarian classes, Denmark: agricultural problems, 751"; and contributory financing, 80; export orientation, 711"; and pensions, 66( agrarian classes, France: attitude to social policy reform, 253ff; and welfare policy, 104 agrarian classes, Germany, and pensions, 275 agrarian classes, Scandinavia, and welfare state, 12 agrarian classes, Sweden: and pension reform, 83ff; and tax-financing, 83 Agrarian Party, Sweden: cooperation with Conservatives, 84; split over protectionism, 84^ and superannuation, 2I7ff Allgemeine Gewerkschaft, 199 Allied Control Council: Manpower Directorate, i9of; Social Insurance Committee, 190 Allied Finance Directorate, 197 Allied occupying powers: and German social policy, 160; and social policy reform, i89ff Allocation vieillesse, see Allowance for Elderly Wage Earners, France Allowance for Elderly Wage Earners, France, 166 Alsace-Lorraine, 105; Christian workers' movement in, 205 altruism, and welfare state, 23 Andersen, Ernst, 226 n. 69 Angestellte, see salaried employees, Germany 346

Arbejderkommissionen af 1875, see Commission on Workers' Conditions, Denmark Arbetareforsakringskomiten, see Workers' Insurance Commission, Sweden Aron, Raymond, 250 n. 2 artisans, France, and pension reform, i8of artisans, Germany: and pension reform, 192; and social reform, i6of Ashford, Douglas, 103 n. 35 Asquith, H. H., 101 Assheton, Ralph, 130 Atlantic Charter, 108 Attlee, Clement, 58, 109 Bad Godesberg, SPD congress 1959, 279 Belin, Rene, 164 Berg, Christian, 78 Berlin, social policy reform 1945, i88ff Berlin Municipal Council, i88f Bevan, Aneurin, $1, 108, 109, 232, 234 Beveridge, Janet, 108 Beveridge, William, 3, 5, 17, 24, 30, 35, 58, 99, 101, 106, 107, n o , 118, 146, 155, 159, 163, 164, 188, 201, 203, 210, 232, 235, 236,243,245, 246, 252,279, 287, 290; and contributory principle, 124; visit to Germany, 194; welfare reform proposals, 115

Beveridge Committee, and the self-employed, n8ff Beveridge Report, 24, 53, 57, 107, 108, 116; French reforms compared to, 174; gradation by costs, 116 Bevin, Ernest, 128 Bismarck, 3, 5, 41, 42, 74, 86, 95, 99, 100, 102,105,106,108, 205, 285; anti-Socialist laws, 103; social insurance policies, 5f, 21, 57, 5»> 9*ff Bismarckian Empire, 102 Bismarckian social insurance: characteristics of, 59ft contrast to Scandinavian, 42f

Index Blackley, W. L., ioo Blanc, Louis, 32 n. 43 Blank, Theodor, 273 Blondelle, Rene, 257 n. 25 Blum, Leon, 169 Bojsen, Frede, 77 Bonaparte, Louis-Napoleon, 58, 102, 108 Bonapartism, and welfare state, 27, 39ff, no Bondeforbundet, see Agrarian Party, Sweden Bonjean, Alexandre, 257 n. 25 Bony, Pierre, 176 n. 79 Booth, Charles, 118, 123 Borgbjerg, Frederick, 25 n. 29 Boscary-Monsservin, Roland, 256 n. 17 Boulin, Robert, 266, 268 Bourgeois, Leon, 35 bourgeois revolution, 24 n. 25; and social interpretation of the welfare state, 55f bourgeoisie, see middle class Boyd-Carpenter, John, 239^ 244 Bramsen, Ludwig, 78 Branting, Hjalmar, 92f Bretton Woods, 131 Briggs, Asa, 57 n. 3 Bruning, Heinrich, 50 Bundvad, Kaj, 149, 153 Businessmen's Association, Denmark, 79 Cabinet, Britain, and Beveridge Report, I28ff cadres^ see salaried employees, France Caillaux, Joseph, 105 n. 45 Calvados, 255, 256 CANAM, 263, 266, 267 CAPEB, 26off, 264, 265 Castle, Barbara, 246 Catholic parties, 8; and the welfare state, Catholics, and Bismarck's social insurance, 99 CDU: bill on artisanal pensions 1956, 271; and social policy reform, 201 f Center Party, Germany, and social insurance, 98 Center Party, Sweden, 22of Centerpartiet, see Center Party, Sweden Central Economic Office, British Zone, 194 n. 146 Central Labor Office, Lemgo, 190 CFTC, 168 CGC, 168, 169, 172 CGPME, 185, 259, 261 CGT, 167 CGTU, 105

347 Chamberlain, Joseph, 5 Chester, D. N., 131 Chevalier, Louis, 104 Churchill, Winston, 2, 130 CIDUNaTI, 263ff citizenship: T. H. Marshall's concept of, 3f, 29, 110; see also social citizenship civil servants, Denmark, and Conservatives, 74 CNJA, 258 CNPF, see Employers' Federation, France Cobban, Alfred, 24 n. 25 cold war, and social policy reform, 197 collective agreement of 14 March 1947, France, i7of Comite general d'etudes, 164 Comite national de liaison et d'action des classes moyennes, 176, 259, 261, 262, 263 Commission du travail, see Labor Committee, French parliamentary Commission national paritaire d'etude des regimes complementaires de securite sociale, see Parity Commission, France Commission on Workers' Conditions, Denmark, 66 Commune, France, 103 Communist Party, Denmark, 226 Communist Party, France, 176; and pension reform, 168 Communist Party, Sweden, 142 Conseil national de la resistance, see National Resistance Council consensual politics, theory of, 61 n. 17 Conservative Party, Denmark, see Hejre Conservative Party, Sweden, see Moderata Samlingspartiet Conservatives, British, and Beveridge, 130 consociational democracy, 61 n. 17 Constituent Assembly, second, France, 167 constitutional agreement, Denmark 1894, 79 constitutional conflict, Denmark, and welfare reform, 6$f, 72, 74 contracting-out of superannuation, Britain, 240, 243, 246 contributory financing, and Danish agrarians, 80 Copenhagen, fortification of, 74 corporatism, and the welfare state, 44 cost-of-living supplements, Sweden, 90 n. 115 Cousins, Frank, 238 crisis agreements, Scandinavian (1932-33), 50 Croizat, Ambroise, i68ff, 172, 175, 176, 177, 183, 184

34 8

Index

Crossman, Richard, 208, 218, 234ft, 238, 243f currency reform, Germany 1948, 270 D'Aragona Plan, 108 DAF, 188 DAG, 200 Dalton, Hugh, 133 Danielson, A. P., Syi Dax, Giinter, 276 n. 107 De Gaulle, Georges, 163 de Lagarde, Georges, 180, 181 Defense Committee (of CFTC and CGC), 168 Defense paysanne, 255 Deleau, Gustave, 263, 266 Deutscher Anwaltsverein, 277 Deutscher Bauernverein, 275 DGB, 199, 200; and artisanal pensions, 274; and pensions for the self-employed, 282 Dich, Jorgen, 149 n. 168 Dickens, Charles, telescopic philanthropy, 61 n. 16 Diskussionskreis Mittelstand, of the CDU, 272 Disraeli, Benjamin, 223 Dobbernack, Wilhelm, 190 Doignon, Louis, 164 Domo, Fritjof, i36f Dorgeres, Henri, 254f Durafour, Michel, 285 Durkheim, Emile, 34 earnings-related benefits, in Germany, 96f Economic Council, Frankfurt, 197 economists, approach to welfare state, 2if Education Act 1880, Britain, 101 Einheitsversicherung, 187ft, 274f El Alamein, 116 Employers' Federation, France, 180, 185; and pension reform, 169 entitlement, by need, 114 Entreprenerforeningen, see Businessmen's Association, Denmark Erhard, Ludwig, 272 Eriksen. Erik, 151 Eriksson, Bernhard, 140 Erlander, Tage, i4of, 208, 218, 219 Esping-Andersen, Gosta, 11 n. 9, $6 n. 2, 61 n. 15, 62 n. 17, 63 n. 21, 111 n. 16, 112 n. 20, 139 n. 125, 162 n. 4 Estates, Denmark, 66 Estrup, J. B. S., 69 n. 38, 74 Ewald, Francois, 2 n. 2 Faellesrepraesentationen for Dansk Industri

og Handvaerk, see Joint Representation of Danish Industry and Crafts Falbe-Hansen, V., 67 n. 28 family allowances, Britain, 117 family policy, 26; France, 102 farmers, see agrarian classes FDP, and artisanal pensions, 273 Fifth Republic, France, 257, 264 First World War, 105 flat-rate social insurance, 17, 52; and bourgeois parties, Denmark, 228f FNSEA, 1958 congress, 257; and health insurance, 257f Folkeforsikringskommissionen af 1948, see National Pensions Commission, Denmark Folkepensionskommissionen af 1961, i53f Fourier, Charles, "le garantisme," 268 free rider, problem of, 23 Freisinnige, and Bismarck's social insurance, 98 French Revolution, 288 friendly societies, 99f funded social insurance, i48f Gaitskell, Hugh, 238, 241 Gaitskellite wing of Labour Party, 237 Galliffet, Gaston, 103 Gambetta, Leon, 103 Gaullists, 258, 261, 263 General Regime, France, social insurance, 165, 167, i68ff, 260, 261, 267, 270, 284, 285, 286 Gilbert, Bentley, 125 n. 67, 127, 131 Giscard d'Estaing, Valery, 262 Government Actuary, Britain, 127 grande culture^ 255, 257 Grandval, Gilbert, 261 Great Coalition, SPD-CDU 1966, 281 Great London Exhibition, 134 Green, T. H., 35 Griffiths, James, 116, 132, 232, 236; and subsistence principle, 133 Grob, Jean, 265 n. 61 Guesdistes, 105 Hagard, S. A. A., I 4 2 Halles, Les, 286 Handwerkerversorgungsgesetz 1938, 269 Hansson, Albin Per, i4of Hartkorn, 73 n. 59 health insurance, France, for agrarians, 257ff health insurance reform, Sweden, 144ft Hebert, Jacques, 263 Heclo, Hugh, 33 n. 47, 46 n. 92, 245 n. 147

Index Hedin, Sven Adolf, 8sf Hindenburg, Oscar von, 50 Hjalmarsson, Jarl, i}j{ Hockerts, Hans Giinter, 186 n. i n , 190 n. 128

Hojre: and contributory financing, 67; and pension reform, 152ft and welfare reform, 65ff; and workers' compensation, 64 Hogg, Quintin, 130 horizontal universalism, 11 $f Hutson, T. H., 132 n.94 ILO, 108 Independent Republicans, France, 261 independents, see self-employed indexed savings contracts, Denmark, 152

industrialists, and Bismarck's social insurance, 98 industrialists, Danish, and protectionism, 72 Industry and Society, 237 insurance against work accidents, see workers' compensation interdependence, and solidarity, 33ff Jaures, Jean, 105 Jeanneney, Jean-Marcel, 262 Joint Representation of Danish Industry and Crafts, 80 Junkers, 50, 71, 294 just wage, Church's doctrine of, 102 Katzenstein, Peter J., 76 n. 69 Kautskian approach to agriculture, and SAP, 91 Keynes, John Maynard, n o , 127, 131 Knappschaften, 196 Konigson, Ture, 221 Korpi, Walter, n n. 9, 61 n. 15, 62 n. 17, 63 n. 21, i n n. 16, 112 n. 20

Kristensen, Thorkild, 151 Kropotkin, Peter, 34f La Batie-Montgascon, 263 Labor Administration, of the Allied Control Council, 197 Labor Committee, French parliamentary, i73ff, 179, 183, 254 Labor Ministry, German, 188; renamed 1957, 272 Labor Ministry, France, 168 labor movement: and welfare state, 7, 18, 42; and postwar social policy reform, i6of laborist interpretation of the welfare state,

349 see social interpretation of the welfare state Labour government, and Beveridge Report, 132

Labour Party: and abolishing means tests, 115; and Beveridge Report, i29f; and social insurance, 101; and social policy reforms after 1945, 3f, 24, 57; and tax-financing, 233 Labour Party conference, Margate 1955, and superannuation, 234 Landerrat, see Parliamentary Council Laroque, Pierre, 164, 169, 174, 182, 205 Lasallians, 103 law of 22 May 1946, France, i74ff law of 17 January 1948, France, i77ff law of 23 August 1948, France, 204 law of 10 July 1952, France, law of 5 January 1955, France, Law on the Adaptation of Social Insurance (SVAG), Germany, i97ff Le Roy Ladurie, Emmanuel, 256 Le Roy Ladurie, Jacques, 256f Lecoeur, Marcel, 26of, 264, 266 Left Socialist Party, Denmark, 229 Lespes, Henri, 167, 170 Ley, Robert, 188, 268f Liautey, Andre, 256 Liberal Party, Denmark, see Venstre Liberal Party, Sweden: electoral base, 9of; and pensions, 64; relations to Conservatives, 83f liberal professions, France, and pension reform, i82f liberalism, of the middle class, 27f Liedstrand, Emil, 142 n. 141 livret, 105 Lloyd George, David, 101 LO, Denmark, and salaried employees, 230; and superannuation, 224f LO, Sweden, 145; and pension reform, Lory, Bernard, 177 n. 83 Magistrat der Stadt Berlin, see Berlin Municipal Council marriage of iron and rye 1879, 72 Marsh Plan, 108 Marshall, Alfred, 35 Marshall, T. H., 3f, 29, 50, 108, 293; concept of citizenship, 29 Marx, Karl, 25 n. 29; concept of social justice, 32 Marxist interpretation of welfare state, 38ff, 294 Matignon agreement, 50 Matthew Effect, 26

35O

Index

Mayer, Daniel, 177 means tests, 13 n. 11, 17; abolition of, ii3f; and Danish pension reform, i53ff; and Moderata Samlingspartiet, 138; reduction of in Sweden 1946, i36ff Meek, Henri, 205 Meidner, Rudolf, 223 middle class: and liberalism, 27f; and risk categories, 18; and risk incidence, i2ff, 26; as solidaristic class, 15, i8f; and state intervention, 28; as unsolidaristic class, 14; and welfare state, 8f, 26f, 3of, 111 military reform, Sweden, nineteenthcentury, 84 Miller, David, 32 n. 45 Millot, Roger, 176, 259, 263 Ministry of Health, Britain, and universalism, 128 Ministry of Social Affairs, Sweden, 215 Mittelstdndler, in the CDU, 273ff, 279, 282 Moderata Samlingspartiet: and agrarians, 85; and means tests, 138; and pension reform 1946, i36ff; and pensions, 64; relations to Liberals, 83f Moller, Gustav, 134, 139, i45f Molin, Bjorn, 212 n. 6 MRP: proposals for pension reform, i75f; and social policy reform, i*>7ff Miiller government, Weimar Germany, 50 Muhr, Gerd, 282 mutual dependence, and solidarity, 25 Napoleon HI, see Bonaparte, Louis-Napoleon National Health Service, Britain, 117 National Insurance Act 1911, Britain, 99 National Insurance Fund, Britain, 232 National Liberal Party, Germany, and social insurance, 98 National Pensions Commission, Denmark 1948, i48ff National Resistance Council, France, i63f Nazi social policy, 159, 268ff; and artisans, i86f Netter, Francis, 169, 182 New Workers' Commission, Denmark, 76 New Workers' Insurance Commission, Sweden, 86 New Zealand, 99, 135 Nicoud, Gerard, 2$3ff Nollet Commission, 181 Nordic model of the welfare state, see Social Democratic welfare state nouvelles couches sociales, io^i Nya arbetareforsakringskomiten, see New Workers' Insurance Commission

Occupation, of Germany, 159 Official Committee on the Beveridge Report, i27ff Old Age Allowance, France, 170, 204; for the self-employed, i73ff Old Age Pensions Commission, Sweden, 88ff ORGANIC, 181 Osthilfe, 50 Paris Opera, 167 Parity Commission, France, i68ff Parkinson's Law, 45 Parliamentary Council, American Zone, 195 Parodi, Alexandre, 164 Parodi-Laroque-Croizat Plans, 108 pay-as-you-go financing, 132, i48f, 162,205, 215; Germany, 191 peasants, see agrarian classes Pension Insurance Reform Law 1972, Germany, 281 pensions, 52 pensions, Britain, system of 1908, 99ff pensions, Denmark: system of 1891, 63f; system of 1891, differences to Bismarckian system, 75; reform of 1956, 114, i47ff; reform in 1960s, i53ff pensions, France, system of 1910, io3ff pensions, Germany, reform of 1957, 205^ 271, 272, 275, 277,

281

pensions, Sweden: system of 1913, 64^ 83ff; system of 1913 and SAP, 9off; system of 1913 and workers, 90; reform of 1946, 114, I34ff people's pensions, see pensions, Sweden, system of 1913 Peyret, Claude, 268 Philip, Andre, i74f Phillips, Thomas, 128 Plimsoll line, 123 Pompidou, Georges, 261 Poor Law Commission, Denmark, 66 poor relief, see public assistance Popular Front, 41, 50 Pringent, Robert, 168 protectionism, in Swedish agriculture, 84f public assistance, 30, 74, 117; in Denmark, 65f Radical Liberals, Denmark: and means tests, 115; and pension reform, 68ff, 148, 15off; and stigma of public assistance, 151; and workers' comp, 78f Radical Party, France, 34; and agricultural pensions, 254 Rawls, John, 32ff

Index redistribution: contests over, if, 9; upward, 27

Reedtz-Thott, Tage, 79 Reiermann, Sven, 226 n. 69 Rentenreformgesetz, see Pension Insurance Reform Law Resistance, France, 158, 163, 165 Retail Trades Committee, 120 retirement condition, in British pensions, I24ff risk: redistribution of, i2ff; social construction of, 12 n. 10 risk categories, i2ff; and middle class, 18; and social classes, 17 risk incidence, and welfare state, i2ff Roosevelt, Franklin D., 107 Rowntree, Seebohm, 123 Royer, Jean, 268 Royer law, 268 Rubin, Marcus, 68 salaried employees: relations to working class, 15; and welfare state, 17 salaried employees, France: and means tests, 166; and social policy reform, 161, i65ff; and supplementary pensions, i7of salaried employees, Germany, and social policy, 195, 197, 199^ 268ff sansculottism, 263 SAP: and agrarians, 83, 9of; coalition with Agrarians, 2i8f; party congress 1944,139; and pension reform 1946, i39ff; and 1913 pension system, 83, 9off; and postwar program, 140; and superannuation, 2o8f, 2i8ff; and wage earner funds, 222f; and working class, 83, 9of, 209 Scandinavia, social reforms after 1945, 4 Scandinavian model of the welfare state, see Social Democratic welfare state Scandinavian welfare state, 29; and agrarian classes, 12; characteristics of, 21, 55ft, 6off; contrast to Bismarckian welfare state, 42f Schellenberg, Ernst, i88f, 279, 280 Schleicher, Kurt von, 50 Schmiicker, Kurt, 275 Schuman, Robert, 175 Schumpeter, Joseph, 1 Scotland, and flat rates, 123 Second Empire, France, 102, 104 Second World War, and welfare reform, 7, 10, 24, iO7ff Seirup, H. C , 153 self-employed: and welfare state, 15, 248ff; anchBeveridge's proposals, n8ff; and French pension reform, i72ff; and

35i

Labour's welfare reforms, i32ff Sen, Amartya, 22 n. 19 SFIO, 105, 168, 176; and relations to salaried employees, i7if Sheepshanks, T. H., 132 n. 94 shopkeepers, German, and pensions, 276f Siegfried, Andre, 257 Snowden, Philip, 102 social basis of welfare state, 48ff Social Catholicism, 102 social citizenship, 29, 5of Social Citizenship State, 111, 156 social classes, and risk categories, i7ff sociat control, and welfare state, 39 Social Democratic interpretation of the welfare state, see social interpretation of the welfare state Social Democratic parties, 8 Social Democratic welfare state, 42ff Social Democrats, 3 Social Democrats, Denmark: and agrarians, 70; and noncontributory financing, 71; and pension reform, 70, i47ff; postwar program, 147; Program Commission, 230; and salaried employees, 210, 23off Social Democrats, Sweden, see SAP social insurance: Bismarckian system, 3, 5f, 21, 39ff, 43, 52, 56, 83, 92; flat-rate, 52 social insurance, Britain, nineteenthcentury, 99ff social insurance, France: development in nineteenth-century, io2ff; law of 1930, 105, 166; and tax-financing, 103 social interpretation of European history, 55ff, 288 social interpretation of the welfare state, 7f, 24ff, 30, 4off, 93f, io9ff, 288f, 294 social justice, definitions of, 32ff social policy, bourgeois orientation of, Social Reform Commission, Denmark, 23if social security, io7f Social Welfare Committee, Sweden, 134, 140, 145 Socialist People's Party, Denmark, 154, 226, 229

Socialistisk Folkeparti, see Socialist People's Party, Denmark Socialists of the Chair, 35 Socialreformkommissionen, see Social Reform Commission, Denmark Socialvardskommitten, see Social Welfare Committee, Sweden solidarisme, 34 solidarity: and interdependence, 33ff; and mutual dependence, 25; and war, 34

35*

Index

Soviet military authorities, and social policy reform, iS^i Soztalausschusse, of the CDU, 272 Sozialversicherungsanpassungsgesetz, see Law on the Adaptation of Social Insurance (SVAG) SPD, 71; and Bad Godesberg Program 1959, 203; and Bismarck's social insurance, 97f; and German social policy reform, 187^ 201 ff; as Volkspartei, 279; and Volksversicherung plan, 279^ 281 Staatsburgerversorgungy 268 state, and welfare state, 44ff state intervention, and middle class, 28 Steffen, Gustav, 91 f stigma: of means-tested measures, 114; of public assistance, Denmark, i5of Stockholm Conservative Club, 137 Stockholm Exhibition 1930, 134 Storch, Anton, 193, 188, 201, 272, 273, 275 subsistence principle, 133; in British pensions, 232 suffrage reform, Sweden, nineteenthcentury, 9of Summerskill, Edith, 234f Sumner, William Graham, 35 n. 58 superannuation, 53, 171; in Denmark, 153; referendum in Sweden 1957, 217, 219 supplementary pensions, see superannuation Supplementary Pensions Committee, Denmark: First 223^ Second, 227 Surleau, Frederic, 177, 182 Surleau Commission, i77ff tariff reform: Denmark, nineteenth-century, 67f; Sweden, nineteenth-century, 84 Tawney, R. H., 35 tax-financing: of pensions in Britain, 233^ of welfare state, 52 tax reform: Sweden, nineteenth-century, 84; Sweden 1940s, 143; and welfare reform in Denmark, 65, 68ff, 72ff tax system, France, weakness of, 159 TCO, and superannuation, 2i6f TGWU, 238 Thatcher, Margaret, 95, 294 Thiers, Adolphe, 103 Third Republic, France, 102 Tietz, Georg, 190 Titmuss, Richard, 22 n. 18, 24^ 29,109 n. 8, 110, 157, 223 n. 50, 232, 235, 237, 241, 291 Tory Reform Committee, 130 Townsend, Peter, 241

trade unionists, Christian Democratic, and pension reform, 2721" transition generations in social insurance, l62f TUC: and Beveridge Report, ii9ff, i29f; and earnings-related benefits, 236; and retirement condition, 125; and salaried employees, 242; and superannuation, 211; and tax-financing, 233, 238, 244 UN Universal Declaration of Human Rights 1948, 108 unemployment insurance, 50, 95f; in France, io3f universalism: and the welfare state, 5if; horizontal and vertical, ii3f utility-maximizing, and welfare state, 22 van Acker Plan, 108 van Rhijn Plan, 108 Vanoni Plan, 108 n. 5 VAT, 264 Venstre: internal political battles, 67I; new social policy program, zz6i\ and noncontributory financing, 71; and pension reform, isof; and social reform, 65ff; and tax-financed welfare policy, 67; and workers' compensation, 64 Venstresocialisterne, see Left Socialist Party, Denmark Versicherungsanstalt Berlin, i88f vertical universalism, ii3f Viatte, Charles, 167, 175 Vichy government, 166 villes mortes, 264 n. 57 Volkspartei, SPD as, 279 Volkspensionen, 201, 203, 279f Volksversicherung plan, SPD, 279f wage earners' funds, SAP strategy, 222f Wagner-Murray-Dingell Plan, 108 war, and solidarity, 34 Weimar Germany, 41 welfare reform, after 1945, iO7ff welfare state: and agrarian classes, 63; and altruism, 23; and Bonapartism, 27, 39ff; and Catholic parties, 43f; and corporatism, 44; criticism by the left of, 3; economist's approach to, 2if; egalitarian possibilities of, 3, 5; functional purposes of, 5f; interpretations of, 36ft; and labor movement, 7, 18, 42; Marxist interpretation of, 38ff; and middle class, 8, 26f, 3of, i n ; preconditions of, 37ff; reform of, after 1945, 10; and salaried employees, 17; Scandinavian, 6, 29; and

Index Second World War, 7, 10, 24; and the self-employed, 15; social basis of, 9ff, 25ff, 29ff, 48ff; and social control, 39; Social Democratic, 42ff; social interpretation of, 7f, 24, 30, 4off, 55ff, 93f, iO9ff; solidaristic, 7; and the state, 44ff; tax-financing of, 52; and universalism, 5 if; and utility-maximizing, 22; and working class, 7, 24ff, 55ff white-collar wage earners, see salaried employees Wigforss, Ernst, i4of, 143 Wilson, Harold, 241 n. 132 Wood, Kingsley, 129 workers' compensation, 52f; in Denmark, 64, 76ff; French law of 1898, 103; German, 97

353 Workers' Insurance Commission, Sweden, 86 working class: relations to salaried employees, 15; and risk incidence, I2ff, 15; and social insurance in Britain, 100; as solidaristic class, 7, 9, 14, 25, 42, 55f; as unsolidaristic class, 15; and welfare state, 7ff, 15, 24ff, 55ff World War I, see First World War World War II, see Second World War Wright, Gordon, 174 ZDH, 270, 271, 272 Zonal Advisory Council, 194, 199 Zonenbeirat, see Zonal Advisory Council