Is There a European History of Social Rights?

After Donald Trump’s victory in the US presidential election, Stephen Moore — one of Trump’s closest economic advisors — remarked that the United Kingdom faced a choice between embracing American ‘free enterprise’ or committing itself to a ‘European economic model of more socialism’.

Moore is not the first to suggest that state intervention in economic affairs is typically European. While Moore characterised the ‘European model’ in negative terms, many left-of-centre commentators have lauded the continent’s supposed commitment to guaranteeing certain social rights, through strong welfare systems and laws which uphold decent working conditions.

Yet the very notion that there is a distinct European model of social provision has its critics. Peter Baldwin, an American historian, contends that the social policies of European countries are not discernibly different from those of other non-European industrialised nations. Baldwin also argues that the theory of a coherent, continental model ignores the wide variations between European states.

European countries may share some common ground in policy but can, at times, appear to be taking radically different approaches. Here, the example of Britain is instructive. Although the UK’s modern history features moments of apparent convergence with continental neighbours, the prospect of embarking on a distinctive path of welfare provision has repeatedly appealed to British policymakers.

Two Paths to Welfare Provision: Britain and Germany

Britain’s welfare reforms after 1945 gave the country a reputation as a leading example of progressive European social provision. However, the UK provides neither the only nor the oldest blueprint for state welfare in Europe. Many scholars regard Germany’s social policies as an alternative paradigm. In the 1880s, German chancellor Otto von Bismarck initiated a pioneering social insurance programme in which pensions and health insurance were financed by compulsory contributions from workers and their bosses. Bismarck aimed thereby to secure workers’ loyalty to the newly-created monarchist German Empire.

Otto von Bismarck, chancellor of Germany from 1871 to 1890. Source: Bundesarchiv, Bild 183-R68588 / P. Loescher & Petsch / CC-BY-SA 3.0

In 1908, the Liberal government in Britain passed the Old Age Pensions Act, which provided state pensions to people over seventy. This system differed notably from its German precedent. British pensions were funded through general taxation rather than compulsory occupational payments. Furthermore, the Old Age Pensions Act generally applied a principle of ‘universal minimalism’. Most people could claim the pensions at a roughly equal rate, but they did not cover more than basic needs. German pension levels, by contrast, varied according to individual earnings. Employees with higher wages paid greater contributions and were given more plentiful retirement benefits, whereas the pensions of low-paid workers were often insufficient for subsistence.

After the Second World War, Britain and Germany continued to diverge in their welfare systems. The UK’s Labour government implemented (with some alterations) the recommendations of Liberal politician William Beveridge, who had renewed the ideal of universal minimalism when he argued in 1942 that the state should provide basic support for the whole population. The National Insurance Act of 1946 established a universal state pension with flat-rate payments for all recipients. Healthcare for all citizens was enabled by the creation in 1948 of the National Health Service, which is funded through taxation but free at the point of use.

Other European countries such as Sweden, which introduced taxpayer-funded government healthcare in 1955, adopted aspects of the ‘Beveridgean model’. In postwar West Germany, however, the Bismarckian system of social insurance represented one of the few national traditions which appeared unblemished by Nazi rule. Konrad Adenauer, the first West German chancellor, insisted that Germans did not need Beveridge’s approach. In 1957, he oversaw significant pension reform, alleviating old-age poverty but maintaining the graduated social insurance model. Champions of the reform proclaimed its superiority over the ‘levelling’ approach associated with communist East Germany.

To this day, much of Britain’s welfare provision remains more egalitarian but financially more limited than Germany’s generous but hierarchical social insurance system. Proponents of the ‘path dependence’ theory argue that nation-states are bound to their existing welfare methods, even when these exhibit serious shortcomings. Welfare institutions, once established, are costly to abolish and often inspire popular loyalty. Despite widespread dissatisfaction in Britain at the standard of public healthcare, most people believe that the NHS’s taxpayer-funded, free-access model should be preserved.

During the COVID-19 pandemic, public displays of support for the National Health Service demonstrated the continued popularity of one of Britain’s post-1945 welfare institutions. Photo: Duncan Cumming

Writing an International History of Social Rights

Do national variances in welfare policy, such as those between Britain and Germany, render it impossible to tell a European story of social rights? There are two important grounds for suggesting otherwise. First, international institutions have helped to affirm and diffuse social rights throughout the twentieth century, especially since 1945. Presently, laws made in the European Union and enforced by the European Court of Justice oblige EU member states to maintain or implement workers’ rights to equal treatment, freedom from discrimination, and various protections from exploitation.

Since Britain voted in 2016 to leave the EU, progressive observers have worried that the Westminster government could weaken these social protections in its attempts to strike trade agreements with other countries. For now, however, such fears have been somewhat allayed by the election of a Labour government which has drafted legislation to strengthen employees’ rights.

Secondly, state policymakers have perennially been willing to adopt successful ideas from other countries, with amendments that they felt would better suit their own nation. Three years after the 1908 Old Age Pensions Act, the British government introduced a new programme of National Insurance, in which workers, employers, and the state made compulsory contributions to a fund that supported waged labourers during sickness and unemployment.

That the scheme closely resembled Germany’s occupational social insurance system was no coincidence. The chancellor, David Lloyd George, had visited Germany in 1908 and was impressed by the country’s social insurance programme. He insisted, nonetheless, that National Insurance imposed fewer burdens on industry than its German equivalent. His government claimed, for example, that the British scheme’s flat-rate contributions were easier than graduated payments for bosses to collect. The National Insurance Act of 1911 is just one of many examples in which social reforms in one country have influenced policy-making in another, even as governments insist on the distinctiveness of their approach.

Modern social rights have been implemented differently from nation to nation. However, the role of international institutions and the ways in which governments borrow ideas from abroad suggest that the history of social policy is a European and a global story, as much as it is one of separate paths.

Rory Hanna is a Research Associate on the project ‘Global Socio-Economic Rights, Local Contexts: Work in East Africa and Western Europe, 1880 to the Present’.

Further Reading

Baldwin, Peter, The Narcissism of Minor Differences: How America and Europe are Alike (Oxford and New York, 2009)

David, Paul A., ‘Why Are Institutions the ‘Carriers of History’?: Path Dependence and the Evolution of Conventions, Organizations and Institutions’, Structural Change and Economic Dynamics 5:2 (1994), 205–220

Hennock, E. P., The Origin of the Welfare State in England and Germany, 1850–1914: Social Policies Compared (Cambridge, 2007)

Hockerts, Hans Günter, and Winfried Süß (eds), Soziale Ungleichheit im Sozialstaat. Die Bundesrepublik Deutschland und Großbritannien im Vergleich (Munich, 2010)

Mau, Steffen, The Moral Economy of Welfare States: Britain and Germany Compared (London, 2003)

Thane, Pat, Old Age in English History: Past Experiences, Present Issues (Oxford, 2000)