By Ismael Hernandez ~ President, Freedom & Virtue Institute
Otto Eduard Leopold von Bismarck was a Prussian statesman and diplomat of the late 19th century who played an important role in world affairs. He became the first Chancellor of the German Empire in 1871 and is regarded as the creator of the first modern welfare state. Ironically, Bismarck created his welfare system to prevent a radical socialist take over.
With Germany’s rapid industrialization came significant population growth and massive migration from the countryside into the centers of industry. Masses of people moved quickly only to find themselves impoverished and isolated. Under such conditions many were easily lured by Socialist propagandists. As the Socialists grew in numbers and the state failed to suppress them, Bismarck tried other tactics.
After attacks against the life of the Kaiser in 1878, Bismarck introduced laws banning most socialist newspapers and trade unions and deprived the socialists of the right to assemble. But in 1880 the de facto underground Social Democratic Party met in Switzerland to plan a resistance movement against Bismarck—they had no plans to give up easily. Knowing that the socialists could not be tamed only by force, Bismarck found a way to beat them at their own game by enacting his own socialist laws.
Prussian nationalism was the foundation for Bismarck’s injection of socialist ideas; which facilitated accusing the internationalist socialists as “un-German.” In a sense, the Bismarckian experiment was a precursor of Hitler’s National Socialism. In fact, the Nazis claimed to follow Bismarck and Hitler considered himself “a second Bismarck.” This time, the Jews were the ones called “un-German.” In both instances, a managed economy and a powerful state were promoted to defeat movements with claimed intolerable foreign allegiances. As is often the case, socialism hides behind other ideas. Ho Chi Minh confirmed this much later when he said, “We have a secret weapon…it is called Nationalism.”
Bismarck stunned Germany in 1881 by introducing in the Reichstag a legislative program of welfare reforms such as a national health and accident insurance, as well as retirement pensions for German workers. In doing so, Bismarck planted the seed of doubt in the capacity of the market to provide jobs and security for all and thus initiated the slippery-slope of government interventionism that will eventually confirm the socialist analysis of capitalism.
The insecurity that drives individuals into action was seen as a hindrance and a threat to human dignity. Insecurity creates a sense of helplessness and entitlement was proposed as the solution for the illness of insecurity. Bismarck affirmed that the state should offer the poor “a helping hand in distress…. Not as alms, but as a right.” He called his system Staatssozialismus or “state socialism.”
Conceived in Germany, the idea rapidly spread throughout industrialized Europe under the same rubric of protecting workers and shielding families from the perceived hazards of industrial society. Little by little, the free market system was assaulted in the name of saving it. Socialists all over denounced the welfare state as a new capitalist tool of oppression. It was seen as another facet of the capitalist system, intent on moderating the tensions of class conflict by pacifying the workers and controlling the conditions under which capital is organized. In effect, however, the policies helped the socialists destroy capitalism without the need for total war.
To the contrary, in capitalism security is not granted as a right. Insecurity becomes the great engine of motivation to thrust forward and risk. Instead of being a social illness, insecurity shows a healthy heart that pumps life into the social arrangement. It is insecurity what allows men to create a universe in their minds and then move to actualize it. If you take away insecurity, you destroy the system piece by piece.
Destroying the free market economy has become the hallmark of American statists who have looked to Bismarck for inspiration. For example, as Professor Anthony Bradley of The King’s College tells us, Bismarck is praised as a visionary on the official U.S. Social Security Administration’s website. The site says the following about Bismarck:
“Despite his impeccable right-wing credentials, Bismarck would be called a socialist for introducing these programs, as would President Roosevelt 70 years later. In his own speech to the Reichstag during the 1881 debates, Bismarck would reply: ‘Call it socialism or whatever you like. It is the same to me.’”
Bismarck has become a patron saint for the intellectual left. Whole generations of Americans have been indoctrinated into the idea that Franklin Roosevelt, modeling his welfare system on Bismarck’s, saved our country from economic doom and that now Barack Obama is saving us again by completing the project. State interventionism is now presented as a main reason for individual success and thus with a claim over individual property. The enemy now is “inequality” and “the one percent.”
A change in the meaning of social allegiance is breaking the bonds of solidarity that once existed in local communities and shifted solidarity toward larger social structures—with all roads leading to a collapse of society within the affairs and institutions of the state. Instead of the intimate bonds of family, friends, and neighbors, we now have an overarching larger “community” where bonds are more detached. Civil rights, under such construct, gives way to political rights, which in turn lay the ground for the social rights of the welfare state. We are told to accept it, get in line, and get over it.
Instead of nationalism being the driving force giving cover to the statist onslaught, “social justice” has become the gathering theme to circle the wagons around an ever-expanding welfare state. The self-preservation instinct of political aspirants now responds to the voter’s demand for more government intervention. Income transfers coated with the rhetoric of fairness and solidarity are always popular with those who are at the receiving end and politicians know it. The good old “us against them” attitude is alive and well. Bismarck lives…
Herein lies what is the most appealing and at once devastating feature of collectivism―it confers on the state and its institutions the legitimacy and place of a basic community that promotes the creation of true human capital. Yet, the “Bismarckian” trade-off of freedom for security eventually destroys the whole of the social fabric of a nation. It is not real social solidarity; it simply masquerades as such.
 See Robert Gerwarth, The Bismarck myth: Weimar Germany and the legacy of the Iron Chancellor. (Oxford, England, UK: Oxford University Press.) Pp. 131.  For a Marxist analysis of the welfare state in capitalism see Regulating the Poor by Richard Cloward and Frances Piven and The Fiscal Crisis of the State by James O’Connor.  Anthony Bradley, The Bismarcking of America in http://blackchristiannews.com/bloggers/2010/09/the-bismarcking-of-america.html  http://www.ssa.gov/history/ottob.html