Social Insurance and the Origins of the German Political Economy

The chapter reconstructs the parallel emergence of Germany’s corporatist industrial relations and of the Bismarckian welfare state. It traces the influence that the parity representation of organized labor and organized capital on the self-government boards of the various social insurance schemes had (1) on union organization and organizational development, and (2) on the system of corporatist regulation of work and welfare that started to emerge in Germany in the late nineteenth and early twentieth centuries. The chapter argues that the principle of self-administration of the various social insurance schemes was decisive for the development of German unions into industrial unions, and that it provided both capital and labor with extremely important organizational resources which helped in the creation and then stabilization of corporatist coordination between both. It also provided the responsible ministry with a blueprint for regulating industrial conflict.