Today the European welfare states are strongly challenged and it is heavily debated how much
social security a society should provide and how much private insurance is possible. This article
goes back to the origins of the German welfare state. In the 1830s, industrialists from the district
of Aachen (Prussian Rhineprovince) suggested to implement collective labour rules regulating
working hours and wages. In the 1860s – 20 years before Bismarck – they proposed a mandatory
pension system with equal contributions of employers and employees; they suggested labour
conflict resolution by joint arbitration panels of employers and labour representatives. The proposals
did not gain support from the Prussian ministries arguing collective agreements would
violate freedom of contracting.
Entrepreneurs demanding social welfare and the Prussian state defending economic liberalism –
this challenges the perception of the Bismarckian welfare state as a means to reconcile labour
with the German state. Yet, in the early 19th century the district of Aachen was the most advanced
economic region in Prussia in regard with industrial employment and modern industrial
organisation. Producing quality goods for the world markets, the industrialists aimed at stabilizing
the social environment and reconciling labour with the capitalist society. Their motivation,
however, was not based on philanthropy; it was guided by economic aims and collective selfinterest.
Analysing ‘social policy’ as a capitalist aim, the paper puts the German welfare state in a
new perspective. By doing this it also wants to contribute to the discussion on the future of the
modern welfare states, because if the argument presented here holds it might have implications
for the possibility of privately solving social problems