Otto von Bismarck, the Prussian/German statesman of the late 19th century, is widely regarded as the father of the welfare state and the person who first introduced social legislation, but it appears he worked closely with big business and created the world’s first welfare state in the 1880s to head off the socialists.
At the time the life expectancy for the average Prussian was believed to be 45 years and a pension annuity only applied to workers who reached the age of 65 years. The measures introduced by Bismarck were the Health Insurance Bill of 1883, the Accident Insurance Bill of 1884 and the Old Age and Disability Insurance Bill of 1889. It does not appear to be known how many workers reached ‘old age’ and qualified for the pension benefits. What is known is that the legislation resulted in a sharp decline of emigration to the USA.
Earlier this week John Kane-Berman, the CE of the South African Institute of Race Relations, wrote an article in Business Day SA goes against the world trend by enlarging the welfare state in which he warns against the infliction of injuries on the ‘goose they expect to keep laying the golden egg to finance our corrupt and swelling entitlement and welfare state’.
He also points out that
‘… the stated cost of social security is only half the story. There are plenty of other bills mounting up, including those presented by a host of parastatals, never mind public-sector trade unions extracting real wage increases above what their work performance justifies. Then there are all the free services — housing, education, water, and electricity — promised by the government, or simply appropriated by consumers who steal electricity or otherwise avoid paying’.
The article is well worth reading but we are not the only country with these problems. This is a quote from Bill Bonner in the Daily Reckoning of 1 July 2010:
‘… currently, in America, there are more people getting money from the government than there are people paying taxes. Forty million people get food stamps. Millions more depend on federal tax credits and so forth. Still others have jobs that either are paid directly by the government or by a contractor for the government.
“All these people have the right to vote. Which is a shame. Because they are likely to vote for more social welfare spending. Then, governments will go broke.”