Society for Comparative Studies in Society and History
The Scandinavian Origins of the Social Interpretation of the Welfare State
Author(s): Peter Baldwin
Source: Comparative Studies in Society and History, Vol. 31, No. 1 (Jan., 1989), pp. 3-24
Published by: Cambridge University Press
Stable URL: http://www.jstor.org/stable/178792 .
Accessed: 31/01/2011 12:30
Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless
you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you
may use content in the JSTOR archive only for your personal, non-commercial use.
Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at .
http://www.jstor.org/action/showPublisher?publisherCode=cup. .
Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed
page of such transmission.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact [email protected].
Cambridge University Press and Society for Comparative Studies in Society and History are collaborating with
JSTOR to digitize, preserve and extend access to Comparative Studies in Society and History.
http://www.jstor.org
The ScandinavianOrigins
of the Social Interpretation
of the Welfare State
PETER BALDWIN
Harvard University
If a question can be mal posee, surely an interpretationcan be mal etendue.
This has been the fate of the social interpretationof the welfare state. The
cousin of social theories of bourgeois revolution, the social interpretationof
the welfare state is part of a broader conception of the course of modem
Europeanhistory that until recently has laid claim to the statusof a standard.
The social interpretationsees the welfare states of certain countries as a
victory for the working class and confirmationof the ability of its political
representativeson the Left to use universalist, egalitarian, solidaristic measures of social policy on behalf of the least advantaged.Because the poor and
the workingclass were groupsthat overlappedduringthe initial development
of the welfare state, social policy was linked with the worker'sneeds. Faced
with the ever-presentprobabilityof immiseration,the proletariatchampioned
the cause of all needy and developed more pronouncedsentiments of solidaritythan other classes.2 Where it achieved sufficient power, the privileged
classes were forced to consent to measuresthat apportionedthe cost of risks
among all, helping those buffetedby fate and social injusticeat the expense of
those docked in safe berths.
One of the attractionsof the social interpretationof the welfare state has
been its snug fit with a broader social interpretationof Western European
history. In this, the bourgeois revolution paved the way for liberal capitalist
democracy, which, in turn, would eventually be swept away in the proletariat'srise to power. Merely a readingof past events, the first half of this
analysis was left to historiansto pick over. The second containeda prediction
that has proven to be inaccurate.As a result, there developed an alternative
This essay is partof a largerstudy on "The Politics of Social Solidarityandthe Class Basis of the
EuropeanWelfare State, 1875-1975" that will also cover France, Germany,and Britain. I am
gratefulto LawrenceStone, PeterMandler,and othermembersof the Davis Seminarat Princeton
for a thorough working over, and to the American-ScandinavianFoundationfor resources to
conduct the research. I also owe Daniel Levine a helpful reading of the manuscript.
1 Jean-Jacques
Dupeyroux, Evolution et tendances des systemes de Securite sociale des pays
membresdes communauteseuropeenneset de la Grande-Bretagne(Luxembourg,1966), 55-59.
2 Franz-XaverKaufmann,Sicherheitals
soziologisches und sozialpolitischesProblem: Untersuchungenzu einer WertideehochdifferenzierterGesellschaften (Stuttgart, 1970), 18.
0010-4175/89/1163-2336 $5.00 ? 1989 Society for ComparativeStudy of Society and History
3
4
PETER
BALDWIN
versionof the social interpretation,a reformistsocialist accountthat sought to
identify significant victories won peacefully by the Left to mark a gradual
transformationfrom the bourgeois era to that of the working class. In this
scheme, certainsocial-policy reformsin certaincountriestook the place of the
socialist revolution.Underthe rightcircumstances,social policy went beyond
fine tuning the capitalist system or appeasing the laboring classes. Certain
kinds of social policy restrictedthe rule of the marketover basic conditionsof
existence, taking a step beyond capitalism. The social interpretationof the
welfare state became part of a social-democraticvariant of the traditional
Marxist reading of modem history. Its outcome was social reform, not socialist revolution;a pensioned, not a dictatorial,proletariat;not the stateless
society, but the welfare state.
Although simple, the social interpretationof the welfare state was not
immediatelyobvious. It seemed to work only for some countries. It fit certain
periods better than others. In liberal Britain, the working class was at best
partially responsible for first forays into welfare statism. Even worse,
Bismarck's Bonapartistgoals were impossible to reconcile with the social
interpretation.The workingclass was the passive object of social policy, not
its initiator. Welfare measures were meant to preserve an unjust order by
improving, while not fundamentallychanging it. On the otherhand, William
Beveridge and Labour'sreformsin BritainafterWorldWarII and the success
of egalitariansocial policy in socialist Scandinavia, offered examples of an
alternativeapproachto the welfare state, one that went beyond liberaltinkering, one that reflected the interestsof workers, not their masters. Out of this
contrasta conceptual tension developed between at least two kinds of social
policy, two kinds of welfare states: the conservative and the authentically
reformist. Observersof the Anglo-Scandinavianscene (especially afterWorld
War II) could, and largely did, rest content with some variantof the social
interpretation.3Observersof othercountrieswere left to seek explanationsfor
why social policy there did not resemble this ideal. The result has been a
curious ambivalence about the social interpretation.Often taken for granted,
rarely articulated, it frequently lies implicit in discussions of social policy
without informingthem. The cause of this mixtureof widespreadassumption
and rudimentaryexpression is a fundamentalambiguity at the heart of the
welfare state as an historical concept.
The bourgeoisrevolution, in the mannerthat constructwas used before its
recentdecline, assumedits classic form in France. Subsequentand analogous
events in Germanywerejudged a failurein comparisonto what they ought, by
3 This is why general histories only of Britainand Sweden seek to define the essence of their
currentincarnationsas welfare states: T. O. Lloyd, Empire to Welfare State: English History,
1906-1967 (Oxford, 1970); PaulineGregg, The WelfareState: An Economic and Social History
of Great Britainfrom 1945 to the Present Day (London, 1967); Kurt Samuelson, From Great
Power to WelfareState: ThreeHundredYearsof Swedish Social Development (London, 1968).
SCANDINAVIAN
ORIGINS OF WELFARE STATE
5
this account, to have been. The ideal natureof the Frenchphenomenonwas
not marredby Germany's inability to emulate it. On the contrary, not the
model, but the circumstancesacross the Rhine were pronouncedan aberration. For the welfare state, the path from event to interpretation,from the
classic historicalexample to its deviations, was reversed. At almost the same
time as Bismarcktaintedthe bourgeois revolutionin Germanyby imposing it
from above on the class that ought, in the traditionalsocial interpretation,to
have been its initiator,he associatedthe inaugurationof the welfare state with
the preservationof an archaic social order, the smooth functioning of the
capitalist system, the political dominationof conservatives.4
The social interpretationof the welfare statehas been made possible only to
the extent that social policy was freed from its tie to Bismarckand Bonaparte
and associatedpositively with the downtrodden,particularlythe workers, and
their strivingsfor greaterequality and a fairerdistributionof burdens. Based
on a selective reading of certain historical experiences, it was first made
plausible by the world-wide push for a universalist, egalitariansocial policy
that culminated during the final years of World War II, spilling over into
majorattemptsat change, of which the Beveridge Plan and Clement Attlee's
legislation were the crowning achievements. The postwar wave of reform
underminedthe Bonapartistview of social policy that Bismarck's legislation
had encouraged. Social policy could be used for reactionarypurposes, but,
given the right circumstances, social legislation could also be the autonomous, authenticallyemancipatoryaction of the underprivileged.
While Labour's reforms inaugurateda new conception of social policy,
they were unable to sustain it alone. Illuminatingthe sky like a flare, brilliantlybut briefly, wartimeefforts permittedthe discovery of a non-Bismarckian strainof social policy that both preceded and was to outlive it. Developments in the Scandinaviancountries had generally passed unremarkeduntil
Beveridge.5 With the attentiondevoted to reformduringand after the war, it
no longer escaped notice that, in the North, long traditionsof socialist power
coincided with social policy of an universalist,egalitariansort. Neither social
policy nor Scandinaviahas ever been the same. With the failure of postwar
reformsin Franceand Germany, and Britain's decline from welfare ideality,
the Scandinaviancountriescame into their own as examples of nations where
enlightened, egalitariansocial policy seemed to have been the independent
achievementof the neediest classes. Where Scandinaviahad earlier attracted
the attentionmainly of those interested in, say, pig farming or temperance
movements, the North suddenly found itself the center of internationalatten4 Asa Briggs refuses to anoint Bismarck's reforms with the title "welfare state" because of
theirBonapartistintent("The WelfareState in HistoricalPerspective," Archives europeennesde
sociologie, 2:2 (1961), 247-49).
5 An exception is discussed in Daniel Levine, "The Danish Connection: A Note on the
Making of British Old-Age Pensions," Albion, 17:2 (Summer 1985), 181-85.
6
PETER
BALDWIN
tion. Admiredby many, it was reviled only by a shrill coterie, whose use of
epithets like "the new totalitarians"for what more reasonable spirits describedas "the middle way" suggested a degree of hyperbolelikely to defeat
its own purposes.6Languishingon the peripheryof Europeanhistory, Scandinavia, in certainrespects, suddenly became its cynosure. By extending its
geographicalhorizons, the social interpretationseemed to have demonstrated
its continued power. The ideal case of the bourgeois revolution had been
French. The peaceful victory of the working class proved to be Scandinavian.7
Novelty and accuracy have not in this case been completely compatible
bedfellows. The result of this new focus has been an anachronisticreadingof
the historyof Nordic social policy. To the extent that Scandinaviais taken, in
these respects, as the standardagainst which to measureother countries, this
distortionhas consequences for an understandingof developments south of
the Eider. The long traditionof social-democraticrule in the North has encouraged a tendency to associate even reforms inherited from another age
with the socialists who followed. The Nordic welfare states came, with good
cause, to be hailed as the pinnacleof social-policy achievement.More important for the social interpretation,they were regardedas the antithesis of the
Bismarckianapproach.
Bismarck's social policy is usually considered reactionary, Bonapartist,
and unsolidaristic.It reflected these characteristicsin at least three ways: It
focussed only on the workers, in the hope of politically defusing that dangerous class. It avoided any wide-rangingsocial equalization and gave expressionto existing markethierarchiesthroughbenefits differentiatedaccording to wages. It relied on unredistributivefinancing collected directly as
premiumsor throughregressive consumptiontaxes. Conversely, Scandinavian welfare policy was the fruit of the common masses' political power,
representedby the socialists. It thereforeincorporateda solidarityof the entire
communityby includingall citizens, offering them egalitarianflat-ratebenefits, and relying heavily on tax financing to distributeburdensby ability to
shoulderthem. Socialist success in implementingmeasures of universalist,
flat-rate,tax-financedsocial policy, it is claimed, qualitativelydistinguishes
social-democraticwelfare states from liberal and conservative systems elsewhere. Scandinaviansocial policy is seen as most closely embodyingthe ideal
"institutional" model of the welfare state that fulfills the concept of social
6 Roland Huntford, The New Totalitarians(London, 1971);
Marquis Childs, Sweden: The
Middle Way (New Haven, 1936).
7 On Sweden's careeras an ideal
type, Are Ruth, "The Second New Nation:The Mythology
of Modem Sweden," in Norden: The Passion for Equality, Stephen R. Graubard,ed. (Oslo,
1986), 240-82.
SCANDINAVIAN
ORIGINS
OF WELFARE
STATE
7
citizenship, limits the free workingof marketrelationsin importantareas, and
lessens inequalities.8
The social interpretationasserts that the Scandinavianwelfare states were
the autonomousachievementof the underprivilegedclasses, that their nature
was determinedby the needs of the impoverished. In other countries, where
social policy reflected a fear of social upheaval, measures were restricted,
divisive, and manipulative. The features that define the exceptionalism of
Nordicwelfarepolicy were, in contrast,the resultof the Left's abilityto forge
a coalition of the downtroddenpowerful enough to implementthe demandof
the poor and unfortunatefor help from the affluentand favored.9This viewthat there was an essential link between the apparentsolidarity, the universalism of early Scandinavianwelfare policy, and the socialists-is misleading.10 It anachronisticallyreads back a misunderstandingof postwarreforms
to an earlierperiod in which other factors were at work. " The characteristic
featuresof Scandinaviansocial insurancewere not bom in the postwarperiod,
when socialist power reachedits height, but were formed at the time the first
legislation went on the books, at the turn of the century. They were determined at the behest of partiesand social groups not associated with the Left.
Universalist, solidaristic social policy was, in this case, not the sort of
qualitativechange claimed by social interpretation.Only apparentlydid it
8 On the Nordic, institutionalmodel of the welfare state, Richard Titmuss, Social Policy
(London, 1974), 30-31; Anne-Lise Seip, Om velferdsstatensfremvekst (Oslo, 1981), 11-18;
NormanFurnissand Timothy Tilton, The Case for the WelfareState (Bloomington, 1977), 1420; Bent Rold Andersen, "Rationalityand Irrationalityof the Nordic WelfareState," in Norden:
The Passion for Equality, Stephen R. Graubard,ed., 117-21; Michael Shalev, "The SocialDemocratic Model and Beyond: Two 'Generations'of ComparativeResearch on the Welfare
State," ComparativeSocial Research, 6 (1983), 315-51.
9 "The congruence of Scandinaviansocial-democraticwelfare policy," one recent account
would have its readersbelieve, "is explained by two critical factors. One was that the parties
chose to abandon the ghetto model in favor of parliamentarymajoritarianism.They had to
cultivate, and fabricate,unity among workers, peasants, and the rising white collar strata.This
naturallyled to an insistence on universalism" (G0sta Esping-Andersen,Politics against Markets: The Social Democratic Road to Power (Princeton, 1985), 154, 145, 148).
10 Examplesof an anachronisticmisattributionof the apparentsolidarityof early Scandinavian
welfare reforms to the socialists: Ake Elmer, Frin Fattigsverige till vdlfirdsstaten: Sociala
forhallandenoch socialpolitiki Sverige undernittonhundratalet,7th ed. (Stockholm, 1975), 127;
Stein Kuhnle, "The Beginnings of the Nordic Welfare States: Similarities and Differences,"
Acta Sociologica, 21, supplement(1978), 26; Guy Perrin, "L'assurance sociale-ses particularites-son role dans le passe, le presentet l'avenir," in Beitrdge zu Geschichte und aktueller
Situationder Sozialversicherung,Peter A. Kohler and Hans F. Zacher, eds. (Berlin, 1983), 4041; ThomasWilson, ed., Pensions, Inflation, and Growth:A ComparativeStudyof the Elderly in
the WelfareState (L6ndon, 1974), 159; G0sta Esping-Andersenand WalterKorpi, "From Poor
Relief to InstitutionalWelfare States:The Development of ScandinavianSocial Policy," in The
ScandinavianModel, John Erikson et al., eds. (Armonk, 1987), 45-46.
11 An explanation of why the universalism of postwar reforms in Scandinavia was not a
socialist initiative is given in Peter Baldwin, "How Socialist is Solidaristic Social Policy?
Swedish PostwarReform as a Case in Point," InternationalReview of Social History, 2 (1988),
121-147.
8
PETER
BALDWIN
transcendnarrowclass or group interests. Only in retrospecthas it come to
seem the demandof the rising working class and the Left. When first introduced in Scandinavia,universalist,egalitarian,tax-financedwelfare measures
were a goal some bourgeois groups and parties were able to inflict in their
own interestson the rest of society.
The rest of this account argues the case for these assertionsby examining
the origins of Scandinaviansocial policy's unique features. It analyzes the
reasons why measureshere were universalist,covering all regardlessof social
class, and why they were financedsignificantlythroughtaxes, not premiums.
It takes pension policy as the most convenient gateway to these issues. It
concludes that universalism and tax financing were not the expression in
terms of welfare policy of any uniquely Nordic sense of social solidarityand
certainly not one inspired by socialists or workers. Instead, these features
were the result of narrowinterestdisputes fought out between the rising rural
middle class and the entrenchedbureaucraticand urbanelites. It follows that
the social interpretationof the welfare staterests on shakyfoundationseven in
its Scandinavianredoubt.
FARMERS,
SOCIAL
CONSERVATIVES,
POLICY:
AND
THE ORIGINS
OF UNIVERSALIST
DENMARK
The first Danish social-insurancereforms were articulatedin the context of
the major political dispute of the late nineteenth century. This crisis was
sparked by the unwillingness of the conservative H0jre (the party of the
monarchicalbureaucracy,the urbanprofessional and manufacturingclasses
and the aristocraticlandowners)to grant the mainly agrarianliberal Venstre
Party the political representationto which farmers' growing social and economic importancegave them a claim. Farmerssought reforms that would
benefit them financially. When the constitutionalconflict draggedon, social
policy became partof the largerpolitical strugglebetweenliberalsand conservatives, and eventually was an element in its resolution. Social reform was
taken up as an alternativeway of achieving the effects of the fiscal demands
still blocked by the conservatives. Farmersused social policy tailoredto their
specifications to squeeze concessions from a state they did not yet control,
before more direct solutions were possible. Withoutcoverageof all, agrarians
would not benefit from social measures. Without tax financing and state
subsidies, farmers, as employers, would be disadvantagedby higherproduction costs that they, as exporters,could accept less sanguinelythan the urban
manufacturersamong their political opponents, who aimed only at the home
market.The political victory for the liberals that permittedfarmersto reform
the tax system and shift burdensfrom the countrysideto the cities had to wait
until the turn of the century. Universalist, tax-financedsocial policy was its
herald.
Earlydiscussions of social-policy reformgave farmerstheir first chance to
SCANDINAVIAN
ORIGINS
OF WELFARE
STATE
9
demand a respite from the growing burdens of poor relief on local authorities.12 As more of the populationwas granteda voice in politics during
the late eighteenth and early nineteenthcenturies, the contradictionwas aggravated between the absolutist monarch's comparatively generous social
policy, and the disinclinationof farmers, who paid the lion's share of local
taxes, to bear a heavier load than necessary. Especially after 1835, with
widened representationin the estates, farmerslamentedthe growing cost of
poor relief, and debatedthe merits of workhouseson the British model and a
declassing treatmentof the poor. In 1874, liberals first tried to reduce their
costs throughanother,and ultimatelymore successful, approach,demanding
subsidiesfromthe statefor self-help, praisingthe relief this would bringto tax
burdens.13The report of the Commission on Workers' Conditions in 1878
continuedthe liberal farmers'interestin state subsidies.14 They worried, lest
employers bear the brunt of the social provision, especially in agriculture,
where a dependence on foreign markets made it difficult to pass along expenses. If low wages in the countrysidewere not to be raised, costs would
have to be shifted to consumersor employers. Neither possibility was attractive, so the farmers' solution for pensions was based on voluntary arrangements, with the state responsiblefor half of the funding.15The commission's
conservativeminority,on the otherhand, saw no justificationfor state financing. Shifting the burdensfrom local governmentsto the state did not lessen
the demoralizingeffect of public subsidies as such. Farmershad long exploited poor relief as a subsidy to their laborers'inadequatewages, but it was
not the public's task to supplementincomes. Since wages that were sufficient
12 Older, but still useful, accounts include Danmarkssociallovgivning (Copenhagen, 191820); HaraldJ0rgensen, Studierover det offentligeFattigvtesenshistoriskeUdviklingi Danmarki
det 19. aarhundrede(Copenhagen, 1940); Kjeld Philip, Staten og Fattigdommen:FernKapitler
af dansk Kulturpolitik(Copenhagen, 1947); Cordt Trap, Om Statens Stilling til Ubemidledes
Alderdomsfors0rgelsei flere europceiskeLande (Copenhagen, 1892); J0rgen Dich, "Kompendium i socialpolitikkens historie: I. Udviklingen indtil 2. Verdenskrig," manuscript, 2d ed.
(1967). Systematizing and expanding the rather schematic works of Dich and others is J0rn
Henrik Petersen's recent and extensive account of pension policy in Den danske alderdomsforsorgelseslovgivningsudvikling:Bind I. Oprindelsen(Odense, 1985) (citations from Petersen are to the more detailed, unpublished manuscriptof the dissertationof the same title
(Odense University, 1985).
13 Dich, "Kompendium," 19. Petersen, Den danske alderdomsfors0rgelseslovgivningsudvikling, 143-48.
14 Betcenkningafgiven af den ifolge Kgl. Resolutionaf 20de September1875 til Unders0gelse
af Arbeiderforholdenei Danmark nedsatte Kommission (Copenhagen, 1878), 71-77, 81-83.
i halvfjerdseme:ArbeBackgroundin G. Warmdahl,"Statens Stilling til Arbejdersp0rgsmaalet
jderkommissionenaf 1875," in Sociale studier i dansk historie efter 1857, Povl Engelstoft and
Hans Jensen, eds. (Copenhagen, 1930), 64-81.
15 Rigsarkivet, Copenhagen, PR 404-07-2, Arbejderkommissionenaf 1875, Minutes of a
meeting 8 December 1875 or 1876. This was the argumentput forth by V. Falbe-Hansen. A
professorof statistics, he was a conservativedeputy at the time, but laterjoined the upperhouse
in 1909 as a royal appointeeand a liberal.
10
PETER
BALDWIN
even in times of old age and disability were the employer's responsibility,
contributoryfinancing was the solution.16
For the time being, farmers'hopes for state-subsidizedsocial policy failed
with the sharpeningof the constitutionalconflict thatpittedthe liberal majority in the lower house against a conservativegovernment.Once moderatesin
the opposing camps wearied of battle, a rapprochement,phrasedin terms of
social policy, became possible, and eventually it was consummatedin the
1891 pension law thatsent Denmarkinto the welfarevanguardas the bearerof
a universalist,tax-financedpension system unlike thatof Bismarck.17 Among
liberals, the conflict was coming to a head between radicals, who resisted
cooperationwith the governmentbefore settlementof the constitutionalissue,
and moderates, who were willing to compromise.18Moderateswere willing
to trade an end to the hostilities for conservativesupportof agriculturaltariff
reform.19 They proposed replacing tariffs on raw sugar with a tax on the urban
workingman'sbeer, and to distributesmall gardenparcels to otherwise landless agriculturallaborers.20Cheapersugarand land redistributionmight, they
hoped, stimulatea preservesindustryand supplementruralincomes. Among
the conservatives,estate owners were encouragedto compromisewith liberals
by the problems they sharedin common as agrarians.
In 1890, poor relief and reform of tariffs and taxes intersectedwith the
chance to resolve the constitutionaldispute to bring forth the first pension
legislation. Faced with an understandingbetween moderateliberals and conservativesfor new taxes on the urbanand laboringclasses' favoriteinebriants,
radical liberals proposedusing their income to finance noncontributorypensions for the poor of all classes.21 Four monthslater, in March 1891, moderates from the parties to the future rapprochementagreed on a response. A
compromise over tariffs foundered on the upper house's unwillingness to
relax protectionism, but was reached instead on pensions. The moderates'
move was an overbid that shifted tax burdensfrom sugarto beer and carved
16 Betcnkning, 87-89.
17 On the complicated negotiations leading up to 1891, Petersen, Den danske alderdomsfors0rgelseslovgivningsudvikling, ch. 12; Dich, "Kompendium," 23-26; Trap, Statens
stilling, 260-77.
18 N. Neergaard, Erindringer (Copenhagen, 1935), 235-40. Frede Bojsens politiske
erindringer,KristianHvidt, ed. (Copenhagen, 1963), 189ff.
19 Rigsdagstidende, FT, 14 October 1890, col. 44-46. A general account is Poul Kierkegaard, "Frede Bojsen som Socialpolitiker," in Mcendog Meninger i Dansk Socialpolitik, 18661901, Povl Engelstoft and Hans Jensen, eds. (Copenhagen, 1933), 67-107.
20 Rigsdagstidende,Fr, 30 October 1890, col. 440-47.
21 Marcus Rubin, "Hvad koster en Alderdomsfors0rgelse for de danske Arbejdere?"
NationalokonomiskTidsskrift, 26 (1888), 357-58; idem, "Alderdomsfors0rgelsesforslaget,"
National0konomiskTidsskrift,29 (1891), 44-48; Trap, Statens stilling, 256; MarcusRubin, Om
Alderdomsfors0rgelsen(Copenhagen, 1891), 12-16; Letter, Rubin to Edvard Brandes, 9 December 1890, in Marcus Rubins brevveksling, 1870-1922, Lorenz Rerup, ed. (Copenhagen,
1963), I, 319-20; MarcusRubin, Nogle erindringer(Copenhagen, 1914), 143-44.
SCANDINAVIAN
ORIGINS OF WELFARE STATE
II
out of a previous governmentproposalon poor relief a bill on statutoryaid for
the worthy elderly.22 Local authoritieswere to grant pensions to all morally
upright needy over age sixty, with half their expenses reimbursedby the
state.23 What the moderateliberals and conservativeshad agreed on was to
begin to end the constitutionalconflict and, in return, to shift a significant
fraction of local poor-reliefexpenses from agrarians'shoulders, to the state.
Two points standout on the socialists' attitudeto this effort at social-policy
reform. First, Denmark's agrariansociety prevented the socialists, to the
extent they entertainedambitionsto power, from limiting their concern to the
urbanworking class.24 In social policy, this meant not restrictingarrangements to any particularclass. Nor could special considerationfor urbanareas
be pressed.25 The socialists' need to appeal to the petite bourgeoisie also
introducedan ambivalencein their relations with the unskilled lowest layers
of the workingclass, allowing them to accept the demeaningcriteriaof moral
worth and respectabilitythat remained a persistent characteristicof Danish
social policy.26 Second, like their British colleagues, Danish socialists rejected the contributoryand self-help principlesof pension policy. Membersof
the extensive networkof voluntarysickness funds could pay premiums, but
furthercontributions,for otherforms of social policy would strainthe average
budget.27 Wages were modest, the right to work was not recognized, and
workers were the source of surplus value; unconditionalhelp from the state
was, therefore,theirright in times of distress.28This derivationof the rightto
22 In
1890, the governmenthad proposedlegislation to reformpoor relief by grantingit, shorn
of its usual demeaningconsequences, to the worthyneedy. Rigsdagstidende, 1890/91, TillaegA,
col. 3393ff.; FT, 11 March 1891, col. 4537-45, 4591-97.
23 The conservativesmanagedto limit the state's obligation to refund
municipalexpenses to
two million crowns annually.Not until 1902, afterthe final resolutionof the parliamentarybattle
and liberal victory was this limit removed.
24 An excellent account of the relation between socialists and their
political clientele in
Denmark'sagrariansociety, with importantimplicationsfor the historyof socialism in general, is
Hans-NorbertLahme, Sozialdemokratieund Landarbeiterin Danemark(1871-1900), (Odense,
1982). Also, HenningGrelle, Socialdemokratieti det danske landbrugssamfund,1871-ca.1903
(Copenhagen, 1978), and Georg N0rregaardand Hans Jensen, "Organisationsfors0gblandt
Landarbejderne,"in Bidrag til Arbejderklassensog ArbejdersporgsmaaletsHistorie i Danmark
fra 1864 til 1900, Povl Engelstoft and Hans Jensen, eds. (Copenhagen, 1931), 54-202.
25 Thus, for example, socialists rejectedthe
assumptionof the Radical Liberals' bill that life
was cheaper in rural than urban areas and that differential benefits were necessary. Rigsdagstidende, FT, 20 December 1890, col. 1823.
26 Torben Berg S0rensen, Arbejderklassens organisering og socialpolitikkens dannelse
(Copenhagen, 1978), 104-05, 168-74.
27 This is the argumentmade, with much supportingevidence on wages and contributions,in
P. Knudsen, Sygeforsikring og Alderdomsforsorgelse: Betcenkningafgiven af det paa de
k0benhavnskeog frederiksbergskeSygekassersFcellesm0deden 29de og 30te August 1883 nedsatte Udvalg (Copenhagen, 1888), 245-63 et passim.
28 Else Rasmussen, "SocialdemokraternesStilling til de sociale Sp0rgsmaalpaa Rigsdagen,
1884-1890," in Mcendog Meninger i Dansk Socialpolitik, 1866-1901, Povl Engelstoft and
Hans Jensen, eds. (Copenhagen, 1933), 149.
12
PETER
BALDWIN
aid from the theory of surplus value was a common socialist position at the
time, shared with the German Left.29 The right to benefits founded on the
productionof surplus value remaineda purely theoreticalideal among German socialists, soon replaced in practiceby contractualentitlementbased on
contributions.30In Denmark, where a happy overlap of interests between
socialists and liberals allowed significant public participationand a noncontributorysystem, reliance on the state remainedboth theory and practice.
Socialists, however, were not the ones who matteredin this period. Without a doubt, liberals and conservativeshoped to dampenthe Left's appeal by
supportingsocial policy and other improvementsfor rurallaborersand smallholders. Nevertheless, the nature of social reform was determinedby the
agrarian liberals, for their own reasons. The constitutional conflict saw
Danish politics split between the conservatives and liberals. Much has been
made of earlier land reforms, the influence of popular education, and the
flowering cooperativemovement to explain the political liberalismof Danish
farmers.31These were certainly factors. Their liberalism was provoked by
conservativeunwillingness to grantthem political power proportionalto their
social importance.One of the peculiaritiesof the Danish situation, however,
was the mannerin which farmersreactedto the agriculturalcrisis, undergirding their political opposition with economic motives that prevented their
division into protectionistsand free-traders.
Danish farmers, who were exportersdependenton cheap foreign fodder,
had obvious cause to be economic liberals. What distinguished them from
their German and Swedish colleagues was their ability, once grain prices
began to drop, to shift to dairy farming and livestock and continue exporting.32Theirconsistentsupportfor free trade,even as the rest of Europeturned
coats, made impossiblethe common groundbehindhigh tariffsbetween some
agricultureand some industry, that Germanyachieved with the marriageof
iron and rye in 1879.33 Because Danish industrialistsand manufacturersproduced for the home market, political realignments-based on a common
29 Hertha Woolf, Die Stellung der Sozialdemokratiezur deutschen Arbeiterversicherungsgesetzgebungvon ihrer Entstehungan bis zur Reichsversicherungsordnung(Berlin, 1933), 4546.
30 The Germansocialists' interest in contributoryfinancing was tied to the relation between
premiumsand representationin the social insuranceadministrativecouncils, a motive absent in
Denmark, where local authoritieswere to run the system.
31 Danes boasted that, whereas among their larger neighborsthe cities were progressive and
the countrysidereactionary,in Denmarkthe situationwas reversed(EdvardBrandes, Fra 85 til
91: En politisk Oversigt (Copenhagen, 1891), 82).
32 Svend Aage Hansen, 0konomisk vceksti Danmark (Copenhagen, 1972), I, chs. 8, 9; Ole
Bus Henriksen and Anders 0lgaard, Danmarks udenrigshandel, 1874-1958 (Copenhagen,
1960). Overviews in English in Michael Tracy, Agriculture in Western Europe (New York,
1964), and Roy Millward, ScandinavianLands (London, 1964), ch. 8.
33 The comparisonbetween Germanyand Denmarkin this respect was memorablydrawnby
AlexanderGerschenkronin Bread and Democracy in Germany(Berkeley, 1943), 39-40.
SCANDINAVIAN
ORIGINS
OF WELFARE
STATE
13
protectionist position, cutting across occupational categories-were hampered. The farmers'inability to compromisewith protectionistconservatives
laid the socioeconomic foundationof the constitutionalconflict. The political
deadlock, in turn, preventedliberalagrariansfrom introducingthe tax reforms
on their agenda, above all income and wealth taxes to lessen those on land,
until after social reform had passed.34
Tax reform was a longstandingagrariandemand. Direct state income and
wealth taxes had been on the liberalprogramsince 1882. The large aristocratic landowners among the conservatives wished to retain land and property
taxes that, though weighty, founded their claim to disproportionalpower.
Since land taxes affected them only slightly, the conservativeurbanmercantile and manufacturingclasses agreed. On the other side, farmersresentedthe
old tax structure,since their debt burdens, increasedduringthe shift to livestock and dairy farming, were ignored. Local taxes seem to have prompted
the most justified reason for complaint. Unlike the income of the state, raised
largely from indirect taxes, local revenues were the fruit of direct property
taxes that increased during that century.35As agriculturegraduallybecame
more differentiated,with otherprofessionsmakinginroadsin the countryside,
the inheritedlocal tax system was unable to adjust, promptingincreasingly
vociferous complaints.36Since poor relief was funded by local taxes, there
was a direct connection between social and tax reform. State-financedpensions promisedto shift the costs of maintainingthe indigentelderly from local
authorities'propertytaxes to the central state's indirectconsumptionlevies.
Farmersexpected to gain most from this displacement.Because the constitutional conflict blocked more direct reforms, publicly-financedpensions became a partialsubstitutefor tax reform.
Both state financing and premiums on the German model would have
relieved the weight that insteadfell on the most progressivelyassessed levies
of the day: local cadastraltaxes. While farmers'ambitionto reducetheirfiscal
burdenscould have been satisfied by either means, financing through taxes
promised them several advantages. First, it eliminated the need for an employer's contribution.Far and away the largest group of employers, farmers
34 The tax reformsof 1903 confirmedthe political shift of 1901, when liberalsfinally replaced
conservativesin government.Urbanpropertywas drawn into the distributionof burdens, and a
general tax on income and wealth was introduced.Burdenswere markedlyshifted from ruralto
urban areas. Accounts are in H. C. Henningsen, "Beskatningsproblemeti Nutiden," in Den
danske Stat, 2d ed. Even Marstrandet al., eds, (Copenhagen, 1933), 320-64; Sven R0gind,
Danmarks Stats- og Kommuneskatter(Copenhagen, 1915), 7-12; Michael Koefoed, "Skattesystemerneaf 1802 og 1903," National0konomiskTidsskrift,41 (1903), 337-63; K. A. WiethKnudsen, Dansk Skattepolitikog Finansvcesen(Copenhagen, 1928), 47-52.
35 Helge Nielsen and Victor Thalbitzer,Skatter og Skatteforvaltningi celdre Tider (Copenhagen, 1948), 127; K., "Hvorledes fordele Skatternei Danmarksig paa de forskellige Samfundsklasser?"National0konomiskTidsskrift,32 (1894), 203-05.
36 A. Clausager, "Godsernesbeskatningsforhold,"in Herregaardeneog Samfundet,Therkel
Mathiassen(Copenhagen, 1943), 283-84.
14
PETER BALDWIN
stood to bear the bruntof costs distributedin this way. Because most farms
were small or medium-sizedenterprisespracticinglabor-intensiveagriculture,
they could not bearpremiumswith the same facility as the large protectionist
industriesof Germany.37Second, the use of tax financingavoided the higher
wages needed to enable workersto pay premiums.38Unlike the protectionist
Germansand Swedes, Danish farmerssold at prices determinedon the world
marketand could absorbhigherproductioncosts only at the risk of decreased
competitiveness. State financing held out special economic advantages to
farmersto the extent they could side-step the higher taxes that would follow.
Related to these considerationswas a third factor born of the severity of the
late nineteenth-centuryagriculturalcrisis. Funded contributorysocial insurance could have begun only aftera lengthy transitionperiodduringwhich the
currentlyneedy would still be without aid. Tax-financed, noncontributory
measures, on the other hand, took effect at once.39
Such factors determinedagriculture'sreluctanceto assume social burdens
directly. Therestill remainedthe questionof where they could be placed. The
inheritedtax structureand antagonismsbetween urbanand ruralgroups gave
state financing the advantageof shifting burdensnot merely away from the
farmers,but from the countrysideto the cities. Farmersattachedgreat importance to the state-financedpensions' ability to reduce their local poor-relief
costs by displacing the expense of providingfor the elderly to state taxes.40
The countrysidecontributedproportionallyless to the state's revenue (raised
largely from indirect taxes) than cities. The new taxes introducedto help
finance pensions, they reasoned, would affect urbanworkersmore than their
rural colleagues, and, generally, economies based on cash more than in
kind.4' Finally, there was also an element of institutionalinertia that tipped
the balance towardtax financing. The 1891 pension law resembled the old
poor-relief system, shorn of its most disagreeableaspects. Avoiding a massive new bureaucracyin the train of a Bismarckiansystem appealed to the
37 In general, large businesses throughoutEurope,especially if protectedby tariffs, fearedthe
increasedproductivecosts of contributorysocial insuranceleast, small businesses most. Freetradingsmall businessmen, like Danish farmers, were thereforethe strongestsupportersof taxfinanced social policy. Where they won, so did it. On business interestselsewhere, see HansPeter Ullmann, "IndustrielleInteressenund die Entstehungder deutschen Sozialversicherung
1880-1889," Historische Zeitschrift, 229: 3 (December 1979), 574-610; Henri Hatzfeld, Du
pauperismed la Securite sociale (Paris, 1971), 137-41.
38 The Germancontributorysystem worked because it was aimed at the well-paid industrial
labor aristocracy.Since Danish legislation focussed first and foremost on agriculturallaborers
with their lower wages, this would not do.
39 Poul M0ller, Gennembrudsdr:Dansk politik i 50' erne (Copenhagen, 1974), 2.
40 A later account found that rurallocalities had profited most from the pension legislation.
Rigsdagstidende, 1896/97, TillaegB, col. 3101-10.
41 FredeBojsen, Lovgivningsvcerket
1890-95 og dets Folger (Copenhagen, 1898), 4-5; L. V.
Birck, Toldog Accise (Copenhagen,1920), 217; Michael Koefoed, "Skatternei Danmark18701900," NationalokonomiskTidsskrift,40 (1902), 374.
SCANDINAVIAN
ORIGINS OF WELFARE STATE
15
liberals' penchantfor administrativeminimalism and their disinclination to
swell the ranksof civil servants, who usually voted for conservatives.42
Taxes were only one of the reasonswhy farmersfavoredreformthat promised to ease their burdens. Despite a successful shift in products, they faced
worsening problems as the agriculturalcrisis deepened.43 Agrarians were
affected simultaneouslyby two problems.The transitionto animalproduction
was profitablebecause livestock and dairy prices remainedstable, while feed
costs declined. In the 1890s, transportationefficiencies intensified competition with the New World and pressed livestock prices. As profits were
squeezed, labor problems arose. Animal and dairy farming were more labor
intensive than grain, while, perversely, the new productive techniques allowed smallholdersto withdraw from wage earning to cultivate their own
land. Largefarmersneeded more labor at the same time that competitionand
falling prices limited their ability to improve conditions and to stem migration. How to make rurallife more attractivewas an importantconcern. Pensions were but one of the most successful measuresconsidered that demonstratedthe close connectionbetween the agriculturalcrisis and social reform.
Because agrarianssought to improve the lot of their laborers, and because
theirwork force includedboth wage earnersand smallholders,dependentonly
partially on outside employment, limiting social measures to wage earners,
not to mention the urbanworking class, was out of the question.44
FARMERS, CONSERVATIVES,
SOCIAL POLICY: SWEDEN
AND THE ORIGINS OF UNIVERSALIST
Although the political circumstancessurroundingpension reformin Sweden
differed from those in Denmark, the most importantfeatures were shared.
Above all, universalistlegislation was rooted in its agrariansocial structure.
Both the government administrationand the socialists initially favored pensions aimed at the workingclass alone. The bureaucratsand the Left could do
little against the wishes of farmersnot to be excluded from statutorybenefi42 Aage S0rensen, "Om Alderdomsunderst0ttelsei Danmark,Australianmed Ny Zeland og
England," Tidsskriftfor Arbejderforsikring,5 (1909/10), 3-7.
43 The most sustainedanalysis linking the agriculturalcrisis, tax policy, and social reform is
undertakenin Petersen,Den danske alderdomsforsorgelseslovgivningsudvikling,ch. 10, which
fleshes out the hypotheses mentioned, but never developed, in Philip, Staten og Fattigdommen,
68-70, and J0rgen Dich, Den herskende klasse: En kritisk analyse af social udbytning og
midlerne imod den, 4th ed. (Copenhagen, 1973), 25-28. Also, Hans Jensen, "Landarbejdersp0rgsmaletsUdvikling i Danmarkfra ca. 1870 til ca. 1900," in Bidrag til Arbejderklassens
og Arbejdersp0rgsmaaletsHistorie i Danmarkfra 1864 til 1900, Povl Engelstoft and H. Jensen,
eds. (Copenhagen, 1931), 48-54.
44 It was no coincidence, Frede Bojsen, leader of the moderateliberals, explained in retrospect, that social reform was concerned with the groups most in need, with the working rural
populationthat had not yet fallen to socialist agitation. The legislation passed was, in the main,
aimed to fit ruralconditions, without, however, giving other groupsreasonto complain (Bojsen,
Lovgivningsvcerket,4).
I6
PETER
BALDWIN
cence and theirdisinclinationto pay for measuresfrom whose enjoymentthey
were barred. The decision against contributorysocial insuranceon the German model was the result of similarforces. Extendingpensions to all citizens
underminedfinancing by premiums. The self-employed, especially farmers,
saw no reason to pay for their benefits alone, while workerswere helped out
by their employers. Tax financingproved necessary in a countrywhere most
citizens were still independents.While contributionswere tolerablefor large
businesses, they were, for the mass of small agriculturalemployers, an unacceptable burden that could be transferredto the state and the tax-paying
community at large. The universalistand largely tax-financedpension system, in these ways, reflected the demandsof small farmers.
Attemptsto solve the pension problem in Sweden at the end of the nineteenthcenturyfailed, with success reservedfor a law in 1913 based on novel
principles.This legislation introduced,for the firsttime, "folk pensions" that
gave all citizens at least token benefits, regardlessof class or income. Reform
came late because farmersopposed the bureaucracy'sinclination to follow
Bismarck'sexample but, for the time being, they could only obstructgovernment plans, not yet implementtheir own. At the same time, while farmers
were still unableto dictate change, their desires were less clearly opposed to
the conservative program than in Denmark. Previous satisfaction of agriculturaldemandson tax and military issues, that to the south were resolved
only with or after disputes over social policy, moderatedantagonisms between farmers and landed aristocratson the one hand, and industrialists,
manufacturers,urbanprofessionalclasses, and the civil service on the other.
Among the issues of concern to farmers, two were closely connected:
military reorganizationand tax reform. Military burdens were distributed
unevenly, resting with particularweight in the countryside.Taxes, too, were
archaicallyand unfairly apportioned.The conservatives' ambitions to modernize the armed forces and the farmers' contradictinghopes of a frugal
administrationand theirdeterminationnot to concede militaryreformwithout
tax reform were reconciled by degrees over two decades. Taxes that especially burdened agriculturalland were gradually reapportioned,and the
army was reformed.45Unlike in Denmark, where social reform coincided
with the political deadlock between urbanand ruralgroups, major agrarian
demandshad been satisfied in Sweden by the time social reformwas first put
on the agenda. Tariffs were anotherissue over which the Swedish agrarians
and conservatives fought less bitterly than across the Kattegat. Ratherthan
45 Accounts of military and tax reform are in Per Hultqvist, Forsvar och skatter: Studier i
svensk riksdagspolitikfrdan representationsreformentill kimpromissen1873 (Goteborg, 1955);
idem, Forsvarsorganisationen,vdrnpliktenoch skatterna i svensk riksdagspolitik1867-1878
(Goteborg, 1959); and TorgnyNev6us, Ett betryggandeforsvar: Vdrnpliktenoch armeorganisationen i svenskpolitik 1880-1885 (Stockholm, 1965).
SCANDINAVIAN
ORIGINS OF WELFARE STATE
17
following their Danish colleagues on free trade, Swedish farmers reacted
much like their German counterparts.46Those with rye for sale, generally
largerfarmersin centralSweden, welcomed high tariffs. Dairy and livestock
farmers, who were grain consumers, opposed them.47 Protectionist agriculture, representedby landed aristocratsin the senate and rye-producing
farmersin the lower chamber,made itself heard. Politically, the tariff dispute
had far-reachingeffects. The agrarianssplit, dividing into free-tradingand
protectionist wings, with other parties following suit. Large farmersin the
lower chamber, and landed aristocratsand industrialistsin the senate, identified common interests and inaugurateda traditionof agrarian-conservative
cooperationthat lasted until the 1930s. In the lower house, the traditional
oppositionbetween city and countrysidewas moderatedby new realignments
over tariffs as workers and free-tradingliberals found common ground.48
Developments in social insurancebegan in Sweden at aboutthe same time
as in Denmark.49For pensions, the First Workers'InsuranceCommission's
report in 1889 unsuccessfully proposed measures covering all with flat-rate
contributorybenefits. Deciding whom to include, the commission defied its
mandateto provide only for workersand those in comparablecircumstances.
Insurmountabledifficulties, it concluded, would plague attempts to distinguish workers from the self-employed and to deal with the many who
would cross any such line duringtheir careers.50The Second Workers'Insurance Commission's proposals differed.51Following Bismarck's lead, measures were now limited to the working class.52 The need for insurancevaried
46 J6rn Svensson, Jordbruk och depression 1870-1900: En kritik av statistikens utvecklingsbild (Malmo, 1965). An overview in English is G. A. Montgomery, The Rise of Modern
Industryin Sweden (London, 1939), 145ff.
47 Sten Carlsson, Lantmannapolitikenoch industrialismen: Partigruppering och opinionsforskjutningari svenskpolitik 1890-1902 (Stockholm, 1953), 65-81; ArthurMontgomery,
Svensktullpolitik1816-1911 (Stockholm, 1921), ch. 7; Jan Kuuse, "Mechanisation,Commercialisation, and the ProtectionistMovement in Swedish Agriculture, 1860-1910," Scandinavian
Economic History Review, 19: 1 (1971), 23-44.
48 DankwartA. Rustow, The Politics of Compromise:A Studyof Parties and CabinetGovernment in Sweden (Princeton, 1955), 40-42; EdvardThermtenius,Rigsdagspartierna,Vol. XVII
of Sveriges Riksdag (Stockholm, 1935), ch. 6, esp. pp. 128-30; Per Sundberg, Ministdrerna
Bildt och Akerhielm:En studie i den svenskaparlamentarismensforgardar (Stockholm, 1961).
49 The standardwork on pensions is Ake Elm6r, Folkpensioneringeni Sverige: Med sdrskild
hdnsyntill alderspensioneringen(Lund, 1960). Detailed accounts of the early phase of Swedish
social insurance are Karl Englund, Arbetarforsdkringsfragani svensk politik, 1884-1901
(Uppsala, 1976), and Hans Peter Mensing, Erscheinungsformenschwedischer Sozialpolitik im
und die Gewerausgehenden 19. Jahrhundert:Adolf Hedin, das Arbeiterversicherungskomitee
beaufsicht nach 1890 (Kiel, 1979). An account in English is in Hugh Heclo, Modern Social
Politics in Britain and Sweden: From Relief to Income Maintenance(New Haven, 1974), 17895. The beginnings of the social-insurancedebate are surveyed in ArthurMontgomery, Svensk
socialpolitik under 1800-talet, 2d ed. (Stockholm 1951).
50 Arbetareforsdkringskomitens
betdnkande(Stockholm, 1889), I, 3, 43-73.
51 Nya arbetareforsdkringskomitens
betdnkande(Stockholm, 1893), I, 25-107.
52 The workingclass was defined to include those
employed by others and having an income
lower than 1,800 crowns annually, but to exclude casual laborerson the fringes between wage
I8
PETER
BALDWIN
among social groups, it concluded. Wage earnerswere more dependenton
poor relief than independents,who enjoyed a certainprotectionthroughtheir
property.As increasingnumbersof workersrelied on poor relief, burdensthat
were unequally distributedthrough local taxes increased. The workers and
their employerswere thereforeto pay premiums.The clarity of the commission's proposalwas marred,however, by the dissentingopinion of the agrarian leader, A. P. Danielson.53Speakingfor the interestsof farmersnot to be
barredfrom what otherwise threatenedto become exclusively working-class
legislation, he regrettedthe exclusion of the most ruralinhabitants,classified
by the law as employers. And he wantedthe financingforeseen for employer
contributionsto be assumed by the state, in order to distributethe required
sacrifices among all.
The government'sbill, introducedin 1895, was able closely to follow the
commission's recommendationsbecause the farmershad not yet made their
objectionsfelt.54In parliament,however, the relevantcommittee, more influenced by Danielson, remainedunpersuaded.55Employercontributions,even
as limited in the bill, hurtsmall employers, while the greaterreliance on tax
funds spared unreasonableburdens for independents.56The government's
next try, still unsuccessful, was a compromisebill in 1898 that took another
step toward the universalist, state-financed measures that were farmers'
goal.57 The classes covered remained largely limited to workers, but employer premiumswere eliminatedaltogether, and state subsidies increased.
With this bill's defeat, the government'sefforts reached their final rest in
this round.Matterslay fallow until, at the end of 1907, the Old Age Pensions
Commissionwas appointed.Its report, five years later, surveyed the field.58
Industrialworkers now challenged agrariansas the dominant social group.
Even thoughsocial insurancewas relatedto the increasedimportanceof wage
earnersas a class, it should not cover them alone. The Germansystem was
inadequatein excluding independentsand reserving the blessings of state
subsidies for only one group. Complete state financing of universalistpensions, on the other hand, was prohibitivelyexpensive.59 Were all included,
earnersand the self-employed. These laborershad been included in Germanybut with unfortunate results that the Swedes saw no reason to duplicate. To start with, 15 percent of the total
population(35 percent of the working population)were to be included.
53 Nya arbetareforsakringskomitens
betankande,I, 141-48.
54 Prop. 1895:22, pp. 37-39, 43-58.
55 2SaU 1895:2, pp. 42-44, 49-50.
56 FK 1895:26, 27 April 1895, pp. 11-12, 45; FK 1895: 27, 27 April 1895, pp. 10-11.
57 Prop. 1898:55, pp. 12-21.
58 Alderdomsforsikringskommitten,
I, Betankandeochforslag angaende allmanpensionsforsdkring (Stockholm, 1912), 19-21, 40-44.
59 An importantcause of the Swedes' concern with costs related to their demographicpeculiarities.Blessed by unusuallongevity andcursedby high emigration,the population'sage profile
was markedlyskewed towardthe older end. In 1900, Sweden had almost twice as many inhabitantsover age seventy as Britainand Germany,and 15 and 20 percentmore thaneven Franceand
SCANDINAVIAN
ORIGINS OF WELFARE STATE
19
contributionswould have to be collected. Employercontributionsplayed no
role in a system not limitedto wage earners,but state subsidiesallowed higher
benefits than otherwise possible. To keep residentsof expensive urbanareas
off poor relief, means-testedlocal supplementsto the otherwise inadequate
pensions were permitted.The goverment's bill followed the commission.60
Had measures been passed some decades earlier, it admitted, they would
probablyhave been limited to wage earners. Favorableeconomic developments now allowed all to be included. Employerpremiumshad been replaced
by state financingfor fear that wage earnerswould be privileged while small
employers were called on to pay both for themselves and their workers.
The socialists' approachto this reformwas interesting.Unlike their Danish
colleagues in the late nineteenthcentury, Swedish socialists focussed attention on the urbanindustrialworkingclass, undistractedby the desire to appeal
to agrarians. The social and economic complexions of the two countries
partiallyexplain this result. Sweden's mining and timber gave the economy
an industrializedhue.61 Denmarkwas still more urbanizedthan Sweden, but
agricultureplayed a dominantrole. Danish agriculturewas characterizedby
comparativelylarge farms worked by laborers, who were riper for socialist
recruitmentthan Sweden's generally small independentfarmers.
Socialist ideology in Sweden reflectedthese differences. When formulating
its firstpartyprogram,the Swedish Left ignoredthe agrarianquestion, assuming, and thereforeassuring,the futility of winning supportamong ruralworkers.62A Kautskianapproachto agriculturesquaredoff against a Danish-style
attempt at a "folk party" in internal debate.63 Only after the turn of the
centurydid the orthodox approachmake way for a more reformistangle. In
part, the Swedes replicated an adjustmentof Marxist doctrine to political
reality found across Europeansocialist parties. In equal measure, they took
Denmark,respectively. Alderdomsforsakringskommitten,
Kostnadsberikningar,(Stockholm)II,
Allman pensionforsdkring,61-63; Riksarkivet, Stock120; Alderdomsf6rsakringskommitten,
holm, 20/1, Alderdomsforsakringskommitten,
Letter, Commission to Statsradet,9 March 1910;
And. Lindstedt, Forslaget till lag om allman pensionsforsdkring(Stockholm, 1913), 8-10.
60 Prop. 1913:126, pp. 28, 34, 48, 50, 126-27, 186-87.
61 Overviews in LennartJorberg, "The IndustrialRevolution in the Nordic Countries," The
Fontana EconomicHistory of Europe, IV, 2; idem, Growthand Fluctuationof SwedishIndustry,
1869-1912 (Lund, 1961); idem, TheIndustrialRevolutionin Scandinavia, 1850-1914 (London,
1970).
62 This program,formulatedby August Palm, was largely a translationof the Danish Gimle
programfrom 1876, in turn a rendition of the German socialists' Gotha programwith, as its
particulartwist, a separatepoint on the agriculturalquestion: John Lindgren, Det socialdemokratiskaarbetarpartietsuppkomsti Sverige 1881-1889 (Stockholm, 1927), 291-94.
63 In Denmark, agriculturalworkerswere significantly representedin the party;this was not
the case in Sweden in the 1890s. Axel Danielsson was the main Kautskien,HjalmarBrantingthe
reformistin the party (G. Hilding Nordstrom, Sveriges socialdemokratiskaarbetarpartiunder
gennombrottsaren1889-1894 (Stockholm, 1938), 184-85, 256, 261, 388-98, 613-23). On
eller folkparti?" (1895) in Tal och skrifter, 8,
Branting's attitude, his "Industriarbetarparti
(Stockholm, 1929), 48-50.
20
PETER
BALDWIN
account of domestic social peculiarities, the political costs of ignoring rural
classes with too blindereda favoritismfor workers.The advantagesof appealing to agrariansbecame especially obvious after the electoral reforms of
1907-09 extended the franchise. In 1911, the year of the first elections with
universalmanhoodsuffrage, a majorrevision of the party's platformshifted
its focus fromthe workingclass, narrowlydefined, to all oppressed, whatever
their social origin.64
Despite such shifts, socialist supportfor the 1913 pension bill, coinciding
with a sharpeninginternalconflict between doctrinairesand reformists, was
far from unanimous.65Early in the year, the party's parliamentarydeputies
had decided for an universalistapproach.Laterdiscussion revealed the presence of a minority in favor of treating various social groups differently.
Several supporteda contributorysystem.66Althoughthe parliamentarygroup
accepted the governmentbill, conflicts arose within the broadermovement.
The partyexecutive was displeasedthatthe deputieshad abandonedemployer
contributions,and were seconded in their doubtsby the unions.67Some, like
Gustav Steffen, the well-known sociologist in the senate, preferredpensions
on the Germanmodel that treatedworkersand independentsseparately. Imposing on all citizens a social-insurancesystem developed for wage earners
was unfortunate,he admitted, but no worse than the government's converse
choice of extending to all a system formulatedin the interests of the selfemployed. The productive process ought to meet the cost of old age and
disability throughemployer premiums.68
On the other side, HjalmarBranting,leader of the socialists, accepted the
bill. His defense of it in parliamentwas a masterfulsummationof the pension
issue and its social background.Had the Swedish working class been more
powerful when legislation was first proposed, he conceded, the problem
might have been resolved as in Germany. But even with measureslimited to
workers, changes would have followed. Contributoryworkers' insurance
could not have been extendedbeyond the ranksof large industrialemployers.
In Sweden, small employers were powerful and able to resist contributory
financing more resolutely than their counterpartsacross the Baltic.
64 HerbertTingsten, TheSwedishSocial Democrats: TheirIdeological Development(Totowa,
N.J., 1973), 115-95. More specifically on agrarianissues, Lars Bjorlin, "Jordfragani svensk
arbetarrorelse1890-1920," Arbetarrorelsensdrsbok, (Stockholm, 1974).
65 Seppo Hentila, Den svenska arbetarklassenoch reformismensgenombrottinom SAPfore
1914 (Helsinki, 1979), 228-29; RagnarEdenman, Socialdemokratiskariksdagsgruppen19031920 (Uppsala, 1946), 165-99, 278-80.
66 Arbetarr6relsensArkiv, Stockholm, SAP, Riksdagsgruppen,minutes, 19 February1913,
28 March 1913, 31 March 1913, 10 April 1913.
67 Arbetarrorelsens
Arkiv, Partistyrelsen,minutes, 14 April 1913. The unions wanted public
subsidies raised substantiallyand the question of employer contributionsre-examinedbecause,
they argued, some way had to be found to allow higher benefits than those foreseen in the 1913
law. LO, Berattelse, 1913, p. 10.
68 FK 1913:34, 21
May 1913, pp. 31-36.
SCANDINAVIAN
ORIGINS
OF WELFARE
STATE
21
The socialists had shifted their stance, he admitted. They had supported
insurancelimited to workers, but now favored universalist measures. This
broadacceptanceof all-inclusive arrangementswas due to the advance of the
popularclasses in the countryside,whose interestshad been given representation throughelectoral reform. Sweden was not an industrializedsociety like
Germanyor Britain, and small independentsrelied on poor relief as much as
wage earners. Thus social insurancethat focussed only on workers ignored
Sweden's social structure.Conceding that universalistsocial policy was unavoidable, Brantingwent on to the difficulties of securing fair treatmentfor
workerswithin a system thatcovered all: Thatharmonizingthe interestsof the
poorestruralinhabitants,with those of urbanworkers,was troublesome.State
subsidies should be given in proportionto the premiumpaid, more to urban
than ruralgroups. Eliminatingurbanmunicipalsupplementsthat would have
given workerslargerpensions than farmershad been a step backwards.It was
difficult with universalistnationalinsuranceto maintainsufficient differentiation between well- and poorly-paidgroups. Improvementsfor the worst-off
should not be broughtat the expense of the industrialworking class.69
In both Denmark and Sweden, social-policy reform was born during a
periodof majorpolitical change and struggle as the child of native social and
economic circumstances.The late nineteenthcenturysaw the breakthroughof
democraticpolitics and the coming to power of the broad middle classes, in
Scandinaviancircumstancesprimarily farmers and peasants. In this clash,
agrarianswrested from the traditionalpolitical elites of urbanprofessionals,
royal bureaucrats,and aristocraticestate owners that influence to which their
growing social and economic importanceentitled them. Social-policy reform
was colored by its coincidence with this battle. Reforms reflected the
strengthenedpower of farmersand their determinationnot to be deprived of
new forms of statutorybenevolence. Socialists were not without a presence
during these changes. Vaguely Bonapartistfears encouraged the bourgeois
parties to implement some form of statutorysocial measures. Nevertheless,
the contentand natureof those finally chosen were determinedby the needs of
the agrarians,who were emerging as dominantamong the bourgeois groups.
The occasional and grudging approvalby the socialists of those features of
social reform for which they would later take and be given credit were responses to demands advancedby agrariansand liberals.
In 1891 Denmarkintroduceduniversal, noncontributory,tax-financedpensions. The universalismof these reforms was the result, most generally, of
Denmark'sagrariansociety, more specifically of the farmers' desire to improvetheirconditionsthroughsocial measuresduringthe ruralcrisis. Because
their work force included cottagers and small holders as well as landless
69 AK 1913:48, 21 May 1913, pp. 44-64; AK 1913:49, 21 May 1913,
pp. 31-36.
22
PETER
BALDWIN
laborers,attemptsto distinguishbetween the dependentlyemployed and independents, focusing measures on one or the other, made little sense. The
agriculturallaborforce was poorly paid because remunerationwas still partly
in natura,because rural conditions hinderedworkers' claims for higher incomes, and because costs were low in the countryside. Contributorysocial
insuranceof the sort Bismarck had aimed at the urban worker aristocracy,
could help the agriculturallabor force only if farmers raised wages. State
financing, however, especially in the context of longstanding agrariandemands for tax reform, provided a solution. The tax system of nineteenthcentury Denmark had evolved to suit the needs of a predominantlyrural
nation in which tillers of the soil had not yet developed the political clout to
shift burdenselsewhere. Direct taxes on land and its products supplied the
local administrationson which the cost of poor relief fell. The manufacturing
and industrialclasses were treatedleniently. Social policy financed through
indirectstate taxes helped shift the cost of poor relief and local taxes to urban
groups. Even thoughan income tax, long a liberal agrariandemand, was not
introduceduntil afterthe turnof the century, farmerswere convinced that the
consumptiontaxes now used for statutorysocial policy would afflict urban
more than rural workers. Before the era of graduatedincome taxes, statefinanced welfare policy in effect shifted the weight of social risk away from
the most progressivelyassessed levies of the period, cadastraltaxes, and onto
the shoulders both of the liberals' urban opponents and of those classes
supposedly among the direct beneficiariesof the new measures.
In Sweden, matters took a somewhat different course. Well-developed,
efficient, and insulatedby the rudimentarynatureof Swedish politics from
outside pressures,the governmentbureaucracywas initially able to formulate
plans for social reform that followed lessons learned from Bismarck more
closely than native social circumstancesand the wishes of not yet powerful
groups. Reformersat first set their sights on contributorysocial insurance
restrictedto the working class. But, while capable of formulatingreforms in
isolation, they could not pass and implementmeasuresthatignoredthe wishes
of importantinterests.70Because antagonismsbetween liberals and conservatives, and ruraland urbangroups, were less pronouncedthan in Denmark,
the main dispute in Sweden arose between farmersand the powerful government bureaucracythat was eventually forced to consider their desires. Attempts at reform were stymied for over two decades until, in 1913, Sweden
finally implemented universalist, largely tax-financed, pensions. This ar70 This is, of course, where the
analysis here differs most markedlyfrom that in Hugh Heclo,
Modern Social Politics in Britain and Sweden (New Haven, 1974), and in other attempts to
"bringthe state back in," for example, Ann Shola Orloff and Theda Skocpol, "Why Not Equal
Protection?Explaining the Politics of Public Social Spending in Britain, 1900-1911, and the
United States, 1880s-1920," AmericanSociological Review, 49: 6 (December 1984), 726-50;
and, more generally, Peter B. Evans et al., eds., Bringing the State Back In (Cambridge,1985).
SCANDINAVIAN
ORIGINS
OF WELFARE
STATE
23
rangementrejectedBismarck's legacy, anticipatedBeveridge, and embodied
the majorfeatures later regardedas the essence of the Nordic welfare state.
Far from being the realizationof demandsput forth by the oppressed or the
Left, they reflected farmers' wishes not to be deprived of state-subsidized
measuresthat were otherwise targetedat workersonly.
In the social interpretationof the welfare state, Bismarck's reforms exemplified social policy used for reactionary,Bonapartistpurposes.They were
limited to workers, who posed the most immediatethreatto social stability.
Benefits were differentiatedby income to preserve the hierarchies of the
marketplaceeven outside its sphere. Financingwas assuredthroughemployer
and workerpremiumswith little state financingin orderto hold redistribution
to a minimum. The Scandinavian welfare states, on the contrary, were
qualitativelydifferentin realizingthe need of the disadvantagedfor solidarity.
Nordic social policy supposedlydemonstratedthatreal reformcould be wrung
from the privileged by the oppressed themselves, on their own terms. It
embodied equality, not hierarchy;consensus, not conflict; solidarity, not
separatism. Scandinavianmeasures were universal in their embrace of all
citizens. They were financed through taxes that fairly apportionedburdens
and had a penchantfor being formally egalitarianflat-ratebenefits.
The social interpretationanachronisticallyattributesthese features to the
power of the social democratsand the working class. Decisions in favor of
universalist, tax-financed, egalitarian measures were taken before the socialists had much say in the matter and often against their will. The cornerstoneof the unique Nordic welfare edifice was set alreadyduringthe late
nineteenthcentury, not in the 1930s or after World War II, when the social
democratsgained power. Social insurancehad been formulatedfirst in Germany to deal with well-paid urban workers. In Scandinavia, these classes
could not be the focus. North of the Eider, priorities were defined by the
emerging agrarianmiddle classes. Scandinavianpensions were made universalist becausefarmersrefusedto be excluded from these new forms of statutory generosity. They were tax-financedbecause, in this way, the ruralclasses
expected to gain more than they lost. State-financedsocial policy is no better
than the tax system on which it rests. To attributethe (often dubious) progressivity of twentieth-centurymeasuresto an earlierperiod is to misunderstandthe natureof battlesthen fought out between social groups, in the guise
of fiscal and welfare reform. In Scandinaviaof the late nineteenthcentury,
government-financedsocial policy was an element of a drawn-out dispute
betweenruraland urbanelites whose resolutionallowed farmersto shift social
burdensto their urbanopponents.
Both of these characteristics-universality and tax financing-did, in fact,
later become progressive, solidaristicaspects of welfare policy in the North.
When the decision was first made to follow this Sonderweg in Scandinavian
social policy, however, these featureswere the resultof demandsput forthby
24
PETER
BALDWIN
the emergingagrarianmiddle classes on theirown behalf. Such characteristics
were not created,only continued,by the socialists in the 1930s and later. This
is not necessarilyto denigratethese aspects of Scandinaviansocial policy. It
is, however, to take a realistic look at their genealogies and to make an
accurate appraisal of their origins, one that can explain why the Nordic
welfare states were unusualwithout resortingeither to the vagueness of supposedly unique Scandinavian social virtues or to the anachronism of socialism's heroic marchin these most quintessentiallypetty bourgeoisof European nations. The origins of virtue turnout to be mundane:The solidarityof
one age has its roots in the selfishness of another.