Mass Conscription and Public Health

The introduction of mass conscription generated a close nexus between the health status of the (male) population, high infant mortality and military power. Given the poor health status of young men and children caused by the repercussions of industrialization, urbanization and rampant diseases such as tuberculosis, concerns about the level of the forces and combat power increased both among politicians and the military.Footnote ²¹ This triggered, in consequence, social reforms with special emphasis on the social protection of (future) soldiers and mothers.Footnote ²² Arguably, the first historical instance is a report by Prussian Lieutenant General Heinrich Wilhelm von Horn to King Frederik William III in 1828 in which he complained about the declining number of soldiers in the Rhineland due to the widespread use of child labour in the textile industry.Footnote ²³ This report prompted the first Labour Protection Act in Germany,Footnote ²⁴ which stipulated a ban on the employment of children under nine years of age, banned work on Sundays as well as at night for juveniles, and restricted working-time for adolescents.

In the second half of the nineteenth century, improvements in recruitment statistics provided reliable information on the health status of large parts of the population.Footnote ²⁵ A common problem was that many of the medically examined young men did not qualify for military service. For example, in Austria-Hungary 70 per cent of the recruits did not pass their initial physical examination in 1912.Footnote ²⁶ Young men who were deemed unfit for military service amounted to 54 per cent of those examined in the early days of the German Empire and 51 per cent in Switzerland in 1878.Footnote ²⁷ Also war itself revealed physical problems among soldiers. In Britain, a country lacking conscription until 1916, contemporary observers attributed the poor British military performance in the Boer Wars to the ‘social degeneration of officers and soldiers, due to urbanization and industrialization in the British motherland’.Footnote ²⁸ Nearly half of the recruits who had been mustered in industrial cities such as York, Leeds and Sheffield between 1897 and 1901 failed the medical examination and were deemed unfit. These were shocking revelations which raised concerns among high-ranking officers about ‘national degeneration’ and eventually led to social policy reforms.Footnote ²⁹ These reforms focused on public health with special emphasis devoted to children and juveniles, in order ‘that the new generation of children, tomorrow’s Imperial Army, [should be] properly nourished’.Footnote ³⁰ During the Great War Prime Minister Lloyd George complained about the poor physical state of British soldiers compared to Australians and Canadians. In fact, a report by the National Service Department estimated that more than one million men were lost for combat through the neglect of public health. ‘You cannot maintain an A-1 empire with a C-3 population,’ Lloyd George said in a speech in Manchester in 1917 as he announced several social policy reforms for building a better Britain in the post-war years.Footnote ³¹ In Switzerland, Joachim Heer, the main architect of the very progressive Swiss Federal Factory Act of 1877, defended the bill by arguing that the ban on child labour, as well as the prohibition of night and Sunday work for women and children, are important vehicles for securing the defence capability and military strength.Footnote ³² Military concerns about social degeneration also prompted labour protection legislation in the 1880s in Austria-Hungary.Footnote ³³

The proportion of men unfit to serve in the forces remained high until the outbreak of the Second World War. In the United States, almost 50 per cent of the mustered industrial workers were unfit for military service,Footnote ³⁴ while 40 per cent of young men failed the draft physical examination in Japan in 1935. As a consequence, high-ranking military officers and the Japanese Army Ministry proposed the creation of a ministry of health. In fact, as early as 1937 a Welfare Ministry had been established and a new national health insurance bill was adopted one year thereafter.Footnote ³⁵

Mass Conscription and Education

Secondly, there is evidence that the army literally became a ‘national school’ and that warfare is an important factor behind the emergence of mass schooling. A recent comparative econometric study has found strong evidence that advances in primary education are positively associated with military rivalry or prior war involvement.Footnote ³⁶ The military had a keen interest in the acquisition of skills and primary education for several reasons. Apart from the fact that information and communication are of particular military importance, technological progress required increasing skill in operating and maintaining more and more sophisticated, dangerous and costly equipment.Footnote ³⁷ The ability to read was a prerequisite for understanding written orders, technical manuals and the use of new technologies such as the telegraph. A contemporary witness of the Great War noted: ‘It is not only the average physical power and health of the individual conscripts that matters. The more technically advanced our military and weaponry is becoming, the more mental activity, readiness of mind, comprehension and the expertise in technical affairs also matter.’Footnote ³⁸ However, illiteracy or poor literacy skills were common problems in many countries and raised military concerns from the very outset. Hence (basic) education and training programmes were also offered by the army itself. Illiteracy was a widespread phenomenon even in the United States. Of the 1.7 million men taking the Army Beta test in 1918, 30 per cent could not read the forms properly due to poor literacy, and this experience gave rise to a broad range of training and education programmes operated by the army.Footnote ³⁹ Language skills were equally important for maintaining an effective military, notably in multi-national armies. In the Austro-Hungarian army, for example, the language of command and working language in the common army was German and every soldier had to learn at least a minimum number of German commands.Footnote ⁴⁰ Overall, more than ten languages were spoken in the armed forces.

Moreover, the military also had an interest in education for reasons of propaganda and indoctrination. Mass warfare not only required the mobilization of the energy and the readiness for self-sacrifice of millions of soldiers, but mass literacy also exposed more soldiers ‘to propaganda, both as children and as adults’.Footnote ⁴¹ Primary education was considered an important vehicle for promoting patriotism, a common national languageFootnote ⁴² or national unity, and there is considerable evidence for Prussia, France and Austria-Hungary that the military tried to manipulate primary education before and during wars.Footnote ⁴³ In Switzerland, the examination of skills in reading, mathematics and writing was part of the army’s initial testing of recruits.Footnote ⁴⁴

Mass Warfare and Population Policy

The emergence of mass mobilization warfare made population policy a focus for policy-makers and the military. High infant mortality was an impediment to rapid population growth and raised military misgivings. In the early twentieth century, all European powers experienced declining fertility ratesFootnote ⁴⁵ and it was population size (and quality) relative to the rival nations that raised political and military concerns. The equation that characterized public debates was simple: higher birth rates and population figures are equivalent to greater military power. In France, the fear of being outnumbered by the German arch enemy (but also by Italy) caused intense debates in the late nineteenth century about the connection between population decline, defence capability and the survival of the nation.Footnote ⁴⁶ This debate triggered pro-natalist policies (for example tax deductions for families, housing policies, public health) and accelerated the introduction of family allowances. Even though similar responses can be found in most European countries,Footnote ⁴⁷ the commitment to population-oriented family policies was most pronounced in fascist Italy and Nazi Germany. Mussolini dreamed of the recurrence of the Roman Empire and launched pro-natalist policies for realizing his power ambitions.Footnote ⁴⁸ The Nazis considered declining fertility rates as an immediate threat to the people (‘Volkstod’) and its defence capabilities.Footnote ⁴⁹ It is thus hardly surprising that both regimes enacted several social policy and tax measures with a view to increasing population figures and providing the military with a sufficient number of soldiers.Footnote ⁵⁰ But even in Social Democratic Scandinavia we find similar population policies in the interwar years. The most prominent example is Sweden, where Gunnar and Alva Myrdal’s 1935 analysis of the ‘Crisis in the Population Question’ hijacked a traditional conservative issue based on concerns for the military survival of the nation and turned it into a Social Democratic reform agenda.Footnote ⁵¹

Social Policy and Mass Loyalty

Both World Wars were waged as mass wars. Millions of war victims, an economy of scarcity, higher tax burdens, repression, inflation, famine, longer working time and work duty connected to labour shortages are possible causes of domestic turmoil and social unrest. Since political stability on the home front was a prerequisite for succeeding in war, governments of all kinds – as well as the military – relied on achieving mass compliance for the official war aims from their populations. In addition to repression and propaganda, strategies aimed at increasing output legitimacy may have helped to secure mass loyalty and preparedness for self-sacrifice. Social policy is a classic instrument in this respect. However, the need to become a benevolent warfare state is likely to be constrained by the sheer size of the military budget during wartime. In fact, social spending stagnated or declined in many countries for which data is available,Footnote ⁵³ while military spending rocketed. While these figures indicate a sharp trade-off between guns and butter in wartime, there is also evidence that governments used social policy to enhance political support. During the First World War, the autocratic Central Powers were domestically challenged by a growing but disenfranchised labour movement with a considerable organizational power and thus a high strike capability. The so-called political truce policy initiated by German Chancellor Bethmann Hollweg was an attempt to gain labour’s approval for the war and to mitigate class-conflict by promising some social compensation. In the beginning, however, national war enthusiasm, which was also shared by the left, eased domestic conflicts. As the war progressed, however, the death toll as well as shortages of food, labour and commodities increased. Against this backdrop, strikes, social unrest and food riots increased in the late war period. While the military often opted to take a hard line, the government was aware of the fact that at least some concessions were necessary, because – in the words of Chancellor Bethmann Hollweg – ‘we cannot win the war against the working class’.Footnote ⁵⁴ The major concession was the recognition of labour representatives as partners in industrial relations in the late war period. Labour shortage in the arms industry led to the Auxiliary Service Bill (Gesetz über den Vaterländischen Hilfsdienst) in 1916 that obliged men aged from 17 to 60 years of age to work in the arms industry. This militarization of labour, however, was compensated by some welfare benefits and labour representatives were incorporated into arbitration boards and gained influence at the firm level, e.g. through the establishment of Workers’ Committees in big enterprises. For the first time, unions were accepted as partners in industrial relations. The situation was similar in Austria-Hungary, even though the regime relied on repressive measures from an earlier date.Footnote ⁵⁵ This shift in the nature of industrial relations was arguably one of the most important effects of the war for the welfare state in the authoritarian Central Powers.

But even a totalitarian regime such as Nazi Germany was reliant on mass loyalty during wartime. Not only the charismatic leadership of Adolf Hitler but, as shown by the historian Götz Aly, social benefits also played an important role in this respect: ‘Continuous bribery in social affairs formed the basis for the internal cohesion in Hitler’s Volksstaat.’Footnote ⁵⁶ Aly portrays the Nazi regime as a ‘socio-political dictatorship of complaisance’ aimed at improving the living standard and social security of the Volksgemeinschaft. In addition to improved social protection of soldiers and their families,Footnote ⁵⁷ the expropriation of Jews and massive armed robbery in the occupied territories provided resources for redistribution, while labour shortage was resolved by the brutal exploitation of forced labourers.

Not only autocracies in all their nasty variants but also belligerent democracies were in need of political support during wartime. What we can observe there in a situation of a pronounced trade-off between guns and butter is the promise of a better, more peaceful and socially just post-war order. Lloyd George’s promise of a better Britain after the Great War, which included a public housing programme and public health reforms, is a case in point. During the Second World War the war cabinets of Canada, the United States and Great Britain either drafted or announced plans to overhaul social security schemes in the post-war period.Footnote ⁵⁸

In January 1941, President Roosevelt enunciated four freedoms in his annual speech to Congress (freedom of speech, want, worship and fear), for which the war would be fought. This speech not only laid the groundwork for the American involvement in the war but also for the Atlantic Charter which made the welfare state a sort of official war aim of the allied powers.Footnote ⁵⁹ Almost exactly three years later, President Roosevelt in a State of the Union Address called for an ‘Economic Bill of Rights’. By referring to his ‘four freedoms speech’ of 1941, he argued that, in the light of the growth of the nation and the expansion of the industrial economy, mere ‘political rights proved inadequate to assure us equality in the pursuit of happiness’ and have, therefore, to be amended by social rights. He suggested a comprehensive list of social rights, including the ‘right of every family to a decent home; the right to adequate medical care and the opportunity to achieve and enjoy good health; the right to adequate protection from the economic fears of old age, sickness, accident, and unemployment, and the right to a good education’.Footnote ⁶⁰

Arguably, the most famous plan aiming at restructuring social security in the post-war era is the British Beveridge Report issued in November 1942. The report received great attention abroad and fuelled, to some extent, social regime competition between the belligerent nations. By April 1943, the Nazi Ministry of Labour had published a translation of the Beveridge Report for internal use only. In the document’s preface even the Nazis classified the report as a ‘political offspring’ of the Atlantic Charter. However, they jeered that the report ‘unintentionally provides a comprehensive picture of England’s numerous shortcomings in the field of social affairs’.Footnote ⁶¹ Motivated by early military success and under the auspices of the head of the German Labour Front, Robert Ley, the Nazis themselves drafted ambitious plans to overhaul the social security system in the post-war period.Footnote ⁶² In an effort to generate mass loyalty, the Nazi propaganda promised the ‘biggest welfare state in the world’ after the end of war.Footnote ⁶³ In contrast to the overhaul of the British welfare state envisaged in the Beveridge Report, a post-war Nazi Sozialstaat never came to fruition.

Other democracies such as Australia, which to a lesser extent were affected by war, already introduced new and comprehensive social programmes in wartime. Among the programmes adopted by the Labor government and its conservative predecessor were widows’ pensions, unemployment compensation, a funeral benefit and a child endowment scheme.Footnote ⁶⁴ Canada introduced federal unemployment compensation in 1940, after several previous attempts had failed as a consequence of provincial resistance and court decisions. The amendment of the British North America Act required for federal policy jurisdiction attracted surprisingly little dissent under war-time conditions.Footnote ⁶⁵ In both federations, the Second World War was an occurrence that increased the powers of federal government in social and fiscal affairs. In neutral Sweden government commissions continued to work during the Second World War preparing reforms introduced in the years immediately after the First World War.Footnote ⁶⁶ Moreover, Sweden introduced a special allowance in 1939 for families of mobilized soldiers in order to secure material living standards.Footnote ⁶⁷

Centralization, Economic Planning and Institution-Building

War-induced economic isolation and/or destruction typically led to shortages of foodstuffs, commodities, labour and raw materials and caused, in consequence, inflation and, in many cases, output decline.Footnote ⁶⁸ Governments everywhere responded to economic scarcity with a broad set of regulatory policies including price and rent controls, wage regulation, rationing, currency controls and the nationalization of enterprises in strategically important sectors.Footnote ⁶⁹ In a nutshell, the free market was increasingly replaced by economic planning and gave rise to a dramatic expansion of government, enhanced executive powers of government and changed state–business relations. These effects are well documented by numerous studies.Footnote ⁷⁰ Even contemporary analysts of the war economy such as the Austrian economist Gustav Stolper predicted in 1915 a dramatic and long-lasting rise of big government, i.e. a phenomenon that after the Second World War, i.e. ex-post, became known as a displacement effect (see below). In the early months of the Great War, Stolper noted clear-sightedly:

Indeed, the war-induced transition to a command economy significantly changed state–society relations and required new bureaucratic capacities that often were established at the central state level. Social policy is no exception, as war led to several institutional innovations: Britain established a Ministry of Labour (1916), a Ministry of Reconstruction (1917) and a Ministry of Health (1919), while a Ministry of Education was set up in 1944. Austria created the first Ministry of Social Affairs in the world in 1917, Sweden and Denmark followed in 1920 in the aftermath of the First World War, and even neutral Switzerland established a War Welfare Office during the Second World War.Footnote ⁷²

The Military Burden and the Rise of the Tax State

The need to finance the war was a further step on the road to big government. Military budgets rocketed in wartime. In consequence, the tax powers of the central state were everywhere enhanced. New taxes such as income taxes (e.g. France 1915, Canada 1917) and war-profit taxes were introduced during wartime. In the United States, a country where tax increases are notoriously difficult to achieve, the Second World War led to a fiscal revolution.Footnote ⁷³ Even in neutral Switzerland, the government introduced in April 1940 an extraordinary property tax, a sales tax and a progressive income tax in response to the military threat by Nazi Germany. Special cases in this respect were occupied countries that typically had been forced to contribute to the economy of the occupying power through simple plundering of valuables and resources or by means of unfavourable trade agreements.Footnote ⁷⁴ An example is Denmark where the German occupation was paid for out of an account in the Danish National Bank.Footnote ⁷⁵

Mass warfare and mass conscription also increased political demands for progressive taxation. Scheve and Stasavage have shown that the high opportunity costs of war participation borne by millions of individuals generated political pressure to levy financial burdens on those who did not risk their lives or sacrifice time and income during military service.Footnote ⁷⁶ Hence it was the ‘logic of equal sacrifice’ that led to higher tax burdens for the rich. During the First World War, the top marginal rate of income tax rose from 7 to 77 per cent in the United States, from 8.3 to 60 per cent (1920) in the United Kingdom, from 21.9 to 72.5 per cent (1920) in Canada, and from 2 per cent to 50 per cent in 1919 in France.Footnote ⁷⁷ During the Second World War, the effective tax rate of the federal income tax even went up to 90 per cent in the United States for those earning more than 1 million dollars.Footnote ⁷⁸ Even in neutral Sweden the marginal rate of income tax jumped from 18.7 per cent in 1939 to 24 per cent the year after due to a special defence tax rise.Footnote ⁷⁹ There is also cross-national evidence that war and mass conscription fuelled inheritance taxation.Footnote ⁸⁰ Again, the imperative of a fair sharing of the war burden increased pressure for taxation of major fortunes. Governments also financed the war by borrowing. However, derailing public debt was either translated into hyper-inflation once governments began printing money or debt redemption kept tax levels high in the aftermath of war. As we discuss later, hyperinflation may have had a long-lasting impact on the public–private mix of the post-war welfare state as it made private fortunes or fully funded forms of social provision worthless and, in consequence, increased demand for public income support.

Social Policy Diffusion and Policy Transfer through War

War also affected and restructured existing patterns of social policy diffusion and gave rise to coercive policy transfer. First, this most radically took place through occupation and border revisions. In the aftermath of the First World War the map of Europe changed dramatically as new countries emerged and the defeated powers lost territory. This meant that citizens had to be transferred from one social security system to another, as was the case in Denmark when the country reunified with the northern part of Slesvig-Holstein after a referendum in 1920. The process was complicated as the Germans remained financially responsible for war invalids who had served in the German army.Footnote ⁸¹ During the Second World War Germany occupied large parts of Europe and this affected the existing social security systems in the occupied territories in several ways. However, the Nazis employed different techniques of occupation.Footnote ⁸² While German legislation was comprehensively imposed on countries such as Austria and Luxembourg, other countries such as Belgium, the Netherlands, France and Norway were forced into close co-operation. In still other countries like Denmark, the domestic political institutions remained basically intact during German occupation. As a result, the effects of German occupation varied across these groups of countries. In the first group, the imposition of German legislation had, in parts, more direct and long-lasting effects. Even though the old national social security legislation was re-established after the war, some elements of German social security legislation remained in place, in a revised manner. Austria is a case in point, as pension insurance for blue-collar workers, which did not exist before the Anschluss, was adopted by Austrian social security legislation. Within the second group, governments tried to pre-empt a more direct Nazi influence by adjusting their welfare systems accordingly. For example, the Quisling government in Norway, with inspiration from Nazi Germany, developed plans for social policy reforms and implemented changes in unemployment insurance and labour market regulation.Footnote ⁸³ In the third group, where the local administrations continued to function during German occupation, there was even resistance to Germanification of social security systems. In Denmark the Ministry of Social Affairs in 1941, in an effort to defend the existing welfare state, launched a propaganda offensive that included the translation into German of a book running to more than 400 pages on the Danish social security systemFootnote ⁸⁴ and the making of a film on the same topic for a German audience. What all these countries have in common, however, is a drastic deterioration of national social standards in the wake of military occupation.Footnote ⁸⁵ Moreover, the able-bodied labour force was brutally exploited and deported to supply the Nazi war machinery.

Secondly, we find examples of war-related social policy diffusion beyond the German occupied territories. The Beveridge Plan (1942) not only contributed to securing the legitimacy of the British government and its war effort but also immediately became a key reference for social policy debates in other countries offering both practical solutions and a symbolic alternative to the German warfare regime. A special case of policy diffusion is related to the exiled governments of the occupied countries that were based in London. This gave an impetus to new kinds of very direct policy diffusion by establishing a transnational arena for post-war planning.Footnote ⁸⁶

Demobilization

Towards the end of both World Wars, military demobilization in war-waging countries further boosted economic and political planning as well as the introduction of categorical social and education programmes. Military demobilization required significant administrative capacities since millions of soldiers and refugees needed to be reintegrated into society and the labour market. The most pressing social challenges related to demobilization were unemployment, income support to disabled veterans and their families, education and vocational rehabilitation of veterans, and housing. Whereas, prior to the First World War, housing was basically left to markets, governments intervened for the first time on a larger scale in this area after the Great War, either by means of public housing programmes or loan subsidies. Given a shortage of about 600,000 houses in Britain, Lloyd George proposed a large-scale public housing programme to provide ‘homes fit for heroes’ and to bring ‘light and beauty into the lives of the people’.Footnote ⁸⁷ Another example is the Australian war service loan scheme first introduced in 1919 which offered cheap loans to veterans of both World Wars. A striking number of 265,000 homes were built under this scheme between 1945 and 1975.Footnote ⁸⁸ Demobilization also fuelled the introduction of welfare benefits and education programmes for (disabled) veterans.Footnote ⁸⁹ A major example is the Servicemen’s Readjustment Bill (commonly known as the GI Bill) in the United States adopted in 1944. As ‘one of the most generous and inclusive social entitlements the federal government has ever funded and administered’, the programme offered social benefits, higher education and vocational training to the 7.8 million veterans of the Second World War.Footnote ⁹⁰ Arguably the most severe problem connected to demobilization was unemployment. While labour shortage and full employment characterized the war period, the return of millions soldiers and the prospective lay-offs in the munitions industry at the termination of war were huge challenges for all governments. The fear of social unrest and revolutionary activities of those who risked their lives for the nation motivated many governments to adopt emergency benefits for returning veterans. With exception of Britain, however, no country had introduced mandatory unemployment insurance before 1914 and even the British scheme was very limited in terms of coverage and the benefits offered. In an effort to contain working-class discontent, the British government introduced, as part of its plans for demobilization, a temporary and non-contributory out-of-work donation for discharged servicemen that was amended and extended by a civilian out-of-work donation. In consequence, unemployment protection became universal and was granted as a social right immediately at the end of war.Footnote ⁹¹ The British example was not a singular case, however. Several other warring countries such as Austria and Germany extended income support for the unemployed connected to demobilization. Moreover, some of these mechanisms, such as the influx of refugees, were also important for countries not directly involved in combat.

War-Induced Social Needs

During the First and Second World Wars over 60 million people lost their lives and social needs of previously inconceivable magnitude were generated. The social protection of millions of widows, orphans, disabled veterans, unemployed, refugees and homeless people generated a gigantic challenge for policy makers. All these disastrous outcomes of war created a strong demand for income support provided by government and had a tremendous impact on social expenditure.

Political Macro-Context: The Rise of Democracy and International Social Policy Co-operation

Mass warfare and the modern mass army seem to have decisively shaped the political and socio-economic context that facilitated the formation and expansion of the modern welfare state. Both World Wars ended up with immense destruction, human suffering, economic decline and, in some places, the collapse of regimes and empires. The break-down of multi-national empires after the Great War and racial mania during the Second World War resulted in an unusually high degree of ethnic homogeneity in European nation states. The impact of ethnic cleansing on the social structure may be related to the welfare state in a particularly perverse manner, some scholars having argued that this kind of societal homogeneity is a precondition for solidarity and redistribution to flourish.Footnote ⁹²

However, war also meant the breakthrough of democracy. Universal suffrage had been a long-standing demand of the labour movement in many countries, but it was eventually total war that decided this struggle. Given the spilt blood of millions of soldiers, mainly recruited from the lower strata of society, and the large-scale mobilization of the female labour force in wartime, it was no longer possible for governments to deny political participation after the end of war: ‘Mass military service and mass carnage had created a democratic imperative’.Footnote ⁹³ In fact, both World Wars generated a huge extension of male suffrage and/or the introduction of women’s suffrage.Footnote ⁹⁴ Moreover, the Great War was a catalyst for the introduction of proportional representation,Footnote ⁹⁵ with important implications for government spending and redistribution.Footnote ⁹⁶ As a result, all the tremendous war-induced social needs were politically addressed to democratic governments after both wars, at least in the group of countries which later became the founding members of the Organisation for Economic Co-operation and Development. Political competition, the participation of lower income groups and the involvement of unions in politics, plus the changes in individual and collective preferences discussed in the next subsection translated the war-driven sudden shift in public intervention in social and economic affairs into a stable, long-term trajectory of continuous welfare-state expansion.

Moreover, both World Wars also were catalysts for intergovernmental co-operation in social and economic policy. Carnage, destruction and social turmoil created both a necessity and a window of opportunity for establishing international collaboration in social and economic affairs. The foundation of the International Labour Organization (ILO) in 1919 was clearly triggered by ‘war and revolution’.Footnote ⁹⁷ Designed as a tripartite organization the ILO promoted co-operation between governments, employers and unions and contributed in subsequent years to the spread of social security legislation in member states. Efforts to promote international co-operation for the sake of common welfare and economic well-being intensified again during and after the Second World War. Examples include the Atlantic Charter, the ILO Declaration of Philadelphia, the Bretton Woods institutions and, eventually, the United Nations Declaration of Human Rights. In Europe, war experience was an important impetus for the restructuring of Western Europe from the European Coal and Steel Community over the Treaty of Rome to the European Union.Footnote ⁹⁸

Micro-Foundation of Social Policy Change: War Impact on Individual Preferences and Collective Behaviour

War is certainly an event that leads to a recalibration of individual preferences and may even affect general normative and ontological beliefs. Both soldiers and civilians suffered from manifold war-related traumata, mostly in an early phase of their biography. Early life experiences have a particularly strong impact on individual consciousness by creating a natural conception of the world which preconfigures the perception and mental processing of later experiences in the life cycle. In addition, manifold loss experiences among civilians and soldiers – such as loss of physical integrity, death of relatives, loss of native land and housing, job loss and material losses caused by inflation, robbery and expropriation – were abundant in wartime and affected all social strata. ‘Bombs, unlike unemployment, knew no social distinctions, and so rich and poor were affected alike in the need for shelter and protection.’Footnote ⁹⁹ Moreover, hyperinflation created new welfare constituencies among the better-off. The resulting effect of traumatic war experiences on life satisfaction and individual behaviour is well documented. Psychologists and physicians have found that war experiences have shaped life-long advanced moral, religious and political views and caused specific long-term ego-syntonic behaviour. Moreover, historians have studied how the social and political foundations of the post-war period have been shaped by the experience of war.Footnote ¹⁰⁰

Given wide-spread traumatization and manifold loss experiences, it is extremely plausible that war contributed to a realignment of individual preferences towards stability, security and collective insurance.Footnote ¹⁰¹ Moreover, wars generally increase risks and make subjective risk calculation difficult.Footnote ¹⁰² In this situation, individuals typically show a greater propensity to seek insurance,Footnote ¹⁰³ even those who would otherwise consider themselves as good risks. These changes in individual preferences may also have affected collective behaviour in at least four respects. First, the aforementioned changes of individual preferences increase the chance that policies favouring risk-sharing and risk prevention are adopted at the collective level. The most important institutional device that pools risks is the welfare state. Secondly, drawing lessons from experience is important and had a similar policy impact. ‘Learning from catastrophes’Footnote ¹⁰⁴ paved the way for policies and institutions designed to prevent a recurrence of similar traumatic events in the future. Thirdly, the hardships of war encountered by large segments of the population strengthened solidarity and egalitarianism. Titmuss has summarized the British experience as follows: ‘The mood of the people changed and, in sympathetic response, values changed as well. If dangers were to be shared then resources should also be shared’.Footnote ¹⁰⁵ This realignment of values encouraged a qualitative change in social provision as the odium of traditional poor relief was replaced by the notion that welfare benefits should be delivered as a matter of social rights.Footnote ¹⁰⁶ Moreover, people became accustomed to ‘big government’ that had emerged during wartime and affected the everyday life of people. Even in the United States, habituation to the state was a hallmark of the Second World War.Footnote ¹⁰⁷ Fourthly and finally, war and national crisis stimulated co-operation among competing elites. By incorporating the opposition into war cabinets many democracies deliberately sought national unity and cohesion, while tripartism and conciliation gained importance in industrial relations. While the First World War contributed to the recognition of unions in industrial relations and the introduction of proportional representation in numerous countries, the Second World War marked the breakthrough of fully-fledged consensus democracy and corporatism in the smaller European countries. Even in neutral Switzerland the inclusion of the Social Democrats in Federal Government in 1943 completed consensus democracy at the federal level. The war-induced increase in solidarity facilitated social policy interventions in the war years and beyond. Nevertheless, the effect of the Second World War on the Swiss welfare state was much weaker than in countries that had been at war.Footnote ¹⁰⁸

The Legacy of War Policies as a Welfare State Catalyst

Arguably the most well-known feedback effect of war on post-war public policy is the ‘displacement effect’ detected by Peacock and WisemanFootnote ¹⁰⁹ in their study on British public expenditure development. They argued that large-scale disturbances such as major wars would alter the people’s ideas about tolerable levels of taxation and shift public revenues and expenditure to higher levels during wartime. Moreover, war-induced higher tax rates and expenditure would never return to their pre-war levels due to habituation effects, institutional rigidities and new war-related spending obligations. Peacock and Wiseman also claimed that war contributes to a ‘concentration process’ of public spending in decentralized or federal polities. The reason is that local authorities are incapable of coping with the repercussions of large-scale emergencies, so that a pooling of resources occurs. Once an armistice has been reached, the discontinuation of the military burden as well as the enhanced institutional and fiscal capabilities of the state could be used for civilian spending purposes. Yet, displacement could also occur by pursuing new military or quasi-military projects (for example, during the Cold War), with the shift to welfare-state priorities neglected in nations which, by virtue of their Great Power status, continued to prioritize military spending. With respect to the United States, this may explain why the promises of President Roosevelt were only partially honoured.Footnote ¹¹⁰

Post-war democratic governments could also respond quickly to the social needs created by war as they could rely on measures, preparatory work and proposals that had been drafted or were already implemented during the war. In fact, many (but not all) of the measures and short-term expedients that were enacted by use of emergency powers were transferred into ordinary legislation after the war. In addition, ‘war socialism’ had endowed governments with plenty of experience in how to manage the economy and post-war governments benefited from the massive increase in administrative capacities, policy jurisdictions and fiscal powers that emerged during wartime.Footnote ¹¹¹ There is plenty of empirical evidence for the accelerating effect of wartime policies on post-war social policy. In Germany, the Great War was without doubt a pacemaker for the Weimar welfare state:Footnote ¹¹²

In Austria, the provisional National Assembly adopted a measure of unemployment compensation by decree in late 1918. Closely connected to demobilization, it was initially designed as a fixed-term and means-tested emergency benefit for indigent veterans and the unemployed armament workers.Footnote ¹¹⁴ After this decree had been extended several times it was eventually converted into a general unemployment insurance scheme in 1920. A very similar development took place in Britain. The military and civilian out-of-work compensation that was introduced as an emergency and temporary benefit in 1918 paved, to some extent unintentionally, the way for universal unemployment insurance in 1920:

War had also been a welfare-state pacemaker in neutral countries. In Switzerland war triggered the harmonization of unemployment benefits in 1942 and the introduction of family benefits for mountain farmers in 1944, with a view to averting a rural exodus of peasants and in order to secure the food supply.Footnote ¹¹⁶ Moreover, the Federal Wage and Income Compensation Scheme, a programme providing income support to servicemen, served as a blueprint in terms of the organizational system and the financing of the new pension scheme introduced in 1946.Footnote ¹¹⁷ In Sweden the family allowance given to families of soldiers in the post-war era was transformed into a general family allowance,Footnote ¹¹⁸ and new public agencies introduced during wartime, such as the Labour Market Board,Footnote ¹¹⁹ continued to exist after the war.Footnote ¹²⁰

Finally, new programmes came to fruition because the old democracies, being much more accountable political regimes than autocracies, honoured the social promises made during the wars. The launch of the British welfare state after 1945 under the auspices of a Labour government, the 1945 programmes of the Scandinavian Social Democratic parties, and the encompassing reforms enacted by De Gaulle in France are cases in point.

Effect on Timing of Programme Adoption

War is a crucial factor for explaining when countries introduced social programmes. There is evidence that the immediate post-war period was a phase of rapid social policy legislation and that war and war preparation were closely associated with the introduction of particular welfare state programmes: unemployment compensation, housing and income support for families are key areas where the state had intervened for the first time on a large scale. Legislation in these fields was strongly motivated by population policy, the demobilization of millions of soldiers and the dismissal of millions of workers owing to the closure of the arms industry after the war. The immediate post-war period was also an era of intensive legislative activity in terms of labour law, employment protection, and working time (for example, the eight-hour day). In addition, categorical benefit schemes for disabled veterans and other victims of war were established. Finally, war triggered legislation and reforms in educational affairs and housing. Britain, with the passage of the Fisher Education Act (1918), the Butler Act (1944), the National Health Service Act (1946) and the Housing Act (1949), is a case in point.

Effect on the Public–Private Mix

War significantly shaped the public–private mix as it paved the way towards more public welfare provision in those countries suffering from massive destruction and/or from hyperinflation. Dryzek and Goodin have argued that ‘under conditions of uncertainty, actuaries will be unable to assess risks with any confidence, and hence prudent brokers will refuse to supply insurance. The state alone is capable of filling this gap’.Footnote ¹²¹ In addition, war upsets financial markets and therefore constrains the ability of private insurance to deliver. In fact, in most countries of Continental Europe, total war has strongly crowded out markets for social provision and discredited fully funded modes of welfare financing in the aftermath of war. By contrast, the evidence is more mixed for those nations which were neither struck by acts of war on their own territory nor by hyperinflation. Private and occupational welfare schemes were not negatively affected, but even strengthened, in countries such as the United States and Switzerland. However, war is only a necessary though not a sufficient condition in this respect. Much depends on the power resources of pro-welfare state parties. Japan and, more recently, South Korea are countries where war had a massive impact, but which, under conditions of a marginalized political left, nevertheless strongly relied on private forms of social provision after the war. By contrast, the strong left in the Scandinavian countries crowded out markets from social provision, even though the war impact was much lower. With this important caveat in mind, it is only since the 1990s – nearly half a century after the last Europe-wide military conflagration and with the removal of the Cold War threat of a repeat on an even larger scale – that private social provision has once again gained importance in several European countries.

Effect on State–Family Relations

The modern mass army and mass warfare may also have shaped gender relations in several, contradictory, ways. First, mass conscription of the army served as ‘a school of masculinity’ by separating men and women and by affecting gender roles outside the military realm.Footnote ¹²² Secondly, as mentioned above, war preparations led to a growing concern with regard to the size and quality of the population, which became an important argument for pro-natalist (maternalist) family policies in most European countries. On the one hand, these discourses strengthened the position of women in society and were picked up as arguments in the political debate, especially by inter-war feminists.Footnote ¹²³ Moreover, the war served as a policy window for the introduction of new family benefits. On the other hand, pronatalism and family cash benefits reinforced the male breadwinner model and the role of women as caregivers. Thirdly, we find examples of how reform plans were stopped once the actual war had started. This was the case in Denmark where discussions in the so-called Population Committee were brutally put to a halt in wartime and were only picked up again after 1945.Footnote ¹²⁴ Finally, mass conscription of men offered an opportunity for women to enter the labour market. Women’s labour market participation grew during war time, challenging the dominating ideal of the male provider,Footnote ¹²⁵ and had lasting effects even though women often partly withdrew from the labour market after the war.

Effect on Public Social Spending

Total war had a tremendous impact on public social spending. In Germany, for example, war-related social spending amounted, on average, to 17.1 per cent of total expenditure between 1927 and 1960.Footnote ¹²⁶ Germany is, of course, an extreme case in this respect, but even in less affected countries war-related social expenditure played a role. War is, therefore, an important variable for understanding post-war spending trajectories and cross-national differences in social expenditure. Particularly, and in contrast to the expectation of functionalist accounts of the 1960s, the Second World War may help to explain why there was no catch-up of the then welfare state laggards in social spending after 1945. An important reason for the lack of convergence is that war significantly pushed spending levels up in exactly those countries which had suffered from a high number of casualties and severe destruction on their homeland territory during both World Wars and which already had maintained high pre-war spending levels due to the early introduction of social programmes (such as Germany, Belgium, Austria, France, Italy). Most welfare-state laggards (from today’s perspective), by contrast, were not strongly affected by war, at least on their national territory. In these countries, additional social spending caused by war was mainly related to categorical programmes tailored to the needs of veterans and their families. A third group consists of the welfare state pioneers in Scandinavia and New Zealand, where the war effects were limited and mainly seem to have affected the timing of the adoption of programmes.

Growing Welfare-State Convergence since the 1980s

While the Golden Age of the welfare state in the 1950s and 1960s was characterized by growing dissimilarities in social policy, recent empirical studies are indicative of a growing convergence of social spending and regulatory standards since the 1980s.Footnote ¹²⁷ One reason for this outcome is that the impacts of war petered out with the passage of time. Two processes are important in this respect and both are related to demographics. First, the victims of war passed away over time and thus relieved governments from previous war-related spending commitments. Secondly, generational replacement could be related to a shift in policy preferences.Footnote ¹²⁸ Beginning in the mid-1980s, the policy makers of the Golden Age period, i.e. the political elites who had personally witnessed total war and/or the Great Depression, stepped down from office and were gradually replaced by elites born in the post-war period and who, therefore, had grown up in an era of unprecedented economic affluence and political stability. The traumatic experiences of the cohorts born prior to the Second World War lingered in their memories for decades. This experience is important for understanding the rise of the post-war interventionist state and the underlying Keynesian compromise. In contrast, the markedly different socialization of the post-war cohorts might be one factor that has reinforced the retreat of the interventionist (welfare) state since the 1990s.