Chapter Two. From Bismark to Lenin

"It. is not easy to be a Kaiser under such a Chancellor/' Emperor Wilhelm I. C H A p T E R T w o From Bismarckto Lenin: Origin and·Rise Of CompulsoryMedicine OUGATORYhealth insurance started. moderately enough-in Prussia. Compulsion under a law of 1845 was left in the hands of municipal administrations, with no government subsidy involved, and no contributions from employers.· The anti-socialist law of 1878 suppressed many of labor's voluntary associations for sickness benefits. The next step was the governmentalizationof the associations' functions. ' BISMARCK'S It was no mere accident that ·the ideological OBJECTIVES forefathers of Nazism, Adolf Wagner and Eugen Diihring, happened to be the "brain trusters" behind Bismarck's "nationalistic socialism to end international socialism," using his own terms..When,on Jan uary 1, 1884, his compulsorysicknessscheme went into opera tion it literally started a new era-a new age in the history of Welfarism.

Bismarck's role in modem history;is rarel~ spoken of now a-days. Undoubtedly, his political and administrative "genius" has shaped history down to our times. His revo lutionary innovation mwelfare policy.was preceded five years before, in 1879, by the imposition of a protective tariff that started Europe's internecine commercialwarfare which endures to thi~ day. And it was followea by tile introduction m1889 of universal military service covering even the middle-aged manhood. This started a rearmament race leading into total wars with the objective of annihilating entire nations. 21 COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 22 The shrewd Iron Chancellor-the dictator in constitutional disguise,quoting M. J. Bonn's epigram1-meant to kill several birds with one stone when he embarked on his program of appeasing labor. The reason, announced in the November 17, 1881 message of Emperor William I, to offer something positive to labor, not merely the repression of socialists by police force, may have been born of genuine worry over the unrest of the working classes due to the long depression that had engulfed Europe since 1875. But the true motive has been pointed out in the penetrating Bismarck biography (Vol. III, pp. 370-71) of Erich Eyck: "To his mind the State, by aiding the workers, should not only fulfill the duty ordered by religion, but it should obtain in particular a claim on their thankfulness, a gratitude that was to be shown by loyalty to the government and by loyal pro-government votes in elections." In other words, it was the old-fashioned attempt of the monarchy to ally itself with the plebs against the "aristocracy" in between the two. However, the social insurance legislation did not stop the Marxists from returning in increasing parliamentary strength. The attempt to subdue the socialist movement by appeasement ended in a political fiasco.

Prince Bismarckfound other satisfaction. The state socialism of His Highness was directed against the businessinterests and tlie Liberal (free trade) Party. The latter had accepted the principle that workers should be forced to insure themselvesbut stood for their freedom to choose their own, non-governmental ized agencies. What was even worse from the militarist point of view, the Liberals were blocking time and again the Chan cellor's requests for armaments. The Reich he created had almost no revenues of its own other than from import duties and excises. It had to rely on contributions from the states which were available only through unpleasant parliamentary procedures. The new social insurance organizations were to place their resources at the· federal government's disposal, saving Bismarck the embarrassment of going, when need aros~, with his hat in hand to a reluctant Reichstag.

Above all, the new system was an offshoot of his economic and political philosophy. Bismarck was a tradition-bound re actionary, altogether resentful of modern industrial develop ment, although he himself owned a small paper mill. As did many of the ultra-conservative contemporaries of his junker 23 ] FROM BISMARCK TO LENIN: ORIGIN AND RISE OF COMPULSORY MEDICINE class, he trusted agriculture and handicraft but frowned on large~scale industrial enterprise and on trade unionism. To check both, if they had to be tolerated, was one of his goals. Governmentalizing and thereby controlling,.through an appr.o priate bureaucratic apparatus, the· providing of medical, acci dent and old age care and of death .(burial) benefits seemed an obvious way to put the reins on laissez-faire capitalism as well as on labor. THE SPREAD This approach conformed to the paternalistic OF THE IDEA make-up of his mind-as it conforms to the paternalism of modern dictators and of humanitarian social workers. It is no mere accident if pseudo liberals bubble over with praise of the arch-reactionary Prus sian junker's medical security legislation.2 It was especially palatable to the bureaucracy of the Habsburg Monarchy.

The West resisted at first. It still was imbued with the 19th Century tradition of individual freedom and responsibility.But even before World War I its resistance began to soften under the fascination of the power emanating from. Wilhelminian Germany and under the German propaganda that labor's patriotism has to be bought by social concessions. Shortly be fore or during that war, Britain, Norway, Iceland, Russia (1), etc. introduced modified replicas of the German compulsory panel system, followed by more countries after 1918. A dead and defeated Bismarck proved to have a wider spiritual influ ence than the living and victorious one ever enjoyed. The triumphant march of authoritarian· medicine received a fresh boost at the outset of the great depression when, among others, France, after a decade of political oratory and wran gling on the subject, instituted a system of its own. It was modeled on the German but with significant modifications.

However, 1943-46 was the most crucial time since 1881-84 in the Western history of compulsory health service. It was the hour of the liberation from Nazi occupation, with the .parliamentary systems of the liberated nations in a semi chaotic condition, and with Communists either in cabinet posts or having decisive influence in public affairs. As a result, far reaching legislation was hurried through, which uncler normal conditions, would have run into serious obstacles. In France, COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 24 in November 1944, a new social security law of communistic coloring was voted in a virtually empty Chamber of Deputies. Left-wing rule in Belgium was responsible for its sickness scheme of 1944. It was also under abnormal wartime and post war conditions that Italy and Holland "reformed" their sick ness plans. New plans were put into operation or the old ones were revamped thorougWy in Australia, Argentina, Brazil, Chile, Spain, the Russian satellite countries, Costa Rica, Ecuador and of course in Britain. Legislation has been passed, but is not as yet in effect in three Canadian provinces and in Sweden.

HITLER, THE It·is a fact, and a very remarkable one, that HUMANITARIAN the great demagogues of our age appear to be greatly worried about the health of their subjects. No one was more so than Adolf Hitler. His racism was the last word in "biological" demagoguery, unless the new anti-hereditary biology of the Soviets exceeds it, an expression of the identical nationalistic purpose. In terms of political results, it was a most effective demagoguery due to its emphasis on health and virility. As a committee report on health insurance of the Canadian House of Commons put it (March 16, 1943): "During the early years 6f Hitler's regime, the government's medical program was looked upon by many observers as one of the greatest props of the totalitarian state." Before coming to power, the Nazis were violentl~ critical of the social insurance set-up, considering it a weapon in the hands of their enemies, the Social Democrats. They objected especially to the extravagance and corruption in compulsory medicine and to its alleged effect in "softening" German manhood. Thereby they earned the applause of doctors as well as of businessmen and the approval of the disgruntled middle classes. They promised thorough-going reform and drove their opposition home so forcefully that Chancellor BrUningwas con~trained to introduce in 1931-32several meas ures affecting the medical care system which were most unpopular with labor. A three-day waiting period before cash benefits became available was made mandatory. A small tax ("deductible") on prescriptions and a levy of 50 pfennigs on each quarterly sickness ticket of the patient were imposed. This charge of 20 cents in American money per 25] FROM BISMARCK TO LENIN: ORIGIN AND RISE OF COMPULSORY MEDlCINE quarter, imposed on patients many of whom were unem ployed, resulted at once in cutting the number of applications by about one-quarter! But these "deflationary" measures, to gether with the liquidation of the totally bankrupt unemploy ment· insurance, also had the· consequence of arousing an ill-feeling among the workers which had no small influence in bringing down the house of the Weimar Republic. Briining took. the blame; Hitler got the credit.

Once in ·power, the latter soon reversed his strategy. The ill-famed Dr. Ley, boss of the Nazi labor front, did not fail to see that the social insurance system could be used for Nazi politics as a means of popular demagoguery; as a bastion of bureaucratic power; as an instrument of, regimentation, and as a reservoir from which to draw jobs for political favorites and loanable funds for rearmament. BrUning's extra tax on panel patients was cut in half. By 1935, with Hitlerian full employment under way, the few pennies of extra tax repre sented a purely nominal charge. The sting was taken out of it. The fuhrer gained in popularity by reducing to negligible proportions an unpopular measure which he himself had instigated. He lost no time in making a positive contribution of ·his own to the organization of compulsory medicine by extending it in. 1939 to small business (handicraft), by tight ening it in Austria (1938) and by establishing compulsory health care in occupied Holland (1941). One of his last "social" measures, in March 1945, was to have workers in certain irregular types of employment included. But his attempt to abolish the autonomy of the panels and to regiment them by centralization had been checked by the concerted resistance of the medical profession, the panel bureaucracy and public opinion. Similar abortive attempts at complete bureaucratization of the panels were made under the Kaiser in 1909 and in the Weimar Republic's revolutionary days in 1919. The same goal is on the Social Democratic Party's agenda again in 1949. ' FORCING FRENCH The original schemes of compulsory LABOR INTO medicine have· been imposed on the reSCHEME spective countries without the consent and often against the very vocal resist ance of those who were supposed to ·benefit. That was the COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 26 case in Germany and also in France. The following is a good summary of what happened there: 3 "Social insurance was introduced in France on a really universal scale by the Law of April 5, 1928, which later was amended by the Law of April 30, 1930. At that time it was believed that this was the crowning piece of work completing the entire edifice of French social legislation. Its application nevertheless met with strong opposition culminating in strikes and violent labor disturbances in several industrial districts, particularly in the Northern Roubaix-Tourcoing region.

Labor resented the 4 per cent tax imposed upon wages, and the immediate hardship outweighed in its eyes the possibility of future benefits. Not only did the communists immediately seize upon this occasion to foment strikes by interpreting the new measure as being purely and simply a tax on payrolls, but even the socialists joined the opposition, arguing with a certain degree of justification that the increased price of finished products resulted in all-round higher cost of living, superimposed upon the reduction of salaries. "It is of interest to note in connection with the early strikes that the textile consortium of Roubaix-Tourcoing offered to pay the employees' share of the tax for all operatives employed for over one year. Strangely enough, this proposal met with especially violent labor opposition in spite of its obvious justi fication by the greater skill and experience of steadily em ployed workers, compensating employers for the supple mentary charge which they offered to undertake. The efforts of M. Laval were at that time successful in bringing about a compromise solution.

"The law met, moreover, with much less spectacular but perhaps even greater difficulties from passive resistance. In 1933, for instance, it was not applied to some 3,470,000 work ers, mostly operating for small concerns having not more than five employees. Excessive bureaucracy, opposition of labor and carelessness were principally blamed.. Enterprises com plying with the law were soon menaced by sharper compe tition from the non-observers. These were later converted to a more conciliatory attitude by stricter control and penalties."

27 ] FROM BISMARCK TO LENIN: ORIGIN AND RISE OF COIIlJULSORY MEDICINE Just as the German workers did half a century earlier, the French resisted being forced into a humanitarian scheme. Their trade unions recognized that they would have to pay the price themselves in the .. form of contributions and in creased costs of living. But the real reason for opposition was political rather than economic. They; understood that a tremendous power position and a new bastion of bureaucracy were being built up at their expense. Accordingly, they made an about-face in 1944-45when the scheme was to be reformed, i.e., expanded under a pro-communist regime. By that time the trade unions were .to be vested with the -power which before they had so energetically opposed. LENIN ENTERS Of all totalitarians who have written their names in the book of medical economics and politics, Lenin's will have to be printed in the largest capital letters. His was (1917) the first complete cradle-to-grave plan, the first plan embodying complete nationalization of medicine. His influence on the West did not make itself direcdy felt until World War II. Since then, wherever Rus sian bayonets take over, the Soviet blueprint of social security follows. Even more important to us is his ideological influence, embodied in the Beveridge Plan of 1943, that in tum appears to be spreading over Western Europe, Latin America and the Antipodes.