Summary of Bismarck’s domestic policy in Germany, 1871-90:



Summary of Bismarck’s domestic policy in Germany, 1871-90:

1. Gaining control of the Reichstag and the political parties:

*With regard to the Reich constitution, Bismarck had many advantages:

-The Head of State was the King of Prussia, Wilhelm I, over whom Bismarck had always been able to exert a fair amount of personal influence.

-As Reich Chancellor, Bismarck was very much the Chief Minister. He was the only minister who appeared in front of the Reichstag to justify government actions and saw the other ministers (whom the King could hire and fire at will) as ‘senior clerks’ (Farmer and Stiles, p.111).

-Prussia (as it accounted for 60% of the Reich’s population) returned 235 of the 397 Reichstag Deputies (MPs) and the Prussian Minister for War was also automatically German Minister for war. Assuming Bismarck had the blessing of the Prussian deputies therefore, this helped him stamp his authority on both domestic and foreign policy.

*There were, however, limitations which forced him to make tactical alliances with political parties within the Reichstag in order to force through many of his policies:

-The German Reich was a FEDERAL state, meaning that its 25 constituent state governments maintained their own constitutions, parliaments and administrative systems and, therefore, over some aspects of their own state policy. Non-Prussian came to hold many important positions in the government both of the Reich and of Prussia itself.

-The Reichstag was elected on the remarkably democratic (for the time) basis of full manhood suffrage, meaning that Bismarck was subject to a fairly weighty tide of public opinion.

(a) Collusion with the National Liberal Party:

*In some ways, the National Liberals were natural allies for Bismarck as they were impressed by his uniting of the German states and wholeheartedly threw themselves behind early proposed legislation which, thanks to their backing in parliament (they had 125 deputies in 1871; and 155 by 1874), was passed and included:

-the creation of a single Reich currency; -a Reichsbank; the abolition of all internal Reich tariffs; and the standardisation of many legal codes and systems of weights and measures etc.

They also helped him to pass a great deal of (notably illiberal) legislation with regard to his kulturkampf against the Catholic Church.* - see below in the kulturkampf section for details of this legislation.

-This relationship was not all one-way, however, and, having argued with them over control of the military budget, threatening the dissolve parliament and seek the re-election of a less liberal-dominated Reichstag in 1874, he accepted that, whilst they would not receive their demand for full parliamentary control over army spending, they should get the chance to review the military budget every seven years (i.e. the SPETENNIAL LAW, 1874).

*While the clash over the military budget resulted in compromise, neither Bismarck nor the National Liberals, who were committed as part of the agenda to free trade, were prepared to back down in 1879 when Bismarck, under pressure from the Central Association of German Manufacturers (*see economic section below), decided to pass a Tariff Reform Law whereby prohibitively high taxes were placed on foreign imports in order to protect domestic grain suppliers and manufacturers. The success of the Tariff Reform Bill engendered a fatal split the National Liberal Party as its more conservative members continued to support Bismarck to the consternation of its more radical members who left the party to join a radical alliance with the Progressives. In the 1878 elections, only 99 National Liberal Deputies were returned and the decline continued until there were only 42 in the Reichstag by 1890.

1878-9 therefore marked THE END OF THE LIBERAL ERA and a turning point in Bismarck’s domestic policy.

(b) Collusion with the Conservatives:

*Two parties which approved of Bismarck’s imposition of tariffs were the German Conservative Party and the Free Conservatives, largely because they were made up of landowners (who approved of protection for German grain) and industrialists (who were becoming increasingly worried about competition from foreign industry). This alliance of landowning aristocrats (many of them Prussian Junkers) and industrialists became known as the alliance of ‘steel and rye’ and allowed Bismarck to follow a much more conservative political agenda in the 1880s. This rallying behind, as Bismarck put it, ‘the interests of the German Fatherland’, by attacking foreign economic competition actually served to unite at least the powerful members of German society (although the driving up of food prices with the scrapping of cheaper foreign imports arguably made things harder for the peasants and lowest paid industrial labourers). Because, Bismarck also dropped the kulturkampf in 1878 (partly to win over the Catholic element among the Conservatives), he also generally enjoyed the backing of the Catholic Centre Party in the 1880s.

(c) The attack on the socialists:

-What was the ‘red menace’ in Germany?

*The socialists had been a thorn in Bismarck’s side ever since they had opposed the annexation of Alsace-Lorraine by the new German Reich following the French defeat in the Franco-Prussian war – socialists were very much internationalists who believed that the inevitable result of capitalist dominance was war between the profiteering (middle and aristocratic) and productive (working) classes rather than between individual state governments. Bismarck, a proud and committed Junker, strongly believed in the old-fashioned system of deference among the labouring classes for their superiors and hated socialism accordingly. By 1871, two important socialist organisations existed in Germany – the A.D.A.V. (General German Workers’ Association) led by Ferdinand Lassalle and the S.D.A.P. (the Social Democratic German Workers’ Party) led by Karl Liebknecht. Both groups advocated the redistribution of wealth and the abolition of private property, their main point of divergence being that Lassalle believed in achieving these goals through cooperation with the state whereas Liebknecht’s organisation was prepared to advocate revolution (thereby following the teaching of Karl Marx) in order to achieve them. In 1875, realising the limiting nature of their rivalry, these two organisations joined together to form the S.P.D. (the German Social Democrat Party, who would later, under Friedrich Ebert, go on to form the first Weimar Government in 1919). By 1877, the S.P.D. had 13 deputies in the Reichstag, having received a worrying 500,000 votes in that year’s national elections. Meanwhile, also worrying to Bismarck, was the rise in the Trade Union movement in Germany (and also the liberal-party sponsored Hirsch Dunker Unions) which had over 50,000 members by the end of 1877.

*Bismarck’s excuse to move against the socialists came in May 1878 when an anarchist attempted to assassinate Kaiser Wilhelm I (Bismarck, quite unjustifiably, made no distinction between socialists and anarchists). Although this did not prove sufficient for the Reichstag to pass a bill criminalising incitement to class war and placing tight restrictions on the press, a subsequent assassination attempt, which this time left the Kaiser badly wounded, allowed Bismarck the chance to dissolve the Reichstag and call for new elections. The elections saw big gains for the Conservative Party and big losses for the National Liberals, who, as liberals, had been standing in the way of Bismarck’s proposed repressive legislation. With Conservative backing in parliament, Bismarck was then able to pass an ANTI-SOCIALIST LAW which: banned all socialist and communist meetings; giving all the various state police forces the power to expel socialist activists; and allowing the police to declare ‘a state of siege’ where they could operate locally under emergency decree for up to a year. A legal loophole did, however, exist, meaning that the S.P.D. could stand for election.

*In the following years, the state-sponsored persecution of socialists continued across Germany: 45 of the 47 socialists newspapers were, for example, closed down; Sixty-seven leading socialists were expelled under a ‘state of siege’ from Berlin in 1879, with a similar state of siege the following year in Hamburg, which saw 100 activists expelled, leading to many emigrating to the U.S.A.; prior to the 1881 election, 600 S.P.D. members were arrested forcing the leaders August Bebel and Karl Liebknecht to stand in 35 and 16 separate constituency elections respectively.

As a result of this persecution, many more moderate S.P.D. members left the party and the S.P.D. vote in the 1881 elections was cut by a third.

*Another tactic Bismarck used against the socialist was a policy of State Socialism (*see economic section below) whereby he sought to undermine the S.P.D. with welfare reforms to help the workers to prevent them from feeling the need to follow the S.P.D.

*OVERALL, HOWEVER, BISMARCK’S PERSECUTION OF THE SOCIALISTS ONLY EVENTUALLY SERVED TO TOUGHEN THEIR RESOLVE:

*Liebknecht and Bebel were forced by all this, for example, to drop anarchists and terrorist tactics and pursue a more tightly organised party resistance.

*A new socialist paper, called the Social Democrat, was published in Zurich and then smuggled across the Swiss border and secretly distributed among members to keep them informed about party plans and policies.

*Secret socialists conferences were also held abroad – in Switzerland (in 1880 and 1887) and in Denmark (in 1883).

*A Socialist ‘counter-culture’ was established whereby, although ostracised from mainstream society, party members could benefit from educational courses, libraries, sports clubs and choirs run by the S.P.D.

*The chance to have a voice in public affairs was increased by the ‘societies for municipal elections’ set up in big cities to allow the S.P.D. to take part legally in day-to-day political activity.

#As a result of all this, the number of social democrat deputies in the Reichstag increased from 13 in 1881 to 35 in 1890, while, by the same year, membership of trade unions had rocketed up to 278,000.

2. Bismarck and the economy:

*It certainly cannot be argued that the German economy did not continue to grow under Bismarck, either before or after his switch to a policy of protectionism and tariffs on imports. This was in spite of the fact that 1873 saw the beginning of a severe Europe-wide economic depression which, some historians have argued, lasted until 1896. It was, in fact, this depression which led to the rising price in grain which persuaded Bismarck, following the lead of many other European governments, to place restrictive import duties on foreign goods.

*Despite the economic down-turn, the following benefits were reaped:

-increases in the production of: steel – 169 million tons in 1870 to 2,161 million in 1890…by 1900 German steel output had even overtaken that of Britain; coal – 37.9 million tons (1870) – 89.1 million (1890) and iron – 1.4 million (1870) to 4 million (1890).

-Germany came to lead the World market in several of the new industries, including the electrical and chemical industries. Siemens (still famous today) led the way in lots of pioneering electrical fields, especially the production of dynamos (often used on bikes) whilst Germany had a World-wide monopoly on synthetic dyes and artificial fibres as well as certain photographic materials, drugs, plastics and explosives.

*There were also the following benefits for certain groups in society:

-Big businesses who, with Bismarck’s encouragement, established Cartels, which were federations of businesses who, in cooperation with each other, could totally dominate the market for a certain industry, thereby being able to dictate prices. Ninety such cartels existed in Germany by 1885.

-Middle Class entrepreneurs able to become very rich and, using their wealth, emulate the aristocracy by buying up big country mansions and impressive sounding titles, a course of action followed by the Krupps (following the enterprises of the weapon inventor and industrialist, Alfred Krupp). Other middle class families who made their fortunes included the Siemens, Rathenaus, the Thyssens, and the Furstenbergs.

-The Junkers who, although they had been forced by the increasing industrialisation and resulting rural depopulation, to sell many of their lands to the rising middle classes, were allowed to survive in a system whereby Bismarck allowed them to keep their privileges as well as continuing to dominate the Prussian Landtag (Upper parliamentary house) as well as local government (allowing them to get away with flagrant tax evasion).

-More enterprising and ambitious farmers (with some initial capital to invest in the new machinery and fertilisers becoming available) were able to benefit from the increased demand for food from the growing towns, and from the protection of their prices offered by his tariffs, leading to four million extra acres of land being cultivated between 1880 and 1890.

-STATE SOCIALISM:

Although Bismarck introduced these reforms more to trump the socialists than out of any genuine concerns for Germany’s working classes, they did represent a pioneering set of welfare reforms, coming over about a quarter of a century before the celebrated reforms of similar nature of Lloyd George’s British government in the period 1906-14:

-1883: Medical insurance, contributed to weekly/monthly by both the employer and employee (like the Lloyd George’s national insurance scheme, still functioning today), was brought in covering 3 million workers and their families, whereby their medical bills would be covered by the state.

-1884: an accident insurance scheme (funded entirely by employers) was set up to cover those injured at work.

-1886: this accident insurance scheme was extended to 7 million agricultural labourers.

-1889: State pensions were introduced for workers when they reached the age of 70.

*There were, however, also some far less palatable effects of the growth of Germany’s economy in the 1871-90 period.

-The domination of the countryside by the few enterprising farmers to benefit from the protective tariffs and shift in agricultural technology (as well as the Junkers) led to the majority of farmers and agricultural labours feeling forced to emigrate to the nearby towns to find work as labourers in the factories proliferating there. This rural depopulation and consequent explosion in the population of Germany’s cities and towns (Berlin’s population, for example, grew from 967,000 to 1,588,000 from 1875 to 1890) led to severe overcrowding and desperately harsh (and poorly paid) working conditions in the towns, which continued, for many, long after Bismarck’s welfare reforms:

-In Berlin, there were 10,000 homeless people in 1871.

-Typically an urban German working class family had to spend 25% of their income on often unsafe and cramped accommodation.

-12 hour working days (for children and adults alike), six days per week constituted a normal weekly working pattern.

-In many of Germany’s largest cities the average life expectancy was less than 40 throughout the 1880s.

Although, like the Krupps of Essen, there were some philanthropic industrialists who helped their factory workers, the majority really only sought to look after one thing: profit.

-Unsurprisingly, all this suffering led to a growth in support for the socialists. Similarly, a new political group called the Mittelstand emerged, which was made up of independent farmers, skilled craftsmen and small shopkeepers, many of whom had been put out of business by the industrialisation and 1873 depression. A more worrying trend, however, was the anti-Semitism it began to encourage by the 1880s. This was allowed to happen partly because 45% of the German banking system (who demanded back loans from bankrupt farmers and labourers) and many of the big chain stores putting small shopkeepers etc. out of business were owned by Jewish people. Newspapers and political parties played on the prejudices concerning Jews deliberately profiteering from the agricultural depression, one Catholic newspaper in Wurttemberg, for example, printing in bold the names of any Jewish people convicted of crimes…

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