Otto von Bismarck first thought of it. . .
What is it?
A system of financial maintenance organised by a government to protect the population of a country against loss of earnings resulting from sickness, unemployment, old age or any other misfortunes; to meet medical costs, and provide support to families with children. Such a thing was rare if not non-existent of in the 19th century, and the term social security covers both social insurance and assistance schemes.
Social security developed from primitive beginnings at the end of the 19th to full welfare schemes in the developed countries as a result of two world wars in the 20th. A large class of factory and agricultural workers formed as a result of the industrial revolution, and it depended on a regular payment of wages – not always feasible. Economic depression in the 20s and 30s of the 20th century contributed a great deal towards its development.
The first workable system was introduced in Von Bismarck’s Germany between 1881 – 09 and provided for insurance benefits paid by the state in the event of accident, sickness and old age. A little later, encouraged by moderate success in Germany, similar schemes were developed in other European countries. Both Australia and New Zealand had their systems by 1900. In Great Britain Lloyd George pioneered social security, much scoffed at in the process, between 1908 and 1911.
During the Second World War Churchill appointed a man called Beveridge to inspect social insurance schemes. The Beveridge Report ((1942) proposed a comprehensive insurance scheme which formed the basis of the post-war Welfare State, which in the latter parts of the 20th century was to prove a mixed blessing. My reason for a trace of cynicism is that in a true welfare state, many able-bodied persons find it more comfortable to draw maximum benefits from a benevolent state, rather than work for a living. The inevitable result is a population largely living on benefits, which in turn leads to recession, depression, inflation and deflation; also to idleness, alcoholism, drugging, amorality and suicide: viz. Great Britain in the Noughties.
In Britain the welfare state weas implemented through the National Insurance Act of 1946. The term ‘social security’ actually first appeared in the USA. It had been prompted by the enormous increase in unemployment and social distress fomented during and after the Great Depression. It was Franklin D. Roosevelt who introduced the New Deal programme and the Social Security Act which was based on a direct payroll tax, providing for old age, widows or widowers and disability. The United States never thought it wise to provide welfare for those disinclined to go to work.
By the mid 70s the entire population of developed countries was protected, though rising costs sounded alarms. In some countries social security receipts accounted for a quarter of GDP. Many states raised insurance payments at the same time as reducing benefits, which was wise but unpopular, and helped towards left-leaning politics and its proponents.
In Spain a system of social security was actually introduced by General Franco, who could hardly be labelled a socialist, but his government had recognised that the Spanish people, especially in agrarian districts, had been in a state of near-starvation for centuries.
Most developing or third-world countries have neither the cash nor the administrative structure to support a social security system, though Thailand, Chile and Costa Rica and others are pioneers in these schemes. In the developed countries, social security provisions have reduced in scope during the 80s and 90s, as costs have risen too much. Increased longevity and long-term structural unemployment have meant that governments of many ‘developed’ countries continue to face escalating, not to say frightening social security costs.