Welfare State within the Scope of Bismarck, Beveridge’s Attempts and Key Points of European Union


This article analyzes the historical development of the welfare state concept in the European Union, dating back its roots to the social systems of Otto von Bismarck and Sir William Beveridge, which means almost 100 years between the 19th and 20th centuries. It refers to these foundational models and how they continue to shape the current approach to social welfare within the European Union. The key characteristics of a welfare state are examined including providing social security, ensuring minimum standards of living, offering healthcare access, and so on. It highlights Bismarck’s social insurance system, funded through contributions, and Beveridge’s universal social security system, financed by taxation, and their differentiated models, roughly. Both models aimed to address social issues, poverty, and what great events brought. It is emphasized that the strong commitment to welfare state principles within the European Union. It highlights that European Union member countries spend a significant portion of their GDP on social transfers, demonstrating their dedication to the welfare state concept. Public opinion surveys also reveal that citizens prioritize factors like standard of living, working conditions, and healthcare access, which underlines the importance of the welfare state in the European Union. It is suggested that the key concepts of the welfare state will likely remain, as they address fundamental human needs and economic stability.

  1. Introduction

The welfare state is generally associated with meeting people’s needs such as medical services, social aids to “determine and provide a minimum lifestyle” and social security which guarantees people’s life after retirement. Welfare state concepts can appear in different forms as what current needs are. However, as the welfare state concept can be differentiated by country and conditions, it is possible to consider the welfare state in the context of the health system, social security, income distribution, and social care that is held for people who are in need, such as disabled and elderly people. (Humpries et al., 2016). A welfare state tries to ensure that its residents have access to healthcare which includes a public healthcare system, and universal healthcare opportunities to manage health and prevent issues. Another concept is providing a minimum standard of living for people by the cohesion of financial opportunities; food, child, and education programs. Basically, the welfare state tries to prevent poverty and the gap between minimum necessities that should be met and what the current situation is. In terms of social security, disability benefits, unemployment insurance, and retirement well-being are meant to describe what a welfare state is supposed to focus on. Another focused issue is providing economic security who cannot predict their future when they are the age that one can be retired (Feldstein, 1985). However, it is known that the welfare state concept can be specified for different countries as every country needs different aspects by segregation of economic situation, culture, and what welfare means to people of countries. It is likely that states will develop themselves as welfare states and more opportunities such as social security and living without poverty will be given thereby (Grave, 2006). Legal arrangements in terms of the welfare state began in the 17th century with the Poor Act 1601, significant developments were accelerated in the 19th century and one of the most practical attempts emerged when there was an ongoing war in the Europe. After the Second World War, preserving citizens from accident that can happen due to work has been brought to the table, then it is extended to preserve people from risks beyond the job (Gülcan, 2017). Specifically, there is no proposition to mention Bismarck’s attempts at the welfare state in the 19th century as a development of social policy in states even though it cannot be considered as the first attempt at the way of the welfare state, and Beveridge’s Report in Second World War years. As developments are meant to be cumulative, it is possible to count that these events represented today’s approach to the European Union welfare state.   

2.Otto von Bismarck’s Welfare State

Otto von Bismarck, Chancellor of Prussia and a conservative statesman, referred to a social policy system named as Staatssozialismus (State Socialism), in order to reduce the support of social democracy that is emerged (Fay, 1950). This system is based on the principle offers that people facing poverty and hardship should receive support from the state not as a charity but as a right. Even though there was not need an appreciation from people due to the election to be chosen as Chancellor, there was a crisis time for the country. Thus, in 1880, Bismarck offered a system in the Reichstag which refers to the German parliament, and it was highly interesting for a statesperson who was conservative but offered a socialist system that would be held by the state. Therefore, it is possible to state that the welfare state was made by a statesperson who was responding to demands (Rose, 1985). Bismarck’s system and its establishment dates to the end of the 19th century. (Tulchinsky, 2018)

National health insurance For workers and their families1883
Accident insurence1884
Old age pensions1889

National health insurance was referring to providing health coverage for workers and their families, accident insurance for workplace accidents, and old age pensions to support older citizens. This created a welfare state when people were becoming healthier, even though Otto von Bismarck’s motivation was political. As a bunch of European countries made their social security systems with the respect to Bismarck’s approach, it is based on participation (Tulchinsky, 2018). Participation in the system was obligatory, and contributions were paid by employees, employers, and the government (United States Social Security Administration, n.d.). German process of being a welfare state by a social security system is completed with retirement and disability benefits, as well as the sickness insurance. Nevertheless, this concept is not without challenges. As the system needs payment, it can mean an emerging number of people who cannot pay their contribution share, and therefore there can be a lack of healthcare, pension, and overall, lack of welfare.

Number of members of health insurance at the end of the year

(GHDI, n.d.)

  • Beveridge Report

Beveridge Report, also known as Social Insurance and Allied Services, was Sir William Beveridge’s report submitted to Parliament on November 24th, 1942, to establish a comprehensive social insurance system for the British population (Wolman, 1943). Its importance is that it is the establishment of the United Kingdom as a welfare state. The National Health Insurance Act was conducted in 1911 by Chancellor of the Exchequer David Lloyd George with coverage of almost one-third and increased to half of the population (Tulchinsky, 2018). The report aimed to counter poverty by establishing a minimum standard of living, one of the criteria of the welfare state approach.

As the first implementation of the Beveridge model, the Family Allowance Act in 1945, was a benefit that was paid to families for each second and additional child. The allowance was a universal benefit, meaning that it was provided to all families and so it was not evaluated if families are eligible in terms of income, or other factors. It was funded by taxes (Cross, 1946). National Health Service Act 1946 and the National Health Service (Scotland) Act 1947 followed as they were conducted subsequently, and they came into power in 1948 to create the National Health Service (Marshall, 1952). Another act that was conducted in 1946 was the National Insurance Act which determines insurance for some categories of people such as the unemployed, widowed, sick, and older (Ezer, 2016). As Ezer stated in 2016, acts based on the Beveridge Report also allowed other types of insurance such as occupational insurance and private insurance in addition to compulsory social insurance.

As a key difference between Beveridge’s system when looking at the fellow previous, Bismarck’s, it can be comprehended that Beveridge’s system relies on taxes instead of contribution shares. This may be understood as Beveridge’s system covering more people when it is compared to Bismarck’s, especially for those who cannot pay their contribution shares to the system to be cared for by the health system, accordingly. Beveridge’s approach offers protection as a right, especially after challenges happened in the 1930s (Whiteside, 2014). However, Beveridge’s model should not be polarized from the Keynesian economic approach which offers government intervention. Also, Beveridge was criticized due to his ambitions of idealism and right-wing historians thought that Beveridge should be held responsible for the United Kingdom’s economic decline after the war.

GDP in England (billion GDP) processed by Our World in Data

However, the influence of the Beveridge Report on all democratic countries is obvious when establishment dates of social security institutions and the system outline in countries are investigated, and this influence still rules the key concepts of the social system and welfare state definition around the world.

  • Welfare State as Key Factor of European Union

Key factors of the European Social Model can be considered in 5 types.

Firstly, providing safety and health in terms of work, offering equality between women and men, a social protection system that covers all citizens, a job market that can provide fair wages to all considered social categories, and representation of all social dialogue sides (Ştefan, 2015). Looking at public social transfers, when government (that is central, state, and local governments, including social security funds) controls the financial construct of the transfer. Among Organization of Economic Co-operation and Development (OECD) countries, the top 5 countries are European Union members.


Public social spending (Percent of gross domestic production ‘GDP’)

OECD (2024)

It is seen that European Union member countries are actively supporting the social state policies. In a recent Eurobarometer survey held with a question that asks about the most prominent issue for the European Union’s social and economic development, what 45 percent of people answered was standard of living, 44 percent people’s answered was working condition related answer, and the same rate of people considered accessing quality healthcare as a key factor for European Union’s social and economic development. To support the anecdote that offers welfare state is taken more important when there is a problem, the answer to a question that asks which area the European Union should take action for the future of the continent. At the end of 2020, a conducted Eurobarometer survey states that 25 percent of people think of wages as an action that should be taken for the future of Europe. However, when it comes to the 2024 survey which is recent, the wages issue taken by 34 percent of the people, especially the answer “wages” became the most answered answer in Hungary (41 percent), Croatia (39 percent), and Lithuania (35 percent).

Inflation rates in Lithuania, Hungary, Croatia and Euro area. (percent) Between December 2020 and February 2024.

As it is seen, countries that are most likely to see wages as an action to be taken for the future of Europe have high rates of inflation. This may be a reason to be in favor of the answer. On the one hand, the European Union and its Member States attach importance to the concept of the welfare state, see it in the future of Europe, and act accordingly. Moreover, people living in the European Union seem to see the welfare state as a crucial factor in the European Union and in its future. As welfare state concept is not only about income distribution, but welfare states will also take into account on healthcare, wages, and other factors of the welfare state even though a European Union member countries’ economic factors such as gross domestic product will be higher. For instance, according to the Special Eurobarometer that was held in 2020, looking at Luxembourg, which takes the top position in terms of real gross domestic product per capita[1] around the European Union, people of Luxembourg consider health care as the most important factor in the future of the Europe. Overall, it can be said that the concept of the welfare state, with its key factors such as wages and health care, will continue to exist in Europe.

4.1 Will Far-Right Affect the Welfare State Concept?

As Rathgeb and Busemeyer stated in 2022, the relationship between political radical right parties is not likely to emerge when the welfare state’s influence on these political parties and these parties’ effect on the welfare state are concerned. Motivations of far-right parties’ voters generally include fear of issues related to lack of and inadequacy of welfare a threat to national identity that can be caused by immigration, and concern for democracy. (Koller and Miglbauer, 2019)

As if the welfare state concept is on the table, social transfers are supposed to be mentioned too. Welfare-oriented radical right parties are in favor of pro-elderly spending, such as healthcare and pensions and monetary family support with inherited models from the past industrial era (Rathgeb and Busemeyer, 2022).

However, the welfare state concept is also related to inequality, as far-right populists explain the emerged inequality as an issue arguing that the promises made by conventional politics have not been successful. To address this issue, a welfare state can expand its expenditures and, eventually, the people who get social services from the state; the popularity of political far-right parties may not be accelerated, as economic deprivation can be one of the causes of the rise of political radicalism (Dorn et al., 2020).


As it is seen, welfare states around the European Union have ties with the root of welfare states that include the attempts held in Elizabeth’s rule, Prussia, and the United Kingdom, which is one of the flagships of the Second World War. Looking back, social benefit expenditures have increased significantly after the 1950s, with the effect of war such as losing jobs and displacement due to changes in borders. After events that have magnitudes like unification, war, and economic crisis, there is generally an increase in spending on social benefits (Bosch, 2015). Looking at the current situation, as Bismarckian welfare highlights protecting the majority of the population from main risks, it still works in the European Union. The key issues to be addressed in Bismarck’s and Beveridge’s systems are already considered in European social systems, what governments provide, and what people demand. Especially, this article supports the idea of how the welfare state concept could be shaped by the situation and significant events such as the Second World War, the Coronavirus pandemic, the war between Ukraine and Russia, and its economic effects. Moreover, even if all poverty and problems were diminished, the welfare state concept would still exist, with payments such as pensions, health insurance, and care fees. As a supporter argument that the contribution payment of health insurance postpones the payment for healthcare that contributor can be sure that protection is guaranteed during the illness (Palier, 2006), this statement would remove the concept of the welfare state from the characteristic of a concept that only distributes money. All welfare states, including the member countries of the European Union, will demand all the benefits of the welfare state.

Photo: 18 January 1871: The proclamation of the German Empire in the Hall of Mirrors at the Palace of Versailles – Image Credit: Anton von Werner, Public domain, via Wikimedia Commons


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[1]  It is a measure of economic activity and development in a country’s material living standards.

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