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The real motive behind State Insurance

Just as with Labour Exchanges and Old-Age Pensions, so with the latest dodge, State Insurance it is a soporific. All along the line of Liberal legislation an examination shows that the benefits go to the employing class, not to the employed.

In working-class districts all over the country, the people are told from Liberal platforms that poverty and destitution, sickness and disease, are to be vigorously dealt with and eradicated, while at the same time the employers are being assured that these schemes, far from costing them anything, will, in the long run, result in a greater return for the sums that are to be expended.

Lloyd George, at Birmingham, exposed the mockery of the claim that these measures are being introduced to benefit the working class. He said:

“Take a brewer’s horse. How well he is looked after – well fed, cared for, and doctored. If he does not feel up to the mark he has got a guardian there specially looking after him. He says there is something the matter with his horse to-day. He is kept there, is doctored, until he is right. That is not merely humanity, it is good business. Take a machine. If you neglect a machine, a very small matter develops into a big one. It may simply mean that you want to oil a bearing, to tighten a screw. But if the machinist says I cannot afford to allow this machine to rest for two or three days in order to overhaul it, what happens? That machine has a bad breakdown sooner or later, and it may have to be scrapped. It is good business to overhaul a thing of that kind in time before it develops.”

Just so. To keep the worker in a fit condition ensures a greater output, and the increased efficiency resulting from such condition will enable the employer to wring more profit out of his victim, for, while the labour power may cost a little more, the return is certain to be greater.

A paper issued by the Government contains still more significant statements from German employers who have experienced the working of similar insurance schemes. The president of one of the largest associations of employers in the iron and steel industry, basing his opinions on special enquiries addressed to leading firms, says, among other things:

“The laws ‘pay’ employers from their own standpoint, since they, too, are given a greater feeling of security . . . and they are protected against constant disputes with exacting claimants.
“The proof that these laws are remunerative to employers lies in the fact that an employer has an interest in having at his disposal a healthy and efficient labour force.”

>From the “Chemical Industry” comes the statement that:

“>From the standpoint of the employers these laws are remunerative to the extent that the efficiency of the worker is increased, and without the insurance laws  correspondingly higher wages would have to be paid.”

Herr E. Schmidt, president of the German Tobacco Manufacturer’s Association, says:

“To-day, however, these contributions are booked either to the general expenses account or the wages account – for they are, in fact, a part of wages . . . Speaking as one employer to another, I am of the opinion that the investment in these insurance contributions is not a bad one.”

Apart from the capitalist as employer, the statement of the poor Law Board of Frankfort-on-Main that “the insurance laws have unquestionably afforded direct and permanent relief to the Poor funds” is reiterated by the thirteen towns quoted.

To sum up the whole question, it is but necessary to quote Dr. F. Lahn, Director of the Bavarian Statistical Office, bearing in mind that the State referred to is a capitalist State, and that “national economy” means for the working class a greater speeding up – an economy in the matter of wages. He says:

“Industrial insurance is regarded by many people as a burden placed on certain branches of economic production, and is judged in the same way as taxation. Such a view is just as one-sided and fallacious as if one were to represent our schemes of sanitation, education, and poor relief as a system of national taxation instead of as important constituents of our national system of social welfare, devised to awaken slumbering powers in the body politic, to use them in the service of the State by the nurture and increase of our productive efficiency to further the national economy and the welfare of the State. If it is true that in the keen rivalry of the nations victory will lie with those peoples which have at command the greatest reserves of strength and health, industrial insurance must take a leading place in this policy of industrial welfare.”

Just as Germany a few years ago recognised that in order to obtain the markets of the world they must have efficient labourers, so to-day the “British” capitalists, ever behind, realise that to combat Germany they must economise, they must obtain a better quality of labour-power – if possible without increasing its cost. Hence there is a welling-up of the milk of human kindness in the capitalist breast, and we get State Insurance and the like.

TWEL
(Socialist Standard, July 1911)