On the other hand, it would be risky to point to the internal prosperity of Germany and the vast growth of her exports as proofs of the soundness of protectionist theories. The marvellous growth of that prosperity is very largely due to the natural richness of a great part of the country, to the intelligence, energy, and foresight of her people and their rulers, and to the comparatively backward state of German industry and commerce up to the year 1870. Far on into the Nineteenth Century, Germany was suffering from the havoc wrought by the Napoleonic wars and still earlier struggles. Even after the year 1850, the political uncertainties of the time prevented her enjoying the prosperity that then visited England and France. Therefore, only since 1870 (or rather since 1877-78, when the results of the mad speculation of 1873 began to wear away) has she entered on the normal development of a modern industrial State; and he would be an eager partisan who would put down her prosperity mainly to the credit of the protectionist régime. In truth, no one can correctly gauge the value of the complex causes--economic, political, educational, scientific and engineering--that make for the prosperity of a vast industrial community. So closely are they intertwined in the nature of things, that dogmatic arguments laying stress on one of them alone must speedily be seen to be the merest juggling with facts and figures.
As regards the wider influences exerted by Germany's new protective policy, we can here allude only to one; and that will be treated more fully in the chapter dealing with the Partition of Africa. That policy gave a great stimulus to the colonial movement in Germany, and, through her, in all European States. As happened in the time of the old Mercantile System, Powers which limited their trade with their neighbours, felt an imperious need for absorbing new lands in the tropics to serve as close preserves for the mother-country. Other circumstances helped to impel Germany on the path of colonial expansion; but probably the most important, though the least obvious, was the recrudescence of that "Mercantilism" which Adam Smith had exploded. Thus, the triumph of the national principle in and after 1870 was consolidated by means which tended to segregate the human race in masses, regarding each other more or less as enemies or rivals, alike in the spheres of politics, commerce, and colonial expansion.
We may conclude our brief survey of German constructive policy by glancing at the chief of the experiments which may be classed as akin to State Socialism.
In 1882 the German Government introduced the Sickness Insurance Bill and the Accident Insurance Bill, but they were not passed till 1884, and did not take effect till 1885. For the relief of sickness the Government relied on existing institutions organised for that object. This was very wise, seeing that the great difficulty is how to find out whether a man really is ill or is merely shamming illness. Obviously a local club can find that out far better than a great imperial agency can. The local club has every reason for looking sharply after doubtful cases as a State Insurance Fund cannot do. As regards sickness, then, the Imperial Government merely compelled all the labouring classes, with few exceptions, to belong to some sick fund. They were obliged to pay in a sum of not less than about fourpence in the pound of their weekly wages; and this payment of the workman has to be supplemented by half as much, paid by his employer--or rather, the employer pays the whole of the premium and deducts the share payable by the workman from his wages.
Closely linked with this is the Accident Insurance Law. Here the brunt of the payment falls wholly on the employer. He alone pays the premiums for all his work-people; the amount varies according to (1) the man's wage, (2) the risk incidental to the employment. The latter is determined by the actuaries of the Government. If a man is injured (even if it be by his own carelessness) he receives payments during the first thirteen weeks from the ordinary Sick Fund. If his accident keeps him a prisoner any longer, he is paid from the Accident Fund of the employers of that particular trade, or from the Imperial Accident Fund. Here of course the chance of shamming increases, particularly if the man knows that he is being supported out of a general fund made up entirely by the employers' payments. The burden on the employers is certainly very heavy, seeing that for all kinds of accidents relief may be claimed; the only exception is in cases where the injury can be shown to be wilfully committed[85]. A British Blue-book issued on March 31, 1905, shows that the enormous sum of £5,372,150 was paid in Germany in the year 1902 as compensation to workmen for injuries sustained while at work.
The burden of the employers does not end here. They have to bear their share of Old Age Insurance. This law was passed in 1889, at the close of the first year of the present Kaiser's reign. His father, the Emperor Frederick, during his brief reign had not favoured the principles of State Socialism; but the young Emperor William in November 1888 announced that he would further the work begun by his grandfather, and though the difficulties of insurance for old age were very great, yet, with God's help, they would prove not to be insuperable.
Certainly the effort was by far the greatest that had yet been made by any State. The young Emperor and his Chancellor sought to build up a fund whereby 12,000,000 of work-people might be guarded against the ills of a penniless old age. Their law provided for all workmen (even men in domestic service) whose yearly income did not exceed 2000 marks (£100). Like the preceding laws, it was compulsory. Every youth who is physically and mentally sound, and who earns more than a minimum wage, must begin to put by a fixed proportion of that wage as soon as he completes his sixteenth year. His employer is also compelled to contribute the same amount for him. Mr. Dawson, in the work already referred to, gives some figures showing what the joint payment of employer and employed amount to on this score. If the workman earns £15 a year (i.e. about 6s. a week), the sum of 3s. 3-1/2d. is put by for him yearly into the State Fund. If he earns £36 a year, the joint annual payment will be 5s. 7-1/2d.; if he earns £78, it will be 7s. a year, and so on. These payments are reckoned up in various classes, according to the amounts; and according to the total amount is the final annuity payable to the worker in the evening of his days. That evening is very slow in coming for the German worker. For old age merely, he cannot begin to draw his full pension until he has attained the ripe age of seventy-one years. Then he will draw the full amount. He may anticipate that if he be incapacitated; but in that case the pension will be on a lower scale, proportioned to the amounts paid in and the length of time of the payments.
The details of the measure are so complex as to cause a good deal of friction and discontent. The calculation of the various payments alone employs an army of clerks: the need of safeguarding against personation and other kinds of fraud makes a great number of precautions necessary; and thus the whole system becomes tied up with red tape in a way that even the more patient workman of the Continent cannot endure.