Summary of Bismarcks 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 Reichs 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 Bismarcks domestic policy.
(b) Collusion with the Conservatives:
*Two parties which approved of Bismarcks 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 Bismarcks 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 Liebknechts
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 years
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.
*Bismarcks 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 Bismarcks 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, BISMARCKS 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 1890by 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 Bismarcks 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 Germanys 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 Georges

British government in the period 1906-14:
-1883: Medical insurance, contributed to weekly/monthly by both the
employer and employee (like the Lloyd Georges 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
Germanys 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 Germanys cities and towns (Berlins
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 Bismarcks
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 Germanys 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