He built the welfare state to prevent a revolution, not to start one.
Otto von Bismarck unified the German states into an empire in 1871 and served as its chancellor for the next nineteen years. A Prussian aristocrat with no sympathy for socialism, he nevertheless created the world's first national social insurance system, not out of compassion for workers, but out of strategic calculation.1
In 1881, at Bismarck's direction, Kaiser Wilhelm I sent a message to the Reichstag declaring that those disabled by age and illness had "a well-grounded claim to care from the state."2 Between 1883 and 1889, Bismarck pushed three landmark laws through Parliament. The Sickness Insurance Act of 1883 covered medical treatment. The Accident Insurance Act of 1884 provided compensation for workplace injuries. The Old Age and Disability Insurance Act of 1889 established the world's first state pension.3
The pension was available to workers who reached age 70, at a time when average life expectancy in Prussia was around 45, a figure skewed by high infant mortality but still indicative of how few workers would ever collect.4 Germany lowered the age to 65 in 1916, eighteen years after Bismarck's death.5
Bismarck was candid about his motives. He told the Reichstag that a worker with a pension to look forward to "is far more easy to handle than one who has no such prospect."6 The legislation succeeded as social policy and failed as political strategy. The Social Democratic Party became the largest party in the Reichstag by 1912, despite Bismarck's efforts to undercut its appeal.7