A new effort against the socialists as an alleged “internal enemy” was calculated at preserving the power of the state, which likewise also failed. Intensive industrialisation since the 1850s had increased the size of Germany’s industrial proletariat, which was followed by the lower and middle classes in all of the German states receiving impulses toward expressing their political influences, particularly with the privileges they possessed under the constitution of the new empire. Workers began organizing a socialist party and trade unions by 1869. Commercial and industrial development continued increasing after 1871, when Bismarck invested part of the enormous indemnity received from the war with France into business channels, which led to dramatic economic development that then led to a grievous downturn in 1873, with worsening economic conditions for many economically disadvantaged German citizens.
The original followers of Ferdinand Lasalle had demanded a thorough reconstruction of society through the contention that socialism could be achieved by universal suffrage, to be followed by implementing reforms from above, rather than revolution from below. In contrast, the followers of Karl Marx, including the uncompromising Reichstag representatives August Bebel and Karl Liebknecht, demanded demolishing the fabric of modern society before restoring it on the basis of their own principles of social architecture, which composed revolutionary aims that Bismarck was called on to stem, as Social Democracy was considered to be an enemy to state and society, which alarmed the conservative classes. Socialists initially were divided in the 1869 Eisenach Conference when August Bebel and Wilhelm Liebknecht founded the Social Democratic Workers’ Party as a Marxist party that was committed to the overthrow of the bourgeoisie as the ruling class of society, and attaining the complete economic and political emancipation of the working class.
German socialists later united their interests by establishing the Socialist Workers’ Party of Germany (SAPD) at the Gotha Congress in May 1875, where the General German Workers’ Union founded by Ferdinand Lasalle in 1863 and the League of German Workers’ Association founded by Liebknecht. This was a defensive reaction to Bismarck’s increasing hostility to socialism, and agreeing that it would only apply legal means to achieve working class economic and political emancipation, in spite of Marx’s criticism. This new party acquired significant electoral strength in the face of rapid industrialization, as Germany gradually transformed from an agricultural to an industrial society, with a growing urban working class that constituted its natural constituency, which was later renamed the Social Democratic Party of Germany (SPD) in 1890.
Bismarck considered socialism to be a subversive movement designed to weaken the state, and therefore attempted to suppress it. Bismarck interpreted the attempts on the emperor’s life on 11 May and 2 June 1878, which were not connected with the SPD, as a socialist threat on the conservative-monarchist order of society, while considering the international character of the socialists as repugnant as their political and economic doctrines that constituted fundamental threats to the foundations of the social and political order he strove to establish in a unified Germany, as well as in Europe as a whole, which was to be confronted with greater force than against an external threat to the state. He believed that socialism composed an existential threat to upholding the conservative-monarchist order of society to the extent to claiming that enacting anti-socialist legislation in Germany would also strengthen the authority of the Russian tsar against his own internal opposition elements. The assassination attempts on the emperor were therefore used as pretexts to justify dissolving the Reichstag on 11 June. and calling new elections as a matter of political expediency, which resulted in the election of a more conservative Reichstag majority with thirty-seven seats among them, whereas the National Liberals lost twenty-nine seats.
The Reichstag passed an anti-socialist law on 21 October 1878 by a vote of 221 votes to 149, which was to remain in place until 31 March 1881. This measure gave the authorities great discretionary powers, which practically put socialists and their affiliated trade unions at the mercy of the Ministry of the Interior: public meetings, societies and publications that were considered dangerous were dissolved; the central authorities were empowered with suppressing newspaper and books; the police were empowered with interfering with the proceedings of public meetings, and all persons whose proceedings were of an obnoxious character were to be expelled from their residences, while the authorities could decide whether someone was a socialist, or what defined socialist doctrine or objects calculated to undermine the state; all opprobrious language in regard to the emperor, or even severe criticism, was made a criminal offence; socialists could be banished from their homes, and the states could declare a state of minor siege in disaffected areas for up to a year, which affected Berlin, and then Hamburg, Leipzig, Stettin, among other areas. Clubs suspected of having socialist leanings were closed, newspapers were prosecuted, and the police forbade subscriptions for those selected for banishment from their homes in order to provoke the disaffected into committing acts of violent outrage to justify further severity. These anti-socialist measures were renewed by a compliant legislature in 1881, 1886 and 1888, which supposedly represented public opinion in Germany as being necessary and justifiable. However, the Reichstag maintained the freedom of elections, and therefore socialist electoral activity was maintained, which allowed for socialists to stand for elections as independent candidates, and could speak freely in both the Reichstag and state legislatures while socialist newspapers continued publishing their contents in neighbouring countries. The popular vote for socialists initially dropped by 6 percent in 1881, before dramatically increasing to 99.7 percent in 1884, and then over 10 percent in 1887.
Repressive legislation did not eradicate the viability of socialist beliefs, and instead gave socialists the character of martyrs in the face of autocratic measures while socialists showed solidarity against a common threat, with support for the Social Democratic Party increasing significantly between 1878 and 1890 as a result of its effective leadership and organisation. It had twelve members in the Reichstag in 1877, and polled roughly half a million votes, and eventually had forty=four members and polled more than two million votes by 1893, and would eventually become the strongest single party in the Reichstag twenty years later, with one hundred and thirty members, polling four and a quarter million votes composing a third of the total electorate, and owning eighty-six newspapers. As socialist party members could still take their Reichstag seats, conduct electoral campaigns, and stand for election, and acquired twenty-four seats in the Reichstag, with its electoral support continuing to increase. Until it expired after it was renewed for every two years until 1890, leaders of the party were attacked, over 150 periodicals were suppressed, and over 1,500 socialists were arrested. However, socialists could still stand for election and speak freely in the Reichstag and the state legislatures, thus giving the SPD a parliamentary orientation, and support continued growing among the electorate while it held congresses and published its journals abroad. Using the same recourse for checking and guiding opinion from above that Metternich had used had ineffective results, considering that the socialists confined their efforts to legal and secret measures rather than using violence, and therefore repressive measures were meaningless while only inciting further resistance, and also aroused slight degrees of sensation and animosity as the Kulturkampf legislation had done through imposing suppressive measures.
When it appeared likely that anti-socialist policy could lead to negative consequences, as with the Kulturkampf that had caused disturbances in the first years following achieving the unity of the German states, Bismarck resolved to divert workers away from socialism by introducing social legislation to improve the living conditions of dissatisfied social classes and allay social unrest by successfully competing against the socialists in the Reichstag, which he perceived to be as a menacing growth of radical idealism. Introducing socialism from above to strengthen social stability by making the population dependent on the state, and thereby undermine the influence of socialist representatives. This entailed promulgating social legislation that laid the foundations for a modern welfare state with a series of great constructive measures that would have worldwide significance, in terms of being studied, praised and copied in other countries.
These legislative measures were partially financed in by remarkable industrial expansion after 1871 providing expanding revenue from indirect taxation, and abandoning free trade by imposing protective tariffs in on 7 July 1879 on importing manufactured goods to protect the domestic economic interests, particularly iron and steel, coal and agriculture, and stem recurring national economic deficits since 1871. The imperial government thus required generating revenues that were stagnant while expenditures were continually increasing. Bismarck therefore planned a complete reconstruction of the fiscal and financial principles and apparatus on which the empire had been based, to be followed by a new departure to the objects that would generate revenue. Economic reforms took place from 1879 to 1888, which involved abandoning the free trade principle of taxation for revenue alone; returning to protective tariffs that became increasingly more severe in their successive revisions; imposing a halt in the system of direct taxation, and a large substitution of indirect for direct taxes; attempting to establish large state monopolies in certain goods, such as tobacco, brandy and sugar, which failed in practice.
However, comprehensive social legislation altered the national economic structure. The structure and scope of trade guilds were substantially amended through the trade law promulgated in 1881, with further amendments in 1884 and 1886, with a view toward affording protections to artisans against large manufacturers, along with minimising the power of trade unions, which was diametrically opposed to the notion of abandoning underprivileged parties to their own resources and receiving assistance from outside sources in attempting to diminish the power of labour by making it dependent on a state over which the working class could not exercise any control. Added protections were introduced by setting limits on economically privileged parties, including imposing the stamp tax of 1881 imposed a duty on stock exchange transactions, and the usury law of 1880 introduced legal rate of interest. However, regulations were not introduced for wages, work hours and labour conditions. Only the extension of the power or trade unions would enable workers to confront capitalist interests on equal terms, for which Bismarck did not introduce legislative regulation in these matters of state socialism, which did not improve the status of women and children in the workplace, raising wages above the barest minimum for subsistence, or improving working conditions.
A political consequence of this economic protectionism was agrarian and heavy industry interests forming a long-term conservative “alliance of iron and rye” that Bismarck depended on for conservative political support. They would continue to constitute the leading elements of Germany’s political structure and economy, and were suspicious about different forms of liberalism, including free trade that they considered to pose a threat to their collective economic interests. Maintaining protective tariffs also consolidated the unification of the northern and southern German states, and accelerated the creation of a large domestic market while not exploiting colonies through mercantilism or engaging in international trade. Meanwhile, Bismarck’s determined opposition to extending parliamentary government in Germany and in Prussia deprived political parties of any responsibility for the policy of the state and learning how to conduct a functioning democracy, which led to them increasingly becoming interest groups seeking tactical advantages for themselves, rather than for the sake of national welfare as a whole, with conservatives representing agrarian interests, the National Liberals representing industrial interests, the progressive Liberals representing the professions and those in commerce who were in favour of free trade, the Centre party defending Catholicism, and the socialists representing the interests of the working class who remained subject to the limited electoral franchise that remained largely based on property ownership from December 1850, and whose political demands for greater democratic representation had not been placated, as was demonstrated by increasingly greater numbers of popular support. The highest four percent of taxpayers were granted a third of parliamentary voting, and electoral districts heavily favoured rural over urban districts, which greatly undermined urbanised worker representation, in addition to parliamentary representatives not receiving state salaries. Provisions for extending revenue also made the imperial government dependent on the Reichstag that voted the annual budget, which added leverage to any opposition from the separate states that the imperial government depended on for fiscal support, particularly for increasingly costlier defence expenditures to acquire increased military efficiency and effectiveness to uphold the state that was created through successfully waging war.
Social welfare initiatives were also implemented during this period of rapid industrialisation that had begun after 1871, as well in the interest of alleviating economic distress that was experienced in the 1870s, which Bismarck claimed was cause for concern in German society in conformity with Prussian tradition for providing charitable contributions to the less privileged, while believing the socialists constituted an underlying political threat to the continued unity of the state, and also posed a greater underlying threat to the state than the Catholics, prior to ultimately ending the Kulturkampf, when it became apparent that repressive measures alone would not sway a population into pledging loyalty to the state, and would generate class tensions. Bismarck thus introduced a policymaking programme that would encompass the entire German population, particularly the less privileged, to influence them into becoming more loyal to the empire through receiving the benefits of social insurance and welfare legislation that would be funded by the state to alleviate economic insecurities.
Recasting the entire state taxation system would thus provide funding for “the socialism of the state.” Bismarck undermined support for socialist political ideology by sponsoring Europe’s first social welfare programme that composed a degree of redistribution of wealth from above, rather than revolutionary means, which was universally accepted by underprivileged segments of the population, regardless of their personal political beliefs. State legislation promulgated pioneering health, old age and accident insurance legislation. A sickness insurance bill was enacted in 1882 that was subsequently extended in 1885 and 1886. A compulsory medical treatment insurance plan for workers jointly paid for by workers and employers was introduced in 1882, followed by an accident insurance plan financed wholly by employers on 6 July 1884, which was amended and extended in 1885, 1886 and 1887. Accident and insurance were extended to agricultural workers on 1886, and a pension plan in June 1889 for the aged at seventy and earlier if permanently disabled that was financed by the workers, employers and the state.
These measures were consolidated and extended by Bismarck’s successors in 1891 by introducing a code of factory legislation, while during Bismarck’s rule, he refused to accept socialist demands for state intervention to improve working conditions, such as legislation to improve working hours, placing restrictions on female and child labour and allow for Sunday rest, since he believed that employers must be masters of their own factories and workers would not welcome these types of restrictions. While socialism was initially introduced by the state, Germany had the first and most comprehensive system of social insurance and labour protection dealing specifically with the new problems created by modern industrial society. They accepted these benefits, but it did not abate their socialist convictions, and the Social Democratic party grew under persecution due to its superior leadership and organization, regardless of anti-socialist repression and social welfare legislation. It had twelve members in the Reichstag in 1877, when it had polled nearly half a million votes. After 1881, each succeeding election showed an average gain of about 750,000 socialist votes, and would therefore remain an active in the national government. In 1893, it had forty-four members, and polled more than two million votes. It would late become the strongest single party twenty years later, with one hundred and thirteen members, following four and a quarter million votes, and owning eighty-six newspapers.
The domestic political situation in Germany also changed in 1888, when the emperor, William I, deceased on 9 March, and then Frederick III, his son and successor, survived him while already experiencing an incurable throat cancer until he deceased soon deceased on 9 March 1888. His son was crowned as the new emperor as William II on 16 June. He did not hesitate to come into a conflict with the venerable, but also increasingly cantankerous, seventy-five year old Bismarck, who for had long had free rein in decision making, effectively exercising a monopoly on political power, while the ambitious and assertive twenty-nine year old William intended to assert himself and was unwilling to take second place to Bismarck in governing the empire, who he considered to have become irrelevant in contemporary German political life. There were differences between them concerning view on both foreign and domestic policy, as well as personality clashes. It became undoubtable that Bismarck’s presence became irksome as his influence and authority were too far reaching to the extent that this undermined the authority of the new emperor.
Bismarck had long occupied an exceptional position in domestic political life. He repeatedly defied parliamentary authority, and remained the oldest and most experienced among the Prussian ministers, as well as simultaneously holding the positions of Chancellor, Minister-President, Foreign Minister, and Minister of Trade, and controlled governmental functions more closely than the emperor. This ran counter to the emperor’s own ambitions at the beginning of his reign. One of the immediate causes of difference between Bismarck and the emperor was reaching agreements on this domestic policy decisions.
Bismarck proposed making the law against the socialists permanent, which he had intensified with imposing more stringent clause on 17 February 1888 by empowering municipal authorities to expel agitators from their jurisdictions, and maintaining a clause that empowered municipal authorities to expel agitators from towns as an extension of the banishment decrees, to which the emperor was opposed as being too harsh. Bismarck also sought to extend anti-socialist legislation further in 1888 and 1889 by coercing the Swiss government in “the Wohlgemuth affair” to collaborate with the German secret police posted in Switzerland to pursue German socialists who were driven out of Germany as a result of anti-socialist legislation, to the extent of threatening Swiss sovereignty through unwarranted intervention in its internal affairs. William II considered the expulsion clause to be unduly harsh, which Bismarck refused to abrogate. This contrasted with the emperor’s interest in removing the disaffection of the working classes through introducing more remedial measures, such as advocating for disability insurance, limited work at night time and on Sundays, child labour protection, and higher wages. In contrast, Bismarck argued for making anti-socialist legislation more severe, in terms of making them permanent, imposing the lasting suppression of socialist publications, along with banning strikes. In contrast to his earlier views of establishing social legislation to cripple the socialist movement from above, Bismack hereafter sought to harshly repress socialist demands through forcible intervention and reinforced anti-socialist legislation to maintain state authority under his personal control, which widened the personal rift between Bismarck and the new head of state, Wilhelm II, who succeeded both Wilhelm I who deceased on 9 March 1888, and Friedrich III who deceased on 15 June. This new king of Prussia and the emperor of Germany sought to assert his authority, and would not allow Bismarck to continue considering himself to be indispensable to governing the state.
The dispute between Wilhelm II over the question of dealing with working class demands became evident following the outbreak of a series of unprecedented widespread strikes that had broken out in the Ruhr Valley in May 1889, and then spread to the Saarland, Saxony and Silesia, in which striking workers demanded increased pay, reduced work hours and improved working conditions. Bismarck assessed that allowing the strikes to continue with limited state intervention would weaken the Reichstag’s resistance to renewing anti-socialist legislation, and would therefore introduce harsher legislation thereafter. Bismarck also refused to sanction Wilhelm II issuing a proclamation promising new social legislation as a result of his short-lived enthusiasm for social reform and conciliation following a belief that industrialists had caused hardship and therefore were to bear the costs for restoring order. Unbeknownst to Bismarck, William II ordered the governor-general of Westphalia on 11 May 1889 to force coal mining industrialists to raise wages under the threat of withdrawing governmental forces, and continued calling for raising workers’ wages and protecting their rights. Wilhelm II announcing the calling of an international conference to discuss social questions further strained his relationship with the emperor. In contrast, Bismarck urged pursuing a policy of retrenching conservative resistance, which could entail antagonising the Reichstag with repeated dissolutions to force agreements with his anti-socialist legislation, as well as intentionally overestimating military expenditures, leading to reforming the constitution to reduce the powers of the Reichstag.
The Reichstag shared the emperor’s sympathetic sentiments to improve the standard of living for the working class that would elicit support for the monarchy, and rejected the entire fifth amendment of the anti-socialist law on 25 January 1890 by a vote of 169 to 98, which indicated Bismarck’s political power was disintegrating, rather than Bismarck appearing to become increasingly indispensable in dealing with domestic conflicts. In addition, Bismarck also lost popular political support in the Reichstag elections of February 1890, when the socialists won more votes than any other party, constituting roughly 20 percent of the entire electorate, with their representation combined with the Centre and Social Democrats increased from 141 to 20. Although they did not constitute a coalition, these parties were opposed to Bismarck’s governance, Hence, these election results demonstrated a massive vote of no-confidence in the chancellor, with these opposition parties being in control of the Reichstag at a time of European political stability, and Germany did not face any immediate crisis that required unity under his leadership. Bismarck was thus trapped between a hostile Reichstag and an emperor who sought to exert his independence.
Bismarck’s relations with William II had become badly strained by 1890, which necessarily led to his inevitable dismissal. Bismarck had become vain, suspicious and self-righteous, and it was certain that William II became suspicious that the chancellor was not dealing fairly and sincerely with him while Bismarck practically functioned as the emperor, which his colleagues often felt severely, saying that he considered himself to be infallible long after he could have chosen to retire. From 1871 to 1888, Bismarck was the functioning head of state under the rapidly aging William I who was seventy-four in 1871, and was content to leave Bismarck with a very free hand. In actual practice, the autocracy was shared by the emperor with Bismarck, in a system that rested on the individual character and gifts of the emperor more securely than on the legal and constitutional relations established by the imperial and Prussian constitutions. Bismarck was considered not showing sufficient deference to the considerable powers of the emperor who sought to assert his political authority, in contrast to the uncompromising attitude he had maintained in his dealings with William I who considered him to be indispensable. In contrast, Bismarck was unable to isolate William II from exercising his authority, just as he had done with his grandfather, William II.
William II was determined to use his constitutional rights to a wider degree, and found at his succession how Bismarck held the emperor’s power in different ways in practice, including as the imperial Chancellor, the head of the Bundesrat, the imperial Minister of Foreign Affairs, the Minister of Commerce, and the President of the Ministry of Prussia. He also found many individuals in the state administration who had become angry at Bismarck’s arbitrary and autocratic leadership owing to his self-serving attitudes, and therefore he had few supporters in the Reichstag. (See H-German: Bismarck’s Fall from Power, 1890). Bismarck constituted administrative departments with heads that he chose and were responsible to him, which necessarily undermined the emperor freely exercising his authority without Bismarck’s interference, as Bismarck had become accustomed to administering the state apparatus outside the authority of the emperor. This included William II dealing with the undersecretary of state, von Herrfurth, without consulting with Bismarck, which he argued was contrary to the obsolete Prussian Cabinet decree of 8 September 1852 that made the minister-president responsible for government policy as a whole by being present in meetings between the monarch and any cabinet minister. This decree gave the minister-president complete control to be responsible for all of government policymaking, requiring all Prussian ministers to consult the minister-president before communicating with the monarch. Bismarck made a decided protest against this practice in February 1890, when he refused to comply with William II demanding its repeal, since it clearly restricted the exercise of his authority. William II nevertheless persisted about his own interpretation of these articles of the constitution regulating relations between the minister-president and parliamentary colleagues, and requested that Bismarck resign from his position in the Prussian ministry, while retaining his position as foreign minister, which would deprive Bismarck of all direct influence in governmental affairs.
The fundamental dispute between Bismarck who had functioned as the emperor in practice and Wilhelm II was policymaking adhering to constitutional principle, and precluding Bismarck from engaging in undue interference in domestic affairs by circumventing the authority of the monarchy. William objected to Bismarck’s practice of sitting in on interviews between the emperor and his other ministers, or discussing administrative matters without informing the emperor, including contents regarding formulating legislative matters that he maintained had to be subjected to his approval or imposed his own instructions that were contrary to those of the monarch, rather than allowing individual ministers to act independently, as William II had empowered them to function. Bismarck sought to retain his oversight control. Tension between them was aggravated by Bismarck dealing with the leader of the parliamentary opposition, Ludwig Windhorst of the Centre party, in a perhaps desperate attempt to assess the possibility of creating a parliamentary coalition, privately at his home without consulting with the emperor, which William II had forbidden, which led to a confrontation with Bismarck on 14 March over his right to consult with political party leaders without monarchical consent, and demanded to claim the right to rescind the 1852 Cabinet Decree, and thereby no longer require the presence of the chancellor when Reichstag members conferred with the monarch.
The immediate cause for Bismarck’s fall was his insistence on the renewal of the anti-socialist legislation. An anti-Bismarck clique suddenly became apparent in the government over disagreements over this matter, which included military leaders who refused to support Bismarck’s plans to potentially use military force as an essential element to induce constitutional reforms, which would include his plans for taking more considerable action against socialists. William II ultimately determined that Bismarck was no longer indispensable for administering the state in view of their disagreements on different matters, as well as intending to assert his own authority, leading to the dispute regarding restricting the emperor’s exercise of authority by requiring all Prussian ministers to consult with Bismarck before communicating with William II. William’s dismissed Bismarck rather than allowing himself to be in a role of being mentored by the former chancellor as part of an irreconcilable personality conflict, in addition to having conflicting ideas about dealing with the increasing influence of German socialists, against whom Bismarck intended to take forcible action, whereas William II intended to ingratiate himself with the working population. Wilhelm II expressed that he wanted to be recognised as the genuine director of German policy, and in effect serve in effect as his own chancellor, which Bismarck failed to recognise after having had complete control over domestic and foreign policy for the previous twenty-seven years.
Although they had initially agreed on the conduct of German foreign policy, William II ultimately drove him from the chancellery on the pretext of Bismarck failing to warn him about Russian armaments and troop movements in the Balkans in time to alert the Austrians, and therefore accusing him of gross dereliction of duty by suppressing information in the foreign office. William II was determined to convince Austria-Hungary of Germany’s support, and therefore objected to Bismarck’s conciliatory gestures to Russia in the interest of supporting Russia and thereby alienating Austria. Whereas Bismarck sought the conciliate Russia to keep it isolated from allying itself with France, William II sought to pursue an imperialist foreign policy and could not envisage managing the mutually irreconcilable Russian and Austrian interests in the Balkans. The final dispute over whether ministers were empowered with advising the monarch without vetting their proposals for prior approval by the chancellor ultimately led to Bismarck’s dismissal.
Bismarck submitted his resignation on 17 March in protest against this order that precluded retaining a proper share in the transaction of state business and its supervision and having freedom of action in ministerial decisions, or for such communications with members of the Reichstag as his responsibility required, citing the 1852 decree was indispensable for effective government, as well as declaring that it would be impossible for him to implement instructions that the emperor had submitted to him with respect to foreign affairs for an anti-Russian policy. Bismarck’s resignation request was duly accepted on 20 March. This development left the country he had created with a powerful aristocratic ruler and a legacy of state power that had a dangerous belief in power and force, without having a clear policy on how to maintain peace in the Balkans amid nationalist tensions among the various states therein, and reconciling those interests along with Austria-Hungary and Russia competing for influence in this region in the face of the disintegrating influence of the Ottoman empire.
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