Welfare has existed since ancient times to address poverty, such as flood coverage in Babylon, barley rationing under the Akkadian Empire, the grain dole and land grants under the Roman Republic and medical treatment in Egypt, ect; mostly in response to concerns of the means of subsistence for workers affecting the productive forces through economic or ecological crises and social revolts. Similar economic functions persisted in progressing historical stages of production, such as the Tudor and Elizabethan Poor Laws; however, our study is of modern industrial capitalism as it concerns the proletariat.

The early 1800s were met with the lingering birth pangs from the shift of agrarian society to industrial society, from the transition of individual labour of craftsmen into the social labour of the proletariat and the contradiction of the bourgeoisie. As class struggle was initially underdeveloped, there were philanthropic experiments made by members of the bourgeoisie to integrate labour into capital: employees were given free healthcare and education in cooperative communities influenced by utopian socialist thinkers such as Robert Owens or Charles Fourier.

Germany and the First National Healthcare System

The first Nationalized Healthcare Insurance scheme was set up in 1883 in Germany under Otto von Bismarck, in response to the economic crisis in the previous decade, as Germany was industrializing and to stave off growing socialist sentiment from the growing popularity of the SPD, despite its opportunist and revisionist programme. Despite the claims of bourgeois liberal economists, Bismarck was no socialist, his role was to stabilize capital by placating the rising proletarian forces by easing workers’ momentary conditions. Engels, paraphrasing a section of the General Council of the International Workingmen’s Association, said "You, Mr. Bismarck, have only overthrown the Bonapartist régime in France in order to re-establish it in your own country!”

After WWI and the ruthless destruction of the German Revolution and the murder of Luxemburg and Liebknecht by the entirely opportunists SPD, under Ebert, Scheidemann and Noske with the help of proto-fascist Friekorp, the SPD attempted to dispel any revolutionary sentiment from the proletariat by capitulating to the mostly dispossessed workers through expanding the welfare State: with unemployment insurance, housing aid and veterans pensions.

The growing Nazi Party utilized the National Socialist People’s Welfare (NSV) initially as a small charitable organization based in Berlin, but with the installation of Nazi Regime, the NSV was incorporated into the State – eliminating and seizing all worker orientated welfare organizations, forcing them to subordinate to the Nazis. With nearly ⅓ of Germans beingrecipients of welfare, the NSV ran a budgetary deficit and was subsidized by State funding; they resorted to cutting the wages of workers, expropriating jewish assets, and slave labour to keep it in operation.

The proliferation of the welfare State was not historically made by the capitulation of the left-bourgeois through the kindness of their hearts or rigorous debate of the subject; it was made in the reconstruction period in the aftermath of both world wars as calculated efforts to quell revolutionary sentiment from the proletariat, as they were devastated by immensely brutal conditions – such as starvation, poverty and homelessness; whole city blocks were turned to rubble and most food went towards feeding the military in the war effort. It was only through the fear of a mobilized class, that the bourgeoisie made concessions to the working class.

American Healthcare

Now one might ask: “Why did not America join suit with their European counterparts in developing a robust welfare system? Were they not also a player in both the world wars?” Well, an obvious answer is seemingly complicated at first, yet understandable when broken down from an analysis of the historical aftermath of both imperialist wars on the ground in America.

After WWI, America went towards productivist trade war policies – such as tariffs, tax cutting, deregulation and speculative investments – to ensure a balanced budget and a spending/trade surplus; there was a great overproduction of goods, leading to a deflation of prices. With the first red scare, after the successes of the October Revolution,the rising revolutionary sentiments of the American proletariat, and the strike wave of 1919, the National Association of Manufacturers adopted a strategy to undermine unions called the American Plan; making employees sign contracts that pledge them to not join a union and creating employee tied benefits to eliminate all labour militancy, causing union membership to decline by 25%. The extreme overproduction of goods in “the Golden Age of America” culminated in a sharp rate of deflation resulting in a market crash, as businesses could not make a return of profit from their products, causing them to take on loans, increasing interest rates to which many couldn’t repay, and resulting in the event known as the Great Depression. Resentment toward capitalism increased as more people were starved and general conditions worsened for the working class, forcing many into the reserve army of labour to regulate wages as an attempt by bourgeois enterprise to remain profitable. To subdue this fury and the rise of proletarian revolution, the bourgeois State decided it was in its best interest to develop welfare programs known as the ‘New Deal’ through the Federal Emergency Recovery Act, the Social Security Act, National Recovery Administration, United States Housing Authority and Fair Labour Standards Act; not simply out of a benevolent fervor and care for working people, but to calm the growing working class labour militancy that happened during this period – stabilizing capital; learning from the experience of the German revolution of the previous years that showcased the counter-revolutionary nature of social democratic reformism. The ruling class essentially preemptively eliminated the revolutionary momentum by linking both business interests and “labour” interests into the bourgeois State with the NLRB and NRA (a class collaborationist, essentially a “progressive” mirror image, of the corporatism of Mussolini’s fascism), criminalizing class unionist tactics with the Taft Hartley Act, and banning communist leadership in unions and all advocacy for the overthrow of the government with the Alien Registration Act.

In-depth social democratic measures did not develop in America as they did in Europe because both wars did not financially or physically devastate mainland America, which, therefore, never had to deal with a reconstruction post war period and had already quashed the nascent labour militancy.

The post World War era, with Allied forces occupying Japan and Germany, allowed the development of their economies as an imperial stronghold to fight against its new imperial rival, the USSR, starting the Cold War; utilizing the Marshall Plan to invest $13 billion towards the reconstruction of the economies of Western Europe, fostering trade relations to prevent “the spread of communism” and squash what remained of labour militancy through the AFL and other American regime unions, operating as mediators in Europe’s labour unions to ensure labour peace.

The Welfare State continued to grow in the 1950s as expansions were made to the New Deal Programmes, adding 10 million to social security including benefits towards farm workers, domestic workers and the self-employed, mostly in response to the recessions of post-WWII and after the Korean war. The Medicare Program was signed in 1965 as the Great Society policy, caused in response to the 1960-1961 recession, sending many proletarians into the reserve army of labour due to the overproduction crisis, designed to depress wages and enforce labour discipline when the Union Movement was on decline and unable to fight against the conditions; marking the solidification of total bourgeois domination – not only on the political front as per the nature of the Democratic State – but also economic side. In the late 50s, collective bargaining agreements were permitted amongst the public sector on a State level, in an era called “The Little New Deal”, and solidified on a federal level in 1962. Unionization rates of public sector jobs had increased at the same time that the private sector decreased. However, 1969 was the last time there was a large surplus in the State budget and marked the inevitable disintegration of the welfare State as the State started to “tighten the belt” of government spending in austerity measures.

The beginning of the 70s was met with an economic crisis, after the rise of imperial competition with increased exports from Germany and Japan in the preceding decade caused trade deficits with these countries and devalued the U.S. dollar; ending the gold standard and Bretton Woods System and resulted in the largest crash since the Great Depression and even more capital consolidation. This crisis caused a subsequent increase in labour militancy and strikes in America: 3 million workers engaged in 5,700 strikes in the year of 1970 alone, proving the catastrophism of marxist determinism and the rise of trade union consciousness. However, without clear revolutionary leadership, many nascent proletarian forces were subsumed into regime unions, marking the inevitable gradual dismantlement of the welfare State that distinguished the last 40 years in America. The austerity measures of Reagan, often denoted by liberals as unique acts of greed by an evil man were a necessary response of bourgeoisie to the debt crisis with the end of Bretton Woods as well as the subsequent elimination of sections of the State that did not function in the immediate interests of capital, as the State was in a budgetary deficit. As America transitioned from the greatest creditor to the largest contemporary debtor, it corresponded with the general excision of State expenditures of sectors not immediately necessary in the reproduction capital. The 90s and early 2000s met with the same pattern but, with the fall of the USSR, its main imperialist rival, America’s place in the global market had become largely uncontested, leading towards more direct imperial conflicts, such as the War on Terror campaign, to secure monopoly capital’s interests in the Middle East.

The Affordable Care Act, also known as Obamacare, was only put into place as a carefully crafted response to the 2008 market crash. The reserve army of labour doubled within a year, acting as a rotating wheel of labourers constantly in supply for capital’s needs, and what was left of labour militancy was unable to combat such devastating conditions, as the union movement was thoroughly dismantled over the previous 40 years. The Occupy Wall Street movement was merely a reaction to economic crisis and subsumed into an inter-class activism that wished for a more ‘humane’ and ‘moral’ capitalism; redirecting such material grievances back into the bourgeoisie – either to philanthropists like Bill Gates or into the bourgeois State as a whole.

During the period of the COVID-19 pandemic there was a temporary increase in welfare measures, like unemployment benefits, stimulus checks and increases in those dependant on medicare in response to the economic crisis that took place, alongside the opportunity to consolidate capital, eliminating many of the petit bourgeoisie with corporate mergers. This increase in the welfare State resulted in the “amplification of social democratic calls for a public healthcare system”, as reported by our paper back in April 2020, and the growth of such forces has developed as the ever present threat of crisis has been on full display since the pandemic.

The current bourgeois regime plans on slashing 80,000 jobs of the Veterans Affair Department and contract services. There was a rally of over 5,000 veterans in Washington D.C. in protest on June 6th, to commemorate the Allies victory of the Normandy landing in the Second Imperialist War. The VA exists as an organ to tie the often dispossessed and immiserated strata of the proletariat utilized in the plethora of imperialist wars into the bourgeois State apparatus even after service is finished; by having their livelihood attached to State programs such as: pensions, disability compensation, education, housing, healthcare and business grants. The VA is often touted by many reformists as an exemplary model of a “robust nationalized welfare services” that are already being utilized in America, and could simply be expanded to become universalized to every citizen.owever, this does not fundamentally change productive relations of capitalism, by shifting hands of the distribution of goods onto the State, rather than private enterprise.

As was with the creation of the welfare State, the dismantlement of welfare programs also becomes a necessity for the bourgeoisie as the crisis of overproduction unfolds towards inevitable collapse. This crisis of the welfare State is being shown ever so more glaringly obvious in the ‘One Big Beautiful Bill’, which has called for increased tightening of the belts on medicare and medicaid, forcing more patients to pay out of pocket for medical expenditures and more layoffs of medical workers, mostly affecting hospitals in areas that rely on medicare funding to function, like in rural areas.

Benefits such as pensions, unemployment, medical care, housing education, etc. are merely deferred wages returned to the proletariat by the bourgeoisie to appease the working class’s immediate demands, as an attempt to avoid the internal contradictions of capitalism.

“As we have demonstrated with detailed calculations over the twenty years of its implementation, this systematic bourgeois plan of attack on the working class in Italy entails a drastic reduction of the wage mass, as the pension is nothing other than deferred wages, what would be necessary for each worker to set aside monthly for their sustenance when they are no longer employable. (...) In the last century, bourgeois States, in the ideal framework of both fascist organicism and social-democratic/Stalinist organicism – converging toward the same goal, the utopian quest for a rational capitalism – centralized among the functions of the Leviathan-State also social security for the working class: no longer could the working class demand from the capitalists an increase in wages necessary for this purpose, but that share would be taken by the State from wages (whether from the employer’s or the worker’s accounting makes no difference) and immediately transformed into Capital. Evidently, it is a massive amount of value and a great impulse to the development of accumulation and profits.

In this mechanism, the proletarian remains a proletarian. What the State social security entity deducts from the monthly wage does not take the form of capital, so that at the end of working life the worker is given a periodic pension, but will never get back the full amount collected. And the pension is neither received nor calculated as the yield of a certain accumulated capital, invested at a given interest rate (doing the math, it would be much lower), but as deferred wages, the fruit of years of work, not of savings” (Il Partito Comunista n.321, 2007)

As the overproduction crisis rears towards the surface, not only does the State excise sections of itself by downsizing to cut costs from State coffers to remain imperially competitive, through cutting funding to programs, agencies and workers, so too does industry excise sections of itself to remain profitable and competitive. General real wages for healthcare workers have not changed much; rather yet, healthcare workers have been forced to work more hours, servicing more patients with less workers per hospital, meaning they work more for the same wages, or rather they are receiving less per amount of labour performed.

There have been many strikes called by healthcare workers in California, Minnesota, Michigan, Connecticut, Pennsylvania, Rhode Island in America and Heathrow UK, as healthcare workers instinctively respond to the growing pressures on labour as America shifts towards productivist imperialist trade wars to ensure profits in defense of the bourgeois national-economy i.e. capital.

The bourgeois State, wholly an organism of the collective concentration of capitalist interests, even in spite of competition from opposing forces of the market, however, is resolutely united in their joint exploitation of the proletariat. Even so, attempts to improve the working class’s conditions exist only as a “superficial palliation” of the consequences from capitalism’s economic necessities. The supposed equalization of the proletariat and bourgeoisie, is not a matter of genuine reconciliation of class conflict, but an advanced form of capitalist rule that desires “redressing social grievances in order to secure the continued existence of bourgeois society.” Such reforms will not be made by activism or electoral politics, the communists’ goals should be to build up labour militancy through unions, “as schools for class struggle”, for the immediate improvement of the proletariat’s conditions but acknowledging that such compromises are always fleeting and illusory.

Our Party confirming over 20 years ago:

“Far be it for us to defend the welfare State, an invention of the bourgeoisie and historical opportunism, but the current attack and the debate that has opened up on the issue deserves to be addressed realistically and without mincing words. First of all, the welfare State must be rejected as an improvement of either the old liberal State or the fascist-style ethical State: it is neither an improvement nor a final result, nor a place of equality and justice. Rather, it is the last stage of Capital, a historical ploy of the bourgeois system to postpone its crisis and its end by organizing welfare and security, which are nothing more than the management of the surplus value extracted to intervene in the face of threats of rebellion and frontal attack by the proletariat” (Il Partito Comunista, No. 243, 1996).

We as the working class, can only rely on our own organs for the defence of our conditions, for the unemployed, employed, disabled, able bodied, healthy and sickly, but that requires a class unionist approach that will allow for the working class to fight, not only cover the gaps in their insurance, but to also to allow for a continued fight for class emancipation.

Only with the conquering of political power by the proletariat in revolution, led by the International Communist Party, can social questions be resolved organically with the abolition of capitalism; rather than giving into the delusion that schemes developed by the bourgeois State can save the working class from the devastation created by capitalism itself in the first place.