1 Social Security during State-Building

The declaration of independent Czechoslovakia on 28 October 1918 gave the Czechs, Germans, Slovaks, Carpatho-Ruthenians, Hungarians and other nationalities living in the country the opportunity to build a new state. In all respects, it was to be a modern liberal state, the opposite of the supposedly outdated and inflexible Habsburg monarchy that preceded it. It echoed the voice of the Czechoslovak propaganda because Austria, together with Germany, was one of the pioneers of compulsory workers’ insurance in the 1880s. However, many people believed that Czechoslovakia represented a new and better beginning, albeit built on the foundations of the social legislation of the Habsburg monarchy. In this sense, the political elites wanted to reform the social legislation that the new state had inherited from Austria-Hungary and planned to develop and improve it further. At the time, Ferdinand Peroutka, a prominent Czech publicist and writer, wrote:

An age that forces workers to work ten or twelve hours a day, only leaving them with enough time to go home and sleep, does not deserve to be called a new age, regardless of any great political changes that have occurred.¹

At the dawn of its republican era, the leaders of interwar Czechoslovakia – the so-called First Czechoslovak Republic, which consisted of the Bohemian lands, Slovakia and Carpathian Ruthenia – wanted it to be not only new but also progressive. They abolished noble orders and titles and quickly adopted essential social legislation. The eight-hour working day, which entailed binding regulation of overtime, night work and principles for employing minors, was for some politicians initially inconsistent with the state-building efforts of the independent republic. At the time, these measures were still not commonplace, but that made them all the more significant. The political consensus allowed the introduction of an eight-hour working day, and the left-wing parties pushed through state unemployment benefits and public social insurance for employees. Despite some difficulties that the negotiation process in a liberal democracy consistently presented – from partisan interests to the susceptibility of the political system to instability and obstruction by the parties involved – the First Czechoslovak Republic was among the countries with the most developed social legislation, granting social rights to Czechoslovak citizens, including women.

Compared with the period before 1914, the economy grew again after 1924, and quickly. The controversial deflationary monetary policy under radical national and democratic politician Alois Rašín eventually brought stability to the Czechoslovak crown (K) as one of the first Central European states. Czechoslovakia ranked among the economically medium-developed countries, along with Norway, Finland and Austria. However, the country’s western and eastern parts had significant differences in economic levels. The integration of Slovakia and Carpathian Ruthenia, predominantly agricultural regions, into the Czechoslovak economy was only partially successful. Slovak leaders often felt that Czech institutions and civil servants had colonised them, and Prague faced constant criticism for its centralist policies.²

The Golden Twenties, as the period is known, were brought to a halt by the economic crisis. Social inequalities remained a visible problem, further exacerbated by the Great Depression in the late 1930s. After the industrial boom in the second half of the 19th century, which led to the rise of the working class, the social gap steadily widened. The social stratification of the First Republic reflected the problems inherent to capitalism, and modern social legislation was one way of mitigating the social conflict which flared up both at the time of the establishment of the independent republic and during the deepest economic crisis in the early 1930s. Social legislation as a response to poverty was nothing extraordinary or unusual. Prussian and later German social policy under Bismarck had already acted as an instrument to partially counterbalance social inequalities.³ Revolutionary rhetoric and the radicalisation of political groups and movements in Europe after the First World War, especially in connection with the developments in Bolshevik Russia, motivated efforts to develop the new republic’s social programmes.⁴ Czechoslovak socialist parties wanted to focus primarily on social conflicts that persisted or were emerging after the establishment of the new state. The Social Democrats administered the Ministry of Social Welfare, but the Ministry of Public Health was also mainly in the hands of the socialists. The work on extending social protection and social rights culminated with the implementation of public social insurance for working men and women. In other areas of social policy, the government was less successful. For instance, it enacted a law on social insurance for the self-employed in 1925, only for it to never come into effect.⁵ Throughout the interwar period, cooperation with a vast network of voluntary and charitable organisations was crucial for the Czechoslovak state to maintain a decent level of social protection.

In building the new republic, Czechoslovak leaders relied on its international ties, which included relationships among diplomats, technocrats and international organisations.⁶ In social and health welfare, primarily the Red Cross and the International Labour Organization (ILO) forged international ties that aided efforts to improve social welfare and general health. The former gained a strong domestic presence immediately after the establishment of the republic in 1918 and made it possible to concentrate financial and material resources for distribution among those in need. Throughout the interwar period, during which the Czechoslovak Red Cross was chaired by Alice Masaryková, daughter of President Tomáš G. Masaryk and American Charlotte Garrigue, the Red Cross continued its nursing, health and popular education activities.⁷ Although the ILO did not have direct representation in Czechoslovakia, it maintained close ties with the Social Institute of the Czechoslovak Republic and other institutions. It cooperated with several Czechoslovak experts, helping to connect national, international and global networks. On behalf of the ILO, renowned Czech expert leaders, such as the lawyers and politicians Evžen Štern and Lev Winter and the elite mathematicians Emil Schönbaum and Antonín Zelenka, assisted in spreading the concept of social security, and especially social insurance, around the world.⁸ The importance of Czechoslovakia as a country symbolically associated with social progress was also highlighted by the organisation of the International Congress on Social Policy in Prague in October 1924. The delegates adopted three important resolutions: on the eight-hour working day, on works councils as the workers’ representative bodies in the enterprises, and on combatting unemployment.⁹

Czechoslovakia pursued a programme of economic development and built the foundations of the later welfare state. The principles of ‘economic democracy’ and ‘social democracy’ contributed to the stability of the interwar democratic republic and enabled the political participation of citizens. Both helped to reduce the most severe threat to democratic capitalism – social inequality. Social inequality had the potential to grow to such proportions that, as Tim B. Müller has argued, it annihilated social cohesion.¹⁰ Müller was basing his conclusions on the conditions into which the Great Depression had plunged many European democratic states, especially the Weimar Republic. Political democracy could never ensure economic freedom and political equality without some degree of social democracy. Without it, it remained an empty slogan because it was only in social policy that political democracy found its material expression. According to Müller, it was the active economic and social policy that made democracy possible. However, despite the Great Depression, which resulted in a catastrophic crisis of capitalism, many states were unable to consistently implement both.¹¹ Socialism and socialisation ideals in liberal regimes strengthened local democracies, but in many European countries they gave way to political authoritarianism. Nevertheless, the American New Deal showed that there was a liberal democratic alternative to the solutions presented by flexible radical ideologies.¹²

Czechoslovakia remained democratic until the late 1930s, but internal tensions escalated. Under the pressure of emerging National Socialist regimes in Germany and Austria in 1933 and 1934, refugees began to enter Czechoslovakia, which became a kind of last democratic bastion of Central Europe. ‘Prague welcomed us as its relatives’, German writer Heinrich Mann recalled in his memoirs.¹³ Many privileged intellectuals, artists, social democrats and communists, including the German writer Thomas Mann and the Austrian writer and painter Oskar Kokoschka, were granted Czechoslovak citizenship. However, not everyone belonged to this favoured society and the Czechoslovak political scene was far from united on the refugee issue. Increasingly empowered right-wing parties became more and more intense in expressing anti-German nationalism and anti-Semitism. Moreover, they warned against a strengthening of the German-speaking population in Czechoslovakia.

The Bohemian Germans (or Sudeten Germans, as they called themselves) became involved in the building of Czechoslovakia only after the final verdict of the Allied Powers after the First World War that the border areas inhabited mainly by the German population would be part of Czechoslovakia. However, when Adolf Hitler came to power in Germany with his vision of uniting all Germans in a single state, national antagonism in Czechoslovakia began to deepen. Radical Sudeten German political movements with close ties to neighbouring Nazi Germany voiced harsh criticism of Bohemian Germans’ national and social conditions. There was some truth to this. As reported by Minister of Social Welfare Alfred Meissner in 1934, of the eleven economic sectors with the highest unemployment, eight were dominated by Germans.¹⁴

By the autumn of 1938, the country still had not fully recovered from the economic slump which had plunged the social classes most affected by the Great Depression into misery. Besides many successes, the interwar state also saw structural problems that were not resolved satisfactorily (or at all).¹⁵ Nevertheless, it was a functioning democracy that guaranteed the fundamental rights and freedoms of its citizens. As Peter Bugge pointed out, Czech and Slovak political leaders remained committed to democracy until the end of 1938, whatever that meant in interwar Czechoslovakia. One of the fundamental pillars was Masaryk’s thought, which stressed democracy as a specific ethos and everyday practice (instead of its formal dimensions).¹⁶ When Czechoslovak democracy was threatened, for instance, by the increase in the number of refugees from Germany and Austria due to the seizure of power by National Socialist governments, the democratic rights of selected population groups were restricted. Similarly, the gradual criminalisation of the Czechoslovak Roma in the 1930s showed that the protection of democracy was seen as the primary means of preserving and securing the nation.¹⁷

This chapter is not meant to underline the contrast between interwar Czechoslovakia on the one hand and the authoritarian regimes that were in power from October 1938 onwards on the other. Instead, it shows the limits of the implementation of economic democracy in liberal democracy, the failure to complete some fundamental reforms and the growing discontent under the weight of social and political conditions in Europe. Here, I address selected issues, showing key points of the democratic debate and state-building ethos in the interwar republic. The chapter aims to define a set of issues and topics related to the distribution of social rights that were contested by interwar political representation and expert circles. This chapter focuses on three parts of the Czechoslovak social question: the field of public social insurance, the link between the labour market and health care, and public hygiene. Finally, I briefly outline the milestones of social and political developments in Nazi Germany up to 1938, that is, a similar kind of state-building stage in that country’s history, albeit in a very different political and ideological atmosphere.

Public social insurance in the First Czechoslovak Republic was a financial safety net administered by the government. This section zooms in on the complicated architecture of social insurance through the lens of a broad palette of social insurance branches managed by various public institutions. The system thus offered support to a large part of society, albeit with varying degrees of generosity.

If we want to name the decisive moment of development of public social insurance, then it gained a distinctive form by the Act on Insurance of Employees against Sickness, Disability and Old Age, which was adopted by the Czechoslovak government in 1924 but did not come into force until July 1926.¹⁸ At the time it was known as the ‘Social Insurance Act’ for short. This was inaccurate, as it did not apply to the entire working population (only those in blue-collar occupations), but it was a reference to its importance in the building of the Czechoslovak welfare state.¹⁹ At the same time, the Central Social Insurance Company (ÚSP), a key social security institution in interwar Czechoslovakia, became the body responsible for workers’ social insurance and overseeing the activities of district sickness insurance offices across the country. In addition to stabilising the system, this change confirmed two distinctive features of social insurance in Czechoslovakia. On the one hand, there was partial organisational consolidation, as shown by the merger of the disability and old-age insurance responsibilities under the ÚSP. On the other hand, the system retained a corporate logic. Thus, social insurance for workers, miners, private civil servants and public employees existed side by side.²⁰ Their benefits varied, and there were doubts especially about the adequacy of the benefits covered by the workers’ insurance scheme in which the largest number of insured persons, namely two million workers, participated. By comparison, private employee pensioners were much better off, as Table 1.1 demonstrates.²¹ In particular, the third column shows the ratio of benefits in each type of old-age and disability pension scheme to average wages. Miners and workers remained far below even half of their average wage of the time.

The introduction of social security in Czechoslovakia was not without difficulties. As with economic issues, the conflicts were not primarily national but social in nature. As Christopher Boyer stressed:

In social conflicts, there was no front between nationalities. … There were differences between various sectors rather than between the German economy on the one hand and the Czech economy on the other.²²

This was true for public social insurance. There were three basic levels of controversy that often overlapped in debates about social insurance in interwar Czechoslovakia. Firstly, people needed to understand the mutual solidarity of the insured. This was a basic principle of how insurance worked, that is, one contributed to a fund from which benefits were paid to others. Secondly, experts and politicians were worried about the financial demands of the system. Thirdly, the tension came from the relationship between employees and employers, whose opinions on participation in the system and fulfilling of social insurance obligations differed. In particular, the issue of pensions paid for life after retirement was a field of conflict.

According to Emil Schönbaum, one of the most important founding fathers of the interwar welfare state and an eminent Czechoslovak mathematician and social insurance expert, pensions demonstrated the systemic shortcomings and ‘immaturity’ of the Czechoslovak population.²³ Schönbaum drew attention to the ‘social and ethical ills’ in society. He criticised both the practice where old-age pensions were granted to healthy state and public employees under the age of 65, and the perennial objection of the insured persons to social insurance – namely, that one only paid into the system and received nothing in return. The system seemed to be a financial burden for all parties involved: the state, employees and employers alike. Schönbaum blamed the ignorance of the basic mechanism of insured persons’ solidarity on the lack of information among the population about the benefits of old-age and disability pensions. The financial system should have been based on the principle that each benefit had to be fully covered by insurance contributions. In practice, it meant an acceptable social insurance contribution rate of 4.5–5 per cent, but without the system providing, for example, unconditional widows’ pensions. There was also public criticism of the retirement age, which was set at 65 years. From the point of view of a mathematician, it was adequate, but according to others, it was too high. The probability of living to that age at that time was about 50 per cent, so only one in two people could hope to enjoy retirement one day. By contrast, lowering the age limit to 55, as had been proposed by many, would have, according to Schönbaum, increased insurance companies’ expenditures by a staggering quarter of a billion crowns per year.²⁴ For social insurance to be affordable for the national economy, it could not be generous. Schönbaum defended his social insurance calculation during a series of meetings held in 1927, facing criticism from experts and politicians from various interest groups and political parties. He acknowledged some of its shortcomings but considered the basic design, including the financial system, to be sound, beneficial and workable. Schönbaum’s opinion carried weight. He was one of the most ardent promoters of social insurance and the principal architect of the Social Insurance Act of 1924.

While Czechoslovaks paid relatively little into the system, many, unaccustomed as they were to paying into a welfare system, were critical. The framers of the law adhered to the condition of an average 5 per cent limit on the amount of contributions paid by employers. In terms of the overall burden of public social insurance on the state budget, Czechoslovakia had a more balanced social insurance system than Germany or Austria. It resulted from the introduction of a more economical Ghent system – a design of unemployment benefits that transfers the obligation to pay the unemployed from the state to trade unions, which were only partly subsidised by the state – and smaller coverage in terms of the number of insured persons. However, it was difficult to break the vicious circle of criticism of the financial demands of social insurance, partly because of the higher burden on employers related to the introduction of workers’ disability and old-age insurance. While workers’ sickness and accident insurance was the flagship of Bismarck’s social reforms and was soon introduced in the Habsburg Empire, lifetime pensions had not existed in Habsburg Austria. However, the acceptability of burdens is a very relative category and can perhaps only be concretised by means of international comparison of insurance quotas, that is, the participation rate. In this respect, the situation in Czechoslovakia was good because while the insurance quota made up 16.5 per cent of wages in Germany, 17.5 per cent in Austria and 14–15 per cent in the Polish industrial districts, it reached only 9.5–11.5 per cent of wages in Czechoslovakia.²⁵

Nevertheless, excessive costliness remained one of the main sticking points of social security in interwar Czechoslovakia. There were voices calling for a fundamental reduction of the cost of insurance and a strengthening of the state’s influence on the investment strategy of the ÚSP. According to some participants at the 1927 conference, Czechoslovakia in the mid-1920s was not ready to build something so far-reaching as the system envisaged by the Social Insurance Act. The conflict of interests between employees and employers loomed here essentially ex post in terms of the adoption of the proposal. It is thus not accidental that it was formulated in 1927 by Jan Dubický, a member of the National Assembly for the Agrarian Party, whose constituency consisted primarily of farmers, in a debate about the parameters of the social insurance system.

I am aware that the workers were interested in seeing the law come into force as soon as possible. But it must be pointed out that social legislation must not be assessed merely on the basis of the one-sided perspective of class interests, but that its financial consequences must be examined if we are to avoid upheaval.²⁶

According to Dubický, who had been the first deputy chairman of the ÚSP since 1926, the protracted post-First World War burdens and the constant effort to strengthen the national economy made conditions for the appropriate enforcement of the Social Insurance Act difficult. Although it had long been enacted and was already coming into force at that time, its critics did not back off. They warned it would be essentially crippling for Czechoslovak industry. There were several ways to make it cheaper, from limiting the range of insured persons (specifically by excluding apprentices, wives of insured persons, etc.) to adjusting disability and old-age insurance benefits according to wages. The aim, according to the critics of the Act, was to reduce the insurance contributions paid by employers or even to abolish the companies’ duty to contribute completely.

These discussions typically took place in Prague, and neither Slovaks nor Ruthenians were among the active participants. Still, the dispute over social insurance was essentially one of a social and class nature. If one compared the financial cost of workers’ social insurance with the cost of administrative staff pensions, a marked difference between the two categories became apparent. In 1927, the state budget allocated over one billion crowns for pensioners’ benefits, while the cost of workers’ insurance had a hard ceiling of 700 million crowns.²⁷ Dubický criticised a ‘one-sided perspective’, but at the same time, he argued against accident insurance for workers from pretty much the same positions. Dubický thought it was uneconomical to have both accident and disability insurance simultaneously. Both compensated for injuries, but only the condition of disability, in his view, justified a claim for compensation from the insurance company.²⁸ Such arguments were unfortunate, as was the idea of altogether abolishing accident insurance, as the Assembly Member had suggested because it would only reignite disputes over compensation for workplace injuries.

Workers’ accident insurance, unlike social insurance, also became a prime concern throughout the interwar period. Its reform, founded on the original draft from 1887, was a concern throughout the interwar period.²⁹ The consolidation of its administrators – the accident insurance companies in Prague, Brno and Bratislava – did not take place and accident insurance also remained separate from other branches of social insurance. First of all, it was characterised by the fact that it was insurance of enterprises, not of employees. It was limited to industrial plants and agricultural enterprises and to those working with machinery, where the insured person was protected during work and the journey directly from home to the enterprise and back.³⁰ The shortcomings of workers’ accident insurance resulted mainly from its limited scope. Accident insurance was compulsory only for enterprises defined by law, and it did not cover all agricultural workers. Unfulfilled was the desire of people in the countryside to revise the list of industrial enterprises and traders subject to the insurance obligation and to fully extend the insurance coverage to agriculture and forestry.³¹ Accident insurance in Czechoslovakia was not perfect with regard to its provisioning function, but its financial condition remained good even in times of economic crisis.³² This was the case, among other reasons, because the number of accidents was directly proportional to the number of insured persons. The economic hardship affected accident insurance companies mainly in terms of the amount collected because employment fell during the Great Depression and with it also the number of insured persons and wages. However, accident insurance in terms of improving occupational safety as a kind of preventive protection continued to be a matter of public discussion. The reform intended to significantly reduce the number and severity of accidents, improve the medical care and aftercare system, and ensure adequate care for pensioners with a significant loss of their ability to work.³³

The Great Depression hit two areas the hardest: the mining insurance and workers’ sickness insurance schemes. Miners’ insurance, with what was known as the ‘fraternal treasury’ (bratrská pokladna) – the oldest public insurance company – suffered from considerable instability in income and expenditure, which no interwar reform remedied.³⁴ Miners’ remunerations remained disproportionately low throughout the interwar period and did not even reach average pre-First World War wages.³⁵ The trajectory of miners’ insurance had already been precarious since the establishment of Czechoslovakia in 1918 but became disastrous at the time of the Great Depression. According to statistics of the Central Fraternal Treasury (Ústřední bratrská pokladna) from January 1933, there were ten pensioners for every fourteen insured miners.³⁶ Thus, the contributions paid by employers and miners were not sufficient to pay pensions, and the miners’ insurance survived only thanks to repeated bailouts by the Czechoslovak state, which were not, however, undertaken by the government until 1935.

In the case of the workers’ sickness insurance scheme, which was extended to more than 2.5 million persons by 1929 – as a consequence of the 1924 Act on Insurance of Employees – the situation was merely unfavourable at the time. Declining wages and rising sickness caused considerable complications during the crisis. People were fleeing unemployment by taking sick leave, and the structure of the legislation also posed a problem. While sickness benefits were around 50–60 per cent of the average wage in Germany, France, Italy and Poland, in Czechoslovakia they reached nearly 80 per cent because benefits were also paid for days off.³⁷ Vladislav Klumpar, the director of the ÚSP, explained this unfortunate situation by the low contribution rates, which had led to small and depleted reserves of the insurance company.³⁸ While these low rates were useful in austerity during the crisis, little was saved up during the economic boom of the 1920s. In the first half of the 1930s, Klumpar argued, the only way to improve the financial condition of health insurance companies was to enforce payment of contributions or raise health insurance as a less unpopular alternative to forced debt collection. In Vladislav Klumpar’s opinion, the future reform was to modify the Social Insurance Act into a ‘general social security measure’, consciously less concerned with individual justice compared with redistribution.³⁹

What was the social insurance reform, which failed to be implemented by the end of the First Republic, supposed to consist of? The results of a competition launched in 1931 by the National Economy and Social Affairs Department of the Masaryk Academy of Labour, a think-tank of the Czechoslovak Social Democratic Party, provide a snapshot of the atmosphere of the time. The total burden laid on the public social insurance scheme amounted to over 3 billion Czechoslovak crowns (CSK) annually, and so the central question of the competition was formulated as: ‘How to make social insurance cheaper, with special regard to workers’ and accident insurance?’ The title of the winning entry by Jan Janáček, auditor of the Central Union of Health Insurance Companies in Prague, was simple and to the point: ‘Consolidate.’⁴⁰ Concentrating the various branches of social insurance and reducing the personnel and material overheads that incurred higher operating costs, thus making the whole system more economical, were ideas put forward not only by Janáček, but also by other participants in the competition. However, the debate over improving the existing branches of social insurance continued to avoid another glaring issue of the time – the danger of unemployment.

If social security in Czechoslovakia had its limits, they lay in the risk of unemployment. The interwar state offered a contribution to unemployment benefits from 1921, but it did not really start paying into the fund until four years later.⁴¹ Tenacious negotiations across political camps and interest groups made it possible to implement the Ghent system, which in Czechoslovakia was, in the words of Jakub Rákosník, ‘that proverbial necessity made into a virtue’.⁴² The state was obliged to pay unemployment benefits through trade union organisations, which it partially subsidised. Unemployment benefits could only be received by unionised workers, where union membership was conditional on an employment contract. At the same time, compulsory unemployment insurance was also being introduced by other European countries, but Czechoslovakia lacked reliable unemployment statistics and there were other arguments against the introduction of new compulsory insurance. Firstly, there was the assumption of a greater financial cost of administration, and secondly, there was resistance among employees in sectors with a lower risk of unemployment. Moreover, the general ‘moral decline’ of society which was widely believed to have followed the First World War was thought to have led to abuses of the system, which would have been challenging to control.⁴³

Czechoslovakia experienced a double spike of unemployment: the first after the end of the First World War, caused by demobilisation and a change in the structure of industrial supply chains and a decline in the construction industry; and the second as a result of the Great Depression. During the first unemployment wave, the political establishment reacted by enacting state unemployment benefits, which were paid for a period of two months of unemployment, and for which only about half of the unemployed were eligible.⁴⁴ Moreover, they ranged between only CSK 0.60 and CSK 5 per day, which politicians justified on the grounds of limited resources and the fear of being seen as providing ‘income without work’.⁴⁵

The 1920s were marked by a search for a consensus on how to introduce unemployment benefits during an economic boom, but a decade later the situation changed profoundly. Unemployment became the most significant factor influencing the social situation of interwar Czechoslovakia. Although the Ghent system, heavily revised in 1930, was a relatively cheap form of providing for unemployment benefits, as welfare was covered by employees through their unions and the state only provided financial contributions, the situation was much more difficult for unionised employees.⁴⁶ According to Jaromír Nečas, a social democrat and the last Minister of Social Welfare of the First Czechoslovak Republic, wage reductions due to cutbacks, malnutrition and health complications, and the resulting increased burden on the social insurance scheme, were interrelated issues. While in the case of short-term unemployment the greater burden was shifted to the health insurance companies, long-term unemployment, according to Nečas, induced the elderly population, who had fewer possibilities of ever finding a job again, to try and claim pension insurance benefits. The way out of this vicious circle, Nečas said, was a better system of registration of the unemployed.⁴⁷

The problem was, however, that it was difficult to count and locate the unemployed. Czechoslovakia had public employment agencies (zprostředkovatelny práce), just as many other European countries did. Their development in the Bohemian lands and Slovakia began in the 1930s, while in Carpathian Ruthenia, the easternmost part of the country, the situation remained unsatisfactory until the dissolution of the First Czechoslovak Republic in 1938. The state depended on these institutions to count the unemployed. Still, their statistics did not record people who either did not apply for work at the agencies or were no longer entitled to unemployment benefits. The second means of keeping track of the unemployed was through the statistics on persons supported under the Ghent system. However, the data collected only captured roughly 70 per cent of the unemployed. Czechoslovakia was not far behind the European trend in this registration practice, but this did not lessen the impact of these gaps in records.⁴⁸

The economic crisis hit different parts of the country with varying degrees of severity. The Ghent system operated with similarly varying degrees of effectiveness in the individual regions of Czechoslovakia. It worked best in industrial areas, primarily in the Bohemian lands, but became significantly less effective in Slovakia and even less so in Carpathian Ruthenia. Unemployment became one of the central issues causing disputes among the nationalities within Czechoslovakia, between Czechs and Germans and between Czechs and Slovaks, and Czechs and Ruthenians. The effects of unemployment in the Sudetenland border regions were attributed by right-wing radicals to deliberate oppression of the German minority. The critical comments made by the right-wing and left-wing populists represented by the German National Socialist Workers’ Party (DNSAP) and the Communist Party of Czechoslovakia, respectively, sounded almost the same.⁴⁹ The causes of the crisis’s effects lay elsewhere, in the economic and social structure of the borderlands, in particular in the predominance of the industry most threatened by the economic downturn and in the strong representation of Germans among the working class. Nevertheless, the nationalist arguments were highly effective and provoked the creation of a German social programme based on national self-help. In November 1934, the Sudeten German Party, a successor to the DNSAP, then already co-financed by Nazi Germany, founded the Sudeten German People’s Aid (Sudetendeutsche Volkshilfe), the equivalent of the Reich’s Winter Relief of the German People (Winterhilfswerk des Deutschen Volkes). From December 1934 to March 1935, it raised nearly CSK 6 million in monetary donations and CSK 1.5 million in material goods, and it helped score important political points for the Sudeten German movement.⁵⁰

Among unemployed persons, the most disadvantaged were ‘over-aged’ persons. If an individual was fired around the age of 50, it was not easy to get another job. Moreover, they lacked qualifications for work in dynamic industrial enterprises where companies preferred younger applicants. Thus, they often found themselves outside the system of state benefits. They did not meet the conditions for food aid, the strict criteria for disability pensions and the unconditional retirement age of 65 for old-age pensions, which left them in a situation of complete destitution. The issue of lowering the retirement age thus returned, but, as Minister of Social Welfare Jaromír Nečas pointed out, it would have been entirely financially unsustainable. If the age limit had been lowered to 60, Nečas estimated a 13 per cent increase in insurance contributions, and even then, he did not consider the amount of benefits sufficient to support a whole family.⁵¹ The only way to help the most vulnerable people was to ensure poverty care was provided by their home municipalities. However, the municipalities were not in good shape financially either.

The economic crisis did not end efforts to improve the welfare system for those without work and resources.⁵² On the contrary, the 1930s opened up debates on austerity and benefit cuts.⁵³ In this sense, the comprehensive defeat of the social democrats meant a reduction of welfare to one-third in some cases.⁵⁴ The system of state unemployment benefits was also losing its effectiveness in view of the decline in the number of people supported in proportion to the total number of unemployed reported. Other programmes and institutions of social welfare, therefore, played a decisive role. The second-largest item of expenditure in the state budget was food aid for those not covered by the Ghent system. However, resources were also secured from municipal budgets, fundraising events, lotteries and special municipal surcharges. The state relied to a large extent on the charity and self-help of the people, which made traditional charities virtually a part of the public social policy system during the interwar Czechoslovak Republic.

The area of health care was influenced not only by the modernising ethos of the Czechoslovak welfare state but later also by the unfortunate consequences of the Great Depression and high unemployment. The medical care system provided by health insurance companies under the sickness insurance scheme represented a solid platform for implementing public health care. However, in the 1930s, the health care of the unemployed and their family members proved problematic, as, over time, they were losing the opportunity to benefit from sickness insurance. Insurance companies could not perform miracles, and especially in combatting social diseases such as tuberculosis, alcoholism and venereal illnesses, they could only act in a supporting role. In 1936, the daily expenditure of the sickness insurance companies, which the ÚSP supervised, amounted to more than CSK 1.5 million. Of this amount, approximately CSK 1 million was allocated to medical care, while the rest was for sickness insurance benefits.⁵⁵

Public health care and its expansion were one of the central issues of the political debate. Interwar Czechoslovakia created a special government department for this purpose – the Ministry of Public Health and Physical Education. The Ministry of Health was thus freed from subordination to the Ministry of the Interior and existed in parallel with the Ministry of Social Welfare. However, there were significant differences between the two ministries. The Ministry of Social Welfare had a much larger budget, and the contrast between the cumbersome and philanthropically improvised Ministry of Public Health and the flexible and financially well-provisioned Ministry of Social Welfare was more than apparent.⁵⁶ Despite all this, the network of public health facilities was expanding. Whereas in 1905 there were eighty-five public and 101 private hospitals with 11,686 beds in total, by 1933 there were already 170 public hospitals with 38,859 beds, 204 private hospitals with an additional 13,720 beds, thirty tuberculosis sanatoriums, ninety infectious diseases hospitals and twenty-two mental asylums.⁵⁷ Moreover, the sickness insurance companies had their own specialist clinics, surgeries, hospitals, sanatoriums, spas and bathhouses.

The instruments of social protection in a modern liberal state such as Czechoslovakia were thus mainly found in social insurance and in the field of curative care (healing) rather than prophylactic care (prevention). However, the shortcomings of public health care did not lie merely in this disproportion. Since the establishment of Czechoslovakia in 1918, there had been discussions about reforming the health care system or health care in general and incorporating the ‘health police’, an institution that had existed since the Enlightenment, and district doctors into the public health care system. Debates about the new organisation of care for children and young people, specifically the fight against infant mortality and protection against infectious diseases, especially tuberculosis, marked the need to modernise the existing system by adopting new concepts and working practices. This revised framework was to be provided by transferring the responsibilities of the health police from the municipalities to the state authorities.⁵⁸

The supervision of public hygiene was to become the responsibility of a health staff consisting of a physician and other health workers at the district level. Their responsibilities included smallpox vaccination, treatment of the poor, medical supervision of workers, supervision of physical education, medical supervision of school children and health education. This practice, however, was never fully implemented because of the associated costs. It was not until a greatly reduced version was voted through the National Assembly two years later that the institution of state district doctors was established. Doctors performed their responsibilities with insufficient funding, so district doctors commonly also ran their own private surgeries.⁵⁹ The main consequence of this was insufficient compliance with their duties and the low effectiveness of district doctors in the area of general hygiene. It was the district and field doctors who were in contact with the population and exerted the most effective influence on the hygiene habits of the population. Social and health experts at the State Institute of Health, which was responsible for public hygiene, could hardly replace them in this role.

The overall health of the population in Czechoslovakia after the First World War was positively affected by public health care in certain regards. The number of deaths from infectious diseases was reduced, among other things due to the introduction of compulsory smallpox vaccination. At the same time, the first decade of the new republic saw an increase in vascular and heart disease.⁶⁰ While epidemic threats persisted in the eastern part of the country, especially in Carpathian Ruthenia, attention in the Bohemian lands was gradually shifting to social diseases. At the end of the 1920s, Hynek Pelc, a leading Czech physician and later director of the State Institute of Health, drew attention to these differences showing up on the map of Czechoslovakia.⁶¹ Pelc, a professor of social medicine, a modern interdisciplinary field concerned with population health and the care for the health of society, viewed medicine in a social and economic context as a scientific system combining the knowledge of medicine and social sciences. Its scope was broad and included maternity care and a system of pregnancy clinics. Still, these were not state institutions but almost exclusively highly specialised centres and part of voluntary care. Voluntary organisations also underpinned youth care, which was structured additionally along nationality lines.

The main limitation of public health care, according to contemporary experts, was the lack of funding for social insurance. While the system was set up to provide all-around treatment, the individual items of medical care, that is, benefits in kind and services provided, including practitioners’ fees, were inadequate, especially in the area of workers’ insurance. ‘It is a contradiction that is also unsustainable in the long term’, Hynek Pelc pointed out. ‘Democratic principles require that everyone is treated equally with regard to their basic human rights, which in today’s view include health care.’⁶² Egalitarianism in the sense of equal access to medical care and generous benefits was unrealistic in an era when the merit system was in force. The main reason for this was that social insurance was only just becoming a comprehensive social protection programme. The system still relied heavily on voluntary and charitable institutions operating in social health care. Only a part of the population benefitted from health and social protection through social insurance. In that situation, Eduard Břeský, associate professor of social medicine, argued in favour of insurance companies. If the public social insurance extended to all, he argued, it would become a ‘national insurance’ and, under these circumstances, insurance companies could be given specific responsibilities within the public health care system. Until then, there was nothing for which to criticise them.⁶³ National insurance was not within the means of the interwar state, complexly structured and coping with significant ethnic diversity.

Shortcomings were evident, for example, in the care of mothers and children. The social stratification of society and its geographical distribution caused large differences in access to this form of care. Conditions were most difficult in small towns and villages, where access to a doctor and health and sanitation conditions were often the worst and birth rates the highest. The unsatisfactory organisational state of family care had been known for a long time. It manifested in persistently high infant mortality and falling birth rates. It therefore pointed to the need to implement deeper systemic changes in family and childcare. In this context, the consequences of the Great Depression appeared much more complex. In addition to economic and social difficulties, research also indicated a general deterioration in the Czechoslovak population’s health. The new programme proposal of the Ministry of Health published in 1937 defined both legislative and organisational tasks. Ludwig Czech, then Minister of Health and Chairman of the German Social Democratic Party in Czechoslovakia, presented its specific wording in his speech to the budget committee in November 1937. The correlation between the economic crisis and the health of the population had consequences in the long-term depopulation of the Bohemian lands and the health of children from the areas most affected by the downturn.⁶⁴

Czech’s programme is a remarkable milestone of political reflection on the social situation. His proposal envisaged a new legislative framework creating instruments to improve the health of the youth, conduct medical inspections in schools, and enhance social health care for mothers and children and youth in terms of social care and hygiene. One of the priorities of the new concept was rigorous prevention through counselling, intended to eliminate ignorance on the part of women and mothers and to improve antenatal and postnatal medical care. A woman would be expected to see a doctor and be examined at least three times before giving birth. Whether she did so was up to her. Ludwig Czech envisaged the reform of children’s and maternity clinics, their organisational consolidation and a normative code of practice governing their activities. They had primarily been remedial up to that point, and their reach had been limited. In practice, these services varied in character (from medical surgeries to specialised centres open once a week) and visiting them was entirely voluntary.⁶⁵

Czech’s initiative was a response to several issues of the time. The main one was the virtually non-existent demographic policy of the Czechoslovak state, despite the endless debates about the ‘nation’s population decline’, even though it was faced primarily by Czechs and Germans. Since the end of the 19th century, the number of births had been declining, but infant mortality had been reduced only slowly. Due to the above-average population growth in the eastern part of the country, increased health prevention was to become the solution for the undesirable demographic trend. Slovakia and Carpathian Ruthenia faced a much more dramatic health situation overall but at the same time significantly contributed to the national average population growth rate. The development looked ominous, which was noticed mainly by experts rather than political leaders. As František Pachner, a well-known obstetrician from Brno, Moravia, wrote in his essay The Matter of Progeny – The Matter of National Existence, published for the first time under the name of his colleague, physician Emilie Lukášová, in 1939:

On the whole, we can say that population growth will improve substantially and very quickly if we understand that our population programme needs less theory and more clear and concrete efforts : a couple of well-designed laws, a few good professional institutes, and some money. But money is not the most important factor in this struggle for the population. Even without it, thousands of the nation’s children a year can be saved by immediate, programmatic legislation,

Pachner’s Jewish background and pro-national rhetoric led the author to be cautious. In his treatise, he emphasised two basic methods of population policy: increasing the birth rate and reducing mortality. However, interwar Czechoslovakia was successful in neither of these areas, which has often been blamed on liberalism affecting the way of life and social norms.

In the 1930s there was no time to implement deeper strategic steps. Social insurance rarely supported prophylactic medicine, which was developing new forms of preventive social health care. Insurance did not yet cover periodic medical check-ups and insurance companies used their health resorts almost exclusively for after-treatment of illness. It was particularly the private initiative of preventive medicine advocates that contributed to efforts to care for populations at risk of communicable diseases and other social and health problems. Attempts to push through public health reform remained relevant almost exclusively in expert discussions among physicians, demographers and statisticians and in the agendas of political representatives. But so far it existed only on paper.

The stage of consolidation of Nazi Germany between 1933 and 1938 is the only period of its existence when it is possible to trace its social programme in detail without the direct intervention of war measures. After the outbreak of the Second World War, it was already significantly influenced by its expansionist policies and war developments. Moreover, Germany’s efforts to deal with the consequences of the Great Depression and the crisis of liberal democracies in the pre-1938 period may have later inspired reconstructionist visions in neighbouring conservative regimes, including Bohemian lands, frustrated by the failed reforms under the liberal democratic governments. Before turning to the Nazi Protectorate of Bohemia and Moravia, let us briefly consider Germany and the main themes of its social policy, namely labour and employment, population growth, social insurance and social welfare, that did not go unnoticed by Czech politicians and social experts. Moreover, they may have been attractive to those whose appetite for reform was not far from authoritarian welfare.

From the Nazi seizure of power in January 1933 to the beginning of Germany’s territorial expansion with the Anschluss of Austria in March 1938, the regime built its power base and tried to stabilise the internal situation in the country. As known from the historical works of Tim Mason, Detlev Peukert, Heinz Sünker and many others, social policy was intended to contribute to both these goals, particularly targeting the working class and creating a racially exclusive Volksgemeinschaft.⁶⁶ Germany had been the flagship of social progress since the Bismarck era, and the Weimar Republic did not abandon this social ethos either. There was much to build on. Even in terms of personal and structural changes in labour law, 1933 did not mark a sharp turn.⁶⁷ While the Nazis were vigorously critical of the Weimar regime, interwar Germany improved its social infrastructure; embarked on a generous housing construction programme, with the state co-financing 81 per cent of the 2.8 million new apartments built between 1919 and 1932; and expanded the number of participants in virtually all branches of social insurance.⁶⁸ Unfortunately, the effects of the Great Depression overshadowed these achievements. The peak of statistically recorded unemployment occurred in February 1932, when more than six million Germans were out of work. Unemployment insurance, which had only been introduced in October 1927, was unable to provide benefits to the unemployed because of deficits, and the ranks of the self-employed were dwindling.⁶⁹

The consolidation of the new National Socialist regime primarily required the reduction of unemployment. Billions of Reichsmarks (RM) went into job creation, remilitarisation and employment programmes. From late 1933 to early 1934, the costs amounted to one-third of total government expenditure.⁷⁰ Although 3.5 million of the unemployed returned to work in 1934, only approximately 2.5 million of them gained permanent employment. The rest were placed as temporary agricultural labourers or sent to do hard labour in the mines.⁷¹ All these successes, major and minor, were accompanied by intensive propaganda to further encourage the people’s belief that the Nazi government would be successful. The Nazis’ success was largely dependent on the regime’s ability to get the country back on its feet after a severe economic slump and to provide people with social security by returning them to work.

One of the most widely publicised measures was the Unemployment Relief Act of June 1933.⁷² It was particularly remarkable because it combined an employment programme with a programme to encourage marriage. Its purpose was to push women out of jobs in which they could easily be replaced by currently unemployed young men. Women were offered the alternative of staying at home as housewives and had to commit themselves to not becoming employed again. The aim of eliminating multi-income families had already been pursued by the governments of the Weimar Republic. The Nazi government, however, provided interest-free loans for newlyweds of up to RM 1,000 for setting up a household. This was not an insignificant amount as the average annual worker’s wage at that time was RM 1,520.⁷³ However, only couples married after 3 June 1933 could apply for loans. Both spouses had to be ultimately ‘healthy’ with a ‘good reputation’, a holder of ‘civil rights’ and willing to engage politically for the Nazi ‘nation-state’ at all times. The ethno-racial language of the new legislation and the social practice it required was unmistakable. The considerable expenses for the newlywed loans were to be covered by what was referred to as ‘marriage aid’. All unmarried persons were included in the programme, providing they received wages, salary or income from other sources. Depending on their income, they made a contribution to the Marriage Aid Fund of between 2 and 5 per cent of their pay. The only exception was individuals with a monthly income of less than RM 75.

The impact of this policy was ambiguous. Marriages increased, but at a slower rate than expected. The number of couples receiving aid rose from 33.3 per cent in 1933 to 51.4 per cent of all marriages in 1938, and as Michelle Mouton has pointed out, about half of all marriages still escaped the scrutiny of the Reich’s eugenicists. Moreover, the birth rate among couples who received state aid only rose slowly, from 22.9 per cent in 1937 to 32 per cent in 1940.⁷⁴ The Unemployment Relief Act was the only legislation of its kind designed to address both of Germany’s cardinal problems of the first half of the 1930s at once: unemployment and falling birth rates. The programme for newlyweds continued even later during the war. Between 1937 and 1944, the total expenditure on marriage loans and child allowances was around RM 6.8 billion.⁷⁵

The Ideological basis of the Unemployment Relief Act consisted of two basic arguments. Propaganda portrayed the Nazi programme as a way to secure the present and the future of the German nation and as a means to optimise the work performance of its people. The Nazis strategically placed ‘work’ (Arbeit) at the forefront of their efforts. In January 1934, they also gave it concrete form through one of their basic regulations, the Work Order Act (Gesetz zur Ordnung der nationalen Arbeit). It introduced an ‘enterprise community’ (Betriebsgemeinschaft) as a central legal and political term of the time and regulated relations between employers and employees and the ‘leader principle’ (Führerprinzip), a hierarchy of leaders prescribed at all levels of politics and society, into the organisational structure of German enterprises.⁷⁶

The revalorisation of labour under the National Socialist regime had major implications. Alongside the work associated with various forms of violence, work became a goal towards which education was directed from childhood onwards and then one of the main compasses in adult life.⁷⁷ It also confirmed that the social programme henceforth primarily represented Nazi interests in the area of employment. Labour became the central symbol of Nazi social policy and remained so during the entire course of the Nazi hegemony in Europe. In 1934, the traditional May Day as a labour holiday transformed into ‘National Labour Day’, a German national holiday. This was a fitting commemoration of the destruction of the free German trade unions, or rather their reconsolidation along Nazi lines. The DAF, as Rüdiger Hachtmann has stressed, was both a political organisation on which the regime relied heavily and an umbrella of the entrepreneurial activities with its own business interests.⁷⁸ From the perspective of social policy, it was mainly an institution officially representing the interests of the working class. Not only was it concerned with the situation in the factories and the elimination of social conflicts, but it was also responsible for the equivalent of the Italian Dopolavoro – the German Strength Through Joy (Kraft durch Freude), a spectacular project through which the regime sent millions of German workers on holidays.⁷⁹

The DAF, and specifically its Institute for Labour Science (Arbeitswissenschaftliches Institut), together with the expert circles concentrated in the Reich Ministry of Labour, formed a platform for social expertise. It worked on its programme concept despite the ongoing war. Perhaps, therefore, a momentary detour from the period of consolidation is in order. When Robert Ley, the energetic leader of the DAF, presented his ‘Protection of the German Nation’ plan on 3 March 1939, he proposed an ambitious vision of a minimum monthly pension of RM 90, which he intended to fund with across-the-board social taxation. The estimated cost was around RM 6 billion, of which RM 5 billion was to be spent on old-age pensions alone. Ley came under heavy criticism for incorrectly calculating the revenues and costs, and his proposal was shelved.⁸⁰ The expert opinions of the Reich Ministry of Labour prevailed, but Ley’s efforts to design post-war social reform did not stop. In the second half of the war, the four most important social policy goals of the DAF were refined. Ronald Smelser once drew attention to them and asked with justifiable interest: is it possible to attach the adjective ‘modern’ to these ultimately unfulfilled plans?⁸¹

The first goal of this programme sketch was full employment. It was to be achieved through ‘labour mobilisation’ accompanied by new organisational technologies (labour market management, vocational education, retraining on an ongoing basis, etc.). The second objective was ‘fair wage’, in other words implementing the principle of ‘equal pay for equal work’. The third objective was the continuous improvement of the German workers’ performance, which was to be supported by a range of social and health measures: from preventive medicine to the improvement of the housing situation to the organisation of workers’ leisure time activities. The fourth objective was the creation of a complete social insurance system to serve all those who worked throughout their lives.⁸² Historians usually accept both the modernist and anti-modernist foundations of National Socialism.⁸³ While social planning, especially the plans for comprehensive social insurance, is considered to represent the modernist aspects of Nazi rule, the latter was epitomised by the inherent racism of the Nazi ideology and the resulting mass murder of Jews in Europe.

Social insurance remained the main pillar of social security in Germany. Overall, there were seven branches of German social insurance: sickness and accident insurance and insurance against disability and old-age covered a large part of the working class from the late 1890s onwards.⁸⁴ In 1927, sickness and disability insurance were consolidated in the miners’ insurance, and at the same time, legislators passed unemployment insurance legislation. However, the latter was dramatically affected by the Great Depression. In the longer term, German social insurance has been very consistent. For instance, as Christoph Conrad has argued, National Socialists broke with individual elements of the old-age insurance, but provision and its institutional structure remained largely unaffected.⁸⁵ Nevertheless, as part of the deprivation of civil and social rights, Jews and other persecuted groups had their social security entitlements suspended. This was the most severe consequence of changes in social insurance during National Socialism in Germany and the Nazi Protectorate, as we will see in detail in Chapter Two.

The National Socialists took over the administration of public social insurance at a time of high inflation when old-age, disability, widows’ and orphans’ pensions were in a poor state due to the loss of reserves. By contrast, accident and sickness insurance schemes were not seriously affected by the crisis. The first step taken by the Nazi government was, therefore, to bail out the pension insurance scheme and adjust its benefits.⁸⁶ Approximately RM 200 million per year in state funding was used. It was predicted that once full employment was achieved, some part of the unemployment insurance contribution fund would be transferred to the pension insurance scheme. The government took this step relatively early, in December 1937, under the Pension Insurance Reconstruction Act. Having claimed that unemployment had been eliminated and that the conditions had finally been achieved to permit improvement, the next stage of the reform was initiated.⁸⁷ Each year a quarter of the contributions were transferred from unemployment insurance to pension insurance.⁸⁸ In addition to providing funding for the pension insurance scheme, the authorities also increased the benefits.⁸⁹ With the exception of unemployment insurance, the entire Reich social insurance system was financially bolstered in 1937 and 1938.⁹⁰

In parallel to these stabilisation measures, a major internal rebuilding of the Reich insurance companies took place. In July 1934, their former administrative bodies ceased to exist, and their rights and obligations were assumed by the head of the insurance company supported by his advisory board.⁹¹ This introduced the ‘leader principle’ of organisation and the control over the decision-making of the insurance companies’ highest administrative bodies. The main purpose of the Social Insurance Reconstruction Act was to eliminate the fragmentation and complexity of the social insurance system and to increase the benefits paid. In the future, the Reich social insurance was to include sickness, accident, disability, workers’ and miners’ insurance.

A characteristic feature of Nazi social policy was the solidarity of the German people, which was most clearly represented in the system of social welfare organisation by the National Socialist People’s Welfare (Nationalsozialistische Volkswohlfahrt, NSV). It was not a form of poor relief in the true sense of the word. The NSV was primarily involved in public social and health care, but it also had a strong social mobilisation potential. It expressed what the German DAF expert Richard Bargel once saw in German social policy as a whole: ‘National Socialist social policy does not seek to provide a cure for those suffering from poverty, but to ensure that those who fulfil their obligations to the Volksgemeinschaft do not fall into poverty.’⁹² The precondition for the elimination of individual poverty was admission to the national community, to which only the ‘Aryan’ Germans were eligible.

How did social policy in Germany evolve after the Nazi rise to power and how can these changes be characterised? According to Norbert Frei:

The social policy of the consolidated Nazi regime was not merely reactionary or rhetorical; it was more than a precisely calculated instrument of totalitarian manipulation. … Indeed, it evolved into a substantial and partially even progressive social policy.⁹³

It was above all a compensation for work well done and service rendered to the Nazi Volksgemeinschaft. While it declared its potentially universal applicability and its creators were eager to combat social ills and planned to improve social conditions, its basic (though not exclusive) criterion was the racial ‘eligibility’ of its clients participating in the redistribution of public resources. In the subsequent period, characterised by the expansion of Nazi power and the outbreak of the Second World War, attention partly shifted to the territory of former Austria and then to the Sudetenland, where the authorities sought to establish their own institutions and implement the instruments of the Reich’s social policy. It never disappeared from the Nazi programme but was fundamentally affected by the ongoing war.⁹⁴