Last Thursday, Paul Marks traced the history of the welfare state – as provider of education, health and unemployment insurance – through centuries from its origins in Germany down, ultimately, to Barrack Hussein Obama, the incumbent President of the United States.

First Paul posed the question: why would the editor of the Telegraph, at a time when the US economy had overtaken the UK, and German productivity per man was half of ours. Why would he write that the UK should be more like Germany?

He was not having a fit. He was stating the consensus political opinion of his age.

Otto von Bismarck, being a successful military and political leader who adopted these policies and united a Germany was the primary contemporary influence. Behind him was Frederick the Great of Prussia and an old and respected tradition of scientific and academic success.

Despite other explanations being available – free market reforms, Polish invasion and inflation and the military success of prior leaders – Bismarck’s success is perceived as a victory for the state he created.

The historical echoes of Frederick the Great carry far. While arguably very lucky Frederick II took on his neighbours and won. Still admired by the likes of Naill Ferguson for his religious tolerance, modern liberals hold him up as an example of state led enlightenment.

Paul concedes that Frederick the Great was leader, a composer, a correspondent with Voltaire, a creator and a man of science. To many this alone means “liberalism”: nevermind that he swept away the Common Law in favour of state imposed rules, and imposed his vision on the Poles by conquest.

Frederick the Great was in turn inspired by a long history of a “German Academic Tradition” that was incredibly strong. Broad, thorough and ample, this tradition feels impressive and profoud. It beat the flowery prose of the French and the trivial straightforwardness of the English.

The Historical School

Part of this tradition was Gustav von Schmoller and Paul took a detour to ensure he covered this school due to its opposition to the Austrian School.

German academics were incredibly smart and hard-working, but he said, declaring his bias, possessed of an ethical problem. According to Menger‘s 1883 “Errors of Historicism” (loosely translated) they were “bloody liars” and were prepared to say anything to defend the ruling house.

Incidentally the bias declared was that Marks comes down on Menger’s side in the war of method.

Other dodgy German philosophers

As well as an adversity to the common law and civil society, Paul highlights a strain of racism in the German tradition.

Fichte (~1762) took the thinking of Immanuel Kant to the extreme (Kant interpreted him as saying the universe is not real), but who in politics believed in a totalitarian state at the service of the volk, to the exclusion of others ethnic groups from the state.

Hurder (1776) was more civil, believing that if you were a Jew it was not your fault, but you were simply not German.

Karl Marx, author of The Communist Manifesto (1848) is well-known here, but Paul also stops to mention his anti-semitic book On the Jewish Question, joking that Marx seems to have forgotten his own family were Jewish. The major part of Marx theory though was based on class not race.

The German mainstream ends up promoting the idea that there is no universal logic. There is either class logic (proletarian or capitalist logic) or racial logic (Aryan or Jewish logic) and all the different logics are normatively valid – the idea of polylogism. Our chap von Mises was not a fan, understandably.

This tradition, including right and left Hegelianism, top down and bottom up collectivists, starts to leak out of Germany. (Hegel died 1831)

Who was influenced?

Even 50 years after the death of Frederick the Great Sir William Hamiltion of Scoland, John Stuart Mill of England begin to use the term “state” in a positive way, influenced by his success.

Horace Mann founded the Boston public education system in the early 19th century. Importing the Germanic tradition wholesale.

In the late 19th Century Richard Ely founded the Orwellian projects the American Economics Association (1885) and the American Academic Freedom Campaign.

In the UK Joseph Chamberlain and David Lloyd George who in 1911 conned the English into undermining the Friendly Societies that gave health insurance to 80% of industrial workers, replacing them with National Insurance and ultimately the modern NHS and JSA.

How do we get forward all the way to Obama? That was left to the Q&A, and is for another day.