During the first years of the postwar period, the success of the Beveridge reforms in Britain triggered an intense process of policy experimentation in a large number of European countries. In both Germany and France, policy makers and military occupation authorities initiated ambitious reforms that challenged the fundamental policy principles of their respective welfare state. The main objectives of these reform proposals were the extension of the provision of social insurance to the entire population and the administrative centralization of various subsystems of the welfare state.

What was the role played by German and French employers during these political episodes? What were the policy demands of different sectors? Can the model developed in Chapter 2 explain the observed variation in the preferences of firms? What role did employers play during the political negotiations of institutions of social insurance and in the political defeat of these policy proposals? This chapter examines these questions, by relying on two types of archival sources. First, I document the social policy preferences of a representative sample of the business community in both France and Germany by relying on a data set assembled from the most significant business and parliamentary archives of these countries. Second, I explore the political bargaining over the design of the institutions of social insurance, in an effort to identify the most important political coalitions formed in support of and in opposition to these reforms. The sources of my analysis are documents found in the parliamentary archives and archives of the social policy commissions of the period.

Military Authorities and Social Insurance Reform

The military authorities that governed a defeated and divided Germany during the immediate postwar years regarded reform of social insurance as an issue that could determine Germany's future trajectory of economic and social development (Hockerts 1980). As they immediately discovered, these reforms confronted them with a number of difficult, nearly unsolvable policy questions. The war had depleted the financial resources of the German welfare state. The situation was extremely troubling for Germany's system of old-age insurance, which had been used by the Nazi regime for the financing of the war effort (Manow 1998: 193-211).