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Unemployment Insurance in Interwar Belgium

Published online by Cambridge University Press:  18 December 2008

Guy Vanthemsche
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In 1900, a special type of unemployment insurance was set up in Belgium: the so-called “Ghent system”, which had some influence on the development of unemployment insurance in many European countries. This particular system was characterized by the important role played by the trade-union unemployment societies. The public authorities (in Belgium, from 1920 onwards, the central government next to the towns and provinces) encouraged the affiliation of the labourers to these societies by granting different sorts of financial support to the unemployed society members and to the societies themselves. During the crisis of the 1930s, this led to an important growth of Belgian trade-union membership. On the other hand, the quantitative growth of the labour movement due to this particular organization of unemployment insurance, led to many negative sideeffects for the trade unions (administrative chaos, financial problems, loss of combativity). Moreover, the employers' organizations strongly opposed this system of unemployment insurance, because they thought it reinforced the labour movement's power in society (strengthening of union membership, influence on wage formation, obstruction of deflation policy). This article examines the heated debates waged in the labour movement itself and between this actor, the employers' organizations and the government, to solve the many important problems posed by this type of social insurance. The Belgian pre-Second World War debate concerning unemployment insurance was of great importance for the shaping of the Welfare State in Belgium, which took its present-day form in 1944.

Type
Research Article
Information
International Review of Social History , Volume 35 , Issue 3 , December 1990 , pp. 349 - 376
Copyright
Copyright © Internationaal Instituut voor Sociale Geschiedenis 1990

References

1 See Goossens, M., Peeters, S. and Pepermans, G., “Interwar Unemployment in Belgium”, in Eichengreen, B. and Hatton, T. J. (eds), Interwar Unemployment in International Perspective (Dordrecht, 1988), pp. 289–324.CrossRefGoogle Scholar

2 More details can be found in Vanthemsche, G., De werkloosheid in België tijdens de jaren 1930 (Antwerpen, 1989).Google Scholar

3 Of the vast literature on the subject, suffice it to refer to two recent and excellent surveys, which take different views: Alber, J., Vom Armenhaus zum Wohlfahrtsstaat (Frankfurt, 1982), pp. 73–118Google Scholar, and Therborn, G., “Neo-Marxist, Pluralist, Corporatist, Statist Theories and the Welfare State”, in Kazancigil, A. (ed.), The State in Global Perspective (Paris, 1986), pp. 204–231.Google Scholar

4 At the end of the nineteenth century similar types of public intervention also occurred in Switzerland (in Bern and Sankt Gallen, for instance), but these were far less successful than the Belgian systems. Important studies on the development of unemployment insurance in general include Garraty, J., Unemployment in History (New York, 1979), 2nd ed., pp. 129ff.Google Scholar; J. Alber, op. cit., and its English version, Alber, J., “Government Responses to the Challenge of Unemployment: The Development of Unemployment Insurance in Western Europe”, in Flora, P. and Heidenheimer, A. J. (eds). The Develop ment of Welfare States in Europe and America (New Brunswick and London, 1981). pp. 151–183Google Scholar, and Sinfield, A., “Unemployment”, in Köhler, P. and Zacher, H. (eds), Beiträge zu Geschichte und aktueller Situation der Sozialversicherung (Berlin, 1983), pp. 415–171.Google Scholar

5 The general studies mentioned in note 4 of course mention the Ghent system. So does Ritter, G. A. in Social Welfare in Germany and Britain: Origins and Development (Leamington Spa, 1986), pp. 102 and 163.Google Scholar Some individual country studies also refer in passing to the application of the Ghent system within their national frontiers: e.g. Henning, H., “Arbeitslosenversicherung vor 1914: das Ghenter System und seine Übernahme in Deutschland”, in Kellenbenz, H. (ed.), Wirtschaftspolitik und Arbeitsmarkt (München, 1974), pp. 271–287Google Scholar; Niess, F., Geschichte der Arbeitslosigkeit (Köln, 1979), pp. 168–177Google Scholar; Faust, A., Arbeitsmarktpolitik im Deutschen Kaiserreich (Wiesbaden, 1986), pp. 142–147Google Scholar; Heilman, L. A., “Industrial Unemployment in Germany 1873–1913”, in Archiv für Sozialgeschichte (1987), pp. 45f.Google Scholar; Hofmeister, H., “Landesbericht Österreich”, in K¨hler, P. and Zacher, H. (eds). Ein Jahrhundert Sozialversicherung (Berlin, 1981), pp. 633f.Google Scholar; Rooij, P. de, Werklozenzorg en werkloosheidsbestrijding 1917–1940: Landelijk en Amsterdams beleid (Amsterdam, 1979), pp. 17–22Google Scholar, which deals with the Netherlands; Heclo, H., Modern Social Politics in Britain and Sweden (New Haven, 1974), pp. 70–78 and pp. 92–105Google Scholar; Unga, N., Socialdemokratin och arbetslöshetsfrågan 1912–1934 (Stockholm, 1976), pp. 25 and 98Google Scholar, which deals with Sweden, and Seip, A. L., “Motive Forces Behind the New Social Policy After 1870: Norway on the European Scene”, Scandinavian Journal of History, 9 (1984), p. 340.CrossRefGoogle Scholar (I did not have access to the vast historical literature on the development of social policy in the Scandinavian languages, e.g. the books by A. L. Seip, S. Kuhnle and P. Edebalk.) The Ghent system has even been discussed in the United States, e.g. by Nelson, D., Unemployment Insurance: The American Experience 1915–1935 (Madison, WI, 1969), pp. 6–11.Google Scholar It should be noted that the 1911 National Insurance Act in Britain actually incorporated a variation of the Ghent system in a wider compulsory state scheme, changing consequently the impact the system was going to have e.g. in Belgium. The “orthodox” Ghent system had some influential advocates in the British labour movement, most notably the Webbs: see Gilbert, B. B., The Evolution of National Insurance in Great Britain: The Origins of the Welfare State (London, 1966), pp. 265–270Google Scholar; Harris, J., Unemployment and Politics: A Study in English Social Policy 1886–1914 (Oxford, 1984), 2nd ed., pp. 302–304Google Scholar, and Brown, K. D., Labour and Unemployment 1900–1914 (Newton Abbot, 1971), pp. 119–120.Google Scholar I was not able to consult the study by Topalov, C., Aux origines de l'assurance-chômage: l'Etat et les secours de chômage syndicaux en France, en Grande-Bretagne et aux Etats Unis (Paris, 1985).Google Scholar A chronology of the spread of the Ghent system is provided in Ville de Gand: Fonds intercommunal de chômage, reports from 1901 to 1911 (Gand, 1903–1912), mainly the reports for 1906–1908 and 1909–1911, and Les oeuvres de la Ville de Gand contre le chômage […] Ephémérides: Principaux événements intéressant ces oeuvres: Publié à l'occasion de l'Exposition Universelle de Gand 1913 (Ledeberg, 1913).Google Scholar A useful survey of the application of the Ghent system on the eve of the First World War in Europe is provided in Bulletin trimestriel de l'Association Internationale pour la Lutte contre le Chômage (January-February 1914), which contains national reports on the different systems of unemployment insurance.

6 Further detail is provided in Vanthemsche, G., “De oorsprong van de werkloosheids-verzekering in België: vakbondskassen en gemeentelijke fondsen”, Tijdschrift voor Sociale Geschiedenis, 11 (1985), pp. 130–164.Google Scholar

7 See Harris, J., William Beveridge: A Biography (Oxford, 1977), p. 138.Google Scholar

8 See e.g. on this point as well as the following one: Ritter, G. A., Social Welfare, pp. 80f., pp. 99–103, 163, 172Google Scholar; Henning, H., “Arbeitslosenversicherung”, pp. 281–283Google Scholar; Harris, J., Unemployment, pp. 304 and 330Google Scholar; Unga, N., Socialdemokratin, p. 226Google Scholar, and Wilson, D., The Welfare State in Sweden (London, 1979), p. 70.Google Scholar

9 The methods and motives behind the practice of “social administration” as performed by trade unions in Great Britain and Germany respectively after and before the First World War are analyzed in W. Krieger, “Das gewerkschaftliche Unterstützungswesen in Grossbritannien in den zwanziger Jahren” and Schönhoven, K. “Selbsthilfe als Form von Solidarität: Das gewerkschaftliche Unterstützungswesen im Deutschen Kaiserreich bis 1914”, both in Archiv für Sozialgeschichte (1980), pp. 119–146 and pp. 147–193Google Scholar, respectively. The Belgian variant of this practice and its consequences will be analyzed below. Louis Varlez, the inventor and promotor of the Ghent system, noted bitterly that the French labour movement was not interested in performing social protection functions, particularly unemployment insurance, thereby hindering the development of the Ghent system in France (see e.g. Ville de Gand: Fonds, reports for 1906–1908 and 1909–1911, pp. 66f. and pp. 60f., respectively).

10 Unemployment insurance along the lines of the Ghent system was also introduced in Switzerland, but its very complex organization (due largely to the existence of different systems at the cantonal and municipal levels) diverged from the pattern in the other “Ghent” countries in that union unemployment funds did not have a near-monopoly in the field. In 1930 around 40 per cent of insured workers were covered by public funds and joint employers/employees funds: see Spates, T. G. and Rabinovitch, G. S., Unemployment Insurance in Switzerland. The Ghent System Nationalized with Compulsory Features (New York, 1931)Google Scholar, and Treyer, H., L'assurance contre le chômage en Suisse (Paris, 1933).Google Scholar In France one element of the Ghent system, the subsidizing of private unemployment funds by the public authorities, survived throughout the interwar period. But union funds were less important than the system of direct public allowance set up through separate official unemployment funds which put the union funds at a disadvantage: see Salais, R., Baverez, N. and Reynaud, B., L'invention du chômage: Histoire et transformations d'une catégorie en France des années 1890 aux années 1980 (Paris, 1986), pp. 128–129Google Scholar, and Salais, R., “Why was Unemployment so Low in France”, in B. Eichengreen and T. J. Hatton(eds), Interwar Unemployment, pp. 255–258.Google Scholar Details of this (also rather complicated) system can be found in some obscure and old thèses de droit dating from the interwar period, in Camas, J. Malivoire de, La France et le chômage: Étude de législation (Paris, 1933)Google Scholar, and Héreil, G., Le chômage en France: Étude de législation sociale (Paris, 1932)Google Scholar, and in the better-known work of Letellier, G. et al. , Enquête sur le chômage en France de 1930 à 1936 (Paris, 1938), vol. I.Google Scholar A comprehensive survey of the different systems of unemployment insurance in existence after the First World War is provided in various publications of the International Labour Office (ILO), e.g. Assurance-chômage et diverses formes d'assistance aux chômeurs (Genève, 1933).Google Scholar

11 Concerning Denmark and Sweden, see e.g. L. N. Johansen, “Denmark” and S. Ohlson, “Sweden”, in Flora, P. (ed.), Growth to Limits: The Western European Welfare State Since World War II (Berlin and New York, 1986), vol. 1, pp. 34 and 298.Google Scholar Norway introduced compulsory unemployment insurance in 1938. See also Alber, J., Vom Ar menhaus, p. 169.Google Scholar

12 The statistical material on unemployment funds and insured workers is not quite complete. There was no overall survey of the number of insured workers before 1909. The 1909 figures are incomplete because they do not include existing union funds which had not yet affiliated to a municipal unemployment fund. The 1913 figures include the union funds and insured workers who were not affiliated to a municipal fund, but only if the union funds were “recognized” (usually catholic); they do not include the socialist union funds and their members not affiliated to a municipal fund.

13 In 1900 there were about 30,000 socialist and 10,000 catholic trade-union members. According to the 1910 national census, the number of manual industrial workers totaled 1,185,000. To these figures must be added the membership of a number of liberal and “neutral” trade unions (about 25,000 on the eve of the First World War). The significance of the existence of competing currents in the Belgian working class is analyzed in Strikwerda, C., “The Divided Class: Catholics and Socialists in Belgium 1880–1914”, Comparative Studies in Society and History (1988), pp. 333–359.CrossRefGoogle Scholar

14 The central government had in fact given (very small) subsidies to unemployment funds since 1907, but it did not intervene directly in the payment of unemployment benefits. Most of the country nine provinces granted similar subsidies.

15 Within this alliance, the Christian democrats' influence grew in the years before the First World War. See Witte, E. and Craeybeckx, J., Politiekegeschiedenis van Belgiësinds 1830 (Antwerp, 1981), ch. 3.Google Scholar

16 Further details are provided in Mahaim, E., Le secours de chômage en Belgique pendant l'occupation allemande (Paris, 1926).Google Scholar Although most of Belgium was occupied, there existed a private relief committee, the National Aid and Food Committee (Comité National de Secours et d'Alimentation), which supplied the population with the necessary foodstuffs with the approval of the Belgian government-in-exile and the permission of German occupying authorities and with the aid of the US Commission for Relief in Belgium led by Herbert Hoover. The special unemployment relief system of the Comité National entailed a significant reduction of trade-union influence in this field.

17 In the first general election after the war 73 catholics, 70 socialists and 34 liberals were elected to the 186-member Chamber of Deputies, the lower house of parliament.

18 A good survey in English is provided in Kiehel, C., Unemployment Insurance in Belgium (New York, 1932).Google Scholar

19 See ibid., pp. 148f.

20 In theory, the total benefit granted to unemployed workers – the sum of the allowances of union unemployment fund, municipality and province and the state – could not exceed a maximum of 2/3 or 3/4 of their salaries. According to employers and conservatives this particular rule was consistently broken.

21 See e.g. Delsinne, L., Le mouvement syndical en Belgique (Brussels, 1936), p. 245Google Scholar, and Mouvement Syndical Belge, 15 01 1921, p. 9Google Scholar and 20 January 1931, p. 3. The interesting debates within the German trade-union movement before 1914 concerning the significance of the existence of a network of relief funds (particularly of unemployment funds) organized by the labour movement are analyzed by Schönhoven, K., “Selbsthilfe”, pp. 168ff.Google Scholar

22 It is impossible to analyze here the problem of unemployment in Belgium. Suffice it to say that in 1932,1933 and 1934 about 17 to 20 per cent of all insured workers were wholly unemployed (with a peak of 23 per cent in January 1935) and about 15 per cent were partially unemployed. Monthly figures are included in the official Revue du Travail, 1930–1939.Google Scholar

23 See Vanthemsche, G., De werkloosheid, pp. 53–55.Google Scholar The catholic unions grew much more than the socialist ones. Catholic membership represented respectively 181,000 and 325,000 of the totals given above. Nor should one ignore the existence of some smaller unions, mainly the liberal unions (with about 14,000 members in 1929 and about 75,000 in 1939). A recent and detailed study on the history of the Belgian trade-union movement after 1914 is still lacking, but see J. Dhondt, “L'influence de la crise de 1929 sur les mouvements ouvriers en Belgique”, in Fauvel-Rouif, D. (éd.), Mouvements ouvriers et dépression économique de 1929 à 1939 (Assen, 1966), pp. 76–102.Google Scholar

24 Figures taken from Bain, G. S. and Price, R., Profiles of Union Growth: A Comparative Statistical Portrait of Eight Countries (Oxford, 1980)Google Scholar; Harmsen, G. and Reinalda, B., Voor de bevrijding van de arbeid: Beknopte geschiedenis van de Nederlandse vakbeweging (Nijmegen, 1975), pp. 426–433Google Scholar; Prost, A., La CGT à l'époque du Front Populaire (Paris, 1964), p. 39Google Scholar; Hodne, F., The Norwegian Economy 1920–1980 (London, 1983), p. 25Google Scholar, and Galenson, W., Labour in Norway (New York, 1949), p. 175.CrossRefGoogle Scholar The latter mentions the Ghent system as a “factor in preserving the integrity of the trade unions”, a point reiterated by e.g. Wilson, D., The Welfare State in Sweden, p. 70.Google Scholar G. Therborn's analysis of the Swedish situation in “The Working Class and the Welfare State: A Historical-Analytical Overview and a Little Swedish Monograph”, in Kettunen, P. (ed.), Det nordiska i den nordiska arbetarrörelsen (Helsinki, 1986), pp. 24, 25, 50 and 66Google Scholar suggests that this might not have been the case in that country. See also Therborn, G., “The Coming of Swedish Social Democracy”, in Colotti, E. (ed.), L'Internazionale Operaia e Socialista tra le due guerre (Milano, 1985), p. 577.Google Scholar

25 See e.g. Le Métallurgiste (10 1932), p. 3Google Scholar; and Rapport au Xe Congrès de la Confédération des Syndicats Chrétiens 1932, p. 50.Google Scholar

26 See e.g. Résumé des débats du Congrès syndicale extraordinaire de la Commission Syndicale du 22 nov. 1936 (Brussels, 1936), p. 17.Google Scholar

27 See Audenhove, M. Van, “Histoire des finances communales 3e partie”, in Bulletin trimestriel du Crédit Communal de Belgique (1983), suppl. 143.Google Scholar

28 See the Archives of the International Labour Office, Geneva, U 3/4/7, correspondence Varlez, who had by now become a high-ranking ILO official.

29 See La lutte contre le chômage, 06 1921, pp. 18–47Google Scholar, and XXle Congrès syndical tenules 15–17 juillet 1922, transcript (Brussels, 1922), p. 41Google Scholar, on the socialist rejection of the proposals.

30 See Baudhuin, F., Histoire économique de la Belgique 1914–1939 (Brussels, 1946), vol. 1, pp. 175–218.Google Scholar

31 See Bulletin du Comité Central Industrial(CCI), 1 03 1933, p. 214.Google Scholar A general summary of the employers' criticisms can be found in Goldschmidt, P. and Velter, G., Le soutien des chômeurs en Belgique dans le cadre de l'assurance-chômage (Brussels, 1931)Google Scholar, and L'évolution du régime belge du soutien des chômeurs (Brussels, 1934).Google Scholar

32 See e.g. Revue Industrielle, 7 11 1932, p. 2Google Scholar, and Usine Belge, 16 01 1932, p. 135.Google Scholar

33 See J. Rueff, “L'assurance-chômage, cause du chômage permanent”, in Revue d'Économie Politique, 03-04 1931.Google Scholar A similar theory is still being put forward in scientific publications, for instance in the famous Benjamin and Kochin paper in Journal of Political Economy of June 1979, giving rise to much controversy over its very reductionist approach to what, as e.g. Glynn and Booth demonstrated, is a “multiple problem”. On conservative reaction, see e.g. L. Vertongen, “Le chômage, causes et remèdes”, in Le Flambeau, 06 1932, p. 20Google Scholar, and “La loi de Rueff”, in Revue Economique Internationale, 12 1932, pp. 30f.Google Scholar

34 In 1932 central-government expenditure on unemployment benefits amount to around 1 billion francs, out of a total budget of around 10 billion francs.

35 The industrial firms belonging to the sectoral employers' associations affiliated to the CCI in 1939 employed around 850,000 out of a total of 1,150,000 wage-earners in industry (Bulletin du CCI, 22 03 1939, p. 412).Google Scholar

36 See Vanthemsche, G., “De rol van de gemeenten in het systeem van werkloosheids-verzekering tijdens de krisisjaren 1930 in België”, in L'initiative publique des communes en Belgique 1795–1940: Actes du 12e colloque international du Crédit Communal à Spa, 4–7 septembre 1984 (Brussels, 1986), vol. 1, pp. 461–180.Google Scholar

37 See e.g. CSC-Bulletin, 08-10 1931, p. 202Google Scholar, and April 1932, p. 175.

38 Archives Fabrimetal, “Rapport annuel du Bureau de l'Association Patronale des Constructeurs de Belgique”, 1933, p. 9.

39 See e.g. Mouvement Syndical Belge, 20 02 1936, p. 35Google Scholar, and Centrale des Métallurgistes, meetings of the national committee of 18 May 1933 and 28 November 1935, available on microfilm from the National Archives, Brussels.

40 See C. Strikwerda, “The Belgian Working Class and the Crisis of the 1930s”, in Maderthaner, W. and Gruber, H. (eds), Chance and Illusion: Labour in Retreat: Studies on the Social Crisis in Interwar Western Europe (Vienna and Zurich, 1988), pp. 279–304.Google Scholar

41 Usine Belge, 10 12 1938, p. 65.Google Scholar

42 See Bulletin du CCI, 30 12 1936, p. 1723Google Scholar; and 26 May 1937, pp. 650–666.

43 See Congrès syndical extraordinaire consacré à l'étude du problème de l'assurancechômage obligatoire […] le 22 nov. 1936 (Brussels, 1936)Google Scholar; the 2e and 3e Congrès syndical extraordinaire […] 8 août 1937 and 29 mai 1938 (Brussels, 1937 and 1938Google Scholar, respectively) for the socialist views, and Verplichte verzekering legen onvrijwillige werkloosheid, memorandum drafted by the executive of the ACV (Brussels, 1937)Google Scholar for the catholic views.

44 And not the system of deduction (précompte) under which employers deducted workers' contributions from their salaries and transmitted them directly (with their own contributions) to the state's central unemployment fund.

45 An excellent introduction to the issue of pillarization, on which there exists a vast literature, can be found in a special issue of the Revue Belge d'Histoire Contemporaine, 1982Google Scholar, nr. l.

46 Fuss, H., L'Organisation de l'assurance obligatoire contre le chômage (Brussels, 1937)Google Scholar, and L'organisation, second report (Brussels, 1937).Google Scholar

47 For such detail, see Vanthemsche, G., De werkloosheid, eh. 4.Google Scholar

48 Bulletin officiel de la Chambre de Commerce de Bruxelles, 23 10 1938, pp. 709–711.Google Scholar

49 Le Flambeau, 15 02 1939, p. 177.Google Scholar

50 Two other aspects of general social security, old-age pensions and family allowances, were made compulsory in 1924 and 1930 respectively.

51 The disappearance of the autonomous union unemployment fund logically meant the end of separate allowances sourced from private insurance funds and from public authorities.

52 As noted earlier, the perception of contributions was a controversial issue before the war, because it was supposed to have an impact on the relationship between the workers and the labour movement. The catholic trade unions were especially keen on retaining this administrative link between the insured workers and the unions. The 1944 system withdrew this prerogative from the unions: the “précompte” system in note 44 was then introduced not only for unemployment insurance but also for the other fields of social security.

53 G. Therborn, “The Working Class and the Welfare State” and “Classes and States: Welfare State Developments 1881–1981”, in Studies in Political Economy (1984), pp. 1–13 and pp. 21–24.Google Scholar His analysis is based primarily on the pre-1914 programmes of the labour organizations in some important Western European countries and of the Internationals.

54 These included the relative strength of the Belgian labour movement at the end of the nineteenth and the beginning of the twentieth century: its strong tradition of pragmatism, gradualism and protection; the quite efficient links existing between trade unions and political organizations; the application, to their logical consequences, of the concepts of self-help and“subsidized liberty” advocated by bourgeois circles; the circumstances of the war, the turmoil caused by it and the subsequent installation of govern ments of national unity.

55 The “consensus” view is criticized e.g. in Gough, I., The Political Economy of the Welfare State (London, 1979), pp. 65f.CrossRefGoogle Scholar, and in Thane, P., The Foundations of the Welfare State (London, 1985), 3rd ed., p. 291.Google Scholar

56 Those were the views of the catholic labour movement (for whom the religious motive was a supplementary reason for keeping the labour movement's initiative intact), of the mainly pragmatic Flemish socialists, and even of the small Belgian communist party.

57 Quoted is Artus (of the public-sector trade unions), “Réunion du Comité du Centre Syndical Belge”, 10 June 1943, in Smets, D. and Rens, J., Historique du Centre Syndical Belge à Londres 1941–1944 (Brussels, 1976), pp. A II 41 and A II 45.Google Scholar