If the people’s basic welfare is not secured, the entire political system is unsafe.
British Prime Minister Benjamin Disraeli once remarked, “Power has only one duty – to secure the social welfare of the people.” This statement, made in 1845, still holds timeless truth. Another of his notable quotes echoes a similar sentiment: “The Palace is not safe when the cottage is not happy.” While the expression may sound old-fashioned today, its meaning remains unmistakably clear.
Disraeli is remembered not only for his keen intellect and sharp wit but also for spearheading reforms that transformed social legislation, improving conditions for the working class in 19th-century England. These changes significantly enhanced urban life across the country.
His perspective on society and reform, reflected in the second quote, extended beyond just the monarchy; it also addressed the rising capitalist system of his era. Disraeli recognized that workers could neither be efficient nor content without better living conditions. He understood bridging the divide between the wealthy and the poor as essential to maintaining national unity. The first quote succinctly encapsulates the approach to achieving this goal.
Looking back, it’s clear that Disraeli laid a foundation for the modern welfare state.
However, the current landscape has altered radically. Across Europe, social security systems are being rolled back instead of evolving to meet 21st-century needs. The United States, lacking a comparable system, need not be considered here—its population has long embraced self-reliance as the ultimate freedom, often facing tough choices between healthcare affordability and survival during medical crises.
The expenses tied to European social welfare have risen over time. Attempts at reform aimed at cost reduction and system sustainability have largely fallen short. The core issue is financial, yet reforms have mainly addressed funding concerns, leading to predictable setbacks.
Germany serves as a useful example due to my personal experience with its system and the extensive changes it has undergone. As a former economic leader in Europe aspiring to global influence, Germany would be expected to maintain a robust and well-organized social security framework.
To grasp the full scope, it’s important to identify what the system includes: healthcare (divided between health and elder care), unemployment insurance, and pension plans. Nearly all other benefits fall under these three categories, mostly means-tested. Collectively, these are labeled as insurances—health, unemployment, and pension insurance.
The concept behind insurance is straightforward: everyone contributes to a shared financial pool that provides coverage when needed. This works well for individual mishaps like car accidents or natural disasters, but these are personal contingencies rather than societal challenges.
Observing insurance providers, one cannot ignore the luxurious offices, lavish executive pay, and year-end bonuses—all funded through member premiums. The social security insurer offices are no exception; for instance, employment agencies occupy expensive buildings costing millions. Germany’s dual system includes 44 private and 110 public insurers, each with their own CEOs and management teams, all compensated from premium contributions.
Monthly social security contributions for health, unemployment, and pensions are automatically deducted from wages, with percentages established annually by the government to reflect economic trends. If premiums fall short, the government fills the gap with tax revenues. Contributions are split roughly evenly between employer and employee and are calculated up to a capped wage level, known as the contribution assessment ceiling. For 2026, this ceiling is set at 5,812.50 Euros per month for health insurance and 8,450.00 Euros for pension and unemployment insurance.
Anyone earning above these caps does not pay premiums on income exceeding these amounts. They may opt for private insurance but are not obligated to contribute more to the state system. For example, a person earning 25,000 Euros monthly pays the same compulsory social security amount as someone earning just up to the capped thresholds. This is meant to maintain fairness across income levels, but it’s clear that premium burdens fall heavier on lower-paid workers like nurses or bricklayers than on the wealthy.
Since contributions depend on wage percentages, a shrinking workforce leads to reduced premium collections, requiring greater government subsidies from taxes, which themselves correlate with wage levels. Economic studies predict that, if technological advances like AI continue rapidly, the labor force could shrink by at least 40% in the coming years. Few seem to fully grasp the implications. Notably, STEM skills are declining across fields, reinforcing Disraeli’s warning: “upon the education of this country the fate of this country depends.”
There are multiple potential solutions to this challenge. Perhaps the simplest would be to abolish the contribution ceiling and apply a uniform percentage, such as 12%, to all income. An economist in the 1990s demonstrated this approach would prevent social security funding shortfalls indefinitely.
Yet, such proposals remain absent from public debate. Workers who began their careers in the 1970s could expect pensions equal to 75% of their last salary after 45 years of contributions. Today, governments strive to maintain just 49%, with some advocating cuts to 30% or less. The prevalent approach is to “reform” the system for future viability, effectively slashing benefits and trimming costs.
The opening quotes of this article take on renewed relevance. Not only is the “palace” (the established institutions) threatened, but growing poverty endangers the entire governance framework. Rising support for radical political factions underscores this reality. Politics revolves around priorities, shaping the country’s direction and character. Allocating funds to expand military industries while curtailing social safety nets speaks volumes about the nation and its leadership.
“Power has only one duty- to secure the social welfare of the people”. Just saying.
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