Krupp, the Ruhr and Bismarck's Social Insurance

After 1850 Germany's Ruhr valley became one of the world's great centers of coal, iron and steel. The Krupp firm of Essen, led by Alfred Krupp, grew from a small steel workshop into a giant producer of railway equipment and artillery, displaying a huge steel ingot at the 1851 Great Exhibition. Krupp provided housing, schools and hospitals for workers, a paternalistic model that also discouraged union activity. By the 1890s Germany produced more steel than Britain.

Rapid industrial growth fed a strong socialist movement, which Chancellor Otto von Bismarck tried to weaken by banning socialist organizations from 1878 while also introducing the world's first national social insurance: health insurance in 1883, accident insurance in 1884 and old-age and disability pensions in 1889. Historians debate whether these programs were genuine welfare reforms, a strategy to undercut socialism, or both.