Otto Eduard Leopold, Prince von Bismarck, was a Prussian statesman who in 1871 founded the German Empire and served as its first chancellor for 19 years. In doing so, Bismark provoked the Franco-Prussian War of 1870-71 as an opportunity to bring the South German states into unity with the Prussian-led North German Confederation and build a strong German Empire. This resulted in a crushing defeat for France, overthrowing French Emperor Napoleon III and the "Third Empire". The German Empire was proclaimed at Versailles on Jan. 18, 1871, a triUmph of Prussian militarism and imperialism.

France was forced to pay a huge indemnity and to give up most of Alsace and Lorraine. But Paris resisted, and revolutionaries established THE COMMUNE OF PARIS, an insurrection against the French government from March 18 to May 28, 1871. This was the first great threat of Socialism and Communism in Europe. Karl Marx's support of THE COMMUNE and his writing about it established Marx as the leader of The First International (of Socialism) and Marx became synonymous throughout Europe with the revolutionary spirit symbolized by the Paris Commune.

These developments gravely disturbed Bismark, and he began laying counter-plans. The first compulsory social insurance programs on a national scale were established in Germany under Chancellor Otto von Bismarck: health insurance in 1883, workmen's compensation in 1884, and old-age and invalidity pensions in 1889. Armies of soldiers were replaced by armies of bureaucrats and clerks to implement this system. Germany's example was soon followed by Austria and Hungary.

Thus, a crusty old Prussian "Junker" initiated "the welfare state" -- as a "safety valve".