Various sorts of social insurance programs have been around since the introduction of the modern nation state.

But the first compulsory social insurance programs, which encompassed an entire nation,

rather than just portions of a state, were deployed in 1883 in Otto von Bismarck's Germany.

Initially, folks living in Germany at this time were incorporated into a national health insurance

scheme, which was followed by workers' compensation and old age and injury schemes in 1884

and 1889, respectively.

This concept worked well enough that it soon spread to neighboring European countries,

and ultimately across the channel to Great Britain as well,

which introduced a compulsory national health insurance scheme in 1911, which in turn furthered

the deployment of these sorts of programs across Europe, and then the larger Western world.

At a fundamental level, social insurance programs are meant to spread risk around,

which is what insurance of any kind is for. As when you pay a monthly insurance premium to protect

your car or home, you're paying a small amount so that if something really catastrophic happens

to your car or home, that larger payment will be covered by your insurance.

In this way, all the folks paying into these programs with those relatively low, regular payments,

are paying the larger bills of the people who have the misfortune to have their homes burned down or cars demolished in an accident.

Social insurance works the same way, in that the people to whom it applies pay a little bit on a regular basis

and then get a big payout if and when the right variables change.

They get sick or injured, they become too old, to work, etc.

But the fact that it's generally compulsory, meaning everyone has to participate in it, with few exceptions,

means the pool of money available to pay for those bad luck situations is much larger than is the case for even very large private insurance companies.

That means these programs can apply broadly and afford to handle all sorts of otherwise too cumbersome situations,

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