At present development in this field is along two lines, that of subsidized trade-union relief (the Ghent system), and that of compulsory state insurance in certain industries.  The former has been adopted by many cities and by some countries in western Europe, the public paying a certain proportion (from one sixth to one third) of the amounts of the benefits paid by the unions.  Great Britain is the only country as yet to adopt a compulsory state system.  It began operation in 1912, and applied to 2,500,000 persons, or one sixth of all the wage-earners.  The contributions are made 3/8 by employers, 3/8 by wage-earners, and 2/8 by the state.  There are several original and interesting features of the act, such as rewarding, by the refunding of dues, those employers that provide regular employment and older workmen that have received benefits amounting to less than their contributions.  Its administration in close connection with the labor exchanges will give valuable experience in this field.  The working out of the many minor problems of classification, assessment, and administration, of unemployment insurance, will require many more years of experimentation.

Sec. 13. #Need of ideals in social insurance#.  The world has had nearly forty years of experimentation of a remarkably varied kind, in the field of social insurance, since the German system was inaugurated in the eighties of the nineteenth century.  America stands almost at the beginning of a development along those lines that is certain to be of enormous extent and importance.  It would be folly for us to repeat the costly errors of other countries by failing to recognize certain principles which have been clearly established by experience.  If these could be grasped and firmly kept in mind our progress in this field in America would be faster, more certain, less costly, and farther reaching than it promises otherwise to be.  We can here attempt no more than merely to outline these principles that must be embodied in an ideal system of social insurance in America.

Sec. 14. #Insurance rather than penalty#.  The principle of social insurance rather than that of legal penalty should be universally recognized.  At present, in all countries where the several kinds of insurance are found side by side, accidents are indemnified on plans that are still rooted in the notion of employers’ liability for negligence; whereas, necessarily, the indemnity in case of sickness and of old age has no such explanation.  The unfortunate result of this difference of view is that whereas all cases of sickness and invalidity entitle to benefits, only those accidents suffered “in the course of employment” are indemnified, and the worker is left unprotected in a large share of the accidents to which he is liable.  The worker’s need and the social need are thus not adequately met.  We have started along the same line of development in America, and it is to be feared that only through a long series of legal fictions and contradictory