By the end of the twentieth century, the provision of benefits for the poor had become the almost total responsibility of government. Many believe such arrangements would not exist at all without support from taxpayers. A powerful new book demonstrates that this is not the case.
Written by David Beito, a history professor at the University of Alabama, From Mutual Aid to the Welfare State describes the astonishing variety of mutual-aid societies that sprang up in North America more than a century ago. Funded by voluntary membership fees, these organizations came to dominate the continent’s social welfare industry. They offered their members protection against financial losses arising from unemployment, accident, illness and death in a time when government relief was sparse and inconsistent.
Remnants of these fraternal societies still exist, mainly in the form of social and service clubs like the Elks, Eagles, Odd Fellows and Foresters. Beito’s research on their programs gives us a benchmark against which we can measure the comparative effectiveness of socialized welfare.
At the turn of the nineteenth century, those who accepted public charity were generally scorned. Especially repugnant was the prospect of ending up in a pauper’s grave or, even worse, in the poorhouse. This stigma prompted the rise of the mutual-aid societies, which provided death and sick benefits on a subscription basis. Membership boomed in Britain, a pattern soon followed on this side of the ocean. At its zenith, almost half of all North American adults belonged to one or more of these associations.
Tens of thousands of lodges, distinguished by mysterious codes and signals, offered benefits to members in many forms. The first simply paid for burials, but others expanded into life insurance, unemployment and sick relief and guarantees of medical treatment. Although some were based on geography, others on ethnicity, sex or income level, most subscribers came from the working classes and the poor. Subscription rates for blacks in the southern United States, for instance, were commonly as high as 90%, and membership fees were very low.
Mutual-aid societies in Europe customarily described their payouts as relief, but in America they came to be regarded as benefits for members. As Beito relates, the Odd Fellows revised the language of fraternalism, declaring that money was “not paid or received as charity: it is every Brother’s right, and paid to every one when sick, whether he be high or low, rich or poor.” Lodges usually forgave dues and extended coverage to members who had fallen on hard times.
Restrictions on payouts or membership would offend those who regard welfare as an unconditional entitlement. Coverage was routinely refused for drunkenness, adultery or “disruptive behaviour” and admission denied to high-risk individuals deemed to threaten the solvency of the funds. Committees checked out applications by visiting people who claimed to be in need, and the identities of non-resident claimants who belonged to national organizations were carefully screened.
At the same time, fraternal orders engaged in rituals and conducted education campaigns to promote self-reliance, thrift, self-control, fidelity to family and respect for the law. “Stand Back, Grim Poverty! We Protect the Child”, declared one motto of the Ladies of the Maccabees, who stressed the importance of a strong home life.
Racial bars, while ubiquitous, were sometimes dropped in exceptional circumstances. Oronhyatekha, a doctor and Mohawk chief, became chief supreme ranger of the independent Order of Foresters in Ontario, a lodge normally restricted to white males. A legendary wit, he said that the “law was intended to exclude from the Order only the races which were regarded as being inferior to the whites and therefore did not apply to the Mohawks.” During his tenure from 1881 to 1907, membership rose from 369 to about 248,000. For the most part, though, the composition of mutual aid societies reflected the times. As in labour unions, professional associations and colleges, non-Caucasians were excluded and had to form their own groups.
Fraternal and sororal orders often went beyond mutual aid and set up homes for the elderly, orphanages and hospitals. Those that offered medical benefits did so in the form of “lodge practice”, whereby doctors would charge a yearly fee for the whole membership. Medical societies saw this as undercutting rates and mounted a steady campaign of sanctions and legal challenges to stomp out the “evil”. Ironically, the same associations formed alliances with the lodges to defeat efforts to implement compulsory hospital insurance.
Mutual aid societies stood up well against assaults on their actuarial soundness, including World War I, the flu epidemics and the Great Depression. The high point of private welfare was reached during the 1920s, when almost half of working-class adults belonged to such societies. But the creeping monopolization of welfare by governments via well-intentioned programs eventually snuffed them out. Bingo and beer halls are their only living legacy.
During their time, though, the societies offered common people a bulwark against misfortune, without fostering a culture of dependency. Our government welfare monolith lacks the focus on individual empowerment that drove the decentralized voluntary welfare sector. We can all benefit by looking at how the job was done before government took it over.