A Conversation with David Beito

David Beito, Interview, Poverty, Uncategorized, Welfare

Frontier Centre: Your book, From Mutual Aid to the Welfare State, details a world that seems completely foreign to the modern reader, yet it existed not that long ago. How important were mutual aid societies in the lives of our grandparents and great-grandparents?

David Beito: They were tremendously important. If you wanted to find where the center of community was in an urban neighbourhood or a small town you would often go to the lodge. It often sponsored things like picnics and dances and was a center of social life but also provided social welfare assistance to the members. So, second only to the churches and perhaps even exceeding churches, fraternal societies were the leading providers of social welfare in the early 20th century.

FC: You describe a social welfare system that is completely different from the one we use today, yet you are very guarded in drawing comparisons between the two. In what respects was the subscription system superior to the universal, government-sponsored entitlements in place today?

DB: Fraternal societies offered a personal connection. Members gave money which supported other members but it was reciprocal. So today’s donor could be tomorrow’s recipient – that created a kind of personal bonding. You also had a social infrastructure that was created. The Lodge system existed because it provided social welfare but that had a lot of spillover effects in terms of community improvement like lower crime rates because there were stronger personal ties. Societies also helped to uplift the moral behaviour of their members and make them better people because part of what they tried to do was to teach certain values. Government systems have failed miserably in doing that kind of thing.

FC: In what respects was it inferior, beyond the fact that coverage was not universal?

DB: There are always people that are not going to pay their dues, who are going to drink away all their money so; fraternal societies were not for people like that. You have to assume that a member is somebody who is somewhat responsible and who is going to pay their dues and so forth. But, at the turn of the century government and organized charity provided safety nets for that small portion of the population that fell between the cracks in the mutual aid system.

FC: We often hear that government welfare systems have no feedback mechanisms. What was the difference between the present system and the system of mutual aid?

DB: Fraternal societies were high decentralized. You might have a national organization like the Odd Fellows that would have a million members perhaps but they would be scattered in thousands of local lodges that were very much autonomous. They were run by the members, the leadership was elected from the ranks of the members; the members wrote the rules of the organizations or approved the rules so there was a lot of feedback. The members were very much involved in setting the policy of the organization. Now, there were organizations where you had hierarchies develop in cliques and things like that and that are inevitable with any sort of social welfare system. But at least with fraternal societies people could always leave the organization and often people belonged to several lodges at once and so there were options – there were choices that they had that they do not have with the monopoly and highly centralized systems.

FC: So, when we hear people complaining about the unresponsive bureaucratic welfare state, to some degree this voluntary, decentralized system was a superior system?

DB: Yes. It was much more responsive and it would cater to the particular interests of the people involved. There were female fraternal societies; there were socialist fraternal societies. So each group looked very different and would tend to be more responsive to the members in that sense as well – tailored to the interests of members.

FC: They essentially competed with each other for members so there was an incentive to always sharpen the product?

DB: Exactly, some estimates are that there may have been as many as ten thousand fraternal societies at the turn-of-the-century – so it was highly competitive and each society was saying our group provides this benefit, we are better than that group and was extensive advertisement and solicitation of members drawing comparisons between different organizations.

FC: Much of you book deals with the American experience of mutual aid societies and you contrast them with their predecessors in Britain. To your knowledge, were the Canadian versions of these organizations just as prevalent as the American ones?

DB: Yes, all the evidence points in that direction and the American organizations and the Canadian organizations were often one and the same. Groups like the Fraternal Order of Eagles and the Independent Order of Foresters, which was based in Canada, had lodges in the United States and in Canada. So, I would argue that about the same numbers of people were involved in terms of the percentage of the population and often the same organizations and the benefit systems were very similar.

FC: You say that British fraternal orders usually thought of their payouts in terms of charity, while their American equivalents regarded them as insurance benefits, whereby paying a premium gave you a right of access. Did Canadian mutual aid societies follow the British or the American pattern?

DB: I would actually argue that the British societies were pretty close to the American societies in that respect. In Britain and Australia you had a very strong network of friendly societies which were similar in a lot of ways and in their view of charity to American societies. Canadian societies were much like that American societies. They had more in common with the American societies than they were with the British or Australian societies.

FC: We have described the remnants of mutual aid societies as social clubs that run bingo and beer halls. How many still provide subscription benefits to their members?

DB: It is not as common. Societies are still involved in philanthropy but it tends to be philanthropy for non-members – partly because I don’t think they have the same kinds of working class poor members that need benefits. Now there are some exceptions, one is Moose International which has an orphanage called “Mooseheart” which admits the children of deceased members but, even in that case, even though the Moose International is a very large organization – larger than it has ever been – they have had to open it up to let in people who do not have a connection to the organization partly because the members are no longer the kinds of people that receive social welfare services.

FC: What about the IOF (Independent Order of Foresters)?

DB: Yes, the IOF still provides some services and they still have a few homes for the elderly but, again, they do not tend to have poor people who are members — people who really need the social welfare benefits. These groups used to have substantial numbers of people who were at the bottom of the economic ladder. Those people are not affiliated with social organizations any more it seems to the extent that they were.

FC: Why? Because government is too easy?

DB: A lot of it has to do with the breakdown of the family. It makes it a lot harder for people to have the kind of foresight to pay dues and make long-term investments, even small investments in an organization. You have seen the undermining of the social structure in a lot of inner city neighbourhoods. I think a lot of that does have to do with the welfare state because at one time if people were to get social welfare benefits the only way was to set mutual aid organizations like fraternal societies. That incentive is no longer there because of the welfare state.

FC: The system of lodge practice, where fraternal orders provided sick benefits by retaining doctors to minister to the needs of their membership floundered because professional medical associations regarded it as a threat to their much higher rate structures. Are they still too powerful in their ability to restrict the supply of doctors?

DB: Yes, they are and there are still a lot of things even though the medical professional is often complaining that they are not as powerful as they once were that they are preventing from opening up. Like, for example, in much of Europe you have nurse practitioners doing a lot of things the MD’s do. In the United States it is much more difficult for nurse practitioners to do a lot of the same work and thus save on costs. So, that’s the kind of thing we need to open up and the medical societies are very much opposed to opening up those kinds of options.

FC: You devote a whole chapter to orphanages built and operated by fraternal orders. Such institutions are out of fashion and have almost been completely replaced by foster families which have their drawbacks as well. Do you think that orphanages should still play a role in assisting children whose parents are incapable of providing care?

DB: There has been some very good empirical data comparing the achievements of people that graduated from orphanages versus people who went through the foster home system. The evidence is overwhelming that orphanages are superior in the sense that the graduates who come out of orphanages have higher incomes, are more likely to go to college, are more likely to do well in life. So, if you make that direct comparison, orphanages have a lot to offer and should have their place and that place will probably, hopefully, increase. I would argue though that the best system of all for children is adoption and one problem that we have in the United States is that we make adoption far too difficult. We want to make it easier but, then again, if you look at orphanages years ago, most of the time, the mother was still alive and was still in contact with the child and that was true for a lot of the fraternal orphanages so that kind of orphanage set-up has a lot of potential and has a lot of advantages over foster homes.

FC: Fraternal orders actively promoted cultural values like good character, thrift, hard work and self-reliance – moral targets which receive little attention today and yet which are crucially important to the success of a social order. Does their apparent neglect in modern mass culture have implications for the future of free societies?

DB: If you are going to have liberty the price of liberty, as someone once said, is responsibility. So, yes there are tremendous implications and if we are going to have a society of people that are self-reliant, that are autonomous, families and so forth, we have to build on those requirements of good moral, thrift and the ability to look into the future and to plan for the future and not have a short term mentality. These are survival values – we often see them as these “moral values” but a lot of these are survival values – that’s how people got ahead – because you knew you could trust somebody – they knew that someone was reliable – they knew that somebody would save their money and it was worth taking a chance of them. So, definitely, if we are going to have successful communities and get people out of poverty we have to encourage these kinds of values and societies were very good at doing that kind of thing.

FC: Such appeals to virtue are regarded by today’s social welfare establishment as paternalistic and demeaning to the poor but workfare schemes, currently the rage in both Canada and the United States require that able-bodied people contribute time and/or labour to the communities who are providing their benefits. Isn’t this trend, in fact, a modest attempt to revive the spirit of mutual aid societies?

DB: Yes, it is. There is a movement in that direction in the United States when we put limits on welfare and the amount of time you can receive welfare. What we have seen is often that the recipients themselves when interviewed say that, “I needed somebody to give me a push to move me out of this”. The poor often really do have very strong work ethics but they need the motivation and some times the motivation is being put to work or being told that there would be a time limit of some sort. We have limited resources and we simply cannot pay everyone the same amount of benefits regardless of class, regardless of condition. The money isn’t there so you are faced with a situation where you have to ration in any system so, how do you do it? By whether somebody is a hard-worker or not a hard-worker? Whether they are trying to get themselves out of poverty or are they just lying around? You have to ration it some way. That’s reality.

FC: The feature of mutual aid societies most reviled by the welfare industry is the practice of friendly home visits where people who drew benefits were regularly monitored to make sure they were actually in need. Why is this activity, which seems a logical way to curtail abuse, so out of favour?

DB: Well, you just said it, that people from the poverty industry regard it as overly controlling to do this. But, a lot of it has to do with other factors. As bureaucracies develop they become much more impersonal and you have a big class difference. For example, most welfare recipients are from a very different social and economic class as the people who are giving the money. There is a feeling from some of the bureaucrats that perhaps we don’t want to mix too much with these people. The attitude is much different even among private charities a hundred years ago. The theory was that you had to go into their neighbourhoods and get to know the people, get to know their problems. That takes a lot of work and a lot of effort so a lot of this distaste for home visits is self-serving.

FC: What elements of the mutual aid societies could be incorporated into a model for government welfare systems? For instance, could benefits be more effectively delivered by agencies like neighbourhood associations and churches rather than by civil servants?

DB: There are some interesting experiments of contracting out certain welfare services to private organizations and private charities and to fraternal societies. You have to be very careful about that but those are some interesting experiments that we see in a lot of American cities like Indianapolis. These could be encouraged as a way of moving in that direction and decentralizing government services.

FC: What are they doing in Indianapolis?

DB: Things like services for unwed mothers are often being delegated to the churches. A lot of churches entered into agreement with the local welfare authorities that they would take responsibility for a certain number of poor people and look out for them and they may do that wholly without government money or the government might pay them some money to do that. But it was a way to reintroduce this personal bonding which is very much absent from current social welfare bureaucracies and sort of hand over the control to local churches. That might be an experiment that is worth looking at – it’s worth trying.