Many people think life without the welfare state would be chaos. In their minds, nobody would help support the less fortunate, and there would be riots in the streets. Little do they know that people found innovative ways of supporting each other before the welfare state existed. One of the most important of these ways was the mutual-aid society.
Mutual aid, also known as fraternalism, refers to social organizations that gathered dues and paid benefits to members facing hardship. According to David Beito in From Mutual Aid to the Welfare State, there was a "great stigma" attached to accepting government aid or private charity during the late 18th and early 19th centuries. Mutual aid, on the other hand, did not carry the same stigma. It was based on reciprocity: today's mutual-aid recipient could be tomorrow's donor, and vice versa.
Mutual aid was particularly popular among the poor and the working class. For instance, in New York City in 1909 40 percent of families earning less than $1,000 a year, little more than the "living wage," had members who were in mutual-aid societies. Ethnicity, however, was an even greater predictor of mutual-aid membership than income. The "new immigrants," such as the Germans, Bohemians, and Russians, many of whom were Jews, participated in mutual-aid societies at approximately twice the rate of native whites and six times the rate of the Irish. This may have been due to new immigrants' need for an enhanced social safety net.
By the 1920s, at least one out of every three males was a member of a mutual-aid society. Members of societies carried over $9 billion worth of life insurance by 1920. During the same period, "lodges dominated the field of health insurance." Numerous lodges offered unemployment benefits. Some black fraternal lodges, taking note of the sporadic nature of African-American employment at the time, allowed members to receive unemployment benefits even if they were up to six months behind in dues.
Read more: Welfare before the Welfare State
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