Center for a Stateless Society
A Left Market Anarchist Think Tank & Media Center
From Fraternal Mutual Aid to Welfare State

A Review of David Beito’s From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890-1967, (University of North Carolina Press-2000)

Through much of the 19th and 20th centuries millions of Americans were members of mutual aid organizations known as fraternal societies. These democratically organized groups provided their members with an assortment of social aid through voluntary means. University of Alabama professor David Beito’s 2000 book Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890-1967 chronicles the rise and fall of these organizations, as well as their eventual replacement by the modern welfare state. In doing so he provides a glimpse of the a world in which mutually beneficial voluntary interaction fills the role currently filled by the welfare state and top-down charities. In other words, a world where ordinary working people independently take care of themselves and each other without looking to assistance from above.

Beito takes readers to a period of American history in which fraternal societies were the most popular form of voluntary organization in American life, with the possible exception of churches. Such organizations provided their members sickness and injury-related benefits, compensation for days of work lost, life and funeral insurance, and doctor visits for their members and their families. In addition, these organizations built and ran hospitals and orphanages. More well-known organizations included The Independent Order of Odd Fellows and the Loyal Order Of Moose.

Beito makes it clear that this is not a comprehensive work on the subject and that it only covers a small portion of the numerous societies that existed. Despite this, it is an excellent introduction to the topic, and one that voluntarists, decentralists  and critics of the welfare functions of government should take an interest in. This is not because we should hope to replicate these societies but rather use them as an example of what voluntary aid can do, as well as avoid the pitfalls that led to their demise. Beito makes it clear that this demise largely came at the hands of the state, in the form of regulations and restrictions which greatly hampered their ability to effectively serve their members as well the expansion of a welfare state that shifted the provisions of many of these services to taxpayers. Beito however does not place blame solely on the state, as he notes that changing values as well as competing forms of social life and entertainment undermined the societies as well.

Beito states that the most popular types of fraternal organizations were secret societies, sick and funeral benefit societies, and life insurance societies. All of these had systems of lodges and usually had ritualistic and social components as well as aid sharing functions. He notes that the distinctions between these three were not clearly defined, but uses the Freemasons as an example of an organization closer to the secret society end of the spectrum. He contrasts this with “friendly societies” which were more working class and more insurance focused. Beito notes for example that in 1920 fraternal organizations carried $9 billion in life insurance.

Fraternal societies not only provided material aid but served as places of community interaction, involvement and entertainment. They were often exclusive along ethnic, racial, and gender based lines. As a result women, black Americans, and members of immigrant communities were able not only to acquire the material benefits of membership of such organizations, but were able to achieve important leadership roles and influential positions within the larger community, including running businesses owned by their society. This was at a time when racism and sexism were codified into law and white men dominated business and government, thus making leadership opportunities for women and minorities rare and of great value.

One example is Maggie Walker of the Independent Order of Saint Luke, who became America’s first female bank president to have achieved the position through merit rather than family connections. Female led societies, such as the Ladies of Macabees, whose members included Elizabeth Cady Stanton involved themselves in feminist and suffragette causes. They saw free association in a positive light and considered Herbert Spencer an influence. All-black societies such as the United Order of True Reformers owned multiple business and sought to give their members freedom from white financial control. They were influenced by the work of Booker T. Washington and resisted racial segregation as well. This included a street car boycott that presaged the tactics of the civil rights movement.

While the benefits of fraternal membership were significant, it came with a cost. In addition to dues paid, members were expected to live a lifestyle in keeping with the values of the organization. This is included not only following the law, but there was an emphasis on thrift, sobriety, patriotism, orderliness and religiosity. Indeed there was great overlap between many of the societies Beito discusses and the temperance movement which eventually achieved government prohibition of alcohol in the United States. It was not uncommon for societies to refuse membership to individuals involved in the liquor trade, and drunkenness could be grounds for denial of benefits. Benefits could also be denied for members who were in prison, women who aborted or for injuries incurred during “immoral acts.” Beito states that these puritanical positions reflected the middle class values of the time and notes that colleges, labor unions and suffragette organizations had similar policies. As a result portions of the book discussing these positions read as a compliment to Thaddeus Russell’s A Renegade History of The United States in that it documents the activities of the conformists Russell’s renegades sought to undermine.

In addition to values-oriented restrictions, actuarial restrictions limited members in risky professions or lifestyles. Additionally the societies often went through painstaking efforts to identify members fraudulently claiming benefits. However, in cases where members were found to be truly deserving, rules were often bent to provide extra assistance to those in genuine need. Beito notes that the reciprocal nature of the arrangement meant it lacked the strong social stigma of receiving charity.

Beito notes that patriotism was a common theme among societies and as result opposition to anarchism was not uncommon. As such he spends regrettably little time discussing connections between mutual aid, the labor movement and the anarchism of the era. One exception, however, is his dealing with the Workmen’s Circle, which was dedicated to proletarian solidarity as well as socialism, and boasted Emma Goldman and Alexander Berkman as members. The group prided itself as the “Red Cross of the Labor movement.”

A considerable portion of the book is dedicated to discussing Mooseheart, a large facility that housed and educated the orphan children whose deceased parents had been members of the Loyal Order of Moose. He notes that the house lacked the regimentation and corporal punishment that was common at the time and gave its residents a great deal of freedom. Residents had numerous extra-curricular activities, positive interactions with surviving family members and the local community, and they generally achieved success after graduation. This is much in keeping with his depictions of hospitals and medical facilities run by fraternal societies as well. He discusses the role of Fraternal hospitals in combating tuberculosis in the United States as well as their role in providing quality care for black patients who were discriminated against in other medical facilities. While he is not uncritical of some of their practices, he recognizes they served their residents and the society members well. These portions of the book illustrate that successful large-scale projects can be created through voluntary reciprocal exchange.

In addition to running medical facilities, the mutual aid societies provided their members with cheap doctors through the arrangement known as lodge practice. Under lodge practice a lodge could hire a doctor who would agree to serve its members on a salary based on the size of the membership. Lodge members would pay a negligibly small fee as part of their membership dues which would go to the doctor, in return he guaranteed their access to his care whenever needed. Doctors were subject to the lodge’s election process, and an emphasis was placed on competence, since the lodge had financial interest in keeping its members healthy and long lived. Furthermore, potential members sought lodges with good medical records. The arrangement largely benefited the working poor, as well as up-and-coming doctors looking to establish themselves.

It also undermined already-established doctors by driving the price of medical care down. This unsurprisingly angered the medical establishment who sought war with lodge practice. State medical associations refused membership to lodge doctors and pressured hospitals to refuse treatment to lodge members. Beito interestingly compares these tactics to those of labor unions. He notes that medical associations also turned to the state to undermine lodge practice by increasing the difficulty of the certification process for doctors, thereby limiting the supply of doctors and increasing the cost of medical care for ordinary people.

With Lodge practice greatly wounded, more laws were put in place which ultimately served to undermine fraternal societies in the US. The included laws which regulating life insurance and putting fraternal societies under state control. Legislation generally favored commercial insurance over fraternal models of reciprocal aid. Seven states passed a law referred to as “The Force Bill” which imposed a price floor for new societies in the name of restricting “unfair competition.” Subsequent more widely adopted laws added more extreme restrictions on rates, assets and valuation on societies. By 1919 laws were passed that forbid payment of endowments or credit to members, required societies to show increased reserves, required doctors examinations for all policies, and solidified restrictions on low rates. Beito focuses largely on the politics surrounding the laws, providing good information for those interested in the ugly side of progressive-era politics. He notes that the societies themselves were not always on the libertarian side, as older societies at times favored laws restricting competition from start-ups.

Beito acknowledges that while regulatory restrictions as well as competition from a tax payer funded welfare state played a central role in the decline of fraternal societies, other factors contributed as well. Cultural changes such as a new emphasis on philanthropy, as opposed to reciprocal aid, made fraternal societies passe. Service organizations such as Kiwanis and Rotary clubs, which focused on successful business men giving back to the community, began filling the need for community interaction that was once filled by Fraternal Lodges. Furthermore, television and radio filled much of the entertainment niche previously occupied by the lodge. The gradual decrease of European immigrants and the rise of the modern welfare state also hurt the fraternal movement. This is not to mention that their emphasis on thrift and moral purity also fell out of fashion as the twentieth century progressed. Despite this, Moose International and other societies still exists and have seen a resurgence during the 15 years prior to the books publication. Beito notes that as of 1996 there were 10.7 million fraternal insurance certificates in force.

Beito’s work is an excellent introduction to the topic of fraternal societies in the United States. It is an easy read at 320 pages including notes. Beito provides detailed accounts for many aspects of his topic, thus some portions of the book will interest a given reader more than others. Overall, it provides a good illustration of ways in which ordinary people can aid and support each other without the intervention of the state. Tragically, it also shows that state intervention, which almost always happens at the behest of entrenched interests, can do a great deal of harm to people trying to take care of each other.

Translations for this article:

Markets Not Capitalism
Organization Theory
Conscience of an Anarchist