INTRODUCTION

Bernard Harris

During the last two decades, there has been growing interest in the history of mutualism. This interest has been fuelled, at least in part, by increasing scepticism over the capacity of the state to meet welfare needs, coupled with mounting concern over the seemingly inexorable rise in the costs associated with health care and pension provision. In Britain, this scepticism has been visible on both sides of the political spectrum. In 2010, the self-styled Red Tory, Philip Blond, claimed that the growth of the welfare state had nationalised a previously mutual society and reframed it according to an individualised culture of universal entitlement.1 His Blue Labour counterpart, Maurice Glasman, has also complained that the foundation of the classic welfare state after 1945 caused universal benefit to replace mutual responsibility as the basic principle of welfare.2 The chapters in this book are designed to help place some of this ferment of contemporary ideas in a more historical context. Almost all the chapters originated as papers which were either presented to a specially organized conference at the University of Southampton in April 2009 on Insurance, Sickness and Old Age: Past Experiences and Future Prospects,3 or during the World Economic History Congress later in the same year. We should like to thank the UK Economic and Social Research Council for supporting the first of these events, and the organizers of the World Economic History Congress for assistance with the second. In the introduction to his edited collection of essays on Social Security Mutualism, Marcel van der Linden defined mutual benefit societies as associations formed voluntarily for the purpose of providing their members with financial assistance in case of need.4 However, like all definitions, this has its limitations. In the first place, although the majority of such associations were indeed voluntary some, such as the German Knappschaften, were not. These are discussed in more detail in Chapter 2 below. Second, although some organizations catered for a wide variety of different financial needs, the majority were particularly concerned with the provision of insurance against sickness, old age and death, and many also provided direct assistance in the form of health care. Third, although the societies primary functions were economic, many of them also provided

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access to social and recreational activities. These not only helped to create the bonds of trust which underpinned the societies economic functions, but also provided members with vital opportunities for fellowship and conviviality.5 The chapters in this book examine a number of different aspects of the history of mutual aid in a variety of occupational and national contexts. Although two chapters are particularly concerned with the operation of specialist funds for the support of miners, others deal with more general benefit societies, and whereas some are particularly concerned with the problem of income replacement, others focus more directly on the costs of health care. The chapters also cover a wide geographical range, with three chapters on Britain, two on Spain, and one each on Belgium, Germany, Italy, the Netherlands and the United States. However, almost all the chapters share a common concern, either directly or indirectly, with the relationship between mutual aid and the welfare state. Historians who have examined this relationship in the past have often tended to tall into one of two camps. Some historians have argued that the limitations and deficiencies of mutual-aid organizations paved the way for the introduction of welfare states6 whereas others argue that the growth of welfare states was at least partly responsible for the death or decline of mutualism.7 These positions are not, of course, incompatible and both are reflected in a number of the chapters which follow. One of the central problems for the history of mutualism has been the need to explain why mutual-aid associations developed to a much greater extent in some areas than others.8 In Chapter 1, John Benson explores this conundrum in relation to the growth of specialist funds for the provision of accident insurance in British coalfields during the nineteenth century. In Durham and Northumberland, the Miners Permanent Relief Fund was established in 1862, and by the end of the 1880s it had recruited 90 per cent of eligible workers. In North Staffordshire, a Coal and Ironworkers Permanent Relief Society was founded in 1869, but only one worker in ten belonged to the scheme in 1889/90. Benson argues that miners in the two areas had similar opportunities to join the two funds, faced similar occupational risks and enjoyed similar levels of support from other friendly societies, charities and the poor law. He therefore concludes that the real explanations for differences in rates of growth need to be sought in the culture of the mining communities themselves and in their relationship to their employers. In Durham and Northumberland, miners lived in tightly-knit communities which forged a strong sense of occupational solidarity and enjoyed good relationships with the mine-owners. In North Staffordshire, miners were part of the ordinary working class and received much less support from their employers. In Chapter 2, Timothy Guinnane, Tobias Jopp and Jochen Streb approach the problem of miners relief from a rather different angle. Their chapter focuses on the operation of miners general relief funds, or Knappschaften, in Germany between 1854 and 1923. As the authors point out, the Knappschaften were

Introduction

designed to compensate members for loss of earnings associated with both short-term sickness and with longer periods of chronic illness and invalidity, but they also suggest that these problems did not necessarily lend themselves to the same organizational solutions. The Knappschaften needed to be relatively small in order to be able to police short-term claims effectively but they also needed to be large enough to accumulate the resources needed to fund long-term claims. This problem was also familiar to the actuaries who studied nineteenth-century British friendly societies. They argued that the societies needed to grow in order to minimize actuarial risk, but they worried that increases in the size of friendly societies were tending to increase the duration of sickness claims (see Chapter 5). This means that Guinnane et al.s chapter is interesting on a number of different levels. Their initial aim is to examine the extent to which increases in the size of Knappschaften either led to an increase in moral hazard (as reflected in the tendency to make excessive sickness claims) or actuarial efficiency. Their second aim is to estimate the optimal size of Knappschaften in relation to each of these issues; and their third aim is to estimate the proportion of Knappschaften whose size was sub-optimal. Their overall conclusion is that approximately 50 per cent of societies were too small to deal adequately with the actuarial risks they faced. They argue that this means that the authorities were right to encourage individual Knappschaften to form larger organizations, but there was also much less justification at least in these terms for the decision to merge all the surviving funds into a single Reichsknappschaft at the end of their period. The next two chapters provide more general accounts of the history of mutual aid organizations in Italy and Spain. In Chapter 3, Paolo Tedeschi explores the development of societs di mutuo soccorso, or SMS, in Eastern Lombardy between 1860 and 1914. Although SMS were found in more rural areas, Tedeschi argues that their growth was directly related to the process of industrialization in the region during the second half of the nineteenth century. They differed from the Knappschaften in that membership was voluntary and they differed from the majority of British friendly societies in that they were often either overtly confessional, in the case of the Catholic societies, or political, in the case of the socialist societies. They also provided a wider range of benefits than the majority of friendly societies, including unemployment benefits, and were prepared to engage directly in campaigns for the improvement of wages and working conditions. Although they developed in response to the lack of state or other forms of welfare support, they also acted as a bulwark against state interference, and this was why their position became increasingly precarious following the Fascist seizure of power in 1922.9 Although research on friendly societies in Spain has generated an enormous flow of publications in recent years,10 Margarita Vilar Rodrguez and Jernia Pons Pons argue that the value of these publications has been limited by the fact

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that they often have a highly localized focus. Moreover, they have also tended to concentrate on the role played by the friendly societies in the development of trade unions and as vehicles for the promotion of sociability. Chapter 4 seeks to counter these limitations by examining the development of friendly societies in the country as a whole and by focusing much more closely on what might be regarded as their core insurance-based functions, with particular reference to the provision of health care. One of the most intriguing questions raised by this history is the role played by the friendly societies in the chronology of state welfare provision. As the authors point out, the state intervened in a number of areas associated with friendly societies, including the provision of insurance against accidents, unemployment, old age and maternity, long before it intervened in the area of health care. It has been argued that this reflected the particular strength of the health care provided by the friendly societies but Vilar and Pons question whether coverage was either as widespread or as comprehensive as this statement might imply. They argue that the state was slow to intervene in the provision of health care because of a lack of understanding between the societies and the state, but they also suggest that this enabled the Franco regime to bypass the societies altogether when a statutory scheme was finally introduced in 1942. This decision had disastrous consequences for the societies, which in the majority of cases either collapsed or degenerated into purely recreational associations.11 In Chapter 5, Bernard Harris, Martin Gorsky, Aravinda Guntupalli and Andrew Hinde explore two different aspects of the history of British friendly societies. In the first part of the chapter, they re-examine the contemporary debate over the apparent increase in recorded morbidity in the final quarter of the nineteenth century. Although many observers believed that age-specific morbidity rates were increasing, they attributed this to changes in the attitudes and behaviour of society members and in the societies capacity to police their sickness claims, rather than to any objective change in sickness experience. The second part of the chapter focuses on the societies attitudes to the introduction of state pensions and national health insurance. Although many members were suspicious of the growth of state intervention, others were more supportive. The chapter explores the reasons for these attitudes and also examines the relationship between the societies and other interest groups, including both the medical profession and the commercial insurance industry. In Chapter 6, Nicholas Broten also examines the societies attitudes to the introduction of old age pensions. In a famous paper, the American historian Bentley Gilbert argued that the friendly societies failure to recruit a larger number of younger members and the increasing longevity of their older members meant that they were threatened by growing insolvency.12 Broten reassesses this argument with particular reference to one of the largest British friendly socie-

Introduction

ties, the Ancient Order of Foresters. He argues that, even though the society was what George and Herb Emery have called an old mans society,13 its financial situation was nevertheless comparatively healthy. This leads him to conclude that the societies attitudes to old age pensions cannot be explained by institutional weaknesses, and that more attention therefore needs to be paid to broader political concerns. In recent years, historians have shown a great deal of interest in the failure of the United States to develop a comprehensive system of national health insurance.14 This debate has been fuelled by the enormous controversy surrounding Barack Obamas health reform proposals.15 Herb Emery has explored some of the implications of these issues in a series of papers looking at Progressive attempts to introduce statutory health insurance at the end of the First World War.16 Many authors have attributed the failure of these proposals either to the poverty of American workers or the power of vested interests, but Emery argues that the real reason was that compulsory health insurance was unnecessary, because US workers were already sufficiently well-paid to make their own provision. In Chapter 7, Emery uses data from the US Department of Labors survey of The Cost of Living of Industrial Workers in the United States and Europe, 188890 to compare the disposable income of US workers with that of their European counterparts. He argues that the savings rate (defined as the ratio of surplus household expenditure to husbands income) of US workers was significantly higher than that of workers in either Belgium or Germany, and that this might help to explain why there was so much more support for compulsory health insurance in those countries. However, his figures also show that savings rates in Britain, France and Switzerland were at least twice as high as their US values, and this leads him to conclude that more attention might also be paid to the impact of changes in savings rates on the evolution of attitudes to health insurance in these countries between 1890 and 1914. The final three chapters focus much more closely on the history of mutual aid in the twentieth century. In Chapter 8, Pilar Len-Sanz provides a detailed history of one particular mutual aid organization in Spain, the Sociedad Protectora de Obreros La Conciliacin, which was founded in Pamplona in 1902 and remained in existence until 1984. As Leon explains, the society was distinctive because it included representatives of both employers and employees, and provided a labour arbitration service alongside the more traditional activities of providing financial assistance in times of need and access to medical care. In view of its Catholic origins and employer associations, one might have expected La Conciliacin to have cooperated with the introduction of General Francos health insurance scheme in 1942 but it declined to do so. However, even though it survived the introduction of Francos scheme and retained many of its original functions, this did not prevent its eventual decline.

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Almost all the organizations which have been discussed in this book are concerned with the provision of either financial support or medical care or both to workers and their families. However, in Chapter 9, Robert Vonk takes a rather different approach. This chapter is less concerned with traditional types of friendly or mutual benefit society and more with the operation of not-for-profit organizations providing access to health care for both working- and middle-class members. The main aim of the chapter is to explore the relationship between these organizations and the commercial health sector and to show how the interaction between the two has helped to shape contemporary health policy. At the end of the nineteenth century, non-profit sickness funds dominated the Dutch health care market. However, as the cost of health care increased, these organizations faced increasing financial pressure, and this gave commercial organizations an opportunity to reenter the market, albeit on a relatively limited basis. Vonk argues that the commercial sector continued to make relatively little progress after the Second World War, and that although some of this can be explained by the sectors own ineptitude, the main reason was the Dutch populations persistent distaste for the association of profit and health care. He also argues that this distaste has continued to shape the development of health policy in the Netherlands during the twenty-first century, even after the Health Insurance Act appeared to offer an important victory to commercial health care providers in 2006. The final chapter is also concerned with the financing of health care, with particular reference to Belgium. The author, Danile Rigter, shows how mutual organizations laid the foundations of the Belgian health care system and played a key role in the development of statutory health insurance after 1945. She also demonstrates how the current system has been shaped by a complex web of negotiations between mutual organizations, governments and health care professionals, and explores the extent to which the difficulties associated with these negotiations have been compounded by tensions between Belgiums different national communities. She concludes that it is premature to see Belgium as a model for the development of a single, trans-European health care policy when it is still in the grip of its own complex history. Taken together, these chapters offer a series of important and fascinating insights into the evolution of mutual aid organizations and the development of a number of different aspects of contemporary health and welfare policy. In particular, the chapters cast some doubt on the assumption that the societies were necessarily moribund and show how they could provide an important defence of worker independence, especially in those countries which eventually succumbed to Fascist dictatorships. However, the chapters also illustrate some of the limitations of these organizations, both in terms of their ability to meet the needs of their existing members and their capacity to extend the benefits of membership

Introduction

to a wider population. In view of this, it may be dangerously premature to suggest that the mutual organizations of the late-nineteenth and early twentieth centuries offer a realistic model for the reform of welfare services in the twentyfirst century.

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