Welfare reform through Friendly Societies

Devil's Knife blogger and LPUK leader Chris Mounsey has produced an excellent article on the problems of our current welfare state, and how a resurrection of Friendly Societies can provide a solution.

He begins with a comparison of libertarian and socialist principles:

The first thing to be pointed out is that libertarianism is not about leaving people in the street to die. Libertarianism is, first and foremost, a philosophy based on personal liberty—the central crux of which is the non-aggression axiom.

This axiom is very simple — you shall not initiate force or fraud against another person's life, liberty or property.

As such, a libertarian government would not, for instance, stop people setting up a socialist enclave if they so desired—as long as every member of the socialist group was there voluntarily and not co-opted against their will.

(This, incidentally, is a fundamental difference between a libertarian and a socialist polity: you can live as a socialist under a libertarian government; you cannot live as a libertarian under a socialist government.)

Libertarians think that you ought to help your fellow man; socialists think you ought to be forced to help your fellow man. Libertarians favour direct human compassion and voluntary community structures. For socialists, government intervention is essential — they believe that there is no problem so great that it can't be solved by the state, if only the people would trust in it, and hand over the necessary resources.

As DK explains,

Generally speaking, libertarians recognise collectivism, when voluntary, as being A Good Thing; libertarians welcome people working together, as they can often achieve things that individuals cannot. However—and this is worth repeating ad nauseam—the stress must be on the voluntary aspect of this collectivism.
...
This is the first hurdle at which the state's welfare provision falls down—it is compulsory, not voluntary.

As I have noted previously, compulsion undermines compassion. Welfare recipients develop a sense of entitlement, which is rightly resented by those who are forced to foot the bill.

DK identifies this corrosive effect of the welfare state:

when we see a homeless person in the street, we do not think "there is a fellow human in pain: how can I help?"; instead, we think "why hasn't the government sorted that out yet?"

A social safety net provides many benefits, but after decades of state provision, private charity is no longer up to the task. DK believes the voluntary collectivism of Friendly Societies can provide the answer:

Friendly Societies were voluntary co-operatives, usually based locally, which at one point covered about half of the country—but they were growing swiftly. Their potential was, alas, effectively killed by the National Insurance Act of 1911 and the onset of state welfare provision—for the compulsory contributions, obviously, crowded out the voluntary contributions to the Friendly Societies.

Being local and personal, they are better placed to address genuine needs and avoid fraud:

Most societies allowed their members to choose their level of pay-in; how much was paid out was determined by numerous factors, but criteria usually included how much you had paid in, how long you had been a member and your actual need.

This last is important, for our current Welfare State is not based on need—it is based on an inhuman, box-ticking system. Learn how to play the system and you can get more than a living wage; but this system is not based on need.
...
Friendly Societies address the issue of self-reliance too; you are responsible for ensuring that you pay in and, should you fall on hard times, your pay-out is related to what you paid in.

Friendly Societies also address the issue of fraud. People are far less likely to steal from those whom they know personally; further, knowing you personally, those people will also be able to check whether you are, in fact, stealing from them. And this applies, of course, not only to benefit claimants but also to those running the Society.

DK goes on to explain how private charity can meet the needs of those who cannot afford membership in a Friendly Society.

With such obvious advantages to a local, voluntary safety net, we have to question our blinkered adherence to statist welfare provision.

The welfare state has survived for several decades, despite vast and growing costs — both financial and social — to the public at large. Its success as a meme is out of proportion to its beneficial effects on those it purports to help. We must ask ourselves, Cui Bono?