Wednesday, June 26, 2013

LIFE BEFORE SOCIAL SECURITY

I have had one too many conversations with Christians who want to eliminate America's social service programs.  They claim that (a) they shouldn't be "forced" to support the poor via taxes; and (b) there is "massive fraud" in the system.  Often, they mention someone they "knew" who was either faking an illness or who was deliberately having lots of children out of wedlock so they could collect money from the government.

Obviously, these personal anecdotes cannot be generally applied to the entire poor population, most of whom are elderly or disabled.  In fact, less than 3 percent of those receiving entitlement benefits are able bodied people who are not working.   The old style of "Welfare" no longer exists, except in a very limited sense.  For instance, in New Mexico, it is called "General Assistance" and it pays only $240 per month, but requires that you work for 20 hours per week at some job assigned to the recipient by the city.  Some states limit their general assistance by restricting it to a total of 5 years for the recipients entire lifetime.  Minor children can receive up to $540 a month if their parents are sufficiently low income, but the parents themselves do not receive any assistance over and above the $240 a month recently mentioned.  Recipients live below the poverty line.  They survive in horrible conditions and often go to bed hungry at night.

The solution proposed by some critics of the poor is that all the social welfare programs should be abolished and that charitable giving should be left to the individuals and to the churches.

There are so many gross errors in this way of thinking, that I hardly know where to start, so I have decided to start at the beginning, with the history of life before social security, before social welfare programs were even a glint in the eye of a kind society.


RESIDENCE OF A POOR ROMAN


Prior to the Middle Ages, there was no concept of organized charity.  Various methods were employed to insure one’s own economic security, but nothing was in place to help others.  The ancient Greeks, for instance, used to stockpile olive oil as a form of economic security.  It was a nutritious staple item that lasted a long time and kept its value. 


OIL AMPHORA


Other cultures invested in and wore their fortune on their bodies in the form of jewelry.



ETRUSCAN JEWELRY


Financial insecurity was a fact of life for most people throughout history.  The poor suffered greatly.

Many ancient civilizations practiced some form of “arranged” marriages to ensure the financial security of all the parties.  Extended families were the norm, rather than the nuclear families of parents and children that is the standard of the developed world today.  Until recently, ones elderly parents and/or aunts and uncles lived with you or one of your siblings until their death.  Young women did not live alone, generally speaking, with the possible exception of prostitutes in some cultures.  Family was of paramount importance, and family included a lot of people.



THE ARRANGED MARRIAGE

In Medieval Europe, feudalism was the system people relied upon for a modicum of security.  The Lord of the property was assured of financial security because of the serfs that worked his land, while the serfs themselves were secure only so long as they were healthy enough to perform hard manual labor.  Life was hard, and life expectancy was about age 40.




The agrarian societies began to give way to a more complicated system that included villages and cities.  Family cohesiveness first began to disintegrate as individuals moved away from the land and into cities, looking for employment.

In the middle ages, guilds of merchants or craftsmen were formed, and these guilds provided many benefits to their members, including what we would call price fixing today.  Charitable contributions from these guilds for the benefit of their sick members and their families formed a rudimentary safety net for some situations, but not for extended periods of time.  The assistance was meant as a stop-gap to get members over a difficult patch.  Often, the guild would help pay funeral expenses of its deceased members.  Although the guilds were helpful to the lives of their members, long term illnesses or permanent disabilities were beyond the scope of what they could address.




Sometime around the 17th century, the guilds gave way to what were called “friendly societies,” then, eventually, “fraternal organizations.”  Modern trade unions are the descendants of these organizations.

The concept of life insurance was born in the friendly societies.  The Industrial revolution expanded it considerably.  By the year 1800, one out of every nine Englishmen belonged to a friendly society or fraternal organization.  Again, there were benefits to membership, but the scope was limited.

Some of these organizations were:
The Freemason
The Odd Fellows
Benevolent and Protective Order of Elks
Loyal Order of Moose
Fraternal Order of Eagles


ODD FELLOWS PLAQUE


These organizations persist into modern times.  Many of my close ancestors were Freemasons, and my mother belonged to Eastern Star.  I remember attending a beautiful concert at the Odd Fellows Hall in little Georgetown in the foothills of the Sierras in California about 20 years ago, and, here in New Mexico, I used to live across the street from an Elks Lodge. 

As the people moved off the land and into the cities, families were split up and the feudal system was no more, “poor laws” began to be developed.  The first, in 1601, provided for taxation to provide relief to suffering people.  The distribution was locally and community controlled.  Soon, the poor houses, with all their horrors, were established to house the poor who were accepting relief.  Laws were harsh and punitive.  Think of “Oliver Twist.”




When the pilgrims came to America, they brought with them these harsh and judgmental attitudes toward the poor.  Only those deemed “worthy” of assistance would receive it, and the local town elders would be the ones to decide who was worthy and in what kind and manner the charity would be distributed to them.  Poverty was a grisly, dehumanizing experience.  Some people were deemed unworthy to receive charity and were reduced to begging in the streets.

The provision of charity was made as unpleasant as possible, with the idea that this would discourage dependency.  If you were receiving relief, you could lose all your personal property, the right to vote or move, and you were often made to wear a large “P” on your clothing!


POOR HOUSE IN ILLINOIS


As horrific and demeaning as the system became, it did nothing to ‘discourage’ poverty because the cause of poverty was not and is not laziness.  The English, and then the Colonial Americans, were operating under a false and untested premise, and therefore, their systems failed.  Eventually, the poor houses became too expensive to maintain, even though they were the most miserly of establishments.  Some modern Americans still hold the erroneous belief that people are poor because they are lazy and that a great number of people accepting charity are doing so under false pretenses.  They are just as wrong as the Colonials were.



POOR HOUSE IN ENGLAND


Modern social insurance in America had its birth in the mind of the Revolutionary War figure, Thomas Paine.  His system called for a 10% inheritance tax to create a fund that would pay a one-time stipend to every person at age 21.  The thinking was that this sum would give them a start in life and that, with prudent use and investment, would help keep the hard working person afloat.  Another amount was to be paid to anyone 50 and older, so that poverty would not be the companion of everyone’s old age.


After the Civil War in America, there was a system of Civil War Pensions.  Several of my ancestors received these pensions while they still lived, and their wives received it when they died.  My 5th great grandfather was receiving $11 a month when he died in the early 1920's.  Civil War pension records, in fact, are very valuable in genealogy research, providing a wealth of information about the soldier…but I digress.



In the late 1800’s, pension plans were introduced.  Typically, a certain percentage of each worker’s pay would be withheld and kept in the pension fund, to which the company would also often contribute.  This was a cumbersome and ultimately unsuccessful program, since it did not allow for worker mobility, nor were these pension plans widely available.  Most Americans had nothing on which to rely for their old age needs.

In the economic collapse of the 1840’s, and then the depression of the 1890’s there was widespread unemployment.  People began to realize that even those who were able and willing to work could be struck low by the vagaries of the economy and that something needed to be done to protect them.  Once again, it was proven that poverty is not caused by laziness.  Concern for the welfare of the poor began to grow.  None of the relief systems to date had worked.


1890'S SOUP LINE


In the Great Depression of the 1930’s (which was our third major depression here in America), poverty among the elderly became the worst problem.  “[I]n 1934, over half of the elderly in America lacked sufficient income to be self-supporting.” (www.ssa.gov)  Many different types of pension legislation were passed, but none of the resulting programs was successful in alleviating the suffering of even 3% of the poor population.

The Industrial Revolution, the urbanization of America, the disappearance of the extended family, and a marked increase in life expectancy destabilized the economic security of the majority of the population.  By the year 1920, more people were living in cities than on farms.  A tipping point had been reached.

During the great depression of the 1930’s, there were two million hobos riding the rails and wandering the land.  Most elderly people lived in a dependent situation of some type.  Some of the letters written to the president during that era are heart breaking.  For a sample of a typical heart rending letter, see:

http://www.socialsecurity.gov/history/lettertoFDR.html

Photo by Dorothea Lange for the Resettlement
Administration-1936.


Many social insurance plans were tried and abandoned during the depression.  Huey Long, a radical populist, wanted the government to confiscate the wealth of the nation’s rich.  Then came the “Townsend Plan,” courtesy of Francis E. Townsend, who devised this Old Age Revolving Pension Plan.  His plan called for a 2% national sales tax to fund a pension for everyone age 60 and older.  The author Upton Sinclair had a pension plan scheme for California.  California was rife with plans like this, such as the “ham and eggs movement” and the “Bigelow Plan.”  None were successful in adequately supporting everyone who needed aid.




When the Social Security Act passed in 1935, most of these schemes disappeared, with the exception of the Townsend plan, which limped along until the 1950 amendments to the Social Security plan made the benefits more livable.

Social Security is the most successful, most popular plan ever invented by man, yet many Americans resent it and the other social programs because they are being ‘forced’ to contribute to it!  They don’t mind being forced to pay for police, fire, schools and the like, but being taxed to help the poor is somehow a horrible thing.  Theirs is a selfish and materialistic world view.  Police, firemen and schools help the taxpayer, while giving to the poor does not, except in a broader spiritual sense.

They ignore the fact that, prior to our present social welfare programs, individual charity and church-driven programs did very little toward addressing the real problems of the poor and, in most cases, the poor were treated with contempt.

Given that our modern-day Politico-Christians are witheringly critical of the poor, it is further unlikely that a miraculous generosity of spirit is going to spring forth in their hearts as soon as the taxes for the social welfare programs are removed!

In our current financial crisis, eliminating taxes that fund the social welfare programs would result in the same dire conditions that caused us to institute those programs to begin with.  Get ready for bread lines, people!


DEPRESSION ERA BREAD LINE


Republi-Catholics will often talk about the principle of subsidiarity, first developed by Pope Pius XI, in which the government of any function should be accomplished in the most local arena as will accomplish that function in the best way.  It is NOT a command that everything MUST be administered locally, but only that it should be if it can be done just as effectively at the local level as the national.  History has proven that leaving the administration of poverty relief to the local level does not work and never has.

Furthermore, Pope Pius XI allowed for this in his Encyclical on the Reconstruction of the Social Order, saying that the rulers of the state should give chief consideration to the weak and the poor:




"The function of the rulers of the State,
moreover, is to watch over the community
and its parts; but in protecting private indi-
viduals in their rights, chief consideration
ought to be given to the weak and the poor.
"For the nation, as it were, of the rich is guarded
by its own defenses and is in less need of
governmental protection, whereas the suffering
multitude, without the means to protect itself
relies especially on the protection of the State.
Wherefore, since wageworkers are numbered
among the great mass of the needy, the State
must include them under its special care and
foresight."[20] Quadragesimo Anno

Encyclical on Reconstruction of the Social Order
His Holiness Pope Pius XI
May 15, 1931



The next installment in this series will explore the topic of abuse in the social welfare programs and whether it is as widespread as some people believe.  (Spoiler alert - It's not.)

Reading list for further study of the History of Social Programs:

Classic Sources:
Armstrong, Barbara, "Insuring the Essentials," Macmillan Co., 1932. A scholarly review of the state of social insurance efforts as they stood in the early 1930s, by one of the principal designers of Social Security's old age insurance program.

Epstein, Abraham, "Insecurity: A Challenge to America," Third Revised Edition, Harrison Smith and Robert Haas, 1936.
A classic study of social insurance, with one of the first published critiques of the recently passed Social Security Act by a critic who believed the Act did not go far enough in addressing the need for social insurance programs.

Rubinow, I. M., "Social Insurance: With Special Reference to American Conditions," Henry Holt, 1913.

Rubinow, I. M., "The Quest for Security," Henry Holt, 1934.
Rubinow's two books were the most influential on early thinking regarding social insurance. President Roosevelt, in particular, was an admirer of Rubinow's work.

Seager, Henry, "
Social Insurance: A Program of Social Reform," Macmillan Co., 1910. Believed to be the first American work on social insurance.

Academic Treatments: 

Chambers, Clarke, "Seedtime of Reform: American Social Service and Social Action 1918-1933," University of Minnesota Press, 1963. In-depth discussion of events in the period leading up to the creation of Social Security.

Katz, Michael B., "In The Shadow of the Poorhouse: A Social History of Welfare in America," Tenth Anniversary Edition, Basic Books, 1996.
An outline of the development of American social policy from the earliest days.

Lubove, Roy, "The Struggles for Social Security: 1929-1935," Harvard University Press, 1968.

Mitchell, Daniel J.B.,
"Pensions Politics and the Elderly: Historic Social Movements and Their Lessons for Our Aging Society," M.E. Sharpe, 2000. A discussion of the Townsend Plan, the Ham and Eggs movement, and other alternative pension movements in California.

Skocpol, Theda, "Protecting Soldiers and Mothers," Harvard University Press (Belknap), 1992.
Source for information on Civil War pensions, Mothers pensions, and early workmen's compensation efforts.


Schlesinger, Jr., Arthur M., three volumes: "The Crisis of the Old Order," "The Politics of Upheaval" and "The Coming of the New Deal." Houghton-Mifflin, The American Heritage Library, 1988. This is the classic history of this period.

Weaver, Carolyn, "The Crisis in Social Security: Economic and Political Origins," Duke Press Policy Studies, 1982. Contains an account of historical developments from prior to 1900 through the Social Security amendments of the early 1970s.


Popular Accounts:

Brinkley, Alan, "Voices of Protest: Huey Long, Father Coughlin and The Great Depression," Vintage Press, 1983.
A good overview of Long and Coughlin.

Kennedy, David M., "Freedom From Fear: The American People in Depression and War, 1929-1945." Oxford University Press, 1999.
The early chapters in this book contain a good summary of the period right before the Depression through the passage of Social Security.

McElvaine, Robert S., "The Depression and New Deal: A History in Documents." Oxford University Press, 2000. This books has lots of photos and short essays and is easy to read.

Mitchell, Greg, "The Campaign of the Century," Random House, 1992. This is the most comprehensive account of Upton Sinclair's EPIC Plan.

Watkins, T. H., "The Great Depression: America in the 1930s," Back Bay Books, 1993. Lots of photos and short essays.


Watkins, T. H., "The Hungry Years: A Narrative History of the Great Depression in America," Henry Holt, 1999.
A more in-depth account of this period.




Copyright (c) 2013, Silver Parnell
All rights reserved.

1 comment:

  1. You really did your homework here. God bless you.

    ReplyDelete