Most of my socialist leaning friends would be at a loss to tell me how to poor were cared for before the growth of our massive welfare state. Perhaps they assume that before Medic Aid in 1965, people were stepping over corpses on their way to work. Most of my non-socialist friends also do not know.
The following are excerpts from an important essay about the role Fraternal Societies used to play before government killed them off.
Thoough I’m not certain it was written as an academic study, I makes me think of how few academics pursue things that actually matter. Most humanities Phd’s I know are the first to admit their subject is bullshit. They compare lengths of dresses, catalog break-dance movies, and deciding how the trauma of immigration is evident in some obscure writer’s description of nature. What a waste…
Mutual aid was one of the cornerstones of social welfare in the United States until the early 20th century. The fraternal society was a leading example. The statistical record of fraternalism was impressive. A conservative estimate is that one-third of adult American males belonged to lodges in 1910. A fraternal analogue existed for virtually every major service of the modern welfare state including orphanages, hospitals, job exchanges, homes for the elderly, and scholarship programs.
But societies also gave benefits that were much less quantifiable. By joining a lodge, an initiate adopted, at least implicitly, a set of survival values.
Societies dedicated themselves to the advancement of mutualism, self-reliance, business training, thrift, leadership skills, self-government, self-control, and good moral character. These values, which can fit under the rubric of social capital, reflected a kind of fraternal consensus that cut across such seemingly intractable divisions as race, sex, and income.
The record of five societies that thrived at or near the turn of the century illustrates the many variants of this system. Each had a distinct membership base. Two of the societies, the Independent Order of Saint Luke and the United Order of True Reformers, were all-black. Both had been founded by ex-slaves after the Civil War and specialized initially in sickness and burial insurance. The other societies had entirely white memberships. The Loyal Order of Moose was an exclusively male society that emphasized sickness and burial benefits. It became best known during the 20th century for its orphanage, Mooseheart, near Aurora, Illinois. The Security Benefit Association (originally the Knights and Ladies of Security) followed in a similar tradition but broke from the mainstream by allowing men and women to join on equal terms. During the 1910s and the 1920s, the Knights and Ladies of Security established a hospital, a home for the elderly, and an orphanage all in a single location near Topeka. The Ladies of the Maccabees was an all-white, all-female society. It provided such health benefits as surgical care. It is worth noting that the women who belonged to these societies, regarded themselves as members of fraternal rather than sororal societies. For them, fraternity, much like liberty and equality, was the common heritage of both men and women. To this end, an official of the Ladies of the Maccabees asserted that “Fraternity in these modern days has been wrested from its original significance and has come to mean a sisterhood, as well as a brotherhood, in the human family.”
. . . .
During the 1930s, officials of the homes for the elderly and orphans of the SBA cited Social Security and other welfare programs as justification not only for rejecting applicants but for closing down entirely. The Security Benefit Association, for instance, closed its orphanage because of “a lack of demand or need for that form of benevolence attributable to public funds now available for the support of dependent children.” It used the same justification to discontinue its home for the elderly several years later. While Mooseheart remained open and even increased capacity, applications fell off rapidly in the decades after the Depression because of a rise in social-welfare alternatives such as Aid to Families with Dependent Children.
Mutual aid was a creature of necessity. Once this necessity ended, so too did the primary reason for the existence of fraternalism. Without a return to this necessity any revival of mutual aid will remain limited. Moreover, fraternal membership, although still heavily working class, no longer includes the very poor who most need social welfare services.
Nevertheless, a reinvigoration of mutual aid (though not necessarily through fraternal societies) is not out of the question in the 21st century. One reform that would encourage such a trend is to repeal or revise laws that subsidize third-party insurance. Perhaps the leading example is legislation enacted during World War II, which exempts employer-provided fringe benefits, such as health insurance, from income tax. According to John C. Goodman, the annual value of this exemption adds up to an enormous $130 billion. For a typical autoworker, for example, it is over $1,200 per year. Federal tax policy has not only tied workers to their jobs but has undermined their incentives to purchase health insurance through non-governmental organizations such as fraternal societies. It has also created a perverse system where workers lose all their benefits when they change jobs or become unemployed. By contrast, if individuals had the same tax incentives to purchase insurance from associations, such as lodges, as they do now from their employer they could still retain full coverage even if they changed jobs.
The shift from mutual aid and self-help to the welfare state was not just a simple bookkeeping transfer of service provisions from one set of institutions to another. As many of the leaders of fraternal societies had feared, much was lost in an exchange that transcended monetary calculations. The old relationships of voluntary reciprocity and autonomy have slowly given way to paternalistic dependency. Instead of mutual aid, the dominant social-welfare arrangements of Americans have increasingly become characterized by impersonal bureaucracies controlled by outsiders. 
(Read more from heritage.org)
About the author: David T. Beito is assistant professor of history at the University of Alabama in Tuscaloosa and is the author of From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890-1967 (University of North Carolina Press).