“Fraternal organizations and friendly societies provided health insurance for hundreds of thousands of Americans and Britons before the surge of the welfare state. Their rapid disappearance underscores the fragility of voluntary institutions when challenged by government power.”
“At their peak, fraternal organizations and friendly societies provided health insurance for millions of Americans and Britons, mostly lower-middle-class tradesmen and skilled artisans. By 1886, the Independent Order of Oddfellows and the Ancient Order of Foresters each claimed more than 600,000 members worldwide. In the 1920s, roughly every third adult male in the United States belonged to a fraternal organization.
These groups were characterized by independent lodges, democratic governance, a ritual, and mutual aid for members (and often their families). Although camaderie was a leading incentive to join, disability insurance was also an attractive benefit.
Despite their popularity, however, such groups had all but vanished within two decades after being pushed aside by the surge of the welfare state. What accounts for their rise and fall?
The answer, according to Pavel Chalupnicek and Lukas Dvorak (both from the University of Prague), lies in the concept of social capital, and individual’s ability to use his or her network of friends and acquaintances for economic gain. Social capital, they explain, enables many people to function better in society, but its value depreciates rapidly in the presence of certain kinds of government activities.” (Read more from independent.org)