Mutual Aid Associations

August 2014 POLICY INSIGHTS Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble

By Greg Scandlen*

THE COOPERATIVE SPIRIT Key Points:

Democratic-Capitalist societies • The collapse of governmental are often characterized as lands of promises will spawn new forms of “rugged individualism” – each person virtuous cooperation. responsible only for himself, boldly • Capitalism is the most coopera- standing against the rest of the tive, community-oriented economic system ever invented, but world, come what may. Such a spirit capitalism and self-governance is romanticized in the image of the must be leavened with virtue. lonesome cowboy or in William Ernest • One virtue is a willingness to help Henley’s short poem “Invictus” – one another through hard times.

• First in Great Britain and then in It matters not how strait the gate, the U.S., ordinary working people How charged with punishments banded together to provide a the scroll, wide range of mutual assistance, I am the master of my fate: which included life insurance, medical care, and sick pay. I am the captain of my soul. 1 • Over time these self-help organizations were displaced first by com- In fact, nothing could be further from mercial organizations and then by the truth about capitalism. While we government programs. might admire the heroism of people • But with governments unable to who overcome great odds, that is not deliver all they promise, self-help remotely how democratic capitalist communities are emerging. societies operate. • An early example are Health Shar- ing Ministries which, while rudimen- In his landmark book, “The Spirit tary today, will likely blossom with of Democratic Capitalism,” Michael the help of social media. Novak explains that such a system is in fact the most cooperative economic/ © 2014 CCHF 161 St. Anthony Ave, Ste 923 political arrangement ever created. It St. Paul, MN 55103 www.cchfreedom.org Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 2

begins with the family unit and grows to be worth nothing. include commercial partners, suppliers, and customers. It includes the entire Not one of these other actors is community. He writes – compelled to cooperate with the butchers, brewers, or bakers. They do “It is not The very structure of democratic so only because such cooperation is in from the capitalism – even its impersonal their own interest. Cooperation is hard- benevolence economic system – is aimed at wired into every aspect of political and of the community… the community of free economic life. butcher, the persons in voluntary association. 2 brewer, or This remains true today. Both Romney the baker, Novak cites the founder of the concept of and Obama were right during the 2012 that we capitalism – election when one said, “I built that,” and expect our the other replied, “you didn’t build that dinner, but In the “Theory of Moral Sentiments,” on your own.” Even the most successful from their (Adam) Smith points out that every and largest enterprises begin with one regard to their own self is both individual and social, person – just one – having an idea. But interest.” to take it beyond just being a swell idea, interests. As to which represents the that person must persuade others of higherand has virtue, both selfish it is absolutely and benevolent clear to him ‘that to feel much for others, and then to investors, then to accountants, little for ourselves, that to restrain our attorneys,the merit of managers, the idea – and first marketers, to partners, then

affections, constitutes the perfection All of these people have to agree with the ofselfish, human and nature….’ indulge 3our benevolent initiatorto employees, that the and idea finally has tomerit customers. and is worth trying out. If they don’t agree, the In order to exercise these higher virtues, idea will never come to fruition.

his own needs are taken care of. But It takes not only the idea for a new eventhe individual here the individualmust first ensuremust engage that product or service, but the ability to in cooperative relations with others. explain the idea in a persuasive way. Smith’s famous dictum – “It is not from We all know people who are full of the benevolence of the butcher, the fascinating ideas, but never actually make brewer, or the baker, that we expect our them happen. dinner, but from their regard to their own interest” – makes it clear that the The Importance of Fair Play butchers, brewers, and bakers are not sole operators. They need others to Novak has another important observation supply the wheat, the sugar, and the sides about all this – that it was the Anglo- of beef. They are not making their own Saxon culture that nurtured this ovens, vats or knives. They must have cooperative approach to economics. customers or their products will spoil and Other cultures were more content

© 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 3 with “traditional societies” which So, we have a society in which individuals were dominated by military leaders, are allowed to innovate and prosper aristocracies, or religious orders. These from their own initiative, but only societies did not encourage individual within the bounds of “fair play.” Fair initiative or voluntary cooperation. Novak play is a bundle of virtues which writes – David Green summarizes in his 1993 Virtues that book, “Reinventing Civil Society: The make a free Anglo-Saxon culture appears in Rediscovery of Welfare Without Politics”– society work this respect to be particularly include good misunderstood among other cultures We only have to look at our own character, language to discover the rich honesty, speak openly of the importance of variety of virtues that make a free duty, honour, theof the individual, world. Its but leading in practice figures Anglo- society work and which describe service, self- Saxon customs and traditions nourish the obligations we all owe to one discipline, remarkable social orderliness and another. Good character, honesty, duty, respect, trust, justice, a splendid cooperative spirit. One civility, thrift, sees it in British common law and in discipline, toleration, respect, justice, self-sacrifice, honour, service, self- patriotism that peculiarly British love of liberty self-improvement, trust, civility, and more. combined with respect for the law. 4 fortitude, courage, integrity, diligence, patriotism, consideration for others, Again he cites Adam Smith – thrift and reverence are just a few. 6

Finally Smith insists on fair play. The elevation of these virtues, and the Individualism must be held in check discouragement of their opposites, is by moral-cultural ideals – ‘In the necessary for a well-functioning society. race for wealth, and honours, and Yet today in the United States, little preferments, he may run as hard as thought is given to the need for a virtuous he can, and strain every nerve and people. every muscle, in order to outstrip all his competitors. But if he should The Left sees mankind largely in political jostle or throw down any of them, terms. They want universal suffrage and the indulgence of the spectators is a robust government to rein in economic entirely at an end. It is a violation players and assure that basic needs of fair play, which they cannot are met for all. The Right focuses on admit of.’ 5 economic freedom. They want people to be secure in their possessions and free to Does this sound quaint today? It engage in commerce with a minimum of shouldn’t. From the 19th Century “robber restrictions. barons” to recent actions against Microsoft and Enron, the “spectators” But Green and Novak see an indispensible (society) often step in to blow the whistle role for a third leg of society – the moral/ when companies are not playing fair. cultural sector. In this they are very close

to the American founders who believed John Adams – “Our Constitution was that virtue was a necessary precondition made only for a moral and religious for liberty. Liberty by itself could easily people. It is wholly inadequate to the lead to hedonism. The Washington, government of any other.” People will Jefferson & Madison Institute of sometimes Charlottesville, Virginia recently compiled Cooperation in a Free Society 7 join together a few citations of this principle: to take care What does this mean in practice? There of their George Washington – “Virtue or are times when neither the political mutual morality is a necessary spring of nor the economic sectors are capable of needs. But popular government,” and “Human providing for the needs of the people. to do this rights can only be assured among a Such times are not rare. In fact, for most requires virtuous people.” of the world, that is the normal state of “social affairs. Governments might be corrupt or orderliness Benjamin Franklin – “Only a virtuous inept, markets might be poorly developed and a people are capable of freedom.” or lack stability. Entrepreneurs might be splendid few. What are people to do? Wait around cooperative James Madison – “To suppose that any for conditions to improve? spirit”. form of government will secure liberty or happiness without any virtue in the No, people will sometimes join together people, is a chimerical idea.” to take care of their mutual needs. But to do this requires the “social orderliness Thomas Jefferson – “No government and a splendid cooperative spirit” Novak can continue good but under the describes. control of the people; and … their minds are to be informed by education what is right and what wrong; to be must trust one another. They must have encouraged in habits of virtue and to theTo cooperate virtues Green for mutual discusses benefit, – “Good people be deterred from those of vice … These are the inculcations necessary to honour, service, self-discipline, toleration, render the people a sure basis for the respect,character, justice, honesty, self-improvement, duty, self-sacrifice, trust, structure and order of government.” civility, fortitude, courage, integrity, diligence, patriotism, consideration for Samuel Adams – “Neither the wisest others, thrift and reverence.” constitution nor the wisest laws will secure the liberty and happiness of a At least these are the conditions required people whose manners are universally by a free people. Similar activities might corrupt. He therefore is the truest come about through the direction of a friend of the liberty of his country who strong man, a tribal leader, or a gangster tries most to promote its virtue.” boss – “You will cooperate or I will kill you.” That might work for a while, until the current boss is usurped by another, or

© 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 5 until people’s resentment builds and the Yet they did far more than simply provide boss is overthrown. Then there is chaos until a new boss emerges. elaborate, sometimes very large, self- governingbenefits to organizations. their members. They They instructed were Green and Novak are well aware of their members in the sort of virtues The members totalitarian societies. They understand cited above, including cooperation, duty, of friendly that this is the traditional way to organize societies an economy – have a boss at the top to justice, and thrift. They also taught their self-sacrifice, mutual respect, civility, were owners, tell everyone else what to do. This is the often poorly educated manual laborer investors, default system for humanity. It isn’t even members how to chair meetings, write and manag- old-fashioned. There is plenty of it going minutes, conduct fair discussions, ers of an on today, even underneath a facade of balance books, make presentations, and enterprise. elections and parliaments. perform all the other tasks required by a They and parliament or a large organization. These their fami- The Anglo-Saxon approach to liberty were men who had little power or respect lies received tempered with virtue is all the more on their jobs, but as lodge members they benefits they remarkable, then. It is a counter-intuitive had the opportunity to be leaders and had paid way to order human affairs. It has existed take responsibility for the welfare of for and for only a few centuries of human history, others. saved for. and there is constant pressure to lay it aside and return to the default system. This sense of personal empowerment and It takes constant nurturing, and ongoing responsibility were essential. These men education in what is virtuous behavior. were not passive recipients of charity or We cannot assume that such skills are government largesse. They were owners, instinctual or inherited. investors, and managers of an enterprise.

they had paid for and saved for. THE FRIENDLY SOCIETIES IN They and their families received benefits GREAT BRITAIN Green writes –

There arose in the British Isles a During the nineteenth century and mechanism to accomplish these goals until early (in the twentieth) century – the “friendly societies.” These were most families took pride in being self mutual aid organizations, organized by supporting but wages were such that, workmen, not for charitable purposes, if the breadwinner fell ill or died, hardship was the invariable result. their members. Green writes, “In Britain The philosophy forged by this harsh thebut friendlyto cooperatively societies secure were the benefits most for reality was mutual aid. By the early important providers of social welfare years of (the twentieth) century during the nineteenth and early twentieth the friendly societies had a long centuries.” 8 record of functioning as social and benevolent clubs as well as offering

creed in religion or code in politics, breadwinner was unable to bring we permit neither wrangling nor homebenefits: a wage such due as sick to illness, pay when accident the dissension to mar our harmony or or old age; medical care for both interrupt our proceedings. the member and his family; a death Benefits were In your domestic relationships extensive, supportgrant sufficient for widows to provide and orphans a decent of affectionate and trustful; if a father, including funeral; and financial and practical we look to find you, if a husband, sick pay, deceased members. Medical services regardful of the moral and material medical were usually provided by the lodge or well-being of your children and care, funeral branch doctor who was appointed by dependents; as a son, dutiful and expenses, a vote of the members, but most large exemplary, and as a friend, steadfast financial towns also had a medical institute, and true. 10 support for offering the services now provided widows and by health centres. The societies also The Grand United Order of Oddfellows orphans, and provided a network of support to had a similar charge to new members – even enable members to travel in search of relocation work. 9 It is desired that you should make assistance to the event of your Initiation a time find work. for strict self-examination; and if you sick pay, medical care, funeral expenses, These benefits were extensive, including to amend, I solemnly charge you to set orphans, and even relocation assistance aboutshould that find duty anything without in your delay, past — letlife financial support for widows and no immoral practice, idle action, or low and vulgar pursuit, be retained by societyto find work. members But importantly,would visit the it wasn’t you. 11 sickjust financialat home orsupport. in the hospital,The friendly they If this sounds like a 12-Step Program, would intervene when a member was it should. Like Alcoholics Anonymous, misbehaving.would help each Green other quotes find work,the purposes they these societies were as much focused on given to new members by the Ancient self-improvement as providing mutual Order of Foresters – principle of virtuous behavior among We are united together not only for theirbenefits. members. They were Who reinforcing does that today, the the wise purpose of making provision other than perhaps the church? But against those misfortunes which befall these organizations were strictly secular. all men, and of assisting those who While the churches focused on living require our aid, but for the moderate out faith on earth and salvation and life enjoyment of friendly intercourse, and in the hereafter, the friendly societies the temperate interchange of social concentrated strictly on the here and feeling... We encourage no excess now. in our meetings, and enforcing no

Regulating the Friendly Societies ruthless. By 1910 it had 28.5 million

70,000 door-to-door salesmen, earning societies was enacted by Parliament in commissionsfuneral benefits of 20policies to 30 inpercent force, withon each 1793,The first though legislation of course regarding they existed friendly long policy. It was able to mobilize this force Organized before then. By 1801 there were some medicine 7,200 societies in Britain with a male legislation. to influence the design of the pending and insurers membership of 648,000 out of a total shoved the population of about nine million. By These two interests were able to shove friendly 1910, there were 6.6 million members the friendly societies out of any major societies of 26,977 registered societies plus out of an unknown number in unregistered National Insurance Act, while keeping administer- 12 role in administering the benefits of the versions. their own businesses intact. The only ing the room left for the societies was covering benefits of Green goes into great detail about the the wives and children of workers, since the National various organizational structures, but the Act covered only the workers, not Insurance typically there were local lodges, a their families. 14 Act, while national federation, and some mid-level keeping association. By 1939, national insurance covered 19 their own million of a population of 46.5 million. businesses All of this worked very well, until 1911, About 15 million were covered by some intact. when the National Insurance Act was form of organized care, including the passed. This was originally intended to friendly societies, and the rest would have paid cash. When the National membership to the entire working Health Service was created in 1948, it population.”extend “the benefits That idea of friendlywas killed society by a standardized the delivery of care and combination of organized medicine and eliminated any possibility of alternative the commercial insurance industry. The approaches. former disliked the idea of working-class control over “medical gentlemen,” and the latter saw friendly societies as a threat to FRATERNAL ORGANIZATIONS IN their business model. The British Medical THE UNITED STATES Journal editorialized – The concept of fraternal aid was quickly We now resume our place as medical adopted in the American colonies, practitioners pure and simple, ready starting with the Freemasons, which as sellers to give our services to the organized a lodge in Boston in 1733 15 buyer, who is now not the poverty- and spread to other coastal cities. The stricken wage earner, but the solvent Freemasons tended to be comprised State Insurance Company. 13 of the upper crust of American society and included such luminaries as The insurance industry was even more George Washington, John Hancock,

and Paul Revere. After the revolution they broadened their membership to was a right of membership. include artisans and skilled craftsmen. that this was not charity but a benefit that Unlike other emerging fraternals, the The IOOF grew from 3,000 members in American Freemasons remained decentralized and 1830 to 465,000 in 1877, and dispensed fraternals’ focused more on charity than mutual aid. prime Freemasonry was not strictly a white phenomenon. The African Grand Lodge not$69 themillion most in important benefits during advantage this time.of object is “to But the formal monetary benefits were promote the of Massachusetts was founded in 1791, membership. As important were the brotherhood and by 1840 there were black Freemason ability to connect to a community when of man, lodges in New York, Pennsylvania, relocating for work, and the personal teach fidelity Maryland, and the District of Columbia. assistance members gave to one another to home and during times of hardship. loved ones, Through the 1700s, American mutual loyalty to aid groups tended to be local, one-lodge The Common Devotion to Virtue country and affairs, based on kinship of ethnicity, respect of location, occupation, or religion. But Like their British counterparts, the law.” they tended to be a mixture of economic American fraternals emphasized the classes, including merchants, tradesmen, value of virtue, including thrift, sobriety, and laborers. civility, self-reliance, and honesty. This was true whether the organization was made up of native-born American imported from Britain in the early 1800s. men, women, immigrants, or African- Larger, “affiliated” orders began to be Americans. David Beito takes an in- of the Manchester (England) Unity of OddfellowsOne of the first in 1819. was a The Baltimore Oddfellows lodge grew all-black Independent Order of St. Luke into other communities and broke off anddepth the look United at five Order such of organizations, True Reformers, the from the English order in 1842 to form the white male Loyal Order of Moose, the Independent Order of Odd Fellows the all-female Ladies of the Maccabees, (IOOF). 16 Other imports included the Foresters, Rechabites, and the Druids. 17 Association. 18 They all tended to draw members from and the male/female Security Benefit all economic classes and often had skilled workers in leadership. memberships and different activities, all sharedHe finds the that same while underlying each had valuedifferent system As they became more organized, the that may be summed up in this statement from the SBA – of membership. Rather than giving outsocieties aid on tended an as-needed to regularize basis, thethe benefitsOdd Its prime object is to promote the

to home and loved ones, loyalty sick,Fellows for hadexample. a defined They stipend were insistent of $3.00 to tobrotherhood country and of respect man, teach of law. fidelity To $6.00 per week for members who were

establish a system for the care of the humiliation of a pauper’s funeral. 22 widows and orphans, the aged and Life insurance was initially offered by disabled, and enable every worthy the Ancient Order of United Workmen member to protect himself from (AOUW) in 1868. Beito notes that AOUW the ills of life and make substantial originally offered it as an incidental Fraternals provision through co-operation with had our members, for those who are become “an 19 benefit of membership. It guaranteed nearest and dearest. enormous a death benefit of $1,000 (later raised capita assessment. It was so popular that army (made The orders tended to be non-sectarian, at membershipto $2,000) paid in thefor withorganization a $1.00 per rose to up of) the least in the early days, and were strictly 450,000 by 1902. 23 middle-class non-partisan politically. That didn’t mean workman, they shied away from social movements This was quickly copied by many other the salaried such as temperance and women’s orders until, “By 1908 the 200 leading clerk, the suffrage. The leaders of the Ladies of the farmer, the Maccabees were also prominent leaders artisan, the of feminism in the Nineteenth Century. 20 1910societies article had in paid Everybody’s well over Magazine $1 billion that country mer- But they also encouraged their members fraternalsin death benefits.” had become Beito “an quotes enormous from a chant, and in entrepreneurialism and learning army (made up of) the middle-class the laborer.” workman, the salaried clerk, the farmer, the artisan, the country merchant, and Infinancial fact, most and of managerial the fraternal skills. societies the laborer.” Beito reports that fraternal were extremely entrepreneurial. These life insurance societies had 1.3 million members in 1890, and grew to 8.5 hospitals, banks, retail stores, old-age million by 1910, making for a substantial homes,five orders schools, alone and established newspapers. orphanages, This majority of the total membership was especially true for the black orders in fraternal societies of 13 million. which felt their members were not well When combined with the membership served by white businesses, but Beito also in local lodges not included in the devotes an entire chapter to Mooseheart, above numbers, Beito “conservatively a boarding school for the children of estimates” that “one-third of all adult deceased Moose members. Opened males over age nineteen were members in 1913, enrollment exceeded 1,000 in 1910.” 24 children by 1921. 21 Importantly, the value of life insurance Life Insurance and Medical Benefits was shared by all ethnic groups. A survey in Chicago in 1919 found that 93.8 But by far, the main activity of the percent of “wage-earning” black families fraternal societies was the offering of life owned a policy, as did 88.9 percent of insurance. This was a natural outgrowth Bohemians, 88.5 percent of Poles, 88.4 of the initial offering of death and funeral percent of Irish, and 85.2 percent of native whites. Not all of this was provided benefits that enabled members to avoid © 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 10

by fraternal societies. Commercial life smack dab into a concentrated push insurance companies had jumped into by organized medicine to improve its the business, and at least two commercial fortunes by increasing its professionalism companies, Prudential and Metropolitan, and reducing its numbers, thereby raising 25 Fraternal had evolved from fraternals. their income. societies were drawn Those fraternal societies that did not Around the turn of the century, the to “lodge follow the life insurance model tended to American Medical Association (AMA) practice” expand their sickness funds into medical began a drive to increase the professional medicine, reputations and incomes of its in which a “lodge practice” medicine in which a local members. In 1901, it reorganized from local lodge lodgebenefits. would They hire were a physician particularly (or drawnseveral) to a direct membership association into a would hire to care for their members. Typically, each confederation of state medical societies, physicians to which were in turn confederations of care for their lodge doctor would be their source of county societies. Any physician who members. primarymember care.paid $2.00If they per became year andseriously the ill, wanted to belong to the county society they might engage a specialist on a fee- automatically became a dues-paying for-service basis. In some cases this fee member of the state society, and hence, a covered only the lodge member, in others member of the AMA. it included family members. In some cases medications and minor surgery was Physicians were motivated to join their covered, in others it was not. 26 county societies in part because the local societies agreed to defend member physicians from malpractice litigation and grew exponentially in just a few yearsThe benefit after the proved turn extremelyof the century. popular The privilege policies. The AMA’s efforts King County Medical Society (Seattle) wereand often astoundingly could influence successful. hospital In 1900, estimated 15,000 people were covered it represented only 8,000 of the 110,000 in that area in 1906, compared to “only physicians practicing medicine in the a few hundred” in 1899. Surveys in United States. By 1910, it represented Pennsylvania found the numbers doubled half the profession. 28 from 1908 to 1912. Just three societies (Moose, Eagles, and Foresters) employed This new power enabled the AMA to “several thousand doctors to look after aggressively strengthen professional the medical needs of a half-million licensing laws at the state level. It members” in 1910. 27 also began to take control of medical education by requiring standards of accreditation for medical schools, as PUSH BACK FROM ORGANIZED recommended by the landmark Flexner MEDICINE Report in 1910. 29 These standards were built into state accreditation laws. Unfortunately, this movement ran

These efforts were remarkably successful. them of membership, boycotting them, In a single generation, from 1900 to 1925, and often getting hospitals to deny the number of medical schools was cut admitting privileges. in half, as were the number of medical students. The impact on minorities and Some fraternal societies challenged American women was even more profound. African the restrictions as illegal restraint of physicians American medical schools shrunk from trade, but this was in the midst of the did what seven to two, and women and Jews Progressive Era, which was committed to they could were largely excluded from medical a society in which a well-educated elite to termi- education. 30 Most of the schools that was entrusted to manage the affairs of the nate one of populace. Judges, being part of that elite, the primary and universities, and medical education were unsympathetic to the pleadings of benefits of becamesurvived inseparable were affiliated from with hospital-based hospitals uneducated workers. 34 fraternal clinical training and research-oriented society universities. 31 Insurance Industry Push Back membership, low The newly powerful voices of organized So, as in England, American physicians cost medical medicine went to work to end the practice did what they could to terminate one of services. of lodge medicine. They objected to the idea that common workmen could be membership, low-cost medical services. their bosses and that competing for lodge Alsothe primary as in England, benefits the of commercial fraternal society contracts on an annual basis depressed insurance industry, having awoken to their incomes. They decided to drum out the market potential of life insurance, lodge physicians from the profession. They were not subtle. The Pennsylvania cost life insurance. It’s easy to see why the Medical Journal editorialized in 1904 that, commercialattacked the insurance other primary companies benefit, were low- “the ‘club doctor’ must be shut out of the alarmed. Beito writes – profession.” 32 Beito writes– Societies attracted millions of No opprobrium was off limits Americans and posed stiff competition in depiction of the lodge doctor. to the old-line (commercial) He was a ‘scab’ who broke ranks companies. A direct comparison of with professional solidarity, an fraternal and old-line rates shows incompetent ‘quack’ spewed out by why. In 1896 the median annual a low-grade diploma mill, and most assessment paid by members of unforgivably, a ‘huckster’ bent on the twenty-nine leading fraternal commercializing the noble art of medicine. 33 of insurance. An annual premium for aorders leading was old-line just over policy $10 of per the $1,000 same County medical societies were especially active in punishing such physicians, labeling them as unethical, depriving value, by 35contrast, was about $20 for a man at age twenty-five and $48 at age fifty. © 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 12

Here is an early example of “crony decided it was better to have a seat at the capitalism” or corporate rent-seeking. If table (to borrow from recent Obamacare a company is having trouble competing in negotiations) and help shape the new the market, it goes to the legislature and gets them to use the force of government 1919 what was known as the New York Senator requirements than to fight it outright. By John Dryden to hurt their competitors. This was true Conference Law, which standardized (R-NJ), not only for commercial insurers versus the regulation of fraternal organizations founder of fraternal societies, but for some of the older established fraternals versus the and placed them under the control of an insurance including the rates and benefits offered company, newer start-ups. state insurance commissioners, had been introduced adopted in forty states. 38 legislation Some of the older societies were in 1904 that beginning to have problems paying At the same time there was a sustained would have campaign to enact Workman’s disallowed had to impose additional assessments Compensation laws across the country. fraternal so- onbenefits existing as theirmembers, membership and they aged. began They to This campaign was strongly supported cieties from use aged-based rating rather than equal by employers who wanted protection using the premiums for all their members. They from liability for workplace injuries, and U.S. Mail. began to push for state-level regulations the ability to better manage and predict in 1900 through what was known as the expense of industrial accidents. The the Force Bill. This bill exempted older societies but mandated that newer workers’ compensation was passed in societies use age-based rating. It was 1902,first law and requiring by 1921 companiesall but six states to provide had adopted by seven states before the effort enacted similar legislation. 39 This, too, 36 was a blow to fraternal societies, which

Onfizzled the out.federal side, Senator John Dryden to sick and injured workers for many (R-NJ), who was also the founder and years.had been cooperatively offering benefits president of the Prudential Insurance Company, introduced legislation in 1904 that would have disallowed fraternal THE PUSH FOR COMPULSORY societies from using the U.S. Mail. The HEALTH INSURANCE bill didn’t go anywhere but it served as a warning shot about future efforts. 37 The self-help, self-governing fraternal societies, male and female, white, black, As the societies began to look more and immigrant, were being undermined like insurance companies with age at every turn. The medical elite attacked rating and accumulated reserves, state their provision of medical care, the insurance commissioners began to push insurance regulators and commercial for oversight of their activities. There insurance companies came after their was initial resistance, but increasing numbers of the fraternal societies provision of life insurance benefits, and the sickness benefits were eroded by © 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 13

Workers’ compensation laws. increasingly hostile when they realized it would double down on the most These developments were all the objectionable aspects of lodge medicine outcome of the “Progressive Era,” which – low pay and supervision by laymen. saw little merit in self-help, preferring And, of course, the fraternal societies state benevolence managed by a were vehemently opposed. The bill was The “Progressive bureaucratic elite. But the Progressive Era” movement wasn’t done. One leader, in considered it. (This was strictly a state- defeated in the first fifteen states that saw little explaining his support of a compulsory based effort. The idea of federal action in merit in health insurance program said in 1916, this area was unthinkable at the time.) self-help, “Democracy is the progress of all, through preferring 40 all, under the leadership of the wisest” Finally, California held a referendum state – a sentiment shared by most of the on the proposal in November of 1918. benevolence educated elites of today. California had a progressive governor managed by and proponents lined up the support of a bureau- When Great Britain enacted its the state medical society, the president of cratic elite. compulsory insurance law in 1911, Stanford University, the state Federation it tried to incorporate a role for the of Labor, and even former President friendly societies, and in fact was trying Theodore Roosevelt. But for all of that, the measure was defeated nearly three- membership to the rest of the working to-one by a vote of 358,324 to 133,858. 42 class.to extend American the benefits Progressives of friendly had societyno such sentimentality and wanted to Beito’s discussion of this movement ban fraternal involvement. They much provides an interesting comparison to preferred the German model of exclusive the more recent debate over Obamacare, reliance on the State. One report of the especially with the current interest Progressive Party stated, “These lodges in “libertarian populism.” He quotes have a further defect from a patriotic extensively from the publication Fraternal standpoint, in that they form centers Monitor – of association for the different foreign nationalities instead of creating through … the Fraternal Monitor warned, the a strong local sick fund, a nucleus for AALL was primarily an organization loyalty to the state.” 41 of ‘social reformers and college professors.’ Support of compulsory Ultimately, the proposal failed. It insurance by ‘professional social was the brain-child of the American workers’ was not only paternalistic Association for Labor Legislation (AALL), but demonstrated their need to ‘make but organized labor was divided. The a noise in order to earn their salaries.’ American Federation of Labor (AFL) The Monitor clearly did not share opposed it thinking they could do better the fascination with professional at the bargaining table. Organized expertise that was so prevalent during the Progressive Era: ‘ Theorists in medicine was also divided at first, but © 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 14

the classroom have produced few measures of practical progress. The Eventually it moved toward outpatient application of their doctrines usually clinicsdidn’t qualify and disease for services prevention was difficult.for all has led to oppression and bloodshed.’ its members. By 1931 it was operating The editorial concluded that the thirty-six such clinics in seventeen Unlike today, 45 ethnic societ- academics and reformers in the AALL states. ies directly subscribed to the elitist notion that owned and people of ‘superior intelligence should Unlike today, ethnic societies directly operated do something for the lower class.’ 43 owned and operated their own hospitals. their own Beito mentions two Latino facilities in hospitals, Interestingly, one of the leaders of the Tampa, Florida, aimed mostly at cigar including California effort to enact this law largely workers, but also French and German two Latino societies in San Francisco and Los facilities in experience in 1934, saying, “And who Angeles. 46 Tampa, wasagreed. for Isaacit? An Rubinow energetic, reflected largely self- on the Florida. appointed group… which carried with But the most ambitious effort was it the profession of social work, to some extent the university teaching groups, the Association (SBA) in Topeka, Kansas. economics and social sciences, and even Thislaunched facility by wasthe Securityfree to members Benefit who the political progressive organizations, were enrolled in the organization’s life but very little support beyond these insurance program. The original facility 44 had 40 beds and two operating rooms. From 1925 to 1928 it served 5,246 narrow confines.” patients from twenty states, which MOVING INTO HOSPITAL CARE prompted the building of a larger facility in 1930. The new hospital had 250 beds Fraternal societies were resilient. They in two wings and was considered one of had beaten back the proposals for the best hospitals in Kansas. compulsory health insurance, but were still handcuffed by the medical resistance But it was overbuilt for the need and to lodge medicine, the regulations on expensive to operate. The emphasis on their life insurance offerings, and the this facility weakened the SBA’s appeal advent of Workers Compensation laws. to members outside of Kansas and Their next move was to focus on hospital Missouri, as did the growing assessments care. on members to cover the costs. Hostility from organized medicine took a toll as well. Both the American College of never had lodge physicians. Instead it Surgeons and the American Medical hadThe endowedWomen’s Benefitbeds in Associationhospitals for the Association refused to approve the use of its indigent members. By 1919 facility because it violated their ban on it had contracts with 87 hospitals in advertising. The hospital’s advertising

thirty states, but defining who did and consisted mostly of newsletters and fliers © 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 15 going out to SBA members, but the AMA The delta hospitals were both located in was adamant. Mound Bayou, Mississippi, a town run by African Americans. One was established The fatal blow to mutual aid hospitals by the International Order of Twelve was the rise of employer-sponsored Knights and the Daughters of Tabor, the The fatal health insurance and third-party payment other by a group that broke off from that blow to such as Blue Cross Blue Shield. While society, the United Order of Friendship mutual aid employer-sponsored health insurance of America. These groups were solidly hospitals was tax-exempt, Beito writes, “Members in the self-help, self-improvement was the rise of groups such as the SBA were the losers tradition of all fraternal organizations. of employer- because they had purchased policies on The Knights/Tabor group dedicated itself sponsored an individual rather than a group basis. to, “Christianity, education, morality and health They could not deduct their dues from temperance and the art of governing, insurance their taxable income.” self-reliance, and true manhood and and third- womanhood.” 49 In addition to running party The pressure became insurmountable hospitals mostly aimed at black payment. and SBA converted to a mutual insurance sharecroppers and farm workers, the two orders also were very active in the civil Company, in 1950 and the hospital closed rights movement. incompany, 1954. 47 the Security Benefit Life The hospitals were ultimately done in by Other fraternal hospitals experienced intrusive government. First was the Hill- a similar fate – growing regulatory Burton Act of 1946, intended to support interference and in some cases outright hospital construction and expansion to governmental preference for hospitals serve the new families being formed at that were members of the American the end of World War Two. Hill-Burton Hospital Association. for hospital construction, which was Black Hospitals During the provided $3.7 billion in federal funding Jim Crow Era state and local funds. These funds were aimedmatched entirely by another at inpatient $9.1 billion facilities, in How well-intentioned regulations bypassing other models of care such as helped destroy these hospitals is starkly illustrated in Beito’s discussion of a visiting nurse programs. 50 couple of facilities in the Mississippi neighborhood clinics, physician offices, or delta. These were established by black fraternal societies and were indispensible were aimed at a single race while to African Americans in an era of Jim allowingBut the Act funding disqualified of segregated facilities facilities. that Crow and state-mandated segregation. So black hospitals received no funds By 1931 there were nine such hospitals while predominantly white, but in the South, and a scattering of others segregated, facilities got all the funding. throughout the country. 48

This disparity was compounded by pernicious to an economy that relied on increasing regulatory burdens, the consumer spending for growth. The more growth of third-party payment, and one saved, the less one spent. Similarly with loyalty: loyalty to one’s neighbors Opportunity (OEO) – a major component and coworkers interfered with loyalty to “The rapid ironically, by the Office of Economic inflow of of President Johnson’s “war on poverty.” the State. federal OEO helped pay for Tufts University to money establish a clinic in Mound Bayou to Increasingly, the virtues of mutual aid dampened compete directly with the black hospitals and self-help were replaced with newer the com- in the town. In 1967, OEO bought the virtues of charity and service. This munity’s hospitals, merged them, and ran them spawned a new type of civic organization old habits directly as federal programs. Beito writes, – the service club, including Rotary of medical International, Lions International, and mutual aid dampened the community’s old habits of Kiwanis International. 53 It is interesting and self- medical“The rapid mutual inflow aid of and federal self-help.” money There that all three viewed themselves as help.” was no longer any reason to belong to the “international” rather than American fraternal societies, and they collapsed. 51 organizations. These groups were aimed, not at common working men, but local businessmen and professionals. FROM MUTUAL AID TO CHARITY Fraternal organizations could not escape The ideas that fueled the rise of the new social imperative of service to fraternalism in America – mutual aid others, rather than what some saw as and self-help – had come under brutal crass and self-serving mutual aid. Plus, attack in the Progressive Era, and the the growing welfare state made the progressives dominated in the Twentieth services provided by fraternal societies Century. Beito writes – less essential. Retirement security was being provided by Social Security, medical The traditional fraternal worldview was under attack. Age-old virtues of wages due to injuries by Workers such as mutual aid, character Compensation,benefits by employer and life health insurance plans, by loss building, self-restraint, thrift, and a host of commercial life insurance self-help, once taken for granted, companies. Even orphanages were being replaced by state foster care programs. or as drastically in need of came under fire52 either as outmoded THE IMPACT OF ORGANIZED It wasn’tmodification. just that such values were LABOR boring and old-fashioned, but that their existence undermined the necessity of The tension between fraternal societies the State as the center of gravity in a and the Progressive movement could also modern society. Ideas such as thrift were be seen in the differences and similarities

© 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 17 between the Fraternals and labor unions. organizations. In the case of labor, Labor was trying to appeal to many of minimumundermined wage the laws, benefits OSHA of fraternalregulations, the same workers and used many of the Workers’ compensation, unemployment same structures and terminology. The insurance, wage and hour regulations, Fraternal American Federation of Labor (AFL) and other regulations of the work societies was aimed at skilled craftsmen and place made unions ever less relevant to were much artisans, while the Congress of Industrial working people. more “do- Organizations (CIO) targeted unskilled it-yourself” assembly line workers and laborers. and wanted Labor was organized very much like TODAY’S FRATERNAL SOCIETIES to cooper- Fraternal lodges with Locals running ate across Union Halls and regular members were Increasingly, fraternal societies focused income elevated to positions of authority within on either their own charitable activities groups. the organizations. Members called each or “convivial” social activities or some There was other “brother,” and some virtues like combination of the two. Membership no sense solidarity were considered sacred. remains robust. In fact, the number of of class lodges grew from 42,669 in 1987 to struggle. There were even some elements of 43,282 in 1996, and the Eagles, Elks, and mutual aid, such as in 1915 when the Moose all had memberships exceeding AFL declared a “national hatters day” one million (the Moose had 1.7 million.) 55 in support of the Danbury, Connecticut A study by Phillip L. Swagel in 2010 estimated that the two largest societies boycott.Hatters Union, Union whichmembers had across been fined the in the United States, the Knights of country$250,000 were for supportingasked to contribute an illegal one Columbus and Thrivent Financial for 54 direct charitable giving and volunteer Thehour’s fraternal wages tosocieties help pay did off not the share fine. Lutherans, alone provide $1.8 billion in Labor’s antagonism to employers, nor the value of improved social capital brought expectation that collective bargaining was aboutactivities, through and “$1.6 the activities billion in of indirect fraternal 56 much more in a “do-it-yourself” mode of thinkingthe way to and secure wanted benefits. to cooperate They were across Immigrantbenefit society and members.” Denominational income groups. There was no sense Societies of class struggle within the fraternal movement. This raises an issue not well-discussed in Beito’s book – the role of denominational But both sectors shared one other fraternal associations. Beito avoided common trait – the growth of government dealing with immigrant associations diminished the need for both. We have in large part because he used original already discussed how government source material and said he was unable

to translate the original documents of Thrivent Financial for Lutherans is a immigrant societies from their native recent merger of two Lutheran mutual languages. But some of the strongest aid organizations, Aid Association for Lutherans that was started by German Today, immigrants in Appleton, Wisconsin in oftenfraternals had theirtoday origins are affiliated in the variouswith 1902, and the Lutheran Brotherhood that Thrivent specific church denominations, which Financial is waves of immigration to the United was begun by Norwegians in St. Paul, 58 the largest States. Minnesota in 1917. Today, Thrivent fraternal benefit society in the United States with 2.6 Financial is the largest fraternal benefit society in organized in New Haven, Connecticut in million members. In 2004, it was listed the United 1882The Knights among ofIrish Columbus immigrants. was first Its mission as number 284 in Fortune Magazine’s States with was only partly providing mutual aid to Fortune 500 list. 2.6 million its members. Probably more important members. was coping with widespread anti-Catholic These organizations are not unique. sentiment in the country. Like other The Everence Association (formerly fraternal organizations, it emphasized, Mennonite Mutual Aid) was formed in “the virtues of loyalty, charity, courtesy 1945 to serve Anabaptist communities and modesty, as well as ‘self-denial and with direct mutual aid and charitable careful respect for the feelings of others.’ activities. 59 Fraternity and patriotism were added to the Knights’ founding principles of These three organizations are all charity and unity in 1885 and 1900, represented on the Board of Directors respectively.” 57 of the American Fraternal Association (AFA) along with the Catholic Order of But the Knights were also more political Foresters, and Catholic Financial Life. than many of the other organizations, Non-Denominational members include working against the anti-Catholic GBU Financial Life (formerly German prejudice in both the U.S. and Mexico. It fought against a law enacted in Modern Woodmen of America, Foresters, Oregon prohibiting private schools WoodmenBenefit Union, of the based World, in Pennsylvania),Equitable for children under the age of 16, and Reserve Association, and the Western resisted the anti-clerical activities of the Fraternal Life Association. 60 These Mexican revolution, which included the are not small organizations. Modern appropriation of large amounts of church- Woodmen, for example, has 773,000 owned land and the execution or exile members, employs 450 people in its of priests. But providing life insurance coverage for its members was always a ofhome life insuranceoffice in Rock in force. Island, 61 Illinois, and has $12.4 billion in assets and $35 billion lifekey insurancebenefit for in the force. organization. Today, Notice that the Moose, Eagles, and Knights of Columbus has $86 billion of Elks are not represented, and are not

© 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 19 members of the AFA. There appears to be Liberty Health Share, founded in 1990 a sharp distinction today between orders – http://www.libertyhealthshare.org/ that are primarily social and those that • • Samaritan Ministries, founded in 1994 – http://samaritanministries.org/ and charitable service. are more dedicated to financial benefits Christian People with medical needs may go to Health Care any health care provider they choose; Sharing A NEW WAVE? there are no networks. And the price of Ministries the service and the payment of the bill are nothing In recent years an entirely new are strictly between the doctor and the like the old phenomenon has appeared. These patient. The ministry does not second- fraternal so- are the Christian Health Care Sharing guess that relationship. cieties. They Ministries. They are certainly self-help commit to and mutual aid, but they are nothing like While these ministries are not “fraternal voluntary the old fraternal societies. They reject direct giving any insurance model for what they do. federal governments, they do share the Members do not pay premiums and they traditionalassociations” emphasis as defined of virtuous by state behaviorand of the members, and go well beyond the commit to helping one another with traditional admonitions. The criteria for medicaldo not receive expenses benefits. through Instead, voluntary they joining the Christian Care Ministry (Medi- direct giving. Share) is –

Members with medical needs collect Must present a written Christian their itemized bills and submit them testimony indicating a personal relationship with Christ, abstain from its members that this person needs a illegal drugs, tobacco use and sex certainto the ministry. amount Theof money ministry to pay notifies her outside of marriage, and must not medical bills. People send a check for the abuse legal drugs or alcohol. allocated amount directly to the person in need. Importantly, the members also And for Samaritan Ministries – pray for the one in need and send letters of encouragement. The entire process is voluntary. our statement of faith, regularly attendsA born-again church, Christian, abstains who from affirms or There are currently four major such moderately uses alcohol/drinks ministries – in careful moderation, abstains • Christian Healthcare Ministries, found- from illegal drugs, tobacco use and ed in 1982 – http://www.chministries. sex outside of marriage. A pastor org/ • Christian Care Ministry (Medi-Share) 62 founded in 1993 – http://mychristian- must sign a statement confirming care.org/medi-share/ applicant’s qualifications.

The Alliance for Health Care Sharing WHAT MIGHT THE FUTURE Ministries reports that its members, HOLD? Samaritan Ministries and Medi-Share As David Green indicated earlier in this million per year among their 240,000 paper, fraternalism seems to emerge from Samaritan currently share more than $180 Ministries participants. Twenty-eight states have “harsh reality.” People join together to and Medi- help one another when the political and insurance. 63 economic systems have failed them. Share cur- specified that these organizations are not rently share more than People participating in these ministries Today, we don’t see many stockbrokers, $165 mil- are also exempt from the requirements college professors, or Congressional lion per year of the Affordable Care Act (ACA or staffers forming mutual aid associations. among their “Obamacare”). Thus far, per Politico Pro – But factory workers in the early industrial 170,000 par- age, blacks suffering under Jim Crow ticipants. 53 health-sharing groups have been laws, persecuted Catholics and Jews, needed each other to survive. So do individual mandate exemption. Many faithful Christians who do not want their arecertified small by churches CMS as withqualifying fewer for than the premium dollars paying for abortion or 100 members. 64 sex change operations.

The ACA currently limits this exemption Today, many of the needy look to the to organizations in existence since 1999, State for help, rather than thinking in and has a very limited exception for other terms of mutual aid. But how long will that last? Reports from Greece, Italy and have also refused participation in Social Spain suggest that reliance on generous Securityreligious andgroups. Medicare. Specifically, This exempts they must the Amish, but not Muslims, even though Islam strictly forbids participation in trilliongovernmental in immediate benefits debt is short-sighted and well over insurance. 65 at best. In the United States, over $17 trillion, according to Lawrence Kotlikoff, Obviously, like many other provisions $10066 in unfunded trillion, perhaps promises as meanmuch thatas $200 of the ACA, this exemption was not well sooner or later the promises will not be thought-through and is yet another kept. It is possible that the economic/ reason the law is likely to be repealed or political system will eventually crash, the completely revised. Muslims, orthodox dollar will be worthless, and even basic Jews, and many other believers as well as will disappear. of health care sharing very appealing in services like police and fire protection thenon-believers future and aremay likely demand to find to bethe allowed model Kevin Williamson argues in “The End is to participate in the approach. Near: And it’s Going to be Awesome,” that the unfunded obligations of the United States alone are “more than all the money

© 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 21 in the world – about twice that, in fact. It The New Harsh Realities is about twice global GDP, and more than the value of all the assets in the world “Harsh reality” awaits us indeed. As the – from household items to real estate State fails, people will once again look to and stock portfolios – combined.” Other mutual aid and self-help for shelter from As the State countries have similar, if smaller debts, the storms. There is no other choice. The fails, people and “there is no plausible scenario in old style of fraternal organization, with will once which all these obligations are made good its silly rituals, handshakes, and costumes again look on.” 67 may be long gone. But the principles of to mutual thrift, civility, charity, modesty, and self- aid and He says, “the historic challenge of our reliance are never out of date, and new self-help for time is to anticipate as best we can the mutual aid organizations will emerge to shelter from coming changes and to begin developing get us through the hard times. the storms. alternative institutions and social There is no practices to ensure the continuation of a Williamson is impressed by the Christian other choice. society that is humane, secure, free and health sharing ministries mentioned prosperous.” 68 He rejects any idea that above but sees them as rudimentary. He a political solution is possible – such writes – approaches “fail because they attempt to substitute a single brain, or a relatively The Christian health-sharing small panel of brains organized into a or technologically sophisticated as of millions or billions of people. Put theyministries should are be, not but nearly they are as financiallya step simply,bureaucracy, they attempt for the collectiveto manage firepower systems in the right direction. Combining that are too complex for them to the distributed, peer-to-peer understand.” by Kickstarter and similar online More importantly, we are sinking deeply venturesmodel of cooperationwith the old-fashioned exemplified into a narcissistic culture that places little virtues of self-reliance and alone service to others. As the Founders by the fraternal insurance societies knewvalue onwell, even a free delayed society gratification, cannot survive let providescommunity a promising cohesion exemplifiedmodel for without virtue, and the principles of replacing our dysfunctional health virtue are absent from our schools, and insurance system with something even many of our families. Young adults continue to rely on their parents for And we have a tool available to support well into their thirties. People usmore that humane, the Masons flexible, and andthe Elksefficient. graduate from school barely able to read Lodge did not: Rigidly engineered and write. Marriage is becoming obsolete. modern actuarial practices can make cooperative insurance practices

than they were in the 1930s. 69 orders of magnitude more efficient

This seems like a pretty thin remedy before surgery.” So both parties know in for the crisis Williamson sees coming, advance exactly what is to be done and especially if he thinks the outcome will be how much it will cost.

bones. Medical tourism is no longer focused If the health “awesome.” Let’s put some flesh on these care financ- just on India and Thailand. Europe is ing system Restoring a Cooperative Spirit getting into it, as are the Bahamas, South collapses, there are still domestically, it is often far less expensive America, and Pacific Rim countries. Even doctors and collapses as Williamson predicts, which to get care in Buffalo than in New York If the health care financing system nurses and seems fairly likely at this stage of the City, according to the article, and there are dentists Obamacare rollout, what happens next? services like MediBid 71 that help patients to treat There are still doctors and nurses and people. And dentists who are skilled and available to Surgery Center of Oklahoma is like the there are still treat people. And there are still patients facilityfind the in best Belgium, source posting of the procedure. its all-inclusive The patients with with money (or its equivalent) in their fees on-line, 72 which has prompted other money. pockets (some with more, others with facilities in the area to do the same. 73 less). I live in a small town (population Oklahoma City could soon become the of 5,000) in Pennsylvania and our “go-to” place for health care. community has all of these, plus a decent hospital. It is not hard to imagine that with a credit card or a bank loan and in such a collapse. People would pay cash paidSuch forprocedures over time. can Call be it easily “post-payment” financed toour see little a doctor. community Those would who have do just little fine of health care, rather than the “pre- money would pay in the form of services payment” used by insurance companies. – housecleaning, yard work, auto repairs. Yes, the bank will charge interest on the For the truly destitute, of which we have loan, but paying 8% or even 10% interest some, the doctors and churches would is far more rational than paying the 15% pitch in to make sure needed care was or 20% “administrative load” assessed by provided. current health insurance companies.

Now, some of us might need services Obviously not everyone lives in small beyond the capacity of our local towns, but that is where social media providers. What would we do then? Shop and virtual communities come into the globally. The New York Times ran a recent picture. It is easy enough today to set up article about a man who went to Belgium such a community, especially of people for a hip transplant.70 It cost him just with similar values. You don’t have to be a Christian to assemble a socially cohesive and all medications, compared to “close to community. Like-minded people with $13,660 including airfare, doctor’s fees, shared values can be found among the says, “The patient and the doctor settle artists in SoHo, the Latinos in East LA, on$100,000 a price inand the by United law must States.” sign The a contract article the graduates of Ohio State University,

© 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble 23 lobstermen in Maine, hog farmers in would exempt you from the Obamacare Iowa. Each group does not have to have mandate to buy an insurance plan, unless the same values as the other groups. The you qualify for a regulatory exception essential ingredient, as was true of the similar to what the Christian sharing fraternal societies, is a sense of loyalty ministries received. But the ACA’s Once you and trust between the members of the individual mandate is unenforceable have community – a willingness to help each anyway. The only penalty is the IRS assembled other through “harsh realities.” seizure of tax refunds. People who are a group of paying attention will realize it is foolish 5,000 or Once you have assembled a group of to overpay their taxes during the course 50,000 or 5,000 or 50,000 or 500,000 like-minded of a year, essentially giving the federal 500,000 people you can bet there will be medical government an interest-free loan, in the like-minded professionals who would be happy to hope of getting a refund sometime next people, provide services to your group. And, year. there will be when combined with services like medical pro- So there does not appear to be any fessionals world of health care potential opened up effective prohibition on foregoing who would toMediBid, them. users would find an entire insurance in favor of paying cash at be happy the time of service. And there is no to provide Such a system would have the distinct prohibition on asking other people with services. advantage of substantially reducing whom you share a connection to help costs as well. The expectation would be you pay for that service with a voluntary that the patient pays cash at the time of contribution. service. How the patient gets the money is of no concern to the provider of the service. This means the provider presents CONCLUSION the bill, the patient looks it over to make sure it is consistent with the contract, and “Awesome” may be overstating what pays the bill with a check or a credit card. this new world might look like, but we The administrative cost to the provider could return to (or more accurately, is minimal and the reduced overhead is progress to) a society of self-reliance and shared values. And in health care we could progress to a system of direct Whatreflected about in the regulatory fee. obstacles? accountability without the interference of third parties. Physicians, hospitals and To date, it is still legal for me to give other caregivers would compete for our you money, and it is still legal for you to business on the basis of cost, convenience pay someone for performing a service and quality (i.e. “value”) – true value as for you, even a medical service. These transactions are not restricted, not the State. New ways of providing care regulated, though there may be some couldvalued pop by theup withoutpatient, beingnot as shackled defined by by tax consequences. And none of this the restrictions of managed care payment

© 2014 CCHF • 161 St. Anthony Ave, Ste. 923, St. Paul, MN 55103 • www.cchfreedom.org • 651-646-8935 Safe Haven: How Mutual Aid has Protected Families in Times of Trouble 24 systems, price controls and government-issued or 6. David G. Green, Reinventing Civil Society: The Rediscov- ery of Welfare Without Politics, Civitas, London, 1993, P. health plan-dictated treatment protocols. viii

Admittedly, it would be a painful transition, but 7. No Liberty Without Virtue, The Washington, Jefferson & Madison Institute, Castle Hill, Virginia, April 3, 2011. given the unsustainable promises that have been http://wjmi.blogspot.com/2011/04/no-liberty-without- made, the pain is likely to start well before the virtue.html transition begins. In fact, the transition will be a 8. Green, op. cit, P. 25

9. Ibid. response to the pain inflicted on the American 10. Ibid. P. 39 Progressivepeople when era the will government likely come finally to an discovers end and weit 11. Ibid. P. 40 willcannot rediscover provide thethe virtuesbenefits David it has Green promised. discussed The earlier in this paper – “Good character, honesty, 12. Ibid. P. 26

13. Ibid. P. 81 toleration, respect, justice, self-improvement, trust, civility,duty, self-sacrifice, fortitude, courage, honour, integrity, service, self-discipline, diligence, 14. Ibid. P. 84 patriotism, consideration for others, thrift and 15. David T. Beito, From Mutual Aid to the Welfare State, reverence.” University of North Carolina Press, Chapel Hill, NC, 2000. P. 5

These virtues will come together in new forms 16. Ibid. P. 9 of organizations made up of people who care for 17. Ibid. P. 10 and about one another. This is also known as love, and love is the one quality no form of coercive 18. Ibid. P. 27+ government has ever managed to embody. 19. Ibid. P. 28

20. Ibid. P. 31+

* Greg Scandlen, CCHF Senior Policy Fellow, 21. Ibid. Chapter 4, P. 63+ is an independent consultant and analyst. He has worked in health care policy for 35 22. Ibid. P. 26 years, specializing in health care financing and 23. Ibid. P. 12 consumer empowerment. 24. Ibid. P. 15

25. Ibid. P. 25 ENDNOTES: 26. Ibid. Chapter 6 P. 109+ 1. William Ernest Henley, Invictus, http://en.wikipedia. org/wiki/Invictus 27. Ibid. P. 111

2. Michael Novak, The Spirit of Democratic Capitalism, 28. Paul Starr, The Social Transformation of American Medi- Madison Books, New York, 1991. P. 126 cine, Basic Books, Inc. New York, 1982. P. 240

3. Ibid. P. 146 29. Terree P. Wasley, What Has Government Done to Our Health Care? Cato Institute, Washington, D.C. 1992. P. 4. Ibid. P. 144 42-43

5. Ibid. P. 147 30. John C. Goodman, The Regulation of Medical Care: Is the

Price Too High? Cato Institute Public Policy Monograph 57. Knights of Columbus – History, downloaded August 29, #3, San Francisco, CA, 1980. PP. 9-14. 2013. http://www.kofc.org/un/en/about/history/index.html

31. Starr, op. cit. 126 58. Thrivent Builds: History, downloaded August 30, 2013. http://www.thriventbuilds.com/partnership/thrivent/history. 32. Beito, op. cit. 105 html

33. Ibid. 116 59. Everence web site at http://www.everence.com/

34. Ibid. 127 60. American Fraternal Alliance web site at http://fraternalal- liance.org/ 35. Ibid. 131-132 61. Modern Woodmen web site at http://www.modern-wood- 36. Ibid. 137-139 men.org/Pages/HomePage.aspx

37. Ibid. 139 62. HCSM, Comparison Chart. http://www.healthcaresharing. org/wp-content/uploads/2013/07/Health-Care-Sharing- 38. Ibid. 141-142 Ministry-Comparison-July-2013-temp.pdf

39. Starr, op. cit. 109-110 63. “What is a Health Care Sharing Ministry”” Alliance of Health Care Sharing Ministries. http://www.healthcare- 40. Beito, op. cit. 145 sharing.org/hcsm/

41. Ibid. 147 64. Brett Norman, “Religious groups use ‘health sharing’ to skirt Obamacare,” Politico Pro, July 7, 2014. 42. Ibid. 157-158 65. Drew Zahn, “Does your faith free you from forced 43. Ibid. 150 Obamacare?” WorldNetDaily, April 6, 2010. http://www. wnd.com/2010/04/137221/ 44. Ibid. 160 66. Kevin D. Williamson, “The End is Near and its Going to 45. Ibid. 168 be Awesome,” Broadside Books, 2013. P. 96

46. Ibid. 170 67. Ibid. 101

47. Ibid. 180 68. Ibid. 11

48. Ibid. 181 69. Ibid. 140

49. Ibid. 182 70. Elisabeth Rosenthal, “The Growing Popularity of Hav- ing Surgery Overseas,” New York Times, August 6, 2013. 50. Greg Scandlen, “100 Years of Market Distortions,” Con- http://www.nytimes.com/2013/08/07/us/the-growing-popu- sumers for Health Care Choices, May 22, 2006. P. 6 larity-of-having-surgery-overseas.html?_r=0

51. Beito, Op. Cit. 198 71. MediBid website at http://www.medibid.com/

52. Ibid. 213 72. Surgery Center of Oklahoma website at http://www.sur- gerycenterok.com/ 53. Ibid. 217 73. “Oklahoma City hospital posts surgery prices online; 54. “A Short History of American Labor,” March, 1981, AFL- creates bidding war,” KFOR-TV, July 8, 2013. http:// CIO, American Federationist. http://www.albany.edu/his- kfor.com/2013/07/08/okc-hospital-posting-surgery- tory/history316/LaborMovementHistory1.html prices-online/ 55. Ibid. 234

56. Phillip L. Swagel, “Economic and Societal Impacts of

Business, Georgetown University, September 20, 2010. Fraternal Benefits Societies,” McDonough School of