One of the most common criticisms of libertarianism is that it is too utopian, too impractical; it can never work, they say. Few people can imagine how the services that people need in any society could be provided except by government. This is especially true of services for the poor—welfare, health care, etc. Only government is capable of helping the poor, they say. Yet such social services have in fact been provided by private groups before in American history and still do.  There is a rich history of charity and mutual aid groups in the US that many people don’t know about. Whether such groups could be substituted for government welfare is the subject of another analysis. But the first step is to become aware of and communicate about the services that have not only existed before but do exist now.

Several books by libertarians detail the history of mutual aid in the 19^th century, including From Mutual Aid to the Welfare State by David Beito and After the Welfare State edited by Tom Palmer. According to Beito, many of the features of benefit organizations today have been assimilated into organizations that rely on the corporate and political structures of our time. Insurance companies, religious charities, and credit unions now perform many of the same functions that were once the purview of ethnic or culturally affiliated mutual benefit associations. More books are listed here.

However, if libertarians want to be believable, they need to know about modern mutual aid and other private services, not just the historical ones. Most people don’t care about theory; they want to know if it’ll work here and now. Here’s a start.

Charitable Helping Organizations

Government welfare programs have a poor record on both efficiency and cost. Estimates of the overhead alone run between 50 and 70%.¹ Do we really want a system that spends 50-70 cents of every dollar on the infrastructure of bureaucrats, social workers, and buildings and only 30-50 cents on the poor? Few private charities have that kind of overhead.

The track record of small private charities is much better than government programs. For example, Strategies to Elevate People (STEP), in Richmond, VA’s largest public housing project, links poor mothers to services from some 30 local churches and faith-based organizations. It offers a wider range of services including mentoring, job training, and welfare-to-work assistance. Although many of the women have serious obstacles like drug abuse, pregnancy and disabilities, STEP has achieved a remarkable 70% job-placement rate.²

Or the St Martin de Porres House of Hope in Chicago which specializes in helping homeless women. They have to be drug-free to stay in the program.  It spends less than $7 per person per day compared to $22 in government-funded homeless shelters.³

Or the Gospel Mission drug treatment program in Washington, DC. Nearly 2/3 of addicts remain drug-free compared to a government-supported drug treatment facility just three blocks away with only a 10% success rate while spending nearly 20 times as much per client.⁴

Private community services

Many examples of private community services are collected and described in the book Uplift: What People Themselves Can Do. It describes private community groups that provide services such as job training, medical clinics, low cost housing and much more. It compares them to government and shows that they are more efficient in helping people and do so at a much lower cost. Though the book itself dates back to the 70s, many of the organizations in it are still around after more than 40 years.

Here are just some of the many examples of private community services organizations existing right now that give people a hand-up instead of a handout.

• Habitat for Humanity in the United States is a leading example of shared credit and labor pooled to help low-income people afford adequate housing.
• Delancey Street has been hugely successful. Thirteen thousand people have been through its programs. The ex-addicts now run a dozen businesses, including a restaurant and a moving company.
• Community Action House is a nonprofit social services organization based in Holland, Michigan. The organization was founded in 1969. For over 40 years, the organization has assisted in feeding and clothing families, providing housing, and equipping community members with skills and resources to allow provision for sustainable living.
• New Directions Club in Houston TX provides services for ex-cons.
• Davidson Community Center in the Bronx provides resources for minority poor. It serves underprivileged children, adults, and senior citizens by mutual cooperation, training, education, and advocacy.
• Urban Youth Action, Incorporated (UYA) is a youth education and development program emphasizing the importance of education, employment readiness, and community service. It uses a series of educational sessions, internship placements (work experience), and enrichment activities appropriate to the student’s progression through the program.
• Southeast Alabama Self-help Association is a co-op that includes a credit union, economic development, technical assistance, and low-cost housing.

Religious and fraternal societies, the modern mutual aid societies

Here a few modern groups which provide many of the benefits of historical mutual aid groups.

• Thrivent Financial for Lutherans is now the largest fraternal benefit society in the United States. It maintains a network of nearly 1,400 local chapters and is also the only not-for-profit organization listed on the Fortune 500.
• Modern Woodmen of America is the third-largest (based on assets) fraternal benefit society, with more than 750,000 members. Total assets passed $9 billion in 2009. The membership organization sells life insurance, annuity, and investment products not to benefit stockholders but to improve the quality of life of its stakeholders—members, their families, and their communities. They accomplish this through social, charitable, and volunteer activities.
• Brethren Mutual Aid Agency has been in existence over 100 years. It serves the various insurance needs of the Anabaptist communities.

Beito also suggests that new technologies have provided yet more new opportunities for humanity to support itself through mutual aid. Recent authors have described the networked affiliations that produce collaborative projects such as Wikipedia as mutual aid societies. Rotating credit associations and microfinance organizations like the Grameen Bank working in modern Asia, and to a lesser extent in the US, provide loans to the poor to help them with their businesses. Socially conscious capitalism like the Grameen Bank is doing far more for the poor than governments or even UN agencies are doing. Such programs don’t just give money away, they help people get on their feet.

Other Kinds of Mutual Aid Societies

Many activists on the left, including anarchists, have developed some new kinds of mutual aid societies. Here are just a few examples.

• Ithaca Hours is based on American individualist anarchist Josiah Warren’s Time Store. It issues local currency based on work hours that are used for trade for other goods and service. If you’ve read the The Great Explosion by Eric Frank Russell, it’s like the “obs” in the story set on the planet Gand (short for Gandhi).
• Ithaca Health Alliance is nonprofit member-owned health security system that has been in existence since 1997. It provides financial assistance for emergency medical and dental needs.
• Network of Bay Area Workers shares info and resources among worker coops over 30 diverse self-managed workplaces in East Bay and San Francisco
• Northern California Land Trust provides permanently affordable housing for people with no access to market rate housing and keeps costs low for second owners
• Urban Homesteading Assistance Board runs programs to legally take over abandoned buildings in New York City and then sell them for sweat equity (people help rehab them). So far there have been 1,300 buildings converted into limited equity coops, with 1,264 units currently in pipeline. Most are in Harlem and the Lower East Side.
• Ujamaa Cooperative Economics for Women in Boston organizes low-income women to generate income and for community development. It has spun off successful sewing, house cleaning, catering and childcare coops.
• Cooperative Home Care Associates is an employee-owned coop in NYC with jobs for more than 500 African American and Latina women, many of whom were previously on welfare.
• Common Ground is an anarchist collective that came to the aid of poor blacks after Hurricane Katrina. Its aid was far more practical than what FEMA offered. It is discussed in scott crow’s book Black Flags and Windmills.

Many more examples can be found in For All the People: Uncovering the Hidden History of Cooperation, Cooperative Movements and Communalism in America by John Curl.

To those who say we have to have government welfare, the many mutual aid projects and service organizations suggest it could be otherwise. We can’t get rid of government welfare overnight but we can encourage and support the private helping organizations that exist. Maybe some of us can create new ones. Being able to point to workable alternatives to the welfare state is the first step toward developing a wider network of private community service organizations that can help people without destroying their dignity and doing so at a much less expensive price. Time to talk about more than just theory.

Note

1-4. These examples are courtesy of The Poverty of Welfare by Michael Tanner.