FRATERNAL SOCIETIES AS ALTERNATE PROGENY

PART FOURTEEN: GUILDS, OLD AND NEW

This post is an installment in a longer series on Guilds, Old and New. To review a full index of all the installments to this series, see the introductory, part one of the series, here.

Up until now, many of the more contemporary guild corporatists we’ve examined have operated with the assumption that there was some kind of kindred spirit between 20^th century trade unions and medieval guilds: perhaps as their logical progeny with the rise of industrial capitalism, and plausibly as their contemporary alternative for responding to class conflict. In this final installment to the series on Guilds, Old and New, I want to suggest that there is another kind of 19th-20th century corporate institution that might be better identified as the languishing progeny of the medieval guild. That would be the Friendly or Fraternal Societies.

Let’s recall some of the things we learned about the old guilds over this series. We know from the work of Black, Bowen, Renard, and Cole at least, that guilds often began not as economic or work based enterprises, but rather as festive and mutual aid societies. Some began as drinking or dinner clubs, and it was common for them to provide financial assistance to their members in forms such as charity relief and burial costs. It was only later that such organizations took on the function of organizing work, production, and trade. And, as we’ve also seen, through the work of Bowen and Elbow, many guild corporatism theorists emphasized the guilds function of economic improvement without resort to socially divisive appeal to Marxian class conflicts between capital and labor.

Seen through that lens, if one were looking for the embryonic seedling of guild restoration in the late 19^th and early 20^th century, the trade and labor unions were by no means the sole, or maybe even the most relevant, focus of attention. A strong case, in fact, could be made for the fraternal or friendly societies. In his book on these societies, David Beito offers some fascinating insight into the early emergence of these proto-guild organizations, their popularity and function, and indeed of their ultimate demise.¹ In the process, we learn some valuable lessons about what might be demanded of regenerating guild-like organization today – in the breast of the spatial revolution.

First, we’ll allow Beito to sketch out the situation during the late 19^th and early 20^th century in the United State.

During the late nineteenth and early twentieth centuries, millions of Americans received social welfare benefits from their fraternal societies. The defining characteristics of these organizations usually included the following: an autonomous system of lodges, a democratic form of internal government, a ritual, and the provision of mutual aid for members and their families.

An organization of females that also met these criteria generally embraced the label of “fraternal” rather than “sororal.”

Beito states that by “the late nineteenth century three fraternal types dominated: secret societies, sick and funeral benefit societies, and life insurance societies.”² All of them “shared a common emphasis on mutual aid and reciprocity.” In the area of life insurance specifically, Beito observes that by “1920 members of [fraternal] societies carried over $9 billion worth of life insurance.” Adjusted for inflation, today that would be the equivalent of $164 billion. I was unable to determine what share of the life insurance market this constituted in 1920. A bit further on, though, Beito reports: “By 1895 half the value of all life insurance policies in force was on the fraternal plan.”

As Beito observes:

...lodges dominated the field of health insurance. They offered two basic varieties of protection: cash payments to compensate for income from working days lost and the care of a doctor. Some societies...founded tuberculosis sanitariums, specialist clinics, and hospitals. Many others established orphanages and homes for the elderly.

More Americans belonged to fraternal societies than any other kind of voluntary association, with the possible exception of churches. A conservative estimate would be that one of three adult males was a member in 1920, including a large segment of the working class.

And Beito notes the remarkable expanse of these societies, particularly among the poor, during the period under consideration.

Analytical frameworks based on race, class, and gender, at least as currently conceived, have shown limited value as explanatory tools. Often, advocates of these perspectives seem to forget that fraternalism was considerably more than a white male phenomenon. Its influence extended to such disparate groups as blacks, immigrants, and women. Just as importantly, the preoccupation of historians with race, class, and gender has done little to answer the overriding question of why these widespread societies invested so much money in social welfare.

Although fraternal societies had features of hierarchical relief, they were primarily institutions of reciprocal relief. Jane Addams marveled at how many such organizations “honeycombed” the slums of Chicago. Similarly, Peter Roberts observed that among the Italians the “number of societies passes computation,” while according to John Daniels, the typical Jewish neighborhood on the Lower East Side of Manhattan “swarms with voluntary organizations of many kinds.” Roberts was amazed at how rapidly Eastern Europeans formed lodges.

He reasoned that the communal “tendency is in the blood of the Slav, and it finds expression in organizations in America.” Another study noted that Boston’s Polish “clubs, mutual benefit fraternities, patriotic societies and political organizations are legion. All belong to several insurance societies.”

With that explanation of the membership and reach of the societies, Beito turns attention to how and why they operated as they did.

[The fraternal society] allowed Americans to provide social welfare services that could be had in no other way. The aid dispensed through governments and organized charities during the late nineteenth and early twentieth centuries was not only minimal but carried a great stigma.

Societies accomplished important goals that still elude politicians, specialists in public policy, social reformers, and philanthropists. They successfully created vast social and mutual aid networks among the poor that are now almost entirely absent in many atomistic inner cities. Americans can also learn from studying the contrast between voluntary fraternal medical care and third-party payment systems such as private insurance and Medicaid.

Despite continuing efforts, Americans have yet to find a successful modern analogue to the lodge, either as a provider of services, such as low-cost medical care, or as a means to impart such survival values as thrift, mutualism, and individual responsibility.

Yet, Beito observes that these traditions of American mutual aid and self help date well back into American history, unsurprisingly perhaps invoking the famous observation of Alexis de Tocqueville.

“Americans of all ages, all conditions, and all dispositions constantly form associations...The Americans make associations to give entertainment, to found seminaries, to build inns, to construct churches, to diffuse books...Wherever at the end of some new undertaking you see the government in France, or a man of rank in England, in the United States, you will be sure to find an association.”

...scholars generally trace Masonic origins to either England or Scotland in the late seventeenth century. A common theory holds that it arose in some way from stone (or operative) masonry. At some point the operatives began to admit nonoperatives (or “accepted masons”) as members. In any case, by the first decade of the eighteenth century, nonoperatives controlled a network of lodges in both England and Scotland.

The first official lodge of Freemasonry in the thirteen colonies opened in Boston in 1733...

The Revolution marked a turning point in American Freemasonry. The presence of prominent members, such as George Washington, John Hancock, and Paul Revere, greatly widened the fraternity’s popular appeal in the new nation. Initiates flocked to special traveling lodges chartered for the troops. The war served to “Americanize” Freemasonry. The colonial “brethren” reacted to changing events by staging their own war of separation. They organized grand lodges for each state that were independent of the British structure. American Freemasonry expanded in size and numbers as well as in membership diversity.

By the end of the eighteenth century, artisans and skilled workers formed important components of the membership, even a majority in some lodges. Although American Freemasonry still catered to an elite after the Revolution, it had become a less exclusive one.

By the 1840s black Freemasonry had spread along much of the eastern seaboard, including New York, Pennsylvania, Maryland, and the District of Columbia.

The next three decades brought a full flowering of national life insurance orders. Hundreds of organizations, such as the Royal Arcanum, the Knights of Honor, the Order of the Iron Hall...sprang up. Many older societies, which had specialized in sick and funeral benefits, such as the Knights of Pythias and the Improved Order of Redmen, followed suit with their own national life insurance plans. By 1908 the 200 leading societies had paid well over $1 billion in death benefits.

The precise extent of fraternal organizations in the United States during this period will never be known. The fraternal life insurance societies had at least 1.3 million members by 1890, and by 1910 they had grown to 8.5 million.

A conservative estimate would be that one-third of all adult males over age nineteen were [lodge] members in 1910.

We can then turn to Beito’s discussion of the function and culture of these fraternal societies. In the process, it might be helpful to bear in mind the guild’s role in moral regulation, as we encountered in the work of Mack Walker.³

For many who joined, a lodge affiliation was a means to enhance older and more stable forms of mutual aid based on blood ties, geography, and religion. Hence, according to Don Harrison Doyle, fraternal orders “acted to reinforce, rather than to supplant, the family as a social institution. They also supplemented the extended kinship networks that supported the nuclear family.”

Americans may have been informal in matters of money, but they were models of clarity in formulating sanctions for misconduct. The Boston Marine Society imposed fines and other punishments for a multitude of offenses, including failure to attend members’ funerals, blaspheming “the Name of Almighty god,” and promoting at monthly meetings “the playing of any Cards, Dice, or other Gaming whatsoever.” It provided the ultimate punishment of expulsion for the “common Drunkard.”

The exactitude of the American societies in the punishment of infractions and their ambiguity on guarantees of benefits made economic sense. Actuarial science was in an embryonic stage. Promises to pay uniform sick and death benefits entailed greater risk than levying fines. The emphasis on behavioral restrictions also helped to weed out the poorer risks and heighten feelings of solidarity.

The success of these fraternal societies, at this time, were largely the result of prevailing conditions, in which they successfully filled a vacuum of need.

American fraternal life insurance societies had the good fortune to arrive on the scene at a time when commercial companies faced especially bad publicity. A spate of bankruptcies associated with financial panics in the 1870s had shaken consumer confidence. By one estimate the unrecovered losses suffered by policyholders in commercial companies totaled $35 million. In addition the assessment approach of fraternal organizations allowed rates low enough to under-cut commercial insurance companies—at least initially. Most members paid a flat premium that did not vary on the basis of age or health.

At the beginning of the twentieth century, fraternal societies seemed destined for a bright future. They had achieved a striking level of development. In 1800 the fraternal scene (with the possible exception of Freemasonry) was characterized by small and localized societies with meager budgets and haphazard schedules of benefits. By 1900 Americans had flocked to far-flung national organizations with multiple lodges and hefty death and sick benefits. Observers were optimistic about the prospects for fraternalism in the coming century. As Charles Moreau Harger commented in the Atlantic Monthly, so “rapidly does [the fraternal order] increase in popularity that it shows little indication of ever wielding less power over men’s destinies than it does today.”

Still, as important and valuable as were the insurance benefits, it should be remembered that the value of these fraternal societies reached far beyond these obviously important benefits:

Americans were attracted to fraternal societies for a variety of reasons. Some wanted sick and death benefits. Others sought expanded social ties. Still others hoped to find a source of entertainment and diversion. But there were motivations less easy to identify but perhaps more important. By joining a lodge, an initiate adopted, at least implicitly, a set of 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 reflected a fraternal consensus that cut across such seemingly intractable divisions as race, gender, and income.

The societies showed striking similarities in outlook. With perhaps a slight change in wording, the following statement...was suitable to each: “Its prime object is to promote the brotherhood of man, teach fidelity to home and loved ones, loyalty to country and respect of law, to establish a system for the care of the widows and orphans, the aged and disabled, and enable every worthy member to protect himself from the ills of life and make substantial provision through co-operation with our members, for those who are nearest and dearest.”

The theme of the loving and extended family found universal fraternal appeal. According to the ritual of [one such society], all initiates were “members of the same family” pledged to “stand by one another at all hazards.” It specified that what “[we] lack by the sacred ties of blood we make up by a solemn oath-bound obligation, declaring ourselves sisters and brothers, children of the same Father.

Rituals often relied on the Bible to impart lessons of fraternity. [In one fraternity an] initiate vowed to “be true and faithful to the Christian religion” and devote leisure time to “searching the Holy Scriptures, so that I may become useful and true to all mankind.” [Another society] drew inspiration from the Old Testament: “Like the Maccabees of old we are marching forward, a mighty army, for the defense of our loved ones and the protection of our homes.”

Nonpartisanship was another component of the fraternal value consensus...Societies favored nonpartisanship to achieve harmony and to widen the applicant pool. It was standard practice for aspiring Republican and Democratic politicians to join all the leading societies in their community. Individuals who were bitter rivals politically could coexist under a common fraternal banner. The Loyal Order of Moose was not unique when it signed up prominent politicians from both parties—William Jennings Bryan, Theodore Roosevelt, and Champ Clark.

At this point, then, I should think it evident that these societies are the legitimate progeny of the old guilds. As long as we recall that historically the function and influence of guilds, and indeed their origins, were rooted not initially in labor, production, or other work-oriented considerations, but rather in the grounding (and where necessary, regeneration) of community, locality, tradition, and virtue: all, of course, deeply temporalist values. However, all this has been part of the discussion of what Beito refers to as the fraternal societies’ golden age. We should then consider the details of that golden age’s decline.

The decline of the fraternal societies has been attributed to many causes, some without validity, others of only partial importance. Certainly, the devastating impact of the Great Depression, in many instances, pushed the mutual aid resources and capacities of such societies to their limits. Government interventions though played a major role, often propelled by the rent-seeking lobbying efforts of private insurance companies. But it’s also clear that another key factor was the grinding impact of the spatial revolution – including the relentless incursion of the culture industry (here) and the modularization of individualism (here). (Though one may consider “marketization” as itself a manifestation of the spatial revolution. See my book A Plea for Time in the Phenotype Wars).

So, we’ll conclude this post, and indeed this series on Guilds, by reviewing Beito’s assessment of each of these contributors to the decline of the fraternal societies.

...fraternal societies were in good shape on the eve of the Great Depression. Membership, although dropping relative to population, remained at high levels, and lodges continued to wield enormous influence. Even the data in Middletown, a study that often presents a bleak portrait, testifies to this fact. The authors found that 48 percent of working-class adult males in 1924 were lodge members. Fraternalism was still formidable.

This was not nearly as true by the end of the 1930s, a decade characterized by a dramatic and demoralizing fall in memberships and prestige.

...workers in the 1930s…dipped into savings, borrowed money, and petitioned lodges for help, but the odds were increasingly against them. The chief obstacle was the unprecedented duration of the Great Depression. High unemployment persisted for a decade. Hence the traditional fallback mechanisms were more likely to buckle. Credit and savings dried up, and family networks frayed.

And yet, despite these historic challenges, Beito concludes that the societies stood up better than they’re often credited: “Even with these constraints, fraternal finances held up rather well during the depression.” Further, he observes: “a study of sixty-five life insurance orders found that only five had ceased operation as fraternal societies in the 1930s.” Such evidence contradicts the tale told by many historians:

Contrary to the standard view, however, it is not evident that [the fraternal societies] demise can be explained by bankruptcy or inability to pay benefits. A study of the [the societies] in British Columbia from 1891 to 1950 does not find a single example of a lodge that ceased operations because of financial insolvency or failure to pay benefits. Far more common explanations were mergers with nearby lodges or memberships reduced to levels insufficient to maintain official standing. Although the membership...in British Columbia fell off during the depression, the benefit system did not collapse or lead to bankruptcy.

In short, the data for the life insurance orders do not show that societies failed their members during the depression. On the contrary, they responded with resourcefulness and redoubled commitment to social welfare.

Beito in fact points us in the direction of government intervention as a more telling explanation for the demise of the fraternal societies: “There is reason to believe that a relationship existed between the emerging welfare state and the decline of fraternal services. Most notably, the first signs of benefit retrenchment appeared after 1935, the year [of] the Social Security Act.”

The establishment of Social Security and other programs provided excuses to shed costly services. Though societies had maintained social welfare spending at high levels during the depression, it was becoming an expensive proposition. The burdens were especially great because the membership base was older and smaller. If government assumed responsibility, societies would be freed to function in less-challenging roles as life insurance or convivial organizations.

The welfare state certainly factored in as a force that displaced the fraternal society. Though, as always with such situations, especially for a pluralist or temporalist perspective, such developments always have their trade-offs – for better or worse depending on ones phenotypic outlook. But displacement was hardly the sole role played by government in putting the fraternal societies out of business. Imposed regulatory obstacles played a role too.

And indeed in some cases those regulatory interventions were clearly the result of rent-seeking lobbying efforts by the private insurance companies. As usual, we find that odes to the magic of the free market are conveniently sidelined when some kind of pluralist, intermediary institution needs to be eliminated in the interest of expanding the penetration of markets and swelling the profits of entrenched commercial interests.

...the legislatures of Georgia, Kentucky, Mississippi, Virginia, and other states required societies to pay deposits ranging from $5,000 to $10,000. Smaller organizations found it almost impossible to meet this demand. In 1905 the imposition of a $5,000 deposit in Georgia devastated the black societies and forced many to disband. Mississippi followed suit with higher financial requirements. In 1915 the insurance commissioner of the state proudly recounted that he had personally denied or revoked licenses to 50 percent of the applicants during the previous two years. While some of these laws stemmed from a sincere desire to shield blacks from fly-by-night organizations, others arose from decidedly less altruistic considerations. Although the attempt failed, Georgia tried to raise its deposit requirements as high as $20,000 in 1909.

Other laws hampered societies both large and small by limiting the varieties of insurance that they could offer. The initial restrictive legislation during the 1890s centered on endowment insurance.

An endowment could take a multitude of forms, but typically it entailed a contract that ran for a specified number of years and promised the insured, if he or she were still alive at the end of the time period, a stipulated sum. A leading motivation to purchase endowments was to save for old age. This goal contradicted the “die to win” philosophy of traditional life insurance.

Another [instance of state intervention squeezing out fraternal societies] that fostered the centralization of benefits under the control of employers was workmen’s compensation.

Workmen’s compensation spurred centralization of benefits in a subtler way by motivating firms to create an infrastructure for the disbursement of financial benefits. Once established, this infrastructure was available for other purposes, including health insurance. Simply put, workmen’s compensation lowered the transaction costs for centralized employer-based benefits and third-party payment systems.

The federal government was instrumental in speeding this centralization through amendments to the tax code. The Department of the Treasury exempted from the income tax all “reasonable” contributions made by employers to pension funds but did not extend this exemption to employees. It did not take long for group insurance to receive favorable tax treatment as a fringe benefit.

This asymmetric tax policy of course weakened the role of the fraternal societies since individuals could indirectly benefit from getting their insurance through their employers due to a tax which effectively penalized them for getting their insurance through their fraternal society. In many instances such destructive public policies by government were not merely the product of self-serving public choice economics, but often entailed the government acting on behalf of the fraternal societies’ direct competitors in the purported private sector. This tendency was evident in regulation, legislation, as well as court rulings:

A major goal of state legislation was to deprive endowment societies of the legal protections extended to the life insurance societies, such as exemption from taxes and debt garnishment and the right to make assessments to cover deficiencies. Some laws banned outright any sale of fraternal endowment policies. Furthermore, the courts generally ruled that endowments to living, healthy members were inconsistent with an organization’s nonprofit status.

Of course, as we’ve seen above, the fraternal society provided so much more than insurance or welfare benefits, but all of that was frayed through the role of federal policy kneecapping those societies with a subtle nudge toward government or workplace centered provision. And the societies were aware of the impact such government policies were having upon them. For example:

In 1915 William Lloyd Harding, the chairman of the Mystic Toilers, expressed this attitude in a speech, “Are We Burdened with Too Many Laws?” According to Harding the life insurance societies had become “almost wholly commercial. The fraternal has been legislated out of the plan. In other words, we have too many laws that go into the minutest details.”

The role of government intervention, then, would seem to be a major force in the demise of the fraternal societies as embryonic guilds — however driven such intervention may have been by industry lobbying and a general common class disposition toward privileging marketized commerce over worker self-help. However, from the perspective of a series that has been dedicated to exploring the history of guilds as instruments of temporalist pluralism, it is apropos to wrap up this post, and this series, with some reflections from Beito on how the biases of the spatial revolution, consolidating at this time its modernist habitus, contributed to the decline of the fraternal societies as nascent guilds.

Another stumbling block was the emergence of rival entertainment sources such as the movies and radio...the core values of fraternalism, including character building, thrift, and mutual aid, came under increasing assault.

Thomas M. Howell, the supervisor of degrees for the Moose, lamented that “the radio, the automobile, the jazz band, the outdoor entertainment, the fast means of travel” had placed “the old style lodge meeting, in which the same ceremonies, week after week, and month after month, are carried on, somewhat in discard.”

The traditional fraternal worldview was under attack. Age-old virtues such as mutual aid, character building, self-restraint, thrift, and self-help, once taken for granted, came under fire either as outmoded or as drastically in need of modification.

Similar concerns had appeared in the comments of the proponents of mothers’ pensions who worried that stressing self-help, character building, and mutual aid detracted from the united action needed to address the broader problems of the community and the nation

Some reformers, such as Isaac Rubinow, increasingly questioned the efficacy of mutual aid, family networks, and neighborhood cooperation as solutions to poverty and dependence.

Rubinow left little doubt about his belief in the inadequacy of voluntarism. He warned that any movement for compulsory insurance “must meet its strongest opponent in the fetishism of self-help.”

He regarded thrift as a “positive vice” when it reduced “the standard of life, not only below the desirable social standard, but even below the physiological standard.”

Bruce Barton, the public relations pioneer and author of the best-selling life of Christ, The Man Nobody Knows, espoused the ideal of self-realization rather than self-reliance, declaring that “life is meant to live and enjoy as you go along...If self-denial is necessary I’ll practice some of it when I’m old and not try to do all of it now. For who knows? I may never be old.”

For Barton the best substitute for the old folk wisdom was “service.”

The agenda of service clashed with the most valued traditions of fraternalism. Societies stressed reciprocity and mutual self-interest; the byword of service was stewardship. The duty of the good steward was to promote altruism for the betterment of society as a whole, not the members of a single organization.

A good indicator that change was afoot was the rise of service clubs, such as Rotary International (1905), Lions International (1917), and Kiwanis International (1915). Unlike fraternal societies, they catered exclusively to professionals and businessmen. In the name of service the members pledged themselves to community and national betterment. They paid homage to a generalized altruism rather than reciprocity toward peers. The policy of the Lions was “No club shall hold as one of its objects financial benefits to its members.” Shunning of mutual self-interest struck a chord with individuals who had lost faith in the old ways of mutual aid.

In closing then, Beito makes clear that it was the triumphant habitus of mass society, with its appeals to monist sovereignty, professionalism, and modular individualism, combined with the culture industry’s relentless erosion of community and tradition that really crippled the cultural and psychological dispositions which had been the pillars of fraternal societies. Once these cultural and psychological pillars came into question, the economic policies of tactical regulation and taxation – informed by state bureaucratic self-dealing and the private insurance industry’s rent-seeking lobbying – became increasingly effective. Contrary to the claims of most of the few historians who have deemed to glance in the direction of the fraternal societies, their demise was not so much a function of their inherent organizational or financial shortcomings as it was a product of the relentless spatial revolution.

For all that, perhaps like today, a century later, still living through the spatial revolution’s relentless push toward rupture of the negative feedback loop that has historically regulated our interaction with nature – still finding ourselves grinding toward the concluding arc of the phenotype wars spiral – perhaps Beito’s story of the fraternal societies may serve as a reminder. It may remind us what at their core the guilds were in practice, as well perhaps as offering some lessons on how such pluralist corporatism – launched today as part of a project to provide us a softer landing – might better re-constitute itself. All of that though obviously hinges upon the lessons learned from this series, and indeed this, now, nearly year long project of exploring the vicissitudes of the pluralist constitution.

And indeed, the next post to this series (I expect – but you never know) will be an effort to take stock of just what I’ve learned from this deep, deep dive into pluralism. And in the process, I’ll also reveal my plans for this Substack going forward, and what further projects I see lying ahead. So, if you don’t want to miss that milestone post, and you if you haven’t yet, please…

For those who haven’t read it, my most recent book is essential for understanding the context of this major study of the pluralist constitution: A Plea for time in the Phenotype Wars.

And, if you know of others who you think would find the work here of value, please…

Meanwhile: Be seeing you!

1. David T. Beito, From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890-1967, New edition (Chapel Hill, N.C.: The University of North Carolina Press, 2000).

2. It’s worth mentioning in this context the interesting discussion by Jacob Levy on secrecy within guild-like organizations. Some of the scholars we’ve reviewed, including Black, have emphasized the suspicion of guild or corporatist secrecy on the part of monist sovereignty. Levy reminds us though that monist sovereigns had a long history of coveting and expropriating the resources of such organizations. So we should not mistake guild or corporatist secrecy as some esoteric or exotic pretense; it was in fact a practical measure to defend their organization, its members, and its resources from the rapacity of the monist sovereigns. Jacob T. Levy, Rationalism, Pluralism, and Freedom (Oxford: Oxford University Press, 2017).

3. Mack Walker and James J. Sheehan, German Home Towns: Community, State, and General Estate, 1648–1871 (Cornell University Press, 2014).