Let’s focus on fair spending

 

 

Audrey Pietrucha

“No taxes can be devised which are not more or less inconvenient and unpleasant.” George Washington

The question of tax fairness comes up a lot anytime but especially during an election year as candidates trip over themselves and each other trying to convince voters their tax policy is the fairest of them all. Perhaps it is time to move the focus away from tax fairness to spending fairness.

Fairness itself is not an economic concept and therefore impossible to establish by economic means. Neither is it a universal concept and thus impossible to establish through policy as well. One person’s idea of fairness may well be, and often is, another’s idea of unfairness.

This is easily illustrated through the most common forms of taxation. Take the progressive income tax (please!). Those who believe taxation should do more than supply funding for government obligations and programs appreciate the redistribution of wealth that occurs through a progressive tax. But is it really fair to make some people pay a higher percentage of their income merely because they have earned more money in a given year? Usually higher earnings are the result of intense training, hard work, and long hours. Is it wise for a society to discourage people from acquiring skills and education, taking calculated risks and being more productive?

When the United States was founded the government relied on import and export taxes to perform its limited duties. Today’s global economy makes such taxes either more appealing or more problematic, depending on where you stand on the importance of free trade. Those who believe American jobs and goods should stay in America think tariffs are fair. Those who believe the entire world, America included, benefits from open markets think tariffs unfairly inhibit trade and hurt worker and consumers.

Many agree the flat tax, by which all taxpayers are assessed the same percentage on their income, is the fairest way to bring in revenue. But some of the numbers being tossed around seem patently unfair, especially for lower-income families whose necessary purchases represent a far greater percentage of their salaries. A flat tax percentage rate in the high teens or low twenties could be a real hardship to low-earners and there is also the question raised, only half-jokingly, of why ten-percent is good enough for God but not the U.S. government.

A national sales tax, which is actually being called “The Fair Tax,” appeals to people who have established homes and made most of the big purchases they need in order to live day to day. Is it fair to young people, though, who are just beginning careers and establishing households and families? And if such a tax were adopted would it replace the income tax or merely add to it? Though such a combined tax burden would be almost insurmountable for any nation’s economy, it is not beyond comprehension that politicians would try to have their cake and eat it, too.

Since taxes are always unfair to someone it is reasonable to conclude that low taxes are the least unfair to the greatest number of people. This means reevaluating what government is providing and whether it is really the best means of allocating these services and resources. We need to look at which government services are essential and which are better left to the private sector to provide.

We might want to start by identifying where and why government is necessary. According to Thomas Jefferson, the sum of good government was in the protection of persons and property:

“A wise and frugal Government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”

The Constitution provides a list of what the founders believed were legitimate functions of a national government in Article 1, section 8. These enumerated powers relate mostly to protecting national and individual sovereignty and include some practical functions such as coining money and establishing a national postal service. What is not included is most of what the government does today.

The redundant and intrusive federal agencies and department that absorb huge portions of the federal budget are easy targets as are the funds given to special interest groups and pork barrel projects at the expense of all Americans. But by far the largest federal expenditures – three-quarters of the budget - are on national defense, Social Security, and Medicare.

It could be argued defense is sanctioned by the Constitution but the size and scope of our military apparatus certainly begs discussion. As for our national retirement and health insurance programs, let’s just say a private financial services firm would be up to its eyeballs in lawsuits and criminal charges had it conducted itself so irresponsibly with regards to the accounts of its clients. The Medicare program holds trillions of dollars in unfunded liabilities and Social Security is even worse. The 2009 Social Security and Medicare Trustees Reports show the combined unfunded liability of these two programs has reached nearly $107 trillion, about seven times the size of the U.S. economy and 10 times the size of the outstanding national debt.

Raising taxes is not going to fix this problem. We could confiscate all the wealth in the nation and still be unable to pay such crushing bills. It’s time to take a more serious look at the spending side of the equation and change some of our ideas about what are truly essential government services and what should be left to the private sector. For when it comes to our current spending any three-year-old could tell you “That’s not fair!”

 

Audrey Pietrucha is on the executive board of Vermonters for Liberty. She may be reached at vermontliberty@gmail.com.

The illustrative school lunch debacle

Audrey Pietrucha

Advocates of smaller and less centralized government have got to love Michelle Obama right now. The new federal nutrition guidelines being implemented nationwide as part of the first lady’s “Let’s Move” initiative are a wonderful real-life illustration of what happens when government involves itself where it should not. Mrs. Obama has graciously provided a perfect example of how seriously destructive the unintended consequences of well-intentioned but misguided actions can be.

Certainly the objectives of the new guidelines are lofty and benevolent. Who can argue against such common sense ideas as encouraging children to consume more fruits and vegetables, eat more whole grains and reduce their sodium and trans-fats intake? But somehow, it just isn’t all going according to plan. Portion sizes are smaller and children are complaining that they’re hungry; parents are calling schools to demand explanations for the higher meal costs; student athletes are dealing with fatigue during sports practice; students whose school are near stores are supplementing with junk food, and school districts are already worried about how these changes will effect participation and thus the meals programs’ fiscal viability.

That Americans young and old have gained weight is indisputable. Our nation’s obesity rate has been growing for years and with it the attendant problems of illness, disease and physical mobility issues. The causes are up for debate – sedentary lifestyles, diets high in fats and sugar, junk food, fast food – but the results are there for all to see.

So any initiative to get Americans to take initiative with their health seems like a good idea. The problem is in the implementation of those good ideas, which seldom translate well from theory into practice. Worse, dictates from the federal level often hamper or supplant much more effective solutions already being tried at state and local levels.

Brigid S. Scheffert, superintendent of Washington West Supervisory Union in the middle of northern Vermont, understands this reality because her district is currently living it. In a recent letter to media she outlined the harm this new policy is doing to WWSU and its students.

According to Sheffert, WWSU had what they considered an exemplary lunch program in place. The district employed talented food service directors and on-site chefs and offered students whole grain and largely organic food choices as well as all-you-can-eat fruits and vegetables. School salad bars, Sheffert said, could have competed with those of high-end restaurants.

But that has changed dramatically under the new guidelines. Sheffert reports salad bar participation is down fifty-percent in the first month of school. Schools cannot enforce government requirements if students are self-serving so many choices have been eliminated. Proteins are tightly controlled under the new regulations so hard-cooked eggs, lean meats and various cheese are no longer available to salad bar customers. Likewise some vegetables, beans, nuts, seeds, pasta salads and breads are no longer offered because the amounts students take may exceed government limits.

The unintended consequences go on. Condiments can no longer be served in bulk or consumed at the discretion of the diners because calorie restrictions may be exceeded. Canning and freezing of local foods and sauces is no longer feasible due to time constraints and lack of scientific expertise in easily calculating nutrient contents. Using scratch recipes and locally produced food in general has become less of an option for the same reason. Schools are actually forced to use more prepackaged and processed foods since the nutrient information is already stated on the side of boxes.

Sheffert is also concerned with the impact these new guidelines will have on the district’s food services budget, which ran large deficits before the program was reinvented to include more local farmers and suppliers. She worries the $7,000 surplus the program ran in FY 2011 will soon turn into a deficit again.

Unintended consequences brought about by broad federal mandates that attempt to make squeeze everyone into the same mold encumber American businesses and individuals all the time.  Since the victims of most of these invasive programs are both smaller in number and more isolated their plights they are more easily ignored. What happens in our schools, however, cannot be discounted because nearly every citizen is somehow impacted when problems arise. Whether you are a student, teacher, parent or taxpayer, you have a dog in this fight.

Fortunately, the fight is underway. Students have taken their lessons on civil disobedience to heart and started protests of their own, such as a YouTube video  song parody, “We are Hungry,” which has gone viral. Others are writing on blogs and Facebook pages and across the nation “Brown bag-ins” are being held as students organize to boycott the lunch programs at their school and bring their own lunches.

That, in my opinion, is the wisest option. Students and their parents need to take back control over the highly personal and individual act of eating, among many other actions. This kind of push-back, where individuals embrace their responsibilities and once again assert their right to live their lives as they see fit - as long as they harm no one else – is exactly what is needed. Government involvement far too often leads to long and depressing lists of harmful unintended consequences. If you don’t like what the federal government is doing to the school lunch program, just wait till it is running health care.

 

Audrey Pietrucha is a member of the executive board of Vermonters for Liberty. She can be reached at vermontliberty@gmail.com.

The Great and Powerful Oz

“Who's the mage whose major itinerary is making all Oz merrier? Who's the sage who’s sagely sailed in to save our posteriors?” – from Wicked

 When I saw the musical Wicked, a reimagining of the story of the Wizard of Oz, Barack Obama was about a year into his presidency and the parallels between American and Ozian-style hero worship stunned me. Since then our attitude toward the president, and what he can and cannot do, has modified somewhat, but only slightly. As this presidential campaign season has shown, Americans still want a savior president. The only thing we differ about is whether an R or D comes after his name on the ballot.

 
It seems to be human nature to look outside ourselves for rescue when danger or difficulties appear. Perhaps this is a vestige of childhood and calling upon our parents to make everything from scraped knees to bruised feelings better. But when society relegates itself to the position of child and makes government its parent and protector it sacrifices precious liberty as well as opportunities to grow and mature as a people. Examples of this loss, unfortunately, abound over the last two centuries and have increased and intensified over the past decade as our last two presidents have expanded the powers of the office and rendered congress almost superfluous.

Not that our representatives have fought their dismissal very hard. Content to rule over their own little fiefdoms, our representatives and senators have settled for prestige over power because with power comes responsibility and accountability, neither of which is all that appealing. It is easier to niggle from the sidelines while enjoying the perks of lesser office than make unpopular decisions and risk losing a cushy job.

 

Over decades chief executives have discovered a couple of reliable paths to expanded executive power, the most obvious and effortless being some sort of national emergency. James Madison once said “It is a universal truth that the loss of liberty at home is to be charged to the provisions against danger, real or pretended, from abroad” and it is true that a state of war has been a most effective route to increased presidential power. Madison looks especially prescient in light of the changes in American life as a result of the 9-11 attacks. The broad and multi-focused “war on terror” we find ourselves fighting has been the perfect way for presidents who would be kings to justify the steady encroachment of government on American’s freedoms. From humiliating sojourns through airport security lines to warrantless wiretaps to a national defense act which allows American citizens to be executed by drone without the benefit of a trial, national security has become the chief executive’s way of saying “I can do anything I want.”

Regulation is the other preferred route of presidential usurpation. Our current president has shown himself especially skilled at exploiting the post-New Deal administrative state and taking the legislature’s lawmaking power unto himself and the executive branch. From sodium in our diets and credit card fees to what services are considered “essential health benefits,” the Obama administration has had its hands in just about every conceivable area of American life.

Concentration of the power to make and execute laws has encouraged Americans to look unquestioningly to the president to do anything and everything. Especially problematic is our tendency to support regulations we like despite the fact that they have been implemented in unconstitutional fashion by unelected bureaucrats. In our shortsightedness we forget that presidential power is seldom rolled back and the next person to hold office might have priorities that directly conflict with our own. We also overlook the overtly political nature of such a system, through which those in control may grant exemptions or privileges to political and financial allies. When we the people support the regulatory state we give up even more of what little influence we have over our government.

In both the book and the musical the Wizard of Oz is eventually exposed as a fraud. Dorothy and Elphaba, the victim of the wizard’s unchecked power in Wicked, discover their salvation lies within themselves and not with some wonderful wizard. It would be truly wonderful if we would all internalize this lesson and choose our leaders based not on what they can do for us but on what their proposed policies allow us to do for ourselves.

 

Audrey Pietrucha is a member of the executive board of Vermonters for Liberty. She may be reached at vermontliberty@gmail.com.

On Liberty

Audrey Pietrucha

 Rediscovering the founding virtues

Despite almost fifty years of Great Society programs designed to alleviate poverty, America’s lower class is growing. Why some Americans are poor and increasingly dependent on government for basic needs is one of the most important public discussions we refuse to have. Though much is made of the welfare apparatus that treats the symptoms of the disease, the actual causes of economic despair are ignored.

One reason for this may be a fear that explanations of poverty are, at their core, racially unique and no one wants to walk that road. This is why social scientist Charles Murray’s latest book, Coming Apart: The State of White America, 1960-2010, is an important beginning to the public conversation we need to have. By concentrating on whites Murray shows that contemporary American society divides most sharply by class, not race, and the lines are becoming more distinct. Most importantly, he goes beyond simplistic explanations of why economic disparity is growing and explores the cultural underpinnings of our growing divide. This is especially applicable to a state like Vermont, where racial diversity is virtually absent but class differences can be stark.

Central to this discussion is the recognition that there is a widening gap between the working class and the upper middle class, both of which are growing. These differences are not just economic – they encompass everything from television viewing, eating habits and hobbies to educational choices and civic involvement. Murray examines two mostly-white neighborhoods that encapsulate these economic sub-cultures –Fishtown, an urban neighboraahood, and Belmont, a wealthy suburb. The trends he observes in both areas demonstrate the growing cultural disparity which may also explain, at least in part, their economic divergence.

To summarize Murray’s 400-page book here is impossible but his discussion of America’s founding virtues provides a window into his theories on the changing American culture. Through the writings of our founding leaders and later discourses on the American project by such keen observers as Alexis de Tocqueville and Francis Grund, Murray identifies four traits and institutions that were core to our success as a society and a nation: industriousness, honesty, marriage and religion.

Murray traces the disintegration of these values to the 1960s; he actually establishes the assassination of President John F. Kennedy as a pivotal point in the creation of modern American society. Though both Fishtown and Belmont experienced cultural upheaval related to the four virtues during the 1960s, marriage and religion in particular, Belmont pulled up and righted itself. After a period of decreased marriage and increased divorce and cohabitation, Belmont has now returned to nearly that same levels of marriage stability and religious practice that it had fifty years ago. Belmont’s population also demonstrates high rates of industriousness, especially among males in their peak earning years, and a high degree of trust and security.

Unfortunately, this is not the case for Fishtown. The decline in values, which had been practiced fairly uniformly across all classes in the early 1960s, continued in Fishtown. For instance, today only 48 percent of prime-age whites in Fishtown are married, compared to 84 percent in Belmont, and more than a third of Fishtown men have never been married. Since birthrates have not significantly declined, this can only indicate a similar increase in children born to unmarried women. In fact, Murray estimates 43-48 percent of Fishtown births are to unmarried women. As uncomfortable as it makes the politically correct among us, socials scientists have demonstrated repeatedly that children raised in single-parent homes are negatively affected by the situation. While this is true regardless of socio-economic status, it is also true that single mothers and their children comprise the poorest families.

The difference between Belmont and Fishtown in their observance and practice of the founding virtues is stark in all four categories. Industriousness in Fishtown has taken a nose dive, with 53 percent of households in 2010 having someone who worked at least 40 hours a week compared to 81 percent in 1960. Both property and violent crimes are committed today at far higher levels than they were in 1960. Regular church attendance and the benefits it brings of purpose, connection and community is almost non-existent in Fishtown. Meanwhile, Belmont continues to successfully practice the habits which have produced strong individuals, families and communities for centuries.

Here is where Murray sees a way out of the desperate situation in which Fishtown finds itself. Tolerance of all and any lifestyles is hurting those who should be able to look to the successful and find guidance. It is time, Murray says, for the Belmonts among us to start preaching what they practice.

How can this be accomplished? What would such an effort look like? That is for each community to decide but mentoring, outreach, and both practical and moral instruction would seem important components of any endeavor. Churches and civic organizations should be involved and policy makers need to start crafting programs and legislation that incentivize responsible behavior. Whatever we do, we need to get started – we’re already running fifty years behind.

Vermont should learn from other states

The Moocher index - look familiar?

Audrey Pietrucha         

  

Vermonters are understandably proud when the state appears at the top of a list ranking states according to their success in improving access to education or health care or decreasing violent crime. Positive high rankings are seized upon by government agencies, politicians and newspapers to prove to them and us that, yes, everything is working great.

 But there are a number of ranking polls where Vermont does not fare well. These usually have to do with economic issues and general prosperity. A look at these studies and their conclusions about the general fiscal picture is worth noting.

 For instance, the “Ten worst states to retire to” list recently compiled by TopRetirements.com placed Vermont near the top with a ranking of four.  States were judged on five criteria: fiscal health, property taxes, income taxes, cost of living, and climate. Climate, of course, is a personal preference and helps explain why the top ten was dominated by northern states (the only New England state outside the top ten was New Hampshire) but there is no disputing the high taxation numbers that pushed Vermont near the top.

 Vermont’s top marginal income tax rate is 8.95 percent and state sales tax is 6 percent. Property taxes are high in comparison to other states’, there is an estate tax and Vermont is one of the few states that taxes social security benefits, as well as most pensions. Overall the tax burden in Vermont came in at 8^th highest in the nation at 10.3 percent.  Add that to a relatively high cost of living (partially caused by taxation as well as burdensome land use regulations that push real estate prices upward) and it is understandable why retirees might look elsewhere to enjoy amenities similar to those of Vermont without the higher price tag.

Number four is significant but how about a list where we’re number one? That would be the Moocher index, a list compiled in 2010 by Dan Mitchell of the Cato Institute. Mitchell wondered if the residents of some states are more willing than those of others to sign up for government entitlement programs. Using an earlier study of welfare dependency rates, Mitchell subtracted each states poverty rate and came up with the number of non-poor residents receiving government assistance. Vermont blew the competition away, coming in first by a wide margin over second-place Mississippi, which barely beat Maine.

With a ranking of 31 New Hampshire was once again the only New England state ranked outside the top ten. This measurement of government dependence was dominated by northeastern states with large tax burdens. It would be interesting to see if residents of the moocher states felt less justified in using government programs if they were allowed to keep more of what they earn in the first place. It’s not unfathomable that many see these programs as a rebate on their own hefty tax payments.

Finally, Vermont did rank near the bottom of another recent study but not in a good way. This was the American Legislative Exchange Council’s fifth annual Rich States, Poor States report, which ranks states according to a variety of tax, spending, and regulatory policies. Vermont was not at the actual bottom – our neighbor to the west, New York, earned that distinction – but at 49 it was as close as it could get. Once again Vermont was joined in the bottom ten by all of her New England sisters except New Hampshire. An interesting conclusion of the study is that high-ranking states are attracting people while low-ranking states are losing population.

States are much more than outlines on a map – they consist of living, breathing, working individuals who are looking to make the best lives for themselves and their families. Though Vermonters often seem to regard the state as above the money fray, or is at least worth paying extra for, the truth is the same laws of economics are at work here as elsewhere. Money represents the time, effort, skill and education poured into a job or profession. Those who make that kind of investment are looking for a good return.

When opportunities arise elsewhere people take advantage of them. More and more opportunities appear to be in places outside Vermont. Our standard policy of raising taxes and growing government will backfire as more people vote with their feet and move to more friendly economic climates. As this happens state revenues will fall and the tax burden will land more heavily on remaining Vermonters. At some point, they, too, will leave - or rebel.

The lesson Montpelier should learn from the many comparative economic studies available is that low taxes and less government interference produce living environments where people thrive. This is especially important if we hope to keep our young people, who increasingly seek opportunities outside our state and can easily find them just a few miles to the east. Vermont can reverse that trend by improving its own economic climate and giving them a reason to stay home.

Audrey Pietrucha is a member of the executive board of Vermonters for Liberty. She can be reached at vermontliberty@gmail.com.

The High Cost of Higher Education

The United States seems to be breaking trillion dollar barriers on a fairly regular basis these days, so often that many such milestones go unremarked.  Our latest post-trillion dollar status achievement in the area of student loan debt is worth noting, however, as it signifies a trend that shows no signs of reversing itself.  Indeed, with $100 billion in education loans being taken out last year alone, the numbers are only getting higher.
Higher education costs have increased at a rate three times that of inflation over the last two decades, with average increase in college tuition hovering over four percent annually. Reliance on government-backed higher education loans has likewise increased. With more young people being encouraged to pursue higher education we seem caught in an expensive upward supply and demand cycle.

Yet many of the premises on which this cycle spins are faulty, starting with the idea that more formal education is always a good thing. There is no question that college degrees, in the long run, produce higher earnings. However, with college graduates swelling the work force ranks and taking jobs for which they are over-qualified, we could soon see these earnings disparities begin to close. According to the Associated Press, fifty percent of college graduates aged 25 and under are either unemployed or working in jobs that do not require a college degree. One-third of those of all ages who hold bachelor’s degree are in jobs that do not require their credentials.

Even more worrisome are estimates put out by the Bureau of Labor Statistics for the coming years. Only three of the top twenty occupations BLS projects to grow between 2010-2020 - registered nurses, elementary school teachers and post-secondary teachers – require four years or more of post-high school education.

We could be seeing the results of massive over-consumption of higher education, which, it turns out, is really not for everyone and sometimes can be downright harmful. Students who were not necessarily suited to college in the first place often find themselves saddled with student loan debt but no degree to show for it. An astounding eighty percent of first-time community college students will not finish their two-year programs within three years while forty percent of first-time students in four-year programs will not finish within six years. The majority of these students will never finish, period. They will, however, still have the debt accumulated while funding their educational explorations.

In this they are very much like their college-educated peers. The average college graduate carries a debt burden of around $25,000, not an outrageous investment in one’s own human capital. But for every student who went through on a sports or academic scholarship or whose parents paid for school there are students who borrowed far more than the cost of a new car. Stories abound of art majors who owe $100,000 in student loans or social workers who attended schools where the tuition was twice what they now make in a year. These young people may well spend the rest of their lives paying for their educations and be forced to put off buying homes and starting families.

Help in keeping young people out of debt is not likely to come from educational institutions, which make a hefty profit of about forty-one percent off of each student. Advocates of higher education are more likely to pressure the government to make more funds available and at lower interest rates. In fact, President Obama and his presumptive Republican challenger, Mitt Romney, both support the continuation of the 3.4 percent government-backed student loan interest rate.

This seems a hair of the dog solution that encourages more consumption of that which caused the problem in the first place. Anything that is subsidized increases in cost and there is a strong argument that the abundance of low-cost student credit has contributed significantly to the upward spiral in tuition and other college costs that make it nearly impossible for students to follow the traditional path of working their way through. Cheap loans also often lead to borrowing more than is needed. Yesterday’s starving college student has been replaced by today’s bar-hopping partier. How much of the comfortable college lifestyle currently enjoyed will have to be paid for tomorrow?

Fortunately, students and their parents have more control over this situation than they have been led to believe. There are many options in both educational programs and directions and all deserve consideration. Community colleges and technical and professional schools may provide reasonable alternatives more in line with some young adults’ talents and interests. High school grads might also reasonably take a couple of years off to get a better idea of what they want from life and education. Spending some time in the working world can have the two-fold benefit of teaching them what they do or do not want to do with the rest of their lives as well as allowing them to save some money toward college costs and lower the amount they might need to borrow.

Those who do head right to college have a moral obligation to choose their majors wisely, live frugally and take their educations seriously. Much of an individual’s college education is subsidized by the public through taxes which help fund public institutions, provide federal grant money and underwrite discounted loan rates. In addition to their parents, who usually sacrifice much of their own convenience and comfort in order to support their children’s educational aspirations, college students owe a debt to the public at large. Under those circumstances fewer parties and more Ramen noodle dinners seem a fair exchange.

Audrey Pietrucha is a member of the executive board of Vermonters for Liberty. She can be reached at vermontliberty@gmail.com

Mutual Aid: Historic Solution for Modern Problems

Audrey Pietrucha                   

One of most troubling aspects of the growth of government is how it has limited our creativity in response to challenges of all kinds. This is especially apparent when financial difficulties confront us today. Instead of brainstorming as a society for fresh approaches to age-old difficulties, we pass the problems along to elected officials whose solutions usually involves forcing one group of people to pay for the needs or wants of another group. Is it any surprise that Americans increasingly look at each other with resentment and suspicion?

Ironically, some of the solutions we seek may be found in the past. Before the welfare state was created, before either employers or government took or were given responsibility for insuring us against every conceivable difficulty, people themselves came together in Mutual Aid or Friendly Societies. These voluntary organizations, the remnants of which still exist, formed under the premise that there is strength in numbers. These community-based associations required a small investment of time and money but provided great returns. They also showed individuals can work together without government interference to prepare for the future and provide comfort and security to each other in times of need.

Mutual Aid Societies consisted of people who banded together for a common financial and sometimes social purpose. The idea was that regular and widespread contributions to a mutual fund would build a community nest egg which could be used on behalf of members in times of need.  In England, where these groups were called Friendly Societies, the purpose was mainly financial: insurance, pensions, and savings or cooperative banking. In America, where these groups were usually called mutual aid or benevolent societies or fraternal organizations, they often combined to fill both financial security and social needs. Group events included regular meetings, dances and sporting events. Sometimes there were even ceremonies involved – Think Fred Flintstone and Barney Rubble and the Loyal Order of the Water Buffalo lodge with its silly hats, passwords and convoluted handshake.

Typically, members of these organizations paid a regular membership fee and in return received an allowance to cover their financial obligations when they were sick or disabled. Many societies contracted “lodge doctors,” often newly-trained physicians looking to establish their practices, whom members could consult free of charge. During illness fellow society members would also provide emotional support by visiting regularly - this also helped ensure benefits were not being abused. When members died their funerals were paid for by their lodge mates and often there was some money left over for widows or other dependents.

Some mutual aid societies formed around common religious, ethnic or trade affiliations. There were female societies and African-American societies. In fact, these societies were often the only place where single women and blacks could build their own financial security. An unanticipated benefit of the use of lodge doctors was the opportunity it provided females and non-whites to become doctors. Medical colleges were created to train women and blacks for service to their benevolent societies. Unfortunately, these colleges fell victim to established medical practitioners who saw lodge doctors in general as competition and a threat to the dignity of their profession. One way these established professionals used the government to eliminate competition was by pushing for accreditation for medical schools, which put many small medical colleges out of business.

Some familiar organizations with us today are examples of mutual aid societies, most notably the American Association of Retired Persons and the Knights of Columbus. Credit unions and other financial services companies such as USAA, which serves retired and active-duty military personnel and their families, are also present-day equivalents. Unfortunately, the modern welfare state and the labyrinth of rules and regulations it has constructed around what once were mutually agreed upon and beneficial private interactions makes a revival of mutual aid societies on a small scale difficult if not impossible.

It is regrettable that proven community-based solutions such as mutual aid societies are no longer considered practicable. There are many who would chalk this up to the complexity of modern society but I would remind them that people themselves have not changed, only the construct within which they operate. We have the power to rectify that, if only we would.