Front Page Titles (by Subject) [SECT. II.—: OF BENEFIT CLUBS, OR FRIENDLY SOCIETIES.] - Lectures on Political Economy, vol. 2
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[SECT. II.—: OF BENEFIT CLUBS, OR FRIENDLY SOCIETIES.] - Dugald Stewart, Lectures on Political Economy, vol. 2 
Lectures on Political Economy. Now first published. Vol. II. To which is Prefixed, Part Third of the Outlines of Moral Philosophy, edited by Sir William Hamilton (Edinburgh, Thomas Constable, 1856).
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OF BENEFIT CLUBS, OR FRIENDLY SOCIETIES.]
In this review of the attempts which have been made for the relief of the lower orders, I must not omit to mention one, which originated first among themselves, and which promises more real and lasting advantages than all the others put together; I allude to the institutions commonly known by the name of Benefit Clubs, or Friendly Societies. The general object of these institutions is, to secure to the industrious from the surplus, or a part of the surplus, of their earnings, an equivalent resource during their incapacity to labour. This idea, although I have not the least doubt that, in this country, it was the genuine offspring of English good sense and sagacity, was not altogether unthought of by the ancients. Causaubon produces ample evidence to shew, that there were, among the Athenians, and also in the other states of Greece, associations where each member deposited every month, in the common chest, a certain sum, for aiding such of their associates as met with any misfortune. Gronovius, too, seems to prove that the same plan was followed in Rome. The truth is, that the general idea of such establishments, however happy in itself, and important in its consequences, is not of so difficult a nature but that it may be expected to present itself to mankind in every civilized society, where they happen to be pressed by the same evils. From a Memoir by M. Dupont de Nemours, it appears that various establishments of this kind had sprung up spontaneously in differents parts of France among the lower orders.
Since the commencement of the last century, such institutions have extended themselves to most parts of Great Britain. Sir Frederic Eden mentions some in the north of England that had existed for a hundred years, and their utility is now so completely established by experience, that the most enlightened friends of the poor in the southern parts of the island, seem, almost unanimously, to consider them as the happiest of all the expedients which have yet been devised for bettering the condition and morals of the lower orders. It appears, also, from the Statistical Accounts of our clergy, that similar establishments are multiplying fast in Scotland, and that they have been found of great service in preventing labourers and working manufacturers from becoming burdensome.
An Act passed in 1793, for the encouragement of Friendly Societies, removed many difficulties to which they had formerly been subject. By this Act it is declared, that such societies are lawful, and it is required that their Rules shall be confirmed by the Quarter Sessions. The advantages conferred by the Act on such societies as have their rules confirmed, are many and important.
Prior to this Act, it is said to have happened frequently, that the majority of an occasional meeting, which, by the rules of the society, was competent to make laws, expelled all the absent members, though superior to themselves in number, while the persons thus injured were left without the means of redress. A very extraordinary instance of this is stated to have happened lately, in the case of a society whose rules had not been confirmed:—“In the neighbourhood of Ealing, a majority, composed of the young men of a friendly society, agreed to dissolve the society, and divide the stock, and thereby, at once, defrauded all the old members of that provision for age and infirmity, which had been the object of many years’ contribution. A new society was immediately formed of the young persons, and all the old members were left to the parish.”* This very extraordinary fact is stated on the authority of the Society for Bettering the Condition of the Poor, and may be found in the Notes and Observations attached to their First Report.
Another essential advantage conferred on such of these institutions as have their rules confirmed by the Justices, was the privilege of their members to carry on their occupations in the most convenient places, without being subject to be removed to the parish of their legal settlement; an encouragement, however, which is in a great measure done away by the late Act preventing the removal of all persons till they become actually chargeable. A very respectable writer, accordingly, Mr. Rowland Burdon, has suffered his zeal for Friendly Societies to carry him so far as to censure this Act for granting an extension of the advantages formerly enjoyed by the members of such societies alone. “The locomotive faculty derived from the certificates of Friendly Societies, is a very obvious advantage, and I was sorry to be obliged to give way to the authority of the Legislature, in the adoption of a general principle of this nature with respect to the poor, by the passing of an Act for the preventing vexatious removals, which has taken away, or at least diminished much, this inducement for entering into Friendly Societies.”*
The beneficial tendency of these institutions is strongly and very judiciously stated in the paper from which the foregoing observation is quoted:—“The great desideratum, with respect to the maintenance of the poor, has always appeared to me to be the encouragement of habits of economy, and of a system of periodical subscription towards their own subsistence. Where men derive support in sickness and old age from their individual efforts, in conjunction with those of their neighbours, they pass through the various periods of trial without that degradation which attends parochial relief; being necessarily amenable to each other for a certain degree of forethought and good conduct, they learn insensibly to be regular in their attention to the earnings of their business, and by acquiring a permanent connexion with their neighbours, they become incapable of those acts of vagrancy which are so wasteful of that main source of national wealth, the labour of the lower orders of the people.”† These remarks are extracted from a short Memoir, published in the First Report of the Society for Bettering the Condition of the Poor. The paper itself is worthy of a perusal, as it contains some interesting details concerning a Friendly Society at Castle Eden, in the county of Durham, on a scale adapted for general use; and exemplifies, strongly, not only how much the poor may be led to do for themselves, but to what a degree of kindness and good fellowship they may be habituated in the management of their common concerns. “I have learnt with pleasure that, in more instances than one, they have collected little sums among themselves to present to their sick and necessitous neighbours, over and above the allowance from the funds of the society, which, as far as I know, is an effect of philanthropy derived from the institution.”*
Numberless other testimonies in favour of these establishments might be produced from other writers who have turned their attention lately to the state of the poor; and it is by such statements, founded on actual experience, and not by speculative reasonings, that our judgment may be safely guided in disquisitions of this nature. In truth, amidst the most striking discordancy of opinion on almost every other point relating to the maintenance of the poor, I do not recollect a single individual of note who has not acknowledged the beneficial effects of friendly societies, as far as their information has extended.
Impressed strongly with these considerations, Mr. Acland, who published in the year 1786 A Scheme for enabling the Poor to provide for themselves, proposed that a general fund should be established on principles in many respects similar to those which had suggested the institutions now under consideration. This plan is said to have received the approbation of Dr. Price. It has been strongly, though somewhat captiously, opposed by Mr. Howlett;† and is objected to for reasons not so questionable, by Sir Frederic Eden. Among these, there are two entitled to peculiar weight; in the first place, that it would operate, in many respects, like a poor-rate; and secondly, that as the members would be governed by laws not made by themselves, it would want that recommendation from which friendly societies chiefly derive their popularity and usefulness.*
Among our later writers, some have proposed to extend more widely the beneficial effects of such institutions, by the encouragement of premiums; and others, to render them universal, by employing compulsory regulations to obtain subscriptions from labourers of every kind. But both measures are deprecated with great warmth by all those who have combined with their theoretical views, a proper attention to the feelings and prejudices of the lower orders of the state; the former, as it would create a new branch of public expenditure, the extent of which cannot possibly be foreseen, and the utility of which is far from being certain; and the latter, as it would, in all probability, counteract the ends in view, by converting into a tax an article of economy, which derives its whole value, and its most important moral effects, from the circumstance of its being voluntary. It is extremely remarkable, that the people seem to have felt peculiar jealousy at every legislative interference with this favourite institution; insomuch, that Sir Frederic Eden has expressed his conviction, that if Parliament attempts any farther interference, the spirit of the plan will be greatly damped, if not entirely repressed. Even the Acts already passed, he says, though they have been wisely framed, and do really confer a great benefit, have created much alarm, and have occasioned the dissolution of many societies.†
The only inconvenience which has ever been objected to these institutions is, that they encourage convivial meetings, and thereby occasion a waste to the labourer’s family of the fruits of his industry. But it is no solid argument against their general utility, that they are attended with those partial evils which are inseparable from all the devices of human policy. Their aim is not perfection, but improvement; and it is a sufficient proof of their excellence, as Sir Frederic Eden very liberally remarks, “that they have been found congenial to the social habitudes and prejudices of the labourer; and that, if they cannot correct the inclination (which is too often caused by hard labour) for conviviality and dissipation, they at least convert a vicious propensity into a useful instrument of economy and industry, and secure to their members (what can seldom be purchased at too dear a rate) subsistence during sickness, and independence in old age.”*
It is proper for me to add, after expressing myself so strongly in favour of these institutions, that I do not think they accomplish so completely all that might be attempted for the advantage of the lower orders, as to supersede the utility of farther arrangements for the attainment of the same end. Many individuals in the humbler walks of life, at least in ordinary times, can afford a still larger deduction from their expenditure than their monthly contingent requires; and it might be of infinite consequence to the industry, comforts, and morals of themselves, and of their families, if proper measures could be devised to encourage them to habits of economy, and to enable them to lend out at interest their petty gains. The losses which persons of this description, ignorant of the world, frequently suffer from ill-placed confidence, conspire with the temptations of the present moment, to divert them from habits of saving; and it would be a subject well worthy of the consideration of those who unite a spirit of humanity, and a practical acquaintance with business, to devise some plan for diminishing the risk of such loans, and for removing the other obstacles which stand in the way of so desirable an improvement.
The remarks which have been just made, appear to me to furnish the true explanation of a paradox, which has been very often insisted on from motives extremely reprehensible, by various writers, that the liberal reward of labour encourages idleness. A variety of French writers have concurred in this opinion, and Mr. Arthur Young, in several of his works, pretends that the truth of the observation is amply confirmed by his own extensive observation. Dr. Franklin, too, whose works are in general animated by a spirit of genuine humanity, has given it the sanction of his authority. “The common people,” he observes, “do not work for pleasure generally, but from necessity. Cheapness of provisions makes them idle; less work is then done, it is then more in demand proportionally, and of course the price rises. Dearness of provisions obliges the manufacturer to work more days and more hours, thus more work is done than equals the usual demand; of course it becomes cheaper, and the manufactures in consequence.”*
To this doctrine, so discouraging to the most numerous and the most essential of all the classes of society, Mr. Smith has opposed some very ingenious reasonings, endeavouring to prove, in his Wealth of Nations,† that more work is done in cheap years, than in those of greater scarcity. But although I am no less unwilling than Mr. Smith to shew any favour to the views of those who support this proposition, I must own, that his reasoning on this point does not seem to me to be quite satisfactory; nor do I think it necessary for the accomplishment of the benevolent purpose in view, to lay so much stress on the fact on which the doctrine is founded. Granting this fact in all its extent, what does it prove but the necessity of removing those circumstances in the condition of the people, which have produced in their case an effect so contrary to the general analogy of human affairs? Among these circumstances, none has operated more powerfully than the difficulty which the inferior ranks experience, in disposing safely and profitably of the surplus of their earnings. Hence an improvidence of the future, and a habit of considering wages in the light of a daily subsistence, sometimes more and sometimes less abundant, but always destined for present consumption. The natural and necessary consequence is, that when the labour of two days is sufficient for the support of three, instead of accumulating their gains with a steady perseverance, they attempt to economize proportionally their own industry, and poverty and wretchedness are handed down from generation to generation. If an easy and unexceptionable mode of disposing prudently of that proportion of their gains, which they could spare, were devised, that desire of bettering their condition, which never fails to operate where it has a field, would soon produce diligence and alacrity among the poor, and the humble occupation of industry and labour would be enlivened and cheered by hope and by ambition. With the view of assisting, and without the most distant idea of interfering with this arrangement, Mr. Malthus proposed, some years ago, the establishment of country banks; and more lately, Mr. Whitbread suggested the establishment of a great national institution of the nature of a bank, for the easy and advantageous employment of the savings of the poor.* On the merit of neither of these two plans am I prepared to give any opinion. [Our Savings Banks have originated from the same principle.]
[* ] [Reports of the Society for Bettering the Condition of the Poor, No. I.; Vol. I. pp. 10, 11, footnote, third edition.]
[* ] [Ibid. p. 10.]
[† ] [Ibid. pp. 10, 11.]
[* ] [Ibid. p. 9.]
[† ] [Insufficiency of the Causes to which the Increase of our Poor have been ascribed, &c., Part III. sect. iii. p. 109, seq.]
[* ] [State of the Poor, Book II. chap. iii.; Vol. I. p. 603, seq.]
[† ] [Ibid. p. 631.]
[* ] [Ibid. p. 632.]
[* ] [Political Fragments, Sect. iii.; Works, Vol. II. p. 415, edit. 1806.]
[† ] [Book I. chap. viii.; Vol. I. p. 131, tenth edition.]
[* ] [Speech on the Poor-Laws, delivered in the House of Commons, February 19, 1807, p. 42.]