Welfare without the state


Earlier this month the Adam Smith Institute hosted a TNG meeting at which Chris Mounsey spoke on the problems and possible solutions to the welfare state in the UK. As part of his speech he highlighted the value of ‘friendly societies’ or co-operatives as one of the possible solutions, collectives that had previously existed in much of Britain and functioned well prior to the National Insurance Act. As he pointed out, amongst the benefits of these organizations are that they are more needs based and are able to prevent many problems such as fraud and lack of accountability in the government run system.

Although the rise of government welfare has had a similar impact on US private welfare as in the UK, the case of the Church of Jesus Christ of Latter-day Saints (the Mormon Church) has survived the onslaught and is insightful in considering how private welfare can function outside of the state. Members of the church fund the program; on the first Sunday of every month everyone skips two meals and donates the saving from those meals. If a member loses income, becomes unemployed, etc. they meet with their local leader and together they determine the needs of that individual or family, and assistance is given accordingly.

Accountability is at the center of the program: if an individual is on Church welfare he must meet with his local leader each week to determine what progress he or she has made and what else might be done to fix the situation – often families are asked to sacrifice items such as cell phones and cable television before financial assistance is rendered. The Mormon Church also has its own employment services that help individuals seek employment through networking and Church run companies and organizations. There are even private markets, referred to as Bishops’ storehouses, in which individuals can purchase food for nearly 90% below market value while they are in the welfare system.

The program that the Mormon Church has developed creates a sense of accountability and helps people improve their circumstances rather than slowly becoming dependent upon the system. Co-operatives are able to do what no government can, by creating true accountability and fostering the importance of self-reliance and accomplishment. Yet religious commonality is not necessary to create the type of ‘friendly society’ the Mormon Church has. Private groups like this could flourish if it wasn’t for one major problem: the government does not allow you to opt-out of the state run system. If the state allowed an opt-out option for those who can confirm enrollment in a private co-operative, things would improve dramatically and private co-operatives would spring up everywhere.