The Role of Big Business and the State in Usurping the Provision of Social Security from Fraternal Societies and Suppressing Mutual Aid

The increased severity of America's recessions under the National Banking System, which had replaced the Jacksonian Free Banking era during the Civil War, had created a strong desire for consistent economic security during the Gilded Age. The increasingly cyclical nature of the economy, riddled with unsustainable booms that resulted in catastrophic busts, drove the poor to organize fraternal societies for mutual aid, and by 1920 over one-fourth of American males were members. These societies were similar to the order of the Freemasons but emphasized the organization's role as provider of sick benefits and social security in times of need. Due to a constant need for money, members were educated in the values of thrift and reciprocity. These societies were quite selective of their members since free riders threatened the economic viability of these organizations. In addition, aid was rationed on a case-by-case basis, and requests for benefits were often denied if the person was deemed unworthy by the elected administrators of the fraternal lodge. The benefits of fraternal society membership were not charity, which was considered degrading because it fostered dependence on others. Instead, drawing benefits in times of trouble was seen as the right of any good dues-paying member. Commercial insurance and medical societies such as the American Medical Association felt threatened by the fraternal societies' cheap insurance rates and subscription-based doctors. As a result, these interest groups lobbied government to enact legislation which increased certification requirements to minimize competition from cheaper health care alternatives. With the increased government activism during the Progressive Era and the New Deal, which mandated employer-based pensions and workmen's compensation, fraternal society membership declined. The triumph of employer-based commercial health insurance was a result of its collusion with the state. Medical societies imposed sanctions on lodge doctors and urged the government to regulate these societies out of existence, allowing employer-based insurance to corner the health care market through government privilege rather than inherent economic efficiency.

Many people justified their opposition to fraternal societies by claiming that they were financially unsound, but on closer examination they were able to adjust to economic downturns. A candidate for Attorney General accused cheap lodge insurance of being prone to failure and fraud¹. While there were examples of fraternal societies which could not keep up with their benefits payments and went bankrupt², most were able to reassess their rates and continue functioning, even during times of difficulty and demography decline. One major problem was that they promised consistently low rates that they could not deliver, and this drove members away. Fraternal societies began by assessing their insurance rates at one low cost for all members, but economic necessity forced them to adjust and adopt a system with graded rates based on age. There had been an actuarial crisis within American fraternal societies in the 1890s and 1900s, and as a result they had to use the British friendly society as a model for financial soundness. Increasing regulation of rates and increasing cash reserve requirements for fraternal societies forced them to maintain economic viability. While commercial insurance may have been more statistically sound due to its highly variable premiums and deductibles, the decline of the fraternal societies cannot easily be explained by inherent financial problems. Otherwise, the Security Benefit Association would not have been able to operate a hospital that charged a quarter of the average rate for a room³.

Medical societies were afraid that the fraternal societies' cheap rates would threaten their own ability to make money, so they sanctioned lodge doctors and launched campaigns against lodge practice to discredit and destroy these organizations. The American Medical Association, for example, blacklisted all doctors who entered into a lodge contract and denied them access to their hospitals. The fraternal societies were able to maintain such cheap rates because they paid a doctor a steady salary to provide moderate medical care to all of the members. These contract doctors could not charge nearly as much as the fee-for-service doctors, who changed their rates based on the person and procedure, but these contracts were desirable because they ensured consistent employment. Organized doctors wanted to maintain their elite status and prestige, so they claimed that the lodge doctors were untrained, overworked, and unfit to practice medicine. While lodge doctors may have graduated from apprenticeship-style proprietary schools rather than universities, they still had to receive certification to practice, which the states made increasingly difficult for them. Well organized doctors also disdained the idea that contract doctors had to be responsive to their patients' needs. As a result of their disgust for lodge contracts, the professional medical community embraced the fee-for-service method of commercial insurance. The alliance between organized medicine and commercial insurance would begin a trend of using the government's coercive power to destroy the competition that was coming from fraternal societies' insurance plans. The Ohio State Medical Society, for example, pushed through legislation which would prevent organized labor from creating health centers⁴.

The state began its interference into the insurance market by encouraging the purchase of employer-based commercial insurance. They did this by subsidizing these companies and mandating workmen's compensation, pensions, and other employer-based social security. In addition, businesses embraced commercial group insurance so that the workers could not provide for themselves independently of their employers, which gave them increased bargaining power. This trend reduced fraternal society membership by decreasing the need for fraternal insurance, especially during times of high employment. Due to the fact that fraternal societies would not engage in political coercion to promote their institutions, expensive commercial insurance was forced upon the workers, which removed their need for cheaper health care. Contractual medical treatment at health centers was too cheap to compete with, so businesses had the government force employer-based insurance upon the workers, removing their need for fraternal health care⁵.

In addition to encouraging employer-based commercial insurance, states imposed regulations and licensing requirements which made it difficult for fraternal health insurance to exist. Pennsylvania, for example, revoked the licenses of thirteen fraternal orders in 1926 due to their lapses on benefits payments and their high administrative costs⁶. The state courts almost always decided to take the side of organized medicine, and the medical societies were given the power to set the rules of their profession. Increasingly tight certification requirements led to a decline in the number of doctors per capita in the United States between the 1900s and the 1920s. Fraternalists charged that the government was regulating their societies in order to destroy their cheap competition. A particularly petty example was a bill that was proposed to prohibit all fraternal life insurance orders from using the US postal service. Regardless of such obvious antagonism, some fraternalists had lost much of their suspicion of interventionist legislation during the Progressive Era. Government laws prohibited certain types of insurance from being sold by fraternal societies, such as endowment insurance⁷. Legislation ended up mandating business-controlled programs and promoted the commercial insurance trade, and in this way businesses were able to increase their bargaining power in relation to labor by gaining control of the workers' health insurance and social security.

The final step in the decline of fraternal societies came with the state's assumption of social security responsibilities from businesses and private charities. Instead of providing subsidies to private organizations, an increasingly interventionist federal government began to take charge of providing economic security to the people. One of the primary appeals of fraternal societies in the 1930s was their provision of “cradle to the grave” protection to members. Yet by the 1940s, public assistance programs removed the need for private provision of orphanages and retirement homes. There were even examples of the federal government directly taking charge of fraternal facilities, as the government bought fraternal hospitals and often turned them into free clinics for the poor⁸.

In the end, the poor workers were unable to stand together on the issue of insurance provision. Instead of organizing to lobby for fraternal societies' voluntary provision of sick benefits and social security, some of the poorer labor unions endorsed compulsory, state-provided health insurance⁹. While this seemed to be a desirable alternative to the instability of employment-based social security, these entitlement programs legitimized the state's use of coercion. This was what allowed the states to legislate the fraternal health insurance orders out of existence by imposing stringent certification and licensing requirements which only the most privileged commercial insurance companies could pass.

Contrary to the opinions of many government officials, fraternal societies were able to deliver an enormous amount of health care and sick benefits without the danger of financial insolvency. While medical societies and members of the commercial insurance industry questioned the quality of the fraternal societies' doctors and accounting methods, these orders were able to survive through the actuarial crisis of the 1890s and 1900s through strict readjustment. Doctors were elected to their positions within fraternal societies, so there was enough competition to guarantee a proficient doctor at a low price. American fraternal societies raised their reserves and adopted the actuarial conventions of British friendly societies, which had been proven to withstand economic downturns. The fraternal societies fared quite well during the Great Depression in comparison to other businesses. Instead of being frustrated by financial difficulties, the fraternal societies' problems began with the antagonism of medical societies such as the American Medical Association. These organized doctors attempted to end the salaried contract service of lodge doctors and establish fee-for-service practice as the only legitimate payment method. This would preserve doctors' incomes and insulate them from listening to the needs and demands of their patients. Medical societies lobbied the government for stricter licensing laws so that there would be less doctors and less cheap competition. Medical societies allied with insurance companies in lobbying the government to compel employers to provide social security such as workmen's compensation and pensions. Businesses had usurped the power of providing social security, and as a result security and health insurance were tied to having employment. This was shown to be inadequate when economic downturns created unemployment and deprived Americans of economic security, and the Federal government began expanding its own role in providing social security. Ultimately, an increasingly difficult certification process as well as compulsory social security led to the decline of fraternal societies' provision of sick benefits. The prosperity and employment in America after World War II would lead people to regard fraternal insurance as superfluous, yet further unemployment as a result of the boom-bust cycle would result in a new search for more stable and diverse forms of social security.

The decline of fraternal societies has coincided with the increased prevalence of paternalistic social security provision in the “mature” economies. Fraternal provision of social security would offer smaller countries an economically sustainable method of providing for the downtrodden. Fraternal membership would be based on paying dues as well as on engaging in activities which instill good values and increase community solidarity. In order to maintain economic viability, exclusion of members who do contribute to the organization would be a necessary prerogative of the fraternal society's membership, but members should not be expelled for their specific political or religious beliefs. Fraternal societies would provide opportunities for constructive activity during people's free time, which would be essential during times of high unemployment. Unrestrained, these societies would be able to replace employers and the government as primary provider of social security. A wise society would remove all legal barriers which discourage or outlaw low-cost competition, which would create more voluntary options for health care and social security. Institutions should merely provide information about the quality of a product to possible consumers, allowing people to choose whether a product is safe or not for them. The government could provide incentives to encourage the proliferation fraternal societies and other cooperative methods of providing social security, but rewards should be systematic and based on efficiency so that subsidies were not based on political favors and privilege.

1“Politics and Insurance: Maryland Fraternal Societies to Oppose Candidate Poe,” New York Times (September 28, 1891), p. 2.

2“40 Years' Insurance Dues Bring Nothing,” New York Times (May 5, 1916), p. 19.

3David Beito, From Mutual Aid to the Welfare State (Chapel Hill: University of North Carolina Press, 200), pp. 132, 134, 136, 139, 224, 175; Jennifer Klein, For All These Rights: Business, Labor, and the Shaping of America's public-private welfare state (Princeton: Princeton University Press, 2003), p. 13.

4David Beito, From Mutual Aid, pp. 116, 119, 120, 124; Jennifer Klein, For All These Rights, pp. 13, 153, 154.

5David Beito, From Mutual Aid, pp. 205, 218; Jennifer Klein, For All These Rights, pp. 12, 13; Andrew Morris, “New Alignments: American Voluntarism and the Expansion of Welfare in the 1920s,” eds. Bernard Harris and Paul Bridgen, Charity and Mutual Aid in Europe and North America Since 1800, p. 206.

6“13 Orders Lose Insurance License,” New York Times (December 4, 1926), p. 7.

7Usually for retirement, endowment insurance would bestow a cash payment for surviving and paying dues for a certain period of time.

8David Beito, From Mutual Aid, pp. 98, 198.

9Jennifer Klein, For All These Rights, pp. 151, 3.

Woman of the Dunes: Embracing Society to Fix the Precedents which Limit Human Potential

Dissatisfaction with the modern world was a consistent motif within the works of Abe Kobo. He believed that the conventions of industrial society could not fully measure a human's value or worth, however scientific or rational they appeared. Instead, he believed that these definitions limited human potential by providing incomplete and generic stereotypes which modern man would strive to fulfill but not transcend. Believing that capitalism fostered jealousy and destroyed community solidarity by placing men on a hierarchy of worth, he found modern society to be alienating. His views led him to create characters which unsuccessfully strove for complete withdrawal from modern society due to their unwillingness to assimilate. This adheres to the Japanese Communist Party's (JCP) belief that capitalism could not be reformed from within and that a radical revolution was inevitable. His falling out with the JCP in 1962, however, led him to create Woman of the Dunes, a more hopeful story in which the main character was able to embrace society by redefining his goals and values. The main character chose to remain in the oppressive society in order to contribute to the community in ways which would garner him the respect of his peers. The main character enjoyed a freedom which was different from the complete independence which he originally strove for. Due to a belief in the plasticity of identity, Abe Kobo believed that freely accepting a burdensome society in the interest of changing it for the better could be more fulfilling than completely escaping from society. While he was disdainful of the roles that modern society constructed for men, he accepted the fact that integration into society was necessary to some extent if one wished to remold man's collective identity. While he believed that freedom was essential in allowing men to define themselves and fulfill their potential, he understood that reputation and the desire to be recognized by one's peers motivated men to act and drove them to improve society. In Woman of the Dunes, Abe Kobo cautiously endorsed integration into society to the extent that one could contribute creatively while maintaining a sense of fulfillment. His move toward hopeful acceptance of society paralleled the increased freedom of expression and choice within Japanese society which came with the departure of the American occupation force and economic independence.

From the start of his career, Abe Kobo was dissatisfied with the tasks that industrial society assigned to people, believing that they disfigured a man's identity. First of all, he believed that the industrial world compartmentalized humans in such a way that they could not find fulfillment performing their duties¹. He found that the repetitious physical labor required by industrial society was dehumanizing and that it transformed people into the mere units of a collective which was at the service of a few men. The main character of Woman of the Dunes expressed his dissatisfaction with his task of endlessly shoveling sand when he stated that the work was fit for a monkey and that a rational society should utilize the people based on their skills and talents². He felt as if he was being ruthlessly exploited by the people who were making profits from his coerced labor.

Abe Kobo believed that the mindless work provided by industrial society disfigured humans' personalities by restricting them from performing creative tasks and developing unique identities, which was unimportant according to society's measures of a man's worth³. He was mostly disenchanted with society's habit of rating men and creating divisions between them which would lead to conflict. The main character of Woman of the Dunes echoed this dissatisfaction when he described a falling out with his wife which should not have occurred based purely on society's certificates, which assured that he was a good productive citizen⁴. Men were driven to increase their standing in modern society, and as a result they were focused on appearing qualified and trustworthy rather than on searching for their unique role within the community. Abe Kobo expressed this in his 1974 novel The Box Man, a story of men who live in large cardboard boxes to retreat from society. One of the box men criticized people for trying to fit into society's ideal types when he said that they wear clothes and cut their hair to appear identical to one another⁵. European philosophy led Abe Kobo to believe that human language was incapable of completely capturing the essence of reality because it simplified the world into concepts which could be understood by humans, and as a result he rejected society's attempts to measure an individual's contribution to the social good⁶.

Abe Kobo believed that industrial society divided people into types and created class differences which destroyed community solidarity. He was especially upset by the strong desire for privacy and personal property which drove neighbors to conceal the bad parts of their lives from one another while making each other jealous with their possessions⁷. Abe Kobo concluded that the modern day crisis of man was his desire to escape from the alienation engendered by social conventions⁸. In The Box Man, for example, the man said that he would not need to conceal himself from society in the box if he could be free of envy and a sense of inferiority⁹. Similarly, the main character of Face of Another concealed his disfigured face with a mask in order to be protected from society's destructive judgments. The doctor who created this man's new face said that drinking alcohol was similar to wearing a mask in that they both provide a person the freedom to act without worrying about others' judgments¹⁰. People had such a strong desire to get drunk because it could be used as an excuse for acting however they pleased. The main character of The Box Man expressed a similar desire for insulation from outside evaluation when he described his dreams of a city of friendly hospitable strangers¹¹. The doctor from Face of Another described a similar city in which people put on masks to change their identities so that name, position, and occupation would not matter, allowing people to live without restraint¹². In these examples Abe Kobo expressed his desire for a world in which people could act freely upon their whims and fancies without the fear of a loss of reputation which could endanger their prospects.

The majority of Abe Kobo's characters could not come to terms with society yet could not escape from it, leading them to fulfill their own desires and resign from constructive activity. This came from characters' desire to escape the collective rationalities of modern society which cannot capture reality's complexity¹³. Due to his dissatisfaction with a society that limited human potential by assigning people menial or exploitative tasks, Abe Kobo joined the Japanese Communist Party, the only organization which strove to destroy artificial divisions between men and was consistently opposed to the militarism and ultra-nationalism of the Japanese government under Tojo. The JCP introduced Abe Kobo to European socialists and philosophers who strove to reshape the people's values by creating a rational society which was free of conflict and hierarchy. The JCP endorsed revolution and direct action such as striking and boycotting in order to bring about this new society. The JCP was skeptical of the improvements which could be achieved through gradual parliamentary reform, and as a member of the party Abe Kobo's message had to support the views of the party. His works during this period endorse the Communist notion that capitalistic society could not be reformed cooperatively from within, and the characters who attempted to cope with this society were unfruitful.

As an alternative to accepting the limitations of society, Abe Kobo explored the possibility of complete independence from society. The protagonists of Face of Another and The Box Man both adopt an outer skin in order to escape from the social constraints which limit their action¹⁴. They believed that an escape from being seen by the outside world would allow them to act freely without remorse¹⁵. The relentless pursuit for freedom, however, does not lead to constructive activity for the main characters of these works. The masked man, free from all responsibility and accountability, murdered the doctor in the film version of Face of Another¹⁶. The box man's pursuit of freedom was similarly futile, as he expressed a loneliness and a longing to rejoin society if he could be rid of envy and class conflict¹⁷. The main character of Face of Another also felt the loneliness that came with freedom¹⁸.

Abe Kobo seemed to contend that resigning from society robbed man of his purpose, and that the struggle for freedom was a hopeless pursuit. Most of Abe Kobo's characters encountered an overwhelming social force which had the power to control and shape everyone and everything¹⁹. The main character of Woman of the Dunes, completely parched, imagined whole cities being swallowed by the sand and realized that struggling against the tide of society was as hopeless as trying to crawl out of the sand dune he had been trapped in²⁰. The desire to escape from this control motivated the box man and the masked man to search for a way to free themselves from these constraints, but the transformations they undergo destroyed their identity and turn them into the types²¹. The box man's lack of any direction led him to totally resign from constructive activity²², while the masked man's unlimited freedom drove him to seduce his wife and to satisfy his fleeting desires rather than to carry on life as a normal productive human being. Ultimately, Abe Kobo believed that man's relentless pursuit of freedom was doomed for failure²³.

Instead, Abe Kobo endorsed voluntary acceptance of the limitations of society in the interest of shaping society for the better. First of all, he believed that a human's identity was easily changed and influenced by outside factors, and that a man's personality was mainly determined by the sum total of his experiences²⁴. The main character from Face of Another had so many selves that he was confused about how he should speak and act because the mask changed his personality in a way that he could not understand. The doctor points out, for example, that his change of clothing style was the mask asserting its power over shaping the man's actions and identity. The two parallel scenes of the masked man and the bandaged man renting rooms from the landlord showed that even the most subtle differences in treatment would cause a man to act immensely different²⁵. Abe Kobo used the main character of Face of Another to show that a person's identity was pre-determined by his experiences with outside stimuli and could therefore be changed²⁶. He observed that the American occupying force had achieved a radical transformation of the Japanese people's values²⁷, shifting virtue away from selfless emperor worship and toward finding individual meaning and worth. He believed that many aspects of reality could be easily changed by altering the societal norms which shape men. Due to his embrace of the idea that human nature was not innate but socially cultivated²⁸, Abe Kobo's Woman of the Dunes endorsed man's pursuit of rejoining society in the interest of reshaping it.

While the main character of Woman of the Dunes struggled against captivity for a large portion of the story, he chose to accept his position voluntarily when he was able to create the innovative water pump. From the beginning of the story the main character was interested in pursuing work which would gain him reputation and garner the respect of his peers. The main character mentioned more than once that his true motivation for exploring the dunes was to discover a new insect and to get his name in the bug book next to that entry. The man's struggle against captivity was ironically the motivation which led him to discover meaning in his life in the dunes. He was attempting to build a crow trap in the interest of using the birds for communication with the outside world, but instead he created a device for extracting water from the sand. When the main character was given the choice to escape from his desert captivity, he chose to stay so that he could win the respect of the villagers by showing them his new invention. Once the main character realized he could pursue his dreams of fame and recognition as a resident of the dunes, he became much less eager to rejoin urban life. The main character redefined his freedom by deciding that it would be just as fulfilling to work in the desert community away from the alienating social conventions of the materialistic world²⁹. The main character had resigned to the fact that he must live in a constraining society of some sort, and he was able to fulfill his pursuit of gaining social recognition. Ultimately, the main character accepted the fact that his disenchantment with urban society had driven him to explore the dunes, and he chose to be hopeful of his new role in the desert community rather than to strive for unlimited freedom and to resign from all productive social activity.

Abe Kobo's disdain for modern social conventions did not drive him to endorse a struggle for freedom at any cost. Rather, he encouraged humans to find a new kind of freedom in accepting social constraints and striving to improve them. Believing that man could redefine himself and reshape the world to change people's values, Abe Kobo entreated men to contribute creatively to society. While he seemed to emphasize the importance of Buddhist self-cultivation in preparing one to contribute creatively to society, Abe Kobo also embraced the notion that enlightenment and independence could not be used to help others if one unconditionally pursued freedom and withdrew from society.

1Fumiko Yamamoto, “Metamorphosis in Abe Kobo's Works,” The Journal of the Association of Teachers of Japanese (November 1980), p. 171.

2Teshigahara Hiroshi, Woman of the Dunes.

3Yamamoto, “Metamorphosis,” p. 190.

4Teshigahara Hiroshi, Woman of the Dunes.

5Abe Kobo, The Box Man (New York: Alfred A. Knopf, 1974), p. 86

6Bolton, Sublime Voices: The Fictional Science and Scientific Fiction of Abe Kobo (Cambridge: Harvard University Asia Center, 2009), p. 37-8.

7McDonald, From Book to Screen: Modern Japanese Literature in Film (Armonk: East Gate Book, 2000), p. 271.

8McDonald, From Book to Screen, p. 276.

9Abe Kobo, The Box Man, p. 90-1.

10Abe Kobo, Face of Another.

11Abe Kobo, The Box Man, p. 14.

12Abe Kobo, Face of Another.

13Christoper Bolton, Sublime Voices, p. 39.

14Keiko McDonald, From Book to Screen, p. 272.

15Kobo Abe, The Box Man, p. 16.

16Teshigahara Hiroshi, Face of Another,

17Christopher Bolton, Sublime Voices, p. 198.

18Teshigahara Hiroshi, Face of Another,

19Fumiko Yamamoto, “Metamorphosis,” p. 170

20Teshigahara Hiroshi, Woman of the Dunes.

21Fumiko Yamamoto, “Metamorphosis,” p. 190.

22Abe Kobo, The Box Man, p. 19.

23Keiko McDonald, From Book to Screen, p. 284.

24Christopher Bolton, Sublime Voices, p. 167.

25Abe Kobo, Face of Another.

26Christopher Bolton, Sublime Voices, p. 167.

27Fumiko Yamamoto, “Metamorphosis,” p. 172.

28Fumiko Yamamoto, “Metamorphosis,” p. 173.

29Teshigahara Hiroshi, Woman of the Dunes.