The most damaging intellectual legacy of the Depression is not economic but social: the assumption that nongovernmental institutions are unable to cope with the collective problems of an industrial society. This promise became a self-fulfilling prophecy and has left American society badly disfigured.
Look at a typical history of 20th century America and you usually find an argument that runs along the following lines: Until the Great Depression, most charity in America was privately run. But the hard times of the 1930s taught us that private organizations were unable to supply all the needs of the poor. Therefore, the state would have to provide welfare for those unable to provide for themselves.
It may well be that private charities could not, on their own, cope with the Great Depression. But by 1925 (and possibly as early as 1920) the heads of the era’s major charitable organizations were advocating new ideas about how to provide assistance to those in need. They envisioned a world where government would occupy the commanding heights, while nonprofits and foundations produced and nurtured experimental programs for the state to eventually take over.
One factor in the growing nationalization of welfare was the rise of the “social insurance movement.” Social insurance encompasses what we now call Social Security, workmen’s compensation, health insurance, and unemployment compensation. In the United States its chief advocate was I. M. Rubinow, chief statistician at the Ocean Accident & Guarantee Corp.
In lectures before the New York School of Philanthropy in 1912–1913, Rubinow presented reams of statistics designed to support his claim that workers had to be forced to “buy” state-funded “insurance” in order to protect themselves. Such insurance, he argued, was the key to ending poverty. “The progressive social worker,” he wrote, “needs to understand that a sickness insurance law, even in one state, can do more to eradicate poverty and is, therefore, a greater social gain, than a dozen organizations for scientific philanthropy with their investigations, their sermons on thrift, and their constant feverish hunt for liberal contributions.”
In her book Pitied But Not Entitled, historian Linda Gordon argues that gender differences explain in part why social insurance programs were successfully enacted into law. Social insurance advocates, she argues, tended to be men who were comfortable with the use of statistics and wanted to eliminate poverty (which they defined as a lack of income).
Social workers, by contrast, tended to be women who often used narrative case studies as part of their effort to eliminate pauperism (which they defined as a lack of virtue). She argues that this is one reason why Social Security and Aid to Families With Dependent Children became separate federal bureaucracies, even though both were enacted into law as sections of the Social Security Act of 1935.
What’s more likely, however, is that charity leaders were attracted to both social insurance and state-supported welfare.
Take the case of Frederic Almy, who rose out of the Charity Organization Society of Buffalo to become president of the National Conference of Social Work in 1917. Almy began his career as a steadfast champion of traditional charity, but he was transformed by the statist currents that flowed through the world of social work.
In his presidential address to the 1917 conference, Almy gestured to the past. “We look forward to the day when involuntary, innocent poverty will be adequately assisted,” he said, “and when voluntary, willful poverty would be punished, as it should be when opportunities were equal.”
Bad character in the poor was still a problem for Almy, but what mattered more was the “lack of character among the rich who control many of the causes of poverty. Fortunately, the church, which more than any other agent lifts character, is to a considerable extent becoming socialized.”
Indeed, Almy concluded, “the present effort for social justice” was fighting poverty everywhere—enacting social insurance, reducing the number of hours workers spent on the job, and so forth. “No people seem to me more sure they have solved the problem of poverty more than the socialists,” Almy said. “I have read a good many books on socialism, and as I conceive it, it would make opportunity more equal, and be a long step forward. I like still more the motto of the communists, ‘From each according to his ability, to each according to his need,’ which is an ideal worth every effort to realize. This, if anything, would abolish poverty. It would almost be the realization of Christianity.”
Almy was more radical than most social workers of his time. Few, after the rise of Lenin, would admit to being communists. But even mainstream journals were actively debating the issue of whether charity should be nationalized.
In a 1921 Atlantic Monthly article, for example, Cornelia J. Cannon provided a forceful critique of existing philanthropy. “Institutions of social uplift have followed our spread across the country like prairie tumble-weed blown by an autumn gale,” she wrote, but “the apparently solid support of these societies has shown sign of giving way.”
Cannon saw many reasons why charity was in trouble. There were lots of charities—and they competed with one another for a limited supply of funds. Social workers, she wrote, “are themselves become weary of their dependence on the uncertain generosity of the patrons of the poor.” And the demand for aid dropped sharply during World War I, when unemployment fell rapidly as factories pumped up production to defeat the Kaiser. Did non-working Americans, she asked, suddenly become more moral in 1917 and 1918 when they went to the factory instead of the soup line?
Philanthropy, she wrote, still had a role to play in experimentation, creating “temporary demonstrations for combating these evils” which the state could adopt or abandon. “Can we not look forward to the day,” Cannon wrote, “when our philanthropic obligations will be brought to our attention, not by an appeal from boards of directors, but by a tax-bill from the properly constituted authorities?”
Three months later, the Atlantic Monthly printed letters commenting on Cannon’s article. According to the Atlantic, the article “has been seriously debated all over the United States. The Associated Charities of several cities have made it the discussion at stated meetings.”
Most letter-writers supported Cannon or claimed that their particular charity did good work. But the most prescient letter was written by one Rutherford H. Platt. “How does it stand with sound principles of government to make of the State—the community in its corporate, governmental capacity, a universal providence? N.B. Russia under Bolshevism.”
The Gathering Consensus
A consensus was forming around views like Cannon’s. “It is the business of the city, county, and state to take care of most of the individuals whose plight calls for direct relief,” journalist Silas Bent observed in a 1927 critique of philanthropy in Century Magazine. (However, he also observed that “the beneficiary often comes to regard the donation as his right and bases indolence on that premise.”)
Robert W. Kelso’s The Science of Public Welfare (1930) was a synthesis of existing research on poverty-fighting. Kelso contended that modern society was so impersonal that no one could be expected to help a destitute neighbor. “Space forms no boundary in modern social life, hence the identification of neighbor and villager is increasingly difficult,” he wrote. “The whole community (i.e., the state) must take upon itself much that formerly ought to be left to the individual.”
Kelso observed that private charities were affected by many problems. Private organizations did not supply aid as consistently as tax-funded welfare agencies. They were unaccountable to anyone and didn’t even have to issue annual reports.
For Kelso, the frontier between private and public welfare was that “all cases calling for custody or control of the person should go to the public agency.” The “feeble-minded girl with abnormal sex tendencies,” the abandoned child, the “wandering mendicant,” and the juvenile delinquent had to be dealt with by public officials empowered to send them to jail, reform school, or a mental hospital. The role left for public charity was that it “experiments in the field of problems and methods not yet fully demonstrated as practical for social legislation and the functioning of governmental agencies.”
While the Great Depression was the watershed event that ensured that the traditional functions of charity would henceforth be performed by the state, it’s clear that, even in the relatively prosperous 1920s, many social workers and the leaders of private charities were eager to have government as their employer.
Martin Morse Wooster is a contributing editor to Philanthropy and is the author of the Capital Research Center study Return to Charity? Philanthropy and the Welfare State, from which this article is adapted.