The Birth Of Social Security


With the third of AALL’s major campaigns, that for compulsory health insurance, launched in 1915, Rubinow found himself more in agreement. Here again AALL’s leadership stressed the “prevention of sickness” as a goal, and health insurance as a means of achieving it. But in the health field the inadequacy of voluntarism and private initiative was so patent, while binding social action was so clearly the only sensible solution, that AALL’s main emphasis accorded with Rubinow’s basic philosophy. The standard health insurance law proposed by AALL to the states stressed the compulsory requirement: by means of it, coverage was rendered universal instead of partial, and the need for expensive reserves was reduced. The model legislation was also redistributive of income insofar as most of the cost was borne by employer and state, each of whom (argued AALL) had a responsibility for the general health situation far greater than the workers had.

None of these three campaigns came close to achieving its objective. Most states passed workmen’s compensation laws, but these had no clearly demonstrable effect upon accident rates (other factors worked to reduce accidents) and they inadequately compensated the victims of accident and occupational illness: the injured worker continued to bear the bulk of the financial burden imposed by his injury. A mere handful of employers in the whole of the nation even attempted the employment “regularization” schemes proposed by A ALL, whereas the need for unemployment insurance increased even during the 1920’s, when New Era prosperity reigned. The campaign for compulsory health insurance failed most dismally of all. It aroused intense national controversy for half a decade, and in two states, New York and California, the model legislation seemed at one point close to passage. But in the end the proposal was everywhere decisively defeated.

Its chief opponent was the medical profession itself, whose concern to spread the blessings of medical science to the economically disadvantaged in any efficiently organized way proved to be minimal, or, at any rate, to lag far behind the concern for entrepreneurial freedom and private profit. Medical associations—state, local, nationalwaged ruthless war on the measure, learning and employing every trick of pressure lobbying and misleading propaganda, including appeals to the mind-befogging patriotic passions aroused by World War I. Health insurance was damned as a German conspiracy or (after the autumn of 1917) a Bolshevik plot. Consequently, from AALL’s point of view, the entire effort was ultimately counterproductive. The American Medical Association had not theretofore been much involved in politics, but it emerged from this struggle a remarkably potent political lobby and could be counted upon, ever after, powerfully to oppose any legislative proposal that might reduce in the slightest the private-entrepreneurial nature of American health-care delivery.

Small wonder that, as postwar reaction swept America into the 1920’s, AALL’s leadership was discouraged from further efforts along the same line. The new decade’s principal effort in the field of AALL’s interest was initiated not by AALL but by one of America’s zoological garden of fraternal associations, the Fraternal Order of Eagles. Every state had a number of so-called Eagle Aeries, whence came delegates each summer to a national policy-making convention called the “Grand Aerie”; and it was the Grand Aerie of 1921 that, at the behest of a “Past Grand Worthy President” named Frank E. Hering, committed the Eagles to a campaign for state old-age pensions. The time had come, said Hering, to stop consigning “our unfortunate aged to pauper institutions, humiliated, humbled, and, not infrequently, mistreated.”


The subsequent campaign was highly effective in calling popular attention to old-age dependency as a great and growing social problem in America; it was far less effective in providing solutions to the problem. True, the Eagles were largely responsible for the fact that eleven states had old-age pension laws on their books by 1930, whereas no state had such a law in 1921 (Alaska Territory had one, passed in 1915). Moreover, this was accomplished despite strong opposition from business organizations in a time when businessmen dominated the American scene as never before. But this triumph, alas, was more apparent than real. What opponents could not wholly defeat they still might vitiate, and they were aided in doing so by the Eagles’ lack of professional expertise and their willingness to compromise in order to achieve paper victories. Most of the resultant legislation was fatally flawed: it was optional rather than compelling of local compliance, it required local funding, and it confusedly mingled “moral” concerns with economic need in deciding pension rolls. (Hering’s own published belief was that, to become a pensioner, one should have a “history of habitual industriousness, habitual loyalty to family obligations, and freedom from all crimes involving more than four months imprisonment.”) Only six of the state laws were even nominally in effect in 1929, and these produced few actual pensions—a mere twelve hundred or so concentrated in Alaska, Montana, and a few Wisconsin counties, totaling $222,000.