Moral Sentiments, Moral Hazard & The Poor Law

The Many Headed Monster 

Poverty, squalor, disease, ignorance & idleness always sparked deep, universal, emotional, troubles in the minds of all folk. The universal emotions of empathy & moral sentiments distinguished social animals from rats. Humanitarian notions of empathy not only drove cooperation in companies but also the fight against poverty. 

'The Expanding Circle: Ethics, Evolution & Moral Progress' by Peter Singer, 1981. Families, friends, bands, villages, clubs, friendly societies, tribes, cities, religions, companies, nation states, globalisation ... but moral hazard, due diligence & caveat emptor.

'Intellectual Origins of the English Revolution' by Christopher Hill, 1997 - 'The Many Headed Monster' - 

Social division in England existed long before the 17th century of revolution. And it was the exchange of private property that led to the synergies of specialisation & scale which manifested themselves in the industrial revolution. Land had always belonged to Kings, Lords & Bishops. 'The riches and goods of Christians are not common' Article 38, The Church of England. The abolition of church courts ended prosecutions for sin, leaving decisions on religious matters (usury 1624) to the conscience of individuals. 'I refrain from evil so as not to be accused by my own conscience'.  Much of the common law existed to protect private property from violent theft. The laws against vagabondage were savage but their enforcement was restrained by man's empathetic knowledge of poverty & inequality. Enclosure riots, fen draining riots, famine riots were discussed in taverns and ale houses for many years. Setting the individual conscience as a rival to the claims of authority was a Protestant idea. One can see the importance of congregational discussion and hence disagreements. All problems can't be solved by authority. The true experience of Christ is empirical. Scientists agreed, their experiments could be tested by other scientists. Authority was undermined. For Quakers the sense of the 'meeting of friends' became a check on the 'inner light' of individuals. The rapid spread of Quaker ideas in the mid 17th century suggest ready public acceptance of such ideas. Rejection of deference to superiors, refusal to take judicial oaths, millenarian communist ideas, opposition to tithes, insistence that laymen are as good as priests ... and more ...

The Elizabethan Poor Law addressed 'the many headed monster' through the church.

The Poor Law Act of 1597-1601

Responsibility for poor relief was placed in the hands of each parish. Overseers of the Poor in each parish collected poor rates from occupiers of land and property. The money collected was then used to help the destitute. For example by apprenticing the children of paupers. The aim was to try to prevent their children from becoming an additional burden on the parish when they grew up.

The Settlement Act of 1662 & Poor Law Removal Orders

The 'parish of settlement' was usually the original parish of birth or the parish of work & worship and was responsible for administration of the poor relief.
Settlement Certificates could be obtain in new parishes but. if not. assistance could still be obtain if an original parish paid a fee, otherwise a Removal Order ensured the parish of settlement met its obliged to take you back.
Removal Orders could involve taking a family back to a place of settlement miles away, sometimes to a parish they had only known briefly as a small child. Orders were sometimes accompanied by a written pass to the parish of settlement showing the route that must be followed.
It was rare for a husband and wife to have their children taken from them, each going to separate scattered parishes.
The place of settlement for illegitimate children was usually their place of birth, which could result in obvious problems, often exacerbated by remarriage.
Overseers easily became involved in negotiating delicate agreements concerning the welfare of children.
As part of the parish records, Overseers accounts often showed expenses involved in resolving legal places of settlement and the Quarter Sessions court books revealed cases involving settlement and removal of paupers.

Workhouse Test Act 1723

The 'workhouse test' was that a person who wanted to receive poor relief had to enter a workhouse and undertake a set amount of work. The test was intended to prevent irresponsible claims on a parish's poor rate. Between 1723 and 1750 some 600 parish workhouses were built in England and Wales as a direct result of the Act. The costs of this indoor relief was high especially as workhouses were wasteful; this led to the passing of Gilbert's Act in 1782.

Gilbert's Act 1782

Poor relief law proposed by Thomas Gilbert which aimed to organise poor relief on a larger county basis, counties being organised into parishes which could set up workhouses between them. However, these workhouses were intended to help only the elderly, sick and orphaned, not the able-bodied poor.

Speenhamland System of 1795

One example of individual parishes or Unions recognising the need to balance the level of financial assistance with the wider economic situation was the Speenhamland System. This created a sliding scale for the amount of outdoor relief, which related to the price of grain. The system under the Old Poor Law created several problems -
- The system of payment was seen to encourage the growth of the 'idle poor', those who could work, but refused.
- Employers often paid deliberately low wages knowing that the Union or parish would supplement the wage.
- Expenditure on poor relief was spiraling out of control because it was related to rapidly increasing demand rather than supply.

The Great Reform Act of 1832

Reinforced a belief in the efficacy of top down action but did little for real jobs producing innovative goods & services folk wanted.

Poor Law Amendment Act of 1834

A Royal Commission in 1832, produced a new Act which addressed the problems of the Old Poor Law. The Commissioners found that the problem was not one of poverty, or shortage of money, but pauperism. This idleness and drunkenness posed a threat to the fabric of society. The Commission concluded that the most effective way to eradicate pauperism at minimum cost was to make conditions in the workhouse deliberately worse than those of the 'independent labourer of the lowest class'.  New ideas of 'the deserving poor' and the 'undeserving poor'. The recommendations were to be implemented by a national Commission.
Poor Law Unions were created by grouping together parishes, and those Unions would be the responsibility of a Board of Guardians. The Guardians were then responsible for the administration of poor relief for the locality, rather than leaving it in the hands of individual parishes and townships.

Beverage & The Welfare State 1945

Originally conceived as a 'National Insurance' scheme, poor relief became a 'cradle to grave' 'entitlement funded by general taxation.

Stakeholder Welfare Frank Field 1997

Individual heritable savings accounts & rainy day funds offered alternatives to all the poor relief problems which eroded hard work, honesty & thrift and generated moral hazard. 

Swiss Decentralised Discretion.

Philanthropic Discretion.


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