ABSTRACT
The chapter discusses the functioning of poor relief and the multiple functions that poor relief performed for different groups. It discusses an alternative to poor relief – namely, mutual aid by guilds, friendly societies and trade unions. The chapter aims to encompass the various approaches to risks, it will now shrink to a brief discussion of certain, important, material risks to welfare in Europe during the 18th and 19th centuries. Welfare institutions are arrangements for risks, and it may often be difficult to understand the functioning of such institutions if people have no eye for the risks they cover. The fact that a group has an interest in a certain welfare arrangement such as poor relief does not mean that it succeeds in operating it, due to problems of collective action. Welfare economics demonstrates that rational members of a social group will not necessarily succeed in purchasing a public good even though the benefits of doing so outweigh the costs.
