Collective Action and Assisting the Poor: The Political Economy of Income Assistance During the Lancashire Cotton Famine

Problems of poverty are exacerbated by uncertainty.1 This uncertainty means that one role of an income-assistance system is insurance, which in the modern world has often taken the form of government welfare or unemployment insurance. However, various private methods have also been important. The episode known as the Lancashire cotton famine reveals this institutional diversity in a region with a dominant geographically concentrated industry. A cyclical downturn in the cotton textile industry coincided with the Union blockade of Southern ports during the American Civil War, bringing four years of distress to the towns in the cotton manufacturing district concentrated in Lancashire. The unanticipated and unprecedented depth and duration of this shock unveiled both the responses of preexisting income assistance institutions and the institutional change that occurred to spread income losses after the cotton famine struck.