The first kind of social spending to exceed 1 percent of national product was, and still is, the most controversial kind: direct assistance to the poor. The eighteenth and nineteenth centuries had as much trouble with policies toward the poor as we do today. In fact, they had the same troubles, and the same opposing arguments came up.

The early debates were as intense as today's debates, the main difference being that the poor faced a much harsher world before the late eighteenth century. Many with power and voice held the poor in contempt, so that governments were more active in punishing beggars and vagabonds than they were in helping them. Private giving did little to offset this harshness. Contrary to a long tradition of imagining that churches and philanthropists were generous toward the poor before government moved into the charity business, there was never much private charity for the government to displace.

How was poor relief, the ancestor of today's public assistance and welfare programs, born and nurtured in such a harsh climate? Where did significant tax-based poor relief emerge, and where did it remain negligible as late as World War I? How did they handle the welfare trilemma, that unavoidable tradeoff between guaranteeing a bottom income, giving incentives to work more, and protecting the government budget? How did their approach differ from city to countryside, from region to region, and from nation to nation?