It's not only that, you have to *know* the people you share it with. I'd argue welfare can't work properly on a scale larger than dunbar's number. So maybe only a few hundred people. Incidentally, that's exactly how it used to work before Teddy Roosevelt. Income insurance was primarily handled through fraternal societies who'd pitch in if one of their members fell on hard times. They also inter-insured, so if a disaster struck an entire community, affiliated communities would help. It worked pretty well, but it was strongly divided along ethnic and professional lines, so the "melting pot" reformers decided it had to go.