In the European Early Modern Period, subsistence agriculture was the name of the economic game - most people lived close to the poverty line and there were few surpluses. This continued well into the 19th century across Europe with the notable exception of England, which saw a consolidated system of larger farms able to benefit from economies of scale emerge in the 18th century. This development, although allowing England to feed herself without hassle thereafter, came at the expense of the well-being of the agricultural labourer, who saw a decline in his real wages and standard of living as increased productivity reduced the demand for his labour. Many were thrown into long-term destitution and forced to move into the cities to find work, where their real wages but perhaps not quality of life would improve. The patriarchial system of dealing with poverty in England was being dissolved by the creation of a rural proletariat. But what had been the nature of this previous system?
An important concept in the study of English demographics in the Early Modern Period is 'life-cycle poverty'. Because everyone was close to subsistence for their whole lives, something as simple as an accident might throw them into destitution - if the male head of a household broke his arm, his entire family would be in trouble. Widowhood was a constant danger to women and harvest fluctuations a danger to all. Even barring accidents, most households went through a 'life-cycle' of poverty. People in England tended to marry late, especially in hard times1 - the average age for marriage being around 25 - 30. This pushed them into a deficit phase of their life-cycle when they hit the 35 - 45 band, because they had so many dependents to feed. This was precisely the time when their own parents were facing poverty due to old-age - they were no longer able to work. The old could not rely on being looked after by their own children (a problem exacerbated by the English habit of forming a new household upon marriage), so they had to rely on extra-familial institutions.
Before the Dissolution of the English Monasteries, Churches and Monasteries paid a lot of support. After they were dissolved there was a gap in support, especially in the North where they had been widely used. The Elizabethan Poor Laws of 1598 and 1601 established a system of poor relief based on the mutual identity between relief recipient and ratepayer. Parishes collected rates from residents and redistributed the wealth to those in need - typically the elderly, widows and fatherless families. People paid the poor rates when they were enjoying a time of relative plenty because they knew they themselves would receieve aid during the deficit period of their life-cycle. By 1700 it was possible to subsist entirely off poor relief if the parish chose to provide you with it, and most people would need relief at some point during their lives.
After 1770 there was huge structural change in the English economy, especially in the South - and this threw a lot of able-bodied men onto the parish. The Poor Law in its current form began to become untenable as life-cycle poverty gave way to large structural unemployment - and so the Poor Law Amendment Act of 1834 seemed to have forgotten all about life-cycle poverty. It was more concerned with the effect of government intervention on the labour market and wage rates, believing poor relief to have an adverse effect on both. Although the central Poor Law commission banned the giving of outdoor relief (ie. the payment of relief without placing someone in a workhouse), the practice mostly continued until the 1870s because it suited the local Boards of Guardians administering the law. The Guardians were largely local farmers who didn't want to pay to errect workhouses and who understood that to maintain a healthy workforce they had to deal with life-cycle poverty.
The New Poor Law, though, seemed to take for granted that poverty resulted from some sort of personal failing - the only correct reponse was to gently cajole people back into the mainstream of society. The Victorian belief in self-help was so strong that they failed to understand the ancient socio-economic forces which might occasionaly force someone into poverty - these were not the result of indolence, just lack of plenty in an industrialising economy. Although the Old Poor Law had become untenable in the midst of economic change, inflation and war, support structures were still needed to help people who found themselves in poverty through no fault of their own. Victorian philanthropy filled this gap until the government stepped in to shoulder the burden when it started to believe that unemployment and poverty were society's problems, not individual's.
1. Wrigley and Schofield have shown fairly conclusively that the driving factor behind the surge in the English population after 1700 was due to a change in the marriage rate, not a change in mortality rates as was previously assumed. The so-called 'prudential marriage system' meant people married later or not at all during hard times, but married earlier and had more children when the cost of living was lower.