Frozen Desire

   Property/casualty insurance is the lottery in a mirror.  Both imagine a cataclysm of vanishingly small probability, value it in money and distribute it around a population so as to mitigate its force:  in one the event is good, a prize of cash or an annuity or, as in so many of the Dutch municipal lotteries, furniture or silver or a carpet; in the other, it is that fire will break out in a baker’s shop and burn your house to the ground, or a storm run your ships aground.   The law establishing the London Chamber of Assurance in 1601 describes, in undisguised delight, how a mere ‘consideracon of Mony to other persons’ ensures that ‘upon the loss or perishing of any ship there followthe not the undoinge of any Man, but the losse lightethe rather easile upon many, than heavily upon fewe, and rather upon them that adventure not than those that doe adventure.’

"Unless-Jesus-Christ-Had-Died-For-Thee-Thou-Hadst-Been-Damned” Barbon aka “Praise-God Barebone” (1598-1679).

    Faith in God is displaced by faith in credit : faith that the lottery promoter or insurance corporation will not abscond with your ticket or premium and beyond that in the ability of the community to enforce public and private debts. The mental shift is evident in England in a single generation.  Nicholas Barbon, whose father, Praise-God Barebones, MP, had preached hell-fire in Fleet Street in the 1630s, lucidly contrasts the advantages of mutual and share-holder-owned fire insurance in his Letter To A Gentleman of January 26, 1684

 

Nicholas If-Jesus-Christ-Had-Not-Died-For-Thee-Thou-Hadst-Been-Damned Barebon (1640-98), the father of modern fire insurance.



     Life insurance takes the mental procedure one step further.  It was Johan de Witt, among others, who showed that the chances of death, if they could somehow be tabulated, could be combined with an allowance for compound interest to give the present value of a life annuity; and those could be sold either by private promoters or to finance the state.  In other words, money could not defeat death, as Witt’s murder showed in peculiarly ghastly fashion,  but it could dull its effect on a man’s survivor’s and posterity.  O death, where is thy sting?  A burgher’s wife could be as richly left as Portia with all the acres of Belmont.  What a property of money:  that it could take a man’s affection for his wife, freeze it, and then, after his death, to thaw it out to succour the grieving widow!

Attributed to Jan de Baen, The corpses of the brothers De Witt, on the Groene Zoodje at the Lange Vijverberg in The Hague, 20 August 1672., 1672-1702, Rijksmuseum, Amsterdam.  In 1671, Johan De Witt published his Waardije van Lyf-renten naer Proportie van Los-renten ('The Worth of Life Annuities Compared to Redemption Bonds').

 

Edmund Halley, Estimate of the degrees of the mortality of mankind, 1693.

     The mathematical work was done by Edmund Halley, the great astronomer and discoverer of the famous comet, working from the bills of mortality of the city of Breslau in Silesia for the years 1687 to 1691; and the whole process clothed, in the unctuous language of a company promoter of 1712, in terms of common sense.  The man who did not provide for his posterity:

"ought to forfeit the name of a Rational Creature, and be no more ranked among Men; or who  there . . . who can think of leaving a near Friend, a dutiful child, or a tender Wife unprovided for, without the utmost Grief that Human Nature can suffer."

 -- James Buchan, Frozen Desire, pp 113-14

Grave of Edmund Halley(1656-1742)  St. Margaret's Churchyard, Lee, Lewisham.

Age Pyramid, Breslaw 1691. Data from Edmond Halley's An Estimate of the Degrees of Mortality of Mankind (1693), table p.600.* (As the source does not distinguish between the male and female population, the diagram offers only a half pyramid.)

NOTE:    

At the suggestion of the poet Tom Clark, I have been reading James Buchan’s book Frozen Desire (New York, Farrar Straus Giroux, 1997), a study of the history and meaning of money.  As Tom pointed out, this is a book of tremendous value and actual profundity and a highly original work.   Buchan, a British novelist and journalist,  is also the grandson of the famous Scottish novelist, lawyer, politician and diplomat John Buchan, who is probably best remembered as the author of The 39 Steps.  As with all works of real intellect and imagination where every page brings a new door and window-on-the-universe opening, Buchan’s book is both exciting and enervating.  Reading it in these sharp, scraping and straitened times makes me jumpy.  Interested readers can easily find copies on abe.com.  For extra enjoyment (and maybe extra jumpiness), please see below for Edmund Halley's Hollow Earth (link).