Investing in Life: Insurance in Antebellum America (review)

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Investing in Life: Insurance in Antebellum America. By Sharon Ann Murphy. (Baltimore: Johns Hopkins University Press, 2010. 416 pp. $67.00.)Reviewed by Michael ZakimSharon Ann Murphy's Investing in Life is a meticulous history of a significant but understudied event in the making of liberalism, the invention of life insurance. This was a social technology born of statistics, population, and the mass market, and of modern notions of self-ownership. All were pillars of the new industrial system, which meant that all effectively undermined an older patriarchy resting on land and household by which family and property had traditionally been organized in America.Life insurance was accordingly designed for persons whose income depended upon their lives, as the North American Review explained in a survey of the industry's explosive growth in 1863. The reference was to those who owned no real property and so lived and worked exclusively within the money economy. In the event of a father, brother, or son passing away, and in the absence of more grounded collateral, the family would be protected by a financial contract drawn up in advance for such a contingency. The insurance policy, in other words, transformed the wage, that most ephemeral of possessions, into an inheritable asset capable of spanning generations. Boasting of their subsequent success in protecting widows and orphans, insurance companies effectively assumed the mantel of the deposed patriarch. A properly insured society, it was explained, did not have to depend on the good will of family, friends, and neighbors. Instead, everyone would be in a position to help themselves. This was, in other words, the technical apparatus of selfreliance. Or, as Tocqueville remarked in his famous chapter on individualism, Aristocracy links everybody, from peasant to king, in one long chain. Democracy breaks the chain and frees each link.1 A market niche had opened up, and a new industry rushed in to insure that democracy.Life insurance was most often peddled in modest policies on affordable terms. This was an obvious strategy for expanding sales. Much of Investing in Life is consequently taken up with the price-setting quandary (16), the entrepreneurial challenge of turning a novel technology into a profitable enterprise. Regardless of which actuarial model was ultimately adopted, however, the terms for business success were obvious. Insurance required a mass market. There is really no element of uncertainty in the case, provided the company can obtain business the North American Review explained (emphasis in the original).2 Only if enough policies were sold, in other words, would there be enough cash on hand to pay out on claims: Risk could thus become a reliable investment rather than an irresponsible gamble only if it was spread out over the population. In this respect we could say that insurance generated a new form of community, peopled by policy holders who mutually guaranteed each other's personal security while entirely lacking any particular ties or even passing acquaintance. …