The Values of Insurance

FRANÇOIS EWALD TRANSLATED BY SHANA COOPERSTEIN AND BENJAMIN J. YOUNG

The history of insurance tells the story of modern morality, more precisely of modern struggles within the sphere of morality. Thus it would be incorrect to assume that insurance was borne of only a hypothetical need for security. The writings of Jean Halpérin have clearly shown that, for insurance to exist, a new need for security had to appear. Insurance is the offspring of capital. This new form of security was not needed in a feudal economy, in which property was tied to the land, and the individual was enclosed within the bonds of family and religion, or within corporate solidarity. Security becomes necessary, however, as soon as financial assets begin to circulate, become tradable, and capital finds itself exposed to the dangers engen- dered by this circulation. It is no coincidence that the first kind of insurance was maritime: “The sea alone was able to elude rigid feudal armature. The cornerstone of the feudal world was essentially the land; the sea escapes social and political hierar- chies; it is not subject to any governmental authority whatso- ever. Nothing is less feudal than the sea.”1 Insurance as a method for securing capital also was born as a means to circumvent the church’s prohibition against usury. “Insurance was born from the simultaneous struggle against maritime insecurity and against canon laws with regard to finance.” Also, as noted by Halpérin, the origin of insurance is not to be found in the older forms of “common security” [sécu- rité solidaire]; “When insurance appeared for the first time as an autonomous social institution, it was not founded on a sense of solidarity, but rather in the spirit of financial gain.”2 The spread of insurance goes hand in hand with the disman- tling of feudal solidarity and the freeing and autonomy of the individual. Insurance is a security measure linked to individualism. It is the offspring of a capitalist ethos that has been well described by writers such as Werner Sombart and Max Weber. Neither of these authors explicitly took up the theme of insurance in their writing. But texts such as The Quintessence of Capitalism and The Protestant Ethic and the Spirit of Capitalism give the historical background that allows us to understand the moral context in which insurance was called into play.3 When Sombart describes the origin of an entrepreneurial spirit in practices such as speculation and project development [fabrique de projets], we are right to wonder whether “the insurance business” is a pleonasm. When Max Weber describes capitalist rationality, arguing that the spirit of capitalism is characterized by the fact that this rationality became a form of morality, we wonder what better example there could be than insurance. The creation of life insurance in the eighteenth

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 century was part of a movement for moral reform that made foresight the cardinal virtue of man as social actor: foresight as the quintessential social institution. The first insurance companies insisted that there should be a proportional relationship between premium and risk (which excluded the idea of social transfers [transferts sociaux, or payments made to protect individuals against certain risks]). This is the golden rule of insurance. It is due less to the demands of actuarial technique than to the particular political-moral imaginary in which insurance orig- inated, an imaginary at the root of the first forms of insurance.

From the Forbidden to the Obligatory Today, insurance stands as a pillar of our economic and social order and lawmakers continually expand insurance requirements. So it is hard to imagine that, in the beginning of the nineteenth century, all forms of insurance (with the exception of maritime insurance) were treated with suspicion; life and liability insurance were prohibited as antithetical to public order and good morals. And if fire insurance was recognized, it was uniquely under the form of mutual insurance, which would prevent abuses of the system by requiring those policyholders to engage in mutual monitoring. Insurance was, at first, accused of allowing the insured to loosen their oversight of their own affairs, to the point where it encouraged delinquency. Insurance encourages crime. It seems that this adage dates back to the first iterations of life insurance that were based on a system of bets and wagers made on the lives of others. It was indeed an invitation to make whoever has been “insured” disappear. As recounted in Louis-Augustin Boiteux’s La fortune de mer [Maritime fortunes], bets were placed on whether the emperor is coming to Italy, if it will be raining on the day that the ship returns, if the queen is giving birth to a girl, if Titio is ascending to the Capital, if the duke Charles survives (. . .), if Luce Gentilis’s wife—aged 32 years old and 8 months pregnant—is able to remain safe and sound, whether or not Paul of Orto will pass away a year from now, whether Andriolina of Grimaldi will die this year (. . .), we even bet on the life of the pope.4 Bets could be placed on everything: on George III’s return to health, on the life of Robert Walpole, on the acquittal or convic- tion of the Duchess of Kingstown, who was accused of bigamy. Even in France people bet on the life of the Duke of Orléans, regent of France. They bet on the life span of Louis XV’s mis- tresses and how long they would remain in favor.5 These practices, which accompanied the first maritime insurance contracts, had been prohibited across Europe. In particular, such acts had been prohibited by Colbert in the Marine Ordinance of August 1681 (marine code). Nonetheless, these practices persisted. This is reflected in a policy drafted on May 21, 1813, and conserved in Lloyd’s archives. It stipulated that

Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 four insurers, at a premium of three guineas for one hundred pounds, committed to pay William Barrington five hundred pounds if Napoléon Bonaparte died or was taken prisoner before June 21, 1813.6 For a long time, there were suspicions raised against life insurance contracted to the benefit of a third party, because it encourages the disappearance of the insured party. During the trial of La Pommeraye in 1864, in which a doctor had assassinated a patient whom he had insured, the public prosecutor at the Court of Cassation, Dupin, pointed out that no subsequent orders had lifted the ban imposed by Colbert. Legislation hostile to insurance was also motivated by the principled position that: “it is against public propriety and honesty to insure the life of men.”7 This is a view adopted by many authors, including Jean-Étienne-Marie Portalis, who explained that: It is undoubtedly possible to deal with uncertainties, to sell and to buy mere expectations [simples espérances]; but it is necessary that the uncertainties and the expectations at the core of the contract do not contradict either natural feelings [sentiments de la nature] or the principles of honesty. We know that there are lands where ideas about healthy morality have been so obscured and stifled by a vile spirit of commerce that they authorize insurance on the life of men. However, in France, such conventions have always been prohibited. We have proof in the Marine Ordinance of August 1681, which only renewed the previous defenses against insurance. Man is priceless; life should not be commercialized; death cannot become a matter of speculation. These kinds of wagers on the life or death of a human being are odious, and they cannot exist without danger. The greed that speculates on the number of days a citizen will live often accompanies the crime that can shorten them.8 However, good conduct is a matter of custom [bonnes moeurs sont choses de moeurs], morality is relative, and the morals of yesterday are not those of today.9 There was a morality of law, and jurists were concerned, in a somewhat abstract way, only with respect for life. But there were also economic and political advantages that could be drawn from insurance schemes. In 1787 and 1818, the State Council authorized, in spite of Colbert’s prohibition, the activities of the first life insurance companies, recalling that they first offer a means to free oneself from usury and to moralize financial investments; they “also would revive feelings of affection and reciprocal interests that will delight society and improve its strength.”10 Because, in contrast to a life annuity contract, which was authorized by the Civil Code, life insurance contracts were more worthy of protection, because the former is too often the result of selfishness and avarice, while the latter can only be born from a generosity and benevolence which

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 brings the subscriber to impose on himself yearly sacri- fices to provide the objects of his affection the well-being and comfort that his death could deprive them of.11 Life insurance contracts were wed to the most tender of famil- ial sentiments, and gave voice to the most respectable virtues of sociability. The fact that life insurance “became the strongest antidote against selfishness” gave it an air of nobility [des lettres de noblesse].12 Morality, if one could call it that, changed registers. It was no longer a question of knowing whether there could be an obstacle to the principle of life insurance, of whether life could or could not have a price. Rather, it was only a question of evaluating the economic and social advantages of these calculations [combinaisons]. Portalis had declared: “Such acts are vicious in and of themselves and provide no real utility that could compensate for the vices and abuses to which they are susceptible.”13 He was mistaken. At the same time Portalis rehearsed the old Colbertian condemnation of insurance, insurance was being driven [était portée] by a new economic morality, a morality based on time and on solidarity. Moreover, the prohibition of life insurance rested on an ana- lytical error, a confusion about what was to be insured. It was not life that was insured. Pothier already emphasized that since “Negroes exist as commercial items and are susceptible to esti- mation,” one does not see why “the life of Negroes would not be susceptible to an insurance contract.”14 And the grand jurist Pardessus distinguished, with good reason, between the risk insured and the thing itself. He explains conclusively: It is true that the life of a man cannot be sold for any sum. But from the fact that it cannot be evaluated in this regard, we must not conclude that one cannot estimate the damage caused by someone’s death. This is, in fact, the real goal of insurance. An insurance company does not buy things that it has insured; it agrees to redress the wrong that their loss will cause. It is thus useless to examine whether life is or is not susceptible of being sold; it suffices that death, which is the loss of life, caused damage worth a price. This is what cannot be called into question.15

Malpractice Insurance Suspected of Immorality The second largest obstacle to the development of insurance concerned malpractice insurance. Whereas “good morals” were against the insurance of life, it was “public order” that rendered malpractice insurance difficult. What will remain of responsibility if one could insure malpractice, thus shifting the burden of responsibility away from the individual and onto the policyholders as a whole? How can we tolerate malpractice insurance in a political economy founded on the idea that “responsibility is the most perfect regulator of human action?” Are the concepts of insurance and liability [responsabilité] not contradictory to each other? Is it morally and thus socially

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 acceptable that one can “cover” liability for a modest fee? Moreover, does this idea of insurance not protect the same irresponsible actions clearly prohibited by law? In the eighteenth century, legal doctrine was very firm on this point. Valin declared that “insurance could not validly take responsibility for damages that take place at the hand—or by fault—of the insured. Such a thing would be absurd, illusory, and fraudulent. Pacta non servanda quae ad delinquendum incitant [Agreements not observed incite transgressions].”16 Pothier specified: “I cannot agree to let someone else take responsibility for the faults that I will commit. Such a clause would be absurd, illusory, and fraudulent.”17 And Emerigon also stated: “It is thus certain that insurance companies can never respond to damages and losses that occur directly by the hand or the fault of the insured himself; it would be, in fact, unacceptable if the insured indemnified himself through others for a loss which he would be the author.”18 The conflict between the law and insurance gets to the heart of the matter; it touches on the political economy of modern societies and on the principle of their regulation. One might have first thought that there were technical obsta- cles to malpractice insurance: doesn’t the notion of risk imply that its realization must occur independently of the will of the insured? Is the chance that characterizes insurable risk inter- changeable with that which the jurists classify as an unavoidable accident and which excludes all misconduct [commission de faute]? The jurists would have really wanted it that way, that one might be able to equate risk with accident, and to conflate [rabattre . . . sur] the categories of insurance with those of law. But the notion of risk, which expresses the statistical probability of certain events, independent of their cause, is not of the same order as accidents. Such fortuitous events designate, on the contrary, a cause of damages independent of mankind and his will, of that which he could have foreseen and would have tried to avoid. It does not matter whether the accident was due to imprudence or negligence. That does not imply that there were no risks but only that self-determination [la volonté] is one of many factors associated with risk. Insurance requires [passe par] a sort of objectification of liberty. As Adolphe Quételet’s Social Physics was supposed to establish: liberty is chance, an “accidental” cause, which, far from prohibiting the existence of statistical regularities, permits it.19 Of course, this is not to suggest that the insurance company is not invested in the conduct of those it insures. Insurance gives value to the thing lost by the insured. Considered in the abstract, this practice relies on chance. But it can proceed through speculation once insurance is in place. The problems of “moral hazard” [risque subjectif] and of “moral contingen- cies” are quite different from earlier precedents: all of a sud- den, it was about knowing if the fault deemed “tortious” was insurable; now, insurance companies are preoccupied with preventing fraud and deception, as well as penalizing any fraud

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 committed by the insured. Why did insurance companies refuse to insure negligence [faute lourde] in the nineteenth century? Because its severity was such that there would not be any risk? Not at all. Nor is it because bearing witness to such obvious negligence would render insurance immoral. The obstacle is not the public order, and its preventative measures, but the insurance company’s concern with regard to insurance speculation: “The insured bears the damages caused by his negligence, especially when it is clear that, had he not been insured, he would not have suc- cumbed to this extreme negligence.”20 Moreover, many practical reasons militate in favor of malpractice insurance. The first reason is linked to the insurance contract itself. Should land insurance guarantee the insured only against events causing force majeure [acts of God], this guarantee would be illusory. In the case of fire insurance, the insured would only ask for an indemnity if his house was burned by lightning. The insurance premium would no longer constitute an indemnity against the possible risks, since such risks are so rare that the premium would amount to nothing more than a donation.21 Alfred de Courcy confirmed that: “Insurance which does not cover negligence would be illusory. The majority of accidents are caused by negligence.”22 And the jurist Toullier maintained: the proposition that “the insurance company is not held responsible [tenu du sinistre] for that which takes place at the known fault of the insured” must be modified and limited to cases of gross misconduct equivalent to fraud. Because, when I purchase fire insurance for my house, my intention is to safeguard it against all accidents including those which occur involuntarily at my own hand.23 The position of these authors demonstrates a remarkable shift. This shift ensures that the contractual logic of insurance prevails over tortious liability derived from responsibility. The conduct of the perpetrator of the damage (in this case, the insured) is judged [considérée] not in relationship to the requirements for public order but only insofar as it could affect the good faith of the contract. That is how the insurance contract became the standard on which a new notion of public order was defined. Hence, the central notion of accident and its neutrality rendered the question of fault a secondary concern. This tolerant position could be understood within the privately financed framework of malpractice insurance: in this case, only the insured and the insurance company are involved; the insured was the first victim of his negligence, and to not enforce the guarantee would have led to the suspension of a contract that became too unequal. But the problem of malpractice insurance would emerge within the framework of liability insurance where, this time, the fault of the insured caused injury to another person.

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 In principle, liability insurance covers the offenses and quasi-offenses committed by an insured. How could one admit that you must pay for the negligence of another? Is it not a flagrant contradiction to the principle of public order and its imperatives of prevention to permit someone to evade a penalty for his faults? It is difficult to imagine how guarantees regarding the principle of liability could ever be tolerated without doubts. But this is to forget that even if liability insurance contradicts the legal administration of liability, it protects the same interests as law, and in particular, those of the victim. The victim no longer fears the insolvency of the person who caused the damages. In 1844–1845, the best ways to protect the same interests became the subject of a major dispute. At stake was the legality of the first insurance companies against accidents, l’Automédon. On August 21, 1844, the Commercial Court in Paris had inquired “if it is permissible to insure accidents which might happen to insureds, and if it is contrary to public order to recognize [admettre] insurance on the quasi-offenses which could be committed by the insured or by those who he employs. This would incite carelessness.” Consequently, before the question had even been referred to the court, the court declared that “the agreements between parties are invalid as contrary to good morals and public order.”24 It was a reminder of the principles of public order: we cannot support irresponsibility. This judgment condemned liability insurance on principle. L’Automédon appealed to the greatest legal minds of the time, including Pardessus, to draft a response. Pardessus began by asking why is this contract forbidden while other kinds of insurance (fire, the renter’s liability) are authorized? And particularly since liability insurance, unlike malpractice insurance, does not benefit the insured but the victim. In liability insurance, the insured has no interest in causing the damage that will not benefit him in any case. Liability insurance, as a matter of fact, guarantees the victim more so than the perpetrator of the damage. It is driven by a “moral idea,” particularly in relationship to car accidents, where it was difficult to take a more humane and practical pre- caution for the poorest classes, who are almost always victims. Most of the time, without such a clause, these unfortunate individuals would obtain only illusory con- demnations directed at the people who had hurt them, or bear the slow cost of the judicial procedure. Moreover, the idea of this guarantee comes from the Police Commissioner Count Angles who, “in the interest of order, security, and free circulation” in Paris, had instituted in 1821 a sort of guarantee fund destined to repair the numerous accidents that this circulation was causing. In addition, the type of insurance that protects the victims of imprudence responds to the nature of the law, which “refuses to negotiate between the perpetrator of the fault and the perpetrator of prejudicial negligence to others, and the person who

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 suffered from this negligence.”25 In the end, the guarantee offered by l’Automédon was limited in its amount and covered only the tort of the insured; that is to say, explains Pardessus, “the acts which likely would have harmed someone physically, but which would have been committed without malevolence, without harm being the express purpose, and only by simple imprudence.” Nothing is therefore more useful and moral than this institution. On July 1, 1845, the Paris Court issued a judgment in agreement with the defenders of l’Automédon. The idea proposed by the legislator in 1804 [i.e., in the Napoleonic Code, officially the Civil Code of the French] had been that social interests, which must be protected by a system of responsibility [dispositif de responsabilité], would be best protected when any negligence or error was imputed to fault and all fault was sanctioned. The victim would always be indemnified, and each would be encouraged to behave with the greatest prudence; not a single indulgence should be taken. The idea of fault would make reparation, penalization, and prevention to one another easier, to best meet the needs of public order. Insurance introduces a new manner of protecting the same social interests: first, those insured are saved from ruin thanks to insurance. Does protecting social interests not deserve more attention than the potential failure of prudence? Second, insurance protects victims against both the uncertainty of litigation and the possible insolvency of those responsible. Insurance did not interfere with the motivations of the legal system of responsibility so much as it made up for its short- comings. The time is no longer very far away when the protection of public order by the sanction of faults will appear like a complex, theoretical objective, unsuitable and somewhat incomprehensible in regard to the practical demands to be sat- isfied, when the technical-legal rules of liability will appear very rudimentary in relationship to that which enables insurance. This is because insurance has an advantage over the legal system of liability [dispositif juridique de responsabilité]. The latter offers reparation by condemning the activity that caused the damage, or the manner in which it was carried out. Insurance, on the contrary, enables both the continued activity and protection of its possible victims. The development of industrial societies multiplied the situations where profitable and useful activities caused damages that could not be imputed to fault, where the distinction that must be made, according to the law, between the activity and the manner in which one exercised the activity, proves to be factitious. So much so that if choosing between forbidding the activity and forcing it to redress the damages it may cause in any circumstance, as a kind of inherent risk, one will choose the second solution—and thus, insurance. Practically speaking, it was the courts that had to manage the conflict between morality and responsibility. They did this with a double concern in mind: to give the insurance contract all its value and to provide the best protection for victims.

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 Therefore they multiplied the faults, which in turn created the market for responsibility, which could then be exploited by insurance companies. In return, insurance permitted judges to expand the field and the amount of compensation but also the field of responsibilities, which would have been inconceivable without insurance. This spiraling process inevitably led to the disqualification of laws concerning responsibility in the management of damage reparations. What was once prohibited by the French Revolution and its jurists thus became elevated to the rank of political technology less than one century later by a singular reversal of values. Indeed, the champions of the Third Republic created insurance, and in this way it became social, the very basis of the modern social contract. And so we entered into the age of “insurance societies,” with their long procession of insurance obligations.

The Ethics of Insurance The conflicts between the values surrounding insurance are far from being resolved. The battle still roars. But the weapons, terrain, and maneuvers have changed. Now, in contrast to the nineteenth century, the fight is no longer directed against insurance but between insurance institutions; the battle is no longer over knowing whether one event or another, or a certain behavior, must be treated as a risk, but on the legitimacy of specific insurance institutions (premiums, mutuals, or social insurance) to cover specific types of risk. The conflict between social welfare and the insurance market takes place within the frame of the contemporary crisis of the welfare state. The debate concerning the creation of pension funds, as well as the opposition between capitalization and distribution, also corresponds to the battle waged on the moral terrain. This is not to suggest that morality would be on one side and immorality on the other. Rather, this is a battle between two moralities, a com- bat asserted by the different participants involved. The themes, the arguments, repeated a thousand times by Denis Kessler, president of the FFSA, have always highlighted the moral and moralizing aspects of voluntary membership in pension funds.26 Conversely, the opponents—whether trade unionists or political opponents—never miss an opportunity to invoke values like solidarity and equality. One could even argue that in the face of unfavorable economic and demographic realities they sought an advantage on the moral terrain. The same goes in the domain of health insurance, especially as this concerns questions systematically used for selection and exclusion. It is clear that for many actors, such as doctors or those covered by social insurance, the uncertainties that led them to acquire medical coverage stemmed from the fear associated with the moralization of medical consumption. They had a hunch that the “insurancialization” of health risk management could lead to a new relationship between individuals and illness that would privilege values other than those of social security today: the old culture of deficit—never condemned

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 because it was evidence of the importance of coverage—would be replaced by a morality of the economy; the privilege given to ignorance would give way to a demand for knowledge; and systematic indemnification would cede to prevention. When the mutual insurance scheme Mutuelles 45 proliferates adver- tising campaigns with the theme “health is not a business,” it claims morality as its battleground.27 When mutuals without intermediaries evoke the virtues of the social economy while they practice insurance according to the same techniques as their competitors, it is because they seek a decisive advantage on the moral terrain. Insurance draws its morality from the practice of a certain type of rationality; it shares the same logic that implicated the notion of risk and that formalized the calculation of probabilities. What makes insurance unique is that it gives to certain events an objectivity that alters their nature. Insurance, first, reverses the signs: it makes that which was until then considered an obstacle into a possibility. It frees from fear: The first and one of the most salutary effects of insurance is to eliminate from human affairs the fear that paralyzes all activity and numbs the soul. Rex est qui metuit nihil [He is a king who fears nothing], Seneca someplace said. Freed from fear, man is the king of creation: he dares to act; even the ocean is so obedient that he can entrust it with his fortune.28 Insurance, furthermore, assumes a structure in which each person can objectify themselves, individually and in relation to others. It turns man into capital. In the 1860s, a whole campaign in favor of life insurance took place on this theme. Man is capital as, for example, Louis Richard explained: “It is very simple. A patriarch occupies a position in administration, commerce or industry; this job gives him an annual revenue of 10,000 francs; at a rate of 5 percent, 10,000 francs becomes the income of 200,000 francs; thus the patriarch represents a capital of 200,000 francs.”29 And he adds that “there is no capital more precious than man, source of all wealth.”30 The source of all value is itself a potential value that becomes real thanks to insurance. If to insure oneself can be a duty, it is first because of basic economic concerns that drive us to not destroy wealth. At the end of the seventeenth century, William Petty made the calculation of man’s value one of the tasks of political arithmetic: he estimated the value of an Englishman to be a little less than six shillings.31 Insurance provides a means to realize, preserve, and even multiply this already abstract value. As we all know, the ethical outlook that precedes insurance had first been considered and implemented by Pascal. In response to questions that had been posed to him by his friend the chevalier de Méré, Pascal constructed the following rule: when, in a multiround game, one of the players decides to leave before his turn, the players may evenly distribute the bets placed. This rule—the division of stakes—requires calculating

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 the value of the bets placed according to the probability of winning or losing. Pascal would resume this line of thinking in his famous argument now known as “Pascal’s Wager.” The transition from mathematical reasoning to a medita- tion on human life came naturally: if the behavior of the fallen man, the contingency of his being, the arbitrary harshness of laws that imitate a game of chance, lead to his death and certainty that the game will be brutally interrupted, it is then possible to reach a decision.32 Pascal’s Wager thus defines with precision a method of decision- making, according to which life assumes a new meaning, and the value of values is profoundly reevaluated. Underlying insurance there is a kind of reasoning that can be broken down into four major values that occupy the field of the moral: responsibility, solidarity, justice, and truth. These four values are considered to be the cardinal points of insurance. They are the summits of its magic square.

Responsibility The first value of insurance is responsibility. The word should not be confused with the sense conferred on it by jurists in the nineteenth century, when they made this quality of man an offense subject to punishment. “Responsibility” first had a political and social significance. The word itself, which did not appear until 1787, referred to a principle of political regulation that prevented individuals from transferring expenses they had incurred onto others. Whether you suffer injury or are struck by an event, you have no right to request aid or assistance from others. The principle of responsibility directly opposes the principle of assistance and the idea of charity. As Thiers wrote in 1850, The fundamental principle of any society is that each man is charged with providing for his needs and the needs of his family through assets earned or passed down. Without this principle all activity would cease in a society. This is because if man could count on work other than his own to survive, he would gladly delegate to someone else all the worries and hardship of life.33 The formulation of this principle accompanied liberal philosophy. This principle is about teaching people to have foresight, to turn themselves toward the future, preventing them from living only in the present. The principle of responsibility rests on a relationship between man and nature such that anything that happens to me is a sanction, good or bad. Because I am responsible for myself, I must attribute to no one other than myself the cause of my failures. These failures, even if they are caused by other circumstances—for instance, a difficult economic climate—are still only my fault: it is I who did not take into account one specific element, who did not understand the laws of nature or was incapable of using them; in any case,

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 with a few exceptions, it is my fault. I am the single point of imputation for everything that happens to me. “To err is human,” so says the adage. And so, the principle of responsibility converted all error into fault. The principle of responsibility is based on a method of man- aging causality that implies a self-regulation of conduct and activities. Insofar as no one can attribute to another his or her own failures and suffering, failure and suffering will become the indefinite principle of their own amendment. The principle of responsibility, founded on the notion of fault, acts as a universal converter to right wrongs. But it is particularly demanding. From this point of view [dans son optique], security should not be a right but rather a duty. This is because there is no place in this philosophy for the notion of the victim. In this world, to suffer a misfortune gives you no right to anything. And no matter what feelings of compassion and pity the victim might inspire, the victim is always believed to be the sole actor in his or her own destiny. Because man has foresight, he lacks excuses. He owes his security to prudence. He also owes his security to the capacity to join forces with others to offset the effects of fate. Foresight is the great virtue of Enlightenment philosophy, and it remained so in the nineteenth century. It is because of foresight that responsibility prohibits the transfer or imposition of an individual’s burden onto others (except in the case where that burden was the fault of another). Foresight requires being aware of the risks to which one is subjected because one must cope with one’s own decisions [initiative]. The world of foresight is a world in which each person must recognize him- or herself as weak and fragile, subjected to endless blows from fate and reversals of fortune. It is an unbalanced world where man knows too often he has been defeated and can hardly think about how he could exploit science or a technique usu- ally unavailable to rebalance his relationship to nature. Rather, he must appeal to ruse, to intelligence, to the calculation of probabilities, which teaches him that accidents do not happen without laws and that these laws are foundational to mutuals, companies through which one can rationally cope. And that is how insurance touted its merits throughout the nineteenth century: it represents the institutionalization of rational foresight. In a world governed by foresight, man has no other resources than arithmetic and virtue. Confronted by the possibility of unavoidable accidents, the only available resource is to learn to compensate for them. Foresight created the demand for insurance. Foresight can only be free; it is a virtue and cannot be forced on anyone. Therefore there is a fundamental contradiction between responsibility and compulsory insurance. It is the great division, the great judgment matrix of the nineteenth century: there are those who have foresight (and who the state must aid and encourage through incentive policy, because the state is itself interested in the development of this virtue), and the others who lack foresight. There is no need to abandon

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 them. They will benefit from the aid of welfare. But this will cause them to become dependent on others, and dependence is the worst condition for man. Insurance is in service of foresight. It is that form of association that implements foresight and permits the coexistence of liberty and security. The end of the nineteenth century is marked by the acknowl- edgment of the failure of foresight. The word had, as a matter of fact, practically disappeared from our vocabulary. Insurance requirements proliferated because of this failure, particularly within the framework of social insurance.34 It was a failure of morality. One no longer spoke of moral requirements but of social needs. It is always the same story: if choosing between liberty and security, mankind always ends up favoring security.

Solidarity “Man is capital,” Edmond About repeats in a successful book on insurance in which he clarifies that the value of man as capital depends on his partnership [association] with others: You know that the wheels of cars, while driving on asphalt, wear away more than twenty kilos of iron and disperse it through the streets of Paris each day. These 20 kilos of precious metal scattered everywhere are not destroyed but are lost. Their infinitesimal division makes them useless and renders them imperceptible. Suppose that a patient and ingenious worker came to collect these iron atoms, and to give them cohesiveness, strength [résistance], and return to them all their former qualities. The worker puts them in the forge and draws from it a lever. Would he not have created a capital useful for men? One cent is no more capital than steel wool is a lever. It hardly has a value; you will find very few individuals who are sensitive to the loss or gain of one cent, because an isolated penny amounts to nothing. But whoever through an honest process obtains from his fellow citizens of the earth this single useless penny could create a capital of 10 million; that is to say, it could become a handsome lever for moving mountains.35 Where we are nothing individually, we become everything in solidarity. To insure oneself is not only an individual duty, in the sense that to not be insured “is to commit an act of selfishness and to be guilty of carelessness against one’s family (. . .), to take responsibility of one’s future misery.” To not be insured, “is to play with scourges; that is to say with fire, with the sea, with hailstorms, with death.”36 It is even a social duty: those who do not insure themselves become a double burden for society, due to the assistance they will require if they are the victim of an accident, and because the penny that they have refused to share would, when added to those of others, have helped create a capital useful to all. Listen again to About:

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 The son of a family who inherited a million and who “invests” the money in amusements is like a malicious worker who, while filing a lever, reduces it to dust. The stupid worker could say to his boss: “I have taken nothing from you; weigh your iron filings, it’s all there.” The dandy will sing a familiar tune: “It is not lost for everyone! Go see the most fashionable car maker, horse sales- men, linen maids, tailors, jewelry-makers, and chefs; you will find in their hands the shavings of my million.” By Jove! We know that the money is not lost. But you have scattered it, you little idiot. You have disrupted the cohe- sion that gave strength to capital and the levers. It will take years of work and savings to reconstruct the instrument that you have destroyed! The destruction of capital is a calamity that weighs not only on the ruined man but also on all humanity in its entirety. The creation of capital does not enrich the individual but the entire species. Of all the mechanisms that have been invented to repair the destruction of existing capital and to build more capital on earth, the most ingenious and honest is insurance. It is through insurance that we all become capitalists in a given time.37 The idea of solidarity is incumbent on the economy of insurance even prior to all social concerns. Insurance leads to an objectification of the relationship between the whole and its parts and between society and its individuals; it is a relationship that we will encounter again in future doctrines on solidarity. Solidarity exists in a particular space and time, from which the objectification of individual duty as a social duty derives. When reasoning only from his own limited perspec- tive, the individual not only becomes guilty of selfishness but also loses an enormous opportunity for social gain. Insurance, through the alchemy of its calculations, reveals the waste of individualism. Insurance encourages determining the obligations of the individual on the basis of the whole. And insurance incited About to imagine what happens when a million-dollar home burns down: See the consequences of a similar accident. They touch you more closely than you think, even though you don’t even know the name of the owner. There is a million less here, that is less capital, less instruments, one less lever. Of the total sum accumulated up until our days by man and for man, it is necessary to deduct a million. The great human partnership [association] is less rich today than it was yesterday. It might seem like nothing because you don’t know how tight the solidarity that unites us all is; but think about it for a moment, and you will understand that the poor, like the rich, are interested in increasing social capital (. . .) The destruction of a million already gathered together [tout formé] is more harmful to you all than the destruction of 100 million pennies [centimes]

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 between the hands of 100 million individuals. You will say to me that in fact the damage is identical, since in the two cases the total public wealth experienced the same decrease. But remind yourself that capital is a lever, an instrument destined to make work less hard and more useful, and tell me if the destruction of a lever weighing 5 kilos would not be more harmful than the levy of a centi- gram of iron from 500,000 levers.38 One plus one equals more than two; the whole is more than the sum of its parts. What has the power to override the most glaringly obvious arithmetical laws, to transform addition into multiplication? The “unconscious solidarity that unites men,” to which “insurance gives a precise shape, both scientific and practical.”39 Insurance is thus nothing other than the mechanism that in practice reveals society to itself, that manifests society and explicates it as truth: Life insurance is not only an urgent [impérieux] duty, it also is the expression of a universal law. This law is one of the most salient, one of the most forcefully ingrained in nature: we call it the law of the conservation of species; it ensures that the ancestors' expenses do not pass down to their descendants and that the future of a generation is prepared, protected, and insured by the generation that precedes it.40 The idea of solidarity, which furnishes one of the greatest social doctrines of the late nineteenth century, has without a doubt multiple origins. One of them is to be found in the kind of objectification implied by the technology of insurance. It is interesting to note that, before being an antiliberal social doctrine supported by socialists, solidarity was the theme of a large public campaign in favor of life insurance supporting the idea that to insure oneself is a social duty. This is the capitalist origin of the doctrine of solidarity. About’s argument preceded Léon Bourgeois’s formulation of the doctrine of solidarity—from which the current meaning of solidarity derives—by some thirty years. He exposes with great meticulousness how insurance involved a spiritual con- version (to view one’s actions from the point of view of all), which gave a new, radically anti-individualist significance to the idea of liberty. Solidarity based on insurance could not exist without responsibility. Specifically, it gave responsibility a new meaning: one has not only a responsibility to oneself but also a responsibility to the whole. Insurance and solidarity are therefore not opposed. On the contrary. The now familiar opposition came late. It opposes different kinds of solidarity. Today, solidarity refers either to practices of transfer and redis- tribution (tied to the concept of social insurance), or to certain aid practices that are only cautiously called “charity” or “welfare.” The concept of solidarity (as it concerns insurance) is a stronger concept, more demanding than that of mutual insur-

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 ance schemes [mutualité].41 Whereas a mutuality is a technical concept, solidarity is a moral one. Not all mutuality is joint [solidaire] (in the insurance sense of the word). To pool [Mutualiser] is to to organize risk sharing within a population. From this point of view, there is no insurance without mutuality. Indeed, to understand the danger of risk is not only to imagine its possibility but also to think that dreaded events unite you to others who also confront the same risk “equally.” The forms of mutuality that insure protection against risks are numerous: the family, the municipality [commune], the business, the state. Insurance belongs to the large family of political associations and represents an invention in their field. Precisely, it is the invention of a joint association [association solidaire] in the sense developed in the argument by About. Insurance companies face a problem after the conclusion of a contract; that is, how to convince the insured to feel responsible for others, as called for by solidarity. It is a problem of “moral hazard [risque moral]” that was first remedied by the idea that mutual insurance schemes allowed individuals to exercise “mutual” control. By virtue of the proximity of its members, individuals associated with the mutual could exercise reciprocal surveillance over each other. But that implies that mutual insurance remains small in size, a society without a megaphone, as Jean-Jacques Rousseau may have put it. The fight against moral hazard justifies the existence of contractual franchises [franchises contractuelles]. The notion of solidarity, captured by social security [sécurité sociale], is an invention of insurers. The word appears in its current meaning and no longer in its legal sense (which referred to the fact of being jointly liable for a debt) thanks to insurance. Frédéric Bastiat showed that solidarity is similar to mutual dependence through the mechanisms of the economy.42 We are familiar with solidarity—one could call it fraternity. It consists in sticking together during times of misfortune and to not abandon those who are in need. It is a very old idea. As old, no doubt, as the existence of human collectivities. Insurance relies upon another idea of mutuality. First, there is the idea that the contribution will have an exact measurement. Neither too much, nor too little. There is, above all, the economic idea that, through association, that which would be otherwise lost could yield a profit. Solidarity based on insurance does not depend on the expenditure; it depends on the principle of investment and of accumulation. That is why the power of insurance can “move mountains”; it transforms the load into the lever. These are the same values, the same arguments that we find in the contemporary debate on pension funds. Insurance fosters an economy of accumulation that is permitted by democracy because it is founded on the idea of the masses. It transforms the value of individuals: Those very people who could think that they personally amount to nothing (because they are too small) discover that they amount to everything collectively.

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 Justice Insurance is not only the transaction that provides, in return for minimum installments, compensation for the losses that could strike one person or another, thanks to the benefaction of mutual insurance. To reduce it to this transaction would not distinguish it from guilds and fraternities or other venerable kinds of relief, aid, or solidarity. What characterizes insurance is not only that it disperses the expense of individual damages across an entire group but that this distribution is no longer understood as a kind of aid or charity. Instead, it is empowered by the rule of justice, capable of being made explicit: Insurance is nothing other than the application to human affairs of the rule for the division of stakes; this allows us to determine the fate of people who wish to leave [the game] before chance has decided between them and who want to have at their disposal the common funds created through their bets.43 Thanks to the rule of justice based on insurance [justice assurancielle], each person’s contribution to the whole can be made before the event and not only after the fact. Justice is linked to the notion of equality. To be just consists of treating equal things equally. But there are many forms of equality. Aristotle distinguished between two forms of equality: mathematical equality must prevail in contracts and geo- metrical equality in the distribution of honors. One can contrast the formal equality of rights (which do not take into account inequalities of circumstance) with the equality of situations (which implies that the same rule can only be applied equally in the same situations) and with equality of opportunity (which calls on affirmative action). Marx, who contrasted formal equality to real equality, formulated the following rule of justice: “From each according to his ability, to each according to his needs,” which is very nonegalitarian.44 More recently, the American philosopher John Rawls explained that justice operates according to two principles: the principle of equality of rights must be supplemented [complété] by a principle of difference.45 According to the principle of difference, inequalities could be just so long as they accompany a social function that ameliorates the situation of the weakest over time. Insurance, as a specific practice of justice, implements a rule that issues from the notion of equity (or what is called “fair- ness” in English), which is expressed by a certain proportionality of the premium to the risk. From the point of view of risk, individuals are not all equal. They do not all die at the expected moment according to the average life expectancy. Facing the dreaded event, people do not all have equal chances, whether it is for reasons of fact or comportment. Justice based on insurance [justice assurancielle] wants, in principle, the contribution to the whole to be proportional to the risk, even if, in practice, the rule that sets the price of the risk changes according to each type of risk. This rule of proportionality leads us to dis-

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 tinguish risks from each other: to select them. It is a notion that gives rise to much confusion. Selection has been a shameful word, taboo in the French vocabulary, at least since 1968. This is the result of an egalitar- ianist culture of equality [une culture égalitariste de l’égalité]. It is necessary to distinguish between the selection of a risk, exclusion, and discrimination. First, selection is the opposite of exclusion, like the insurable is the opposite of the uninsurable. What we call exclusion corresponds to those who are denied insurance. They are extremely rare, exceeding no more than 1 percent of insurance requests. The denial of coverage stems less from the will of the insurer to cover only the right risks than to the limits of insurability: a risk taken, a risk whose likelihood is such that the proportion between the premium and the risk no longer makes sense, a risk that depends too much on the behavior of the insured. We often believe selection and equality are contradictory, especially in the meaning conferred on these terms by the rights of man. Yet, reading the Declaration [of the Rights of Man and of the Citizen] of 1789 shows that there cannot be equality without selectivity. At the same time that the famous article 1 formulates the principle of equality of rights—“All men are born free and equal”—it concludes with a principle of distinction: “Social distinctions may be founded only upon the general good [l’utilité commune].” It is the same in article 6 (concerning access to public posts)46 and in article 13 (concerning rais- ing taxes).47 The relation between the principle of equality and the rule of selection is straightforward: the formulation of a rule of equality establishes a criterion for comparison (specifically, it makes individuals comparable), and, consequently, it introduces a principle of selection. So, selection does not oppose equality. Rather, it opposes discrimination: a selection could be discriminatory and then becomes a criminal offense. When can a rule of selection be called discriminatory? From the aforementioned articles of the Declaration of Rights of 1789, and from the jurisprudence of the Constitutional Council or the State Council regarding abuse of power, one can derive the rule that discrimination takes place whenever the criterion of selection has no relation to its object: for example, to base access to public employment on sex or race. The same rationale applies to insurance. Risk, in the case of insurance, formulates a rule of equality; it makes individuals facing the same event comparable and at the same time reveals their differences. Risk is a rule of justice. This rule of justice puts in place a principle of comparison that is, at the same time, a principle of differentiation. The selection of a risk is not discriminatory as long as its criterion is a determinant of risk. This is what determines law, including in matters of health.48 The principle of actuarial equity is: equal risk, equal treat- ment. It is rarely applied that way. According to the risks, practices and regulations introduce many modifications. So, there

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 are the rules of the bonus/malus system in car insurance, which, in fact, use the good risks to cover the bad risks. There is also the guarantee of natural catastrophes that does not take into account risk exposure. And there are rules that determine coverage for medical risks in supplementary health insurance. Insurance is a social science: its principles regulate as much as they organize. Risk by risk, they deal with the requests and expectations of society toward insurance.

Truth Insurance occupies itself with the truth and does not compro- mise with it. Perhaps this is what makes it so difficult to tolerate. Sigmund Freud explains that mankind is not naturally devoted to truth.49 On the contrary, he believes that man’s prim- itive attitude is inclined to distort reality. This is the function of dreams: to find a path to satisfaction that economizes the hardship of the real. The pleasure principle turns away from reality and toward the object of desire, seeking satisfaction in the recollection of agreeable imagery. The reality principle is secondary and only develops because the pleasure principle does not lead to satisfaction. Besides, it is a traditional teaching of philosophy that men are not naturally disposed toward knowledge; they only become so when constrained. One does- n't leave the cave without violence. At the crossroads of these contradictory needs, Freud iden- tified a singular intellectual mechanism that he called negation (die Verneinung).50 Negation refers to a certain manner of relat- ing to reality that consists of denying it at the same moment of its recognition. Negation seems to be the natural behavior toward risk. At the same time that one recognizes it, one seeks to diminish its importance, both individually and collectively. Negation is the act of saying that accidents will only happen to others, or of claiming for oneself a behavior so prudent that it protects you from all trouble. Negation could be knowing that you have been exposed to a contagious disease but refusing the test that would allow you to confirm its presence. It is always a negation to indefinitely reject the necessary measures to confront the retirement problems caused by the new demographic situation and longer life spans. Negation is ignoring the deficits of social security and passing on the burden to future genera- tions. Negation also is the speech given by a doctor to his patient declaring him healed after a serious operation, suggest- ing that the patient could behave as if the malady had never taken place. The attitude of negation also appears in the collective attitude toward preventative campaigns against tobacco and alcohol. Negation exploits ambiguity, quid pro quo, and misunderstanding—all manners of speaking that permit one to both disclose and withhold at the same time. Insurance is merciless toward this attitude. It constrains to the truth, in several ways. Risk above all is a principle of truth-telling [véridiction]. It is a way to make events objective, to confer on them a certain

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 reality, the reality of their price, their true value, or at least their economic value. When, in response to a request for insurance, the insurance company fixes the price of risk, the insured becomes aware of a reality that he did not necessarily suspect exists and that often surprises him. And, in principle, the act of insurance involves, on the behalf of the insured, the recognition of the reality of risks. One of the professional tasks of the insurer is to guide, and this characterizes the duty to advise. The insurer has an interest in how the insured perceive the truth, because it is their awareness that influences the rational outcome of insurance. But in fact the perception of risk takes place in conditions such that it is often necessary to compel them into insurance by way of obligations. Insurance companies are devoted to truth—they have a stake in it. To practice life insurance with erroneous mortality tables can only lead to bankruptcy. The commitments made by the insurance company last for such a long term that errors must be avoided at all costs. One of the principal motivations for the development of actuarial science was, on the part of the state, the problem of calculating life annuities when developing borrowing policies: which price was fair? Who, between the annuitant and the state, won in the end? The concern for truth demands researching the fairest criteria for determining the reality of the risk. Competition and the existence of a market create an incentive for truth that is hardly ever found in sys- tems for collective risk management such as social security, which, perhaps because of their monopoly, function rather blindly. At the same time, insurance companies are obligated to be truthful to the mutuality that they guarantee. Each insured expects the insurance company to evaluate risk as meticulously as possible. The obligation of the insurance company has its counterpart in the obligation of the insured to say what he knows about the risk from which he seeks protection. Within the frame of insurance contracts, the declaration of risk consti- tutes the moment of truth. Legislators and courts have progres- sively constructed and clarified its conditions. The requirement for truth can find itself in conflict with other ethical imperatives. It can be in conflict, for example, with medical privacy or the confidentiality of personal data. Information relevant to risk always concerns private life, the intimate details of individuals, in particular, in the case of life and health insurance, medical information. Such delicate material is organized around four grand principles: the first is that secrecy should not protect fraud; the second is that information concerning risk must be the most objective possible and should not include the details [caractéristiques] of the private life of individuals.51 But this ethical conflict can also affect, in a much more fundamental way, even the possibility of releasing certain information about risk, as in the case of genetic information. In this case, the need for truth conflicts both with the right of the

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 person concerned “not to know” (this right is recognized by law in the concept of informed consent), and with any ban that could be placed on an insurance company from seeking information even directly linked to risk. Such questions have engen- dered considerable debate in France and abroad, but have not yet been settled. Knowledge is necessary to evaluate risk and to make it insurable. It is a law of insurance that insurability increases with knowledge. The insured is obligated to declare information at his disposal concerning the risk that he wishes to transfer. This is not intended for the insurance company as much as it is for the mutuality of insureds from whose solidarity he wishes to benefit. Information pertaining to a risk allows it to be estimated fairly, and is a prerequisite for the insurance company to be able to distribute expenses equitably in the pool of the insured [mutualité]. The obligation to inform is an obligation to the mutuality. The suspension of this obligation, even at the insis- tence of the insured, can lead not only to fraud, but above all to what economists call adverse selection [antisélection]: when the price of risk is inexact, only those most exposed to risk have a stake [intérêt] in insurance. And eventually, those least exposed to risk can no longer find a way to insure themselves. Banning the insurance company from knowing things leads to inequity in the mutual: certain people, aware of the reality of their risk, seek to insure themselves, knowing that the risk will be supported by the mutuality in the end. If these people are favored socially, the game becomes socially inequitable because it increases the expense of the least favored. Sapere aude.52 Private interest is not the only beneficiary of insurance’s practice of truth-telling [véridiction]. Truth-telling affects not only the relationship between the insurer and the insured, and, through an intermediary, among the insured. It also has a social interest. Truth enables prudence and prevention. Insurance is the offspring of the Enlightenment; its first defenders were those who respected this philosophy: Lavoisier, Condorcet, Laplace. Insurance is linked to a cultural decision that makes it necessary to live according to truth rather than in ignorance, that the knowledge of truth furnishes the instruments that allow us to overcome harm. Insurance is linked to a civilization that makes recognizing risk a moral imperative, a principle of rational conduct. It is linked to a civilization that refuses the comfort of ignorance, even shared.

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Insurance is an embodied morality that revolves around these four values: responsibility, solidarity, justice, and truth. In insurance, these values are interdependent and refer to one another. It is possible to unpack the morality of insurance by picking one of the values at random. But in insurance, these four values take on a special meaning. And their particular significance

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 establishes insurance as a specific kind of partnership. These values define man’s particular outlook toward the uncertain, toward the world, and toward others. The values associated with insurance have, at the same time, a political dimension. They are the result of societal choice. They are the values of a society founded on insurance [une société assurancielle]. Far from being a society without values, a society founded on insurance is a strict society, maybe even a rigid, terribly virtuous society. Such a society is not necessarily compatible with our current state of “permissiveness.” Insurance’s key values render a society founded on insurance something like a utopia as defined by Thomas More and Campanella. Since the eighteenth century, insurance has given rise to two kinds of moral conflicts. The first was motivated by the recognition of this ethos’s morality. These conflicts emerged again in the 1930s with people who denounced insurance as immoral. The academic Georges Duhamel is one example.53 And much of the contemporary bias against insurance originates more or less explicitly in this time. But, during the nineteenth century, the conflict rapidly shifted. Projects seeking to withdraw insurance from the hands of insurance companies multiplied. So that is how social insurance institutions, starting from the late nineteenth century, exploited the notion of solidarity and the cooperation between law and state, to claim to be a moral force. As a result, for many citizens today, social security represents the moral kind of insurance. But maybe we have entered into a new phase. In fact, it has become commonplace to denounce the demoralization enacted by social insurance institutions. Social insurance appears as a demoralized and demoralizing kind of insurance. Social insurance, it is commonly said, first and foremost removes all sense of responsibility. The solidarity that it requires no longer corresponds to the moral imperative to take into account the significance of one’s actions from the point of view of the collective good. This is because social insurance allows everyone the ability to outsource their problems indefinitely; the notion of justice is so obscured that certain individuals denounce, in the name of equity, an equality that benefits only the rich; as for truth, it is often sacrificed to the cult of equality. Both moral conflicts that arise from insurance are far from being resolved. There is a certain hostility, at least in France, toward the insurance marketplace. It is often a matter of perception [affaire d'image] (which is presumed negative). It is doubtless necessary to distinguish this perception [image] (which essentially depends on the quality of service) from the legitimacy of insurance, whether its legitimacy in principle or its legitimacy to cover certain risks. And this inquiry into legitimacy explicitly refers us back to the moral dimension of insurance. Insurance must develop within the context of a struggle that is not only economic (with regard to competitors) but also axiological. Perhaps this is what singles out insurance in the economic world: its legitimacy is perpetually in question. The insurance

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 market, in order to develop, must prevail on the ground of values. In this struggle, there are not necessarily losers; this is because insurance is a moral strength. The history of insurance is wedded to the history of morality— or more exactly, to the history of conflicts between individual morality and collective morality. The conditions necessary for insurance to develop first appeared when collective morality became a morality of individual foresight. Insurance finds itself marginalized when the collective morality shifts from solidarity to “solidarism.” It will rediscover its complete legitimacy only when the utopia that drives it becomes once again a social utopia.

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 Notes Originally published as François Ewald, “Les valeurs d’assurance,” in Encyclopédie de l’assurance, ed. François Ewald and Jean-Hervé Lorenzi (Paris: Economica, 1998), 399–424. This translation has been supported by Insight Development Grant 430-2017-00065 awarded by the Social Sciences and Humanities Research Council of Canada. 1. Jean Halpérin, Les assurances en Suisse et dans le monde: Leur rôle dans l’évolution économique et sociale (Neufchâtel: Editions de la Baconnière, 1946), 22. 2. Halpérin, 28. 3. [See Werner Sombart, The Quintessence of Capitalism: A Study of the History and Psychology of the Modern Business Man (1913), trans. Mortimer Epstein (New York: E.P. Dutton, 1915); and Max Weber, The Protestant Ethic and the Spirit of Capitalism (1905), trans. Talcott Parsons (London: George Allen and Unwin Ltd., 1930).—Trans.] 4. Louis-Augustin Boiteux, La fortune de mer: Le besoin de sécurité et les débuts de l’assurance maritime (Paris: S.E.V.P.E.N., 1968), 73. 5. Joseph Hémard, Théorie de pratique des assurances terrestres (Paris: Recueil Sirey, 1924), 171. 6. Boiteux, 75. 7. Robert Joseph Pothier, Traité des contrats aléatoires (Paris: Chez les frères Debure, 1777). 8. Jean-Étienne-Marie Portalis and Frédéric Portalis, “Des choses qui peu- vent être vendues,” in Discours, rapports et travaux préparatoires du Code civil, exposé des motifs du contrat de vente (Paris: Joubert, 1844), 244–45. The same opinion is professed by Corvetto who, while presenting the Code of Commerce concerning insurance to the legislative body in 1807, declares: “We have said in article 334 that all the values estimable by money could form a subject of insurance except where the liberty of man is at stake.” This is an opinion found in the same year in Merlin’s Répertoire: “Such convention is contrary to good morals and could encourage a lot of deception.” 9. [Ewald is likely citing Alfred de Courcy, Le droit et les ouvriers (Paris: Librairie Cotillon, 1886), 64.—Trans.] 10. [A similar quotation appears in multiple editions of the Dictionnaire de l’économie politique. See, for example, Frédéric Bastiat, “Tontines,” in Dictionnaire de l’économie politique, vol. 2 (Paris: Librairie de Guillaumin et Cie, 1864), 744. Unlike Ewald’s quote, which states “elles ‘ranimeraient aussi ces sentiments d’affection . . . ’” (they “also would revive feelings of affection . . . ”), the dictionary instead uses the verb ramèneraient, meaning they “would restore . . . .”—Trans.] 11. The State Council’s two decisions are reproduced in Livre du centenaire de “la Nationale,” [ancienne compagnie royale d’assurances sur la vie,] 1830–1930 (Paris [1930]), 393. 12. J.-B. Juvigny, Coup d’oeil sur l’assurance de la vie des hommes (Paris: Delaunay, 1818), 72. The same argument will be taken up by the “four principle companies” in response to the condemnation by the public prosecutor Dupin in 1864: “With regard to the morality of the institution, do we actually need to prove it? And if we ask how it can justify imposing annual hardships on patriarchs to insure his family’s lot in case of a premature death, our con- sciences will respond.” Livre du centenaire de “la Nationale,” 457. 13. [This reference likely comes from Portalis and Portalis, 287.—Trans.] 14. [Robert Joseph Pothier, “Traité du contrat d’assurance,” in Oeuvres de Pothier: Contenant les traités du droit français (Paris: Pichon-Béchat, 1827), 447.—Trans.] 15. Jean-Marie Pardessus, Cours de droit commercial, vol. 2 (Paris: Garnery, 1814), 303. 16. [It is unclear if Ewald is citing the original text, published in René- Josué Valin, Nouveau commentaire sur l’ordonnance de la marine du mois

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 d’août 1681: Avec des explications prises de l’esprit du texte et des notes his- toriques et critiques, vol. 2 (La Rochelle: Chez Jerôme Legier, 1766), 77; or a later version, such as Pierre Sanfourche-Laporte, Le nouveau Valin, ou Code Commercial maritime (Paris: Aux archives du droit français, 1809), 476. In either case, he modified the text.—Trans.] 17. [The quotation likely comes from Robert Joseph Pothier, Traité du contrat d’assurance de Pothier: Avec un discours préliminaire, des notes et un supplément (Marseille: Chez Sube et Laporte, 1810), 105. Pothier’s text reads, “je ne peux pas valablement convenir avec quelqu’un qu’il se chargera des fautes que je commettrai; ce serait une convention qui inviterait ad delinquendum” (I cannot plausibly agree with someone that he will be responsible for all the faults I may commit; this kind of agreement would encourage delinquency).—Trans.] 18. [Balthazard-Marie Emerigon, Traité des assurances et des contrats à la grosse (Marseille: Jean Mossy, 1783), 364.—Trans.] 19. In other words, criminality is an insurable risk on the same basis as any other accident. [See Adolphe Quetelet, Sur l’homme et le développement de ses facultés, ou Essai de physique sociale (Paris: Bachelier, 1835); translated in English as Adolphe Quetelet, A Treatise on Man and the Development of His Faculties, trans. R. Knox (Edinburgh: W. and R. Chambers, 1842).—Trans.] 20. A. Frémery, Études de droit commercial (Paris: Alex-Gobelet, 1833), cited by Louis Pouget, Dictionnaire des assurances terrestres (Paris: A. Durand, 1855), s.v. “faute” and “faute lourde.” 21. Eugène Persil, Traité des assurances terrestres (Paris: Gobelet, 1835), 25–26. 22. Alfred de Courcy, Des assurances (Paris: Comité de publications poli- tiques, 1886), 22. 23. [This claim by Charles Bonaventure Marie Toullier is cited by M.D. Dalloz in “Assurances terrestres,” in Jurisprudence générale du royaume: Répertoire méthodique et alphabétique de législation de doctrine et de jurisprudence, vol. 5 (Paris: Bureau de la jurisprudence générale du royaume, 1846), 356.—Trans.] 24. Jean-Marie Pardessus, Assurance contre les accidents de voiture: Consultation (Paris: Impr. A. Guyot et Scribe, 1860), 16. 25. [Charles Bonaventure Marie Toullier and J.-B. Duvergier, Le droit civil français suivant l’ordre du code, vol. 6 (Paris: F. Cotillon, 1846), 149.] 26. [Ewald is referring to the economist Denis Kessler’s work at the Fédération française des sociétés d’assurances (FFSA, the French Federation of Insurance Companies). From 1990 to 1997 and 1998 to 2002, Kessler served as president of this organization, which represents the interests of almost all of the insurance companies operating in the French insurance market.—Trans.] 27. [Mutuelles 45, also known as les mutuelles, refers to nonprofit partnership companies, particularly in the health sector, governed by the 1945 Code of Mutuality, in which member contributions are not priced according to individual risk, as opposed to both insurance corporations and mutual insurance companies governed by the Insurance Code.—Trans.] 28. Albert Chauffon, Les assurances: Leur passé, leur présent, leur avenir, vol. 1 (Paris: Librairie A. Marescq Aine A. Chevalier-Marescq, 1884), 296. 29. [Cited in François Ewald, L’état providence (Paris: Grasset, 1986), 183 and 192 n. 19, as Louis Richard, L’homme est un capital (Paris, 1866), 7–8.—Trans.] 30. [Richard, 7–8.—Trans.] 31. [William Petty, Political Arithmetick, or a Discourse Concerning, the Extent and Value of Lands, People, Buildings; Husbandry, Manufacture, Commerce, Fishery, Artizans, Seamen, Soldiers; Publick Revenues, Interest, Taxes, Superlucration, Registries, Banks; Valuation of Men, Increasing of Seamen, of Militia’s, Harbours, Situation, Shipping, Power at Sea, &c. (London: Printed for Robert Clavel, 1690).—Trans.] 32. Laurent Thirouin, Le hasard et les règles, le modèle du jeu dans la

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Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/grey_a_00266 by guest on 01 October 2021 pensée de Pascal (Paris: J. Vrin, 1991), 125. 33. [Adolphe Thiers, Rapport général presente par m. Thiers, au nom de la Commission de l’assistance et de la prévoyance publiques, dans la séance du 26 janvier 1850 (Brussels: Société typographique Belge, 1850), 10–11.—Trans.] 34. The first obligation was promulgated in 1910 with the law on the retirement of workers and peasants. 35. Edmond About, L’assurance (Paris: Librairie de L. Hachette, 1865), [34–35]. 36. [Eugène Reboul, Assurances sur la vie (Paris: Dubuisson, 1863), 40. —Trans.] 37. [About, 35–36.—Trans.] 38. [About, 54–55.—Trans.] 39. [Ewald is likely referring to Albert Chaufton, Les assurances, leur passé, leur présent, leur avenir au point de vue rationnel, technique et pratique, moral, économique et social, financier et administratif, legal, législatif et contractuel, en France et à l’étrange (Paris: Librairie A. Marescq Ainé, 1884), 291.—Trans.] 40. [Reboul, 70.—Trans.] 41. [France has two main types of insurance: that offered by insurance companies and by mutuals. Mutuals are not-for-profits and, because they depend only on the contributions of their members, are considered part of what the French would call the “social” or “solidarity” economy.—Eds.] 42. [Ewald is possibly referring to Frédéric Bastiat, “Solidarity,” in Harmonies of Political Economy (1850), pt. 2, trans. Patrick James Stirling (Edinburgh: Olivery and Boyd, 1870), 174–180.—Trans.] 43. Eugène Reboul, Assurances sur la vie (Paris: Dubuisson, 1863), 44. 44. [Karl Marx, Critique of the Gotha Programme (New York: International Publishers, 1970).—Trans.] 45. [John Rawls, “The Principles of Justice,” in A Theory of Justice, rev. ed. (Oxford, UK: Oxford University Press, 1999), 47–101.—Trans.] 46. “Law is the expression of the general will; every citizen has the right to participate personally or through their representative in its formation; it must be the same for all, whether it protects or punishes; all citizens, being equal in the eyes of the law, are equally eligible for all public dignities, and admissible to all public positions and employments, according to their capacity and without distinction other than their virtues and talents.” 47. “For the maintenance of the public force and administrative expenses, a common contribution is indispensable. It must be equally distributed among all citizens in proportion to their means.” 48. Art. 225-3 of the new penal code. 49. [Sigmund Freud, Introductory Lectures on Psycho-analysis, trans. and ed. James Strachey (New York: W.W. Norton, 1966).—Trans.] 50. [Sigmund Freud, “Negation,” in The Standard Edition of the Complete Psychological Works of Sigmund Freud, trans. and ed. James Strachey, vol. 19, The Ego and the Id and Other Works (1923–1925) (London: Vintage, 2001), 235–239.—Trans.] 51. Code of Professional Ethics appended to the Convention of Insurability of HIV-Positive Individuals of 1991. 52. “To have the courage to know.” With this phrase Kant begins “Beantwortung der Frage: Was ist Aufklärung?” Berlinische Monatsschrift, 1784, 481–94. 53. In the beginning of the twentieth century, accusations launched against the immorality of insurance were renewed. According to Georges Duhamel: “I understand that to a number of my contemporaries, insurance currently takes the place of conscience, guardian angel, honor, gratitude, and many other things as well. . . . Insurance will pay. That is the magic formula that sums up the act of faith, the act of hope, and the act of contrition.” From Scènes de la vie future (Paris: Fayard, 1934), 100.

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