The other side of freedom

The birth of life insurance is often tied to the birth of freedom, but the historical record tells a different story.

Martin Luther King Jr March
Do those spared from slavery experience the presumption but not the reality of freedom? [GALLO/GETTY]

New York, NY – During Black History Month, it is common to commemorate the African American struggle from “slavery to freedom”.

Some find this view too narrow, insisting that we ought to be concerned with the path from “freedom to slavery to freedom.” Others will note that “freedom” was short-lived, and cite the failures of Reconstruction as a way to think through the vexed quest for first-class citizenship that culminated in the civil rights movement. And yet another group will discuss the unfinished work of civil rights, perhaps referring to the fact that African Americans have yet to elect as many political officials as they had in office during the Reconstruction, and that members of this demographic are now more likely to be disproportionately sentenced to prison for the same crimes as white Americans as they were on the eve of the civil rights movement.

But while many insist on seeing “freedom” as a work in progress, few of us question whether freedom can ever fulfill our ambitions, whether those people spared from slavery were nonetheless trapped in a different set of insidious contradictions where they experience the presumption, but not the reality of freedom. In this sense, “emancipation” might never mean “freedom”.

It’s worth noting that the same age that witnessed the abolition of slavery in the US gave rise to new forms of credit-debt, like life insurance. The premise of this new institution was that it provided security for newly industrialised workers, replacing the community networks that defined a prior rural existence and promising to secure one’s family through a schedule of payments if the worker – generally figured as a man, the purported head of the household – met his untimely demise.

Though life insurance was pervasive in Britain by the dawn of the 19th century, it would be many more decades before the institution took root in the United States, as people were initially reluctant to place a monetary value on a human life. But, by the 1840s, the idea of life insurance had transformed, and people began to believe it was irresponsible not to establish a clear plan for the financial security of one’s kin.

Life insurance also created a new scheme for assigning differential value to a human life through hierarchies, largely based on private medical histories and employment contracts. In that way, the fact that people are not construed as equal to each other in the eyes of actuaries and underwriters remains concealed. In other words, life insurance has a peril equivalent to its promise.

‘Dead peasant’ insurance

Recent years have given rise to widespread attention to “corporate-owned life insurance” (COLI) – more widely known by the morbid moniker “dead peasant” insurance. On August 25, 2011, NBC and other news outlets reported a scheme that US presidential candidate, Rick Perry, concocted in 2003 (while he was the governor of Texas) to take out life insurance policies on retiring public school teachers through the Swiss financial services firm, UBS (nearly six months before this corporation would appear in headlines again as one of the entities entrusted with Mitt Romney’s Swiss accounts as cited in the 2010 tax returns he made public on January 24, 2012).

The rationale? These senior citizens had a high statistical probability to die within the next decade. When they did, the government of Texas could turn a profit. Critics complained that Perry’s scheme was unethical – and cited evidence of the numerous corporations that have amassed millions of dollars from policies in employees unbeknownst to workers and their families – but overlooked the historical and legal precedents for insuring the lives of other people.

A full decade before life insurance gained sway in the US, firms like the Baltimore Life Insurance had built a lucrative business insuring slaves. And while slaves were usually classified as property or as real estate in the eyes of the law, slave insurance policies did not usually price human chattel according to the condition of the object (as one might do with a chair or a house) but according to the slave’s skill set; artisans (like blacksmiths) and workers in dangerous industries (like coal miners) commanded the highest premiums.

This means, slave insurance was more like life insurance than historians have been wont to acknowledge. It also means that slave insurance foreshadowed post-bellum genres of corporate insurance, as owners of capital sought to shield themselves against the risks associated with the loss of an individual’s capacity for labour.

‘Ice insured’

Because it is intimately connected to our capacity to find relief from illness or injury, and bound up in our ability earn an income and with the fate of our closest kin, insurance – namely, life insurance – has, since the industrial age, helped people to measure the distance from familiar modes of mutual aid. These formal structures of financial assistance continue to provide a language for commenting on life expectancy and social mobility.

“Ice insured. F*** life insurance,” says rapper Rick Ross – who borrowed his stage persona from a notorious narcotics trafficker by the same name – in 2011 Kanye West-produced song, “Live Fast, Die Young”, as he asserts that his jewellery is more valuable, and thus more worthy of securitisation, than his own life.

How might this largely unacknowledged relationship between slave insurance and life insurance to chart the politics of stratification in the modern age?

After all, the same period that witnessed the demise of formal enslavement saw the debut of structures that protected the privilege of people whose wealth and power threatened to come undone, including sharecropping and convict leasing. Despite a similar emphasis on institutionalising credit-debt relations, insurance appears benign by comparison. Even though insurance agencies assign differential value to human lives, the birth of insurance is seen, along with the triumph of capitalism and democracy, as part of the birth of freedom. The historical record tells a very different story.

From people to assets

The birth of modern labour is not merely about the right to wages, but about a series of historical processes that led workers to be classified – as slaves had been, in a previous age – as capital assets, as securities. COLI finds its legal justification in the economic contradictions of a post-bellum age.

The author of a 2008 “Layman’s Guide to Corporate Life Insurance”, cites an 1881 Supreme Court ruling to specify the economic rationale of COLI: Warnock v. Davis … defines insurable interest as follows: “(i) In the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection; and (ii) In the case of other persons, a lawful and substantial economic interest in having the life, health or bodily safety of the individual insured continue, as distinguished from an interest that would arise only by, or would be enhanced in value by, the death, disability or injury of the individual insured”.

Meanwhile, generating millions in revenue from the death of a single employee would seem to undermine the legal rationale that a COLI policy restricts an employee from being “enhanced in value by, death, disability or injury”.

It also suggests that even people who are not the descendants of African slaves are implicated in forms of valuation that date back to slavery. That you can leverage the risk-factor of an employee – or, for that matter, an ageing public school teacher – as a way to generate wealth indicates that even the people who do not see themselves as the descendants of slaves are implicated in forms of valuation forged during the age of legalised enslavement.

Michael Ralph teaches in the Department of Social and Cultural Analysis at New York University. His research centres on risk and liability, citizenship and sovereignty in Senegal and the United States.

Follow him on Twitter: @topdogunderdog

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.

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