November 13, 2014 / by admin / American History / No Comments

Freaks of Fortune: The Emerging World of Capitalism and Risk in America

Freaks of Fortune: The Emerging World of Capitalism and Risk in America

Jonathan Levy

Language: English

Pages: 432

ISBN: 0674736354

Format: PDF / Kindle (mobi) / ePub


Until the early nineteenth century, "risk" was a specialized term: it was the commodity exchanged in a marine insurance contract. Freaks of Fortune tells the story of how the modern concept of risk emerged in the United States. Born on the high seas, risk migrated inland and became essential to the financial management of an inherently uncertain capitalist future.

Focusing on the hopes and anxieties of ordinary people, Jonathan Levy shows how risk developed through the extraordinary growth of new financial institutions-insurance corporations, savings banks, mortgage-backed securities markets, commodities futures markets, and securities markets-while posing inescapable moral questions. For at the heart of risk's rise was a new vision of freedom. To be a free individual, whether an emancipated slave, a plains farmer, or a Wall Street financier, was to take, assume, and manage one's own personal risk. Yet this often meant offloading that same risk onto a series of new financial institutions, which together have only recently acquired the name "financial services industry." Levy traces the fate of a new vision of personal freedom, as it unfolded in the new economic reality created by the American financial system.

Amid the nineteenth-century's waning faith in God's providence, Americans increasingly confronted unanticipated challenges to their independence and security in the boom and bust chance-world of capitalism. Freaks of Fortune is one of the first books to excavate the historical origins of our own financialized times and risk-defined lives.

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fundamental question was how insuring human chattel was different from insuring other forms of property in motion across the high seas—say, bales of cotton. Obviously, cotton did not mutiny. But for centuries, human chattels had always been objects of risk insured by their owners when in transit, most often across the Atlantic Ocean. Legal disputes over insurance liability for slave revolts in the Atlantic World were not uncommon and the case of the Creole was one of the last in a grotesque

percent of the white population had wealth of less than $100. Tellingly, antebellum life insurance policies—even expensive ones—have been linked to men with no accumulated wealth whatsoever. To them, “life” had become not just the “best” but also the only form of property they owned.46 To import the maritime rule of double commodification, the price of a “life risk” still required a premium rate priced according to the expectation of a contingent event. Death, in the end, was that event—another

meetings. Congress appointed an auditor to look into the bank’s finances as it limped along into 1874. At the March 1874 meeting, the board of trustees removed a mentally frail Alvord as president. They nominated Frederick Douglass to be the new president of the Freedman’s Bank.97 Douglass had not sought the nomination. The trustees were doing everything they could to boost the bank’s credibility within the black community in order to prevent further bank runs. Douglass was willing The Failure

Now, more saw the vicissitudes of capitalism as part of a blind, natural world. The Civil War had subtly undermined many providential visions while shattering others. The slaveholders’ providential paternalism, for one, lay in ruins. Now, the freaks of fortune looked to fill the breach.102 148 fr e a k s of fortune In this context, the metaphor of voyage became only more poignant. The September 1873 Independent noted that “Such a thunder-clap” and “such a storm among our bankers and other

marketed to farmers for the first time in the 1870s (particularly to those with mortgages), these policies were the ultimate emblem of the inversion of land and labor on the western plains. Self-ownership, not land ownership, became the bulwark of the farm household’s economic security as male farmers began to offload their personal risks—a double commodification of their productive labor—onto the emerging corporate financial system. But forces and agents at work in that same financial system

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