At 19/11/01 10:06 -0800, you wrote: >Max's example of insurance is on the spot. Originally, as I understand it, >insurance began with shipowners sharing risks among themselves. In this >way, though individual shipwreck could destroy a prosperous shipowner. > >With the great fire of London of 1666, early capitalist business took note >of the possibility of catastrophic risk. Soon afterwards, William Petty >and some friends began developing actuarial tables that were were first >used in life insurance. Fire insurance was regarded as a charitable >operation, meaning that it was not intended to make profit, but only to >help in case of disasters.
Were the Dutch there first, particularly their great progressive bourgeois prime minister de Witt? >Spinoza naturally grew into a philosophy of secular, rationalistic >liberalism, as espoused by John De Witt (1625-72) and a brother, who had >been students of Cartesian mathematics. John De Witt was a pioneer in >calculation of actuarial tables, used in the insurance industry to price >annuities. The De Witt brothers' ideal was political leadership by >enlightened, middle class elements involved in Holland's increasingly >prosperous international trade. http://www.wsu.edu/~tcook/doc/BenedictSpinoza.htm - a page on Spinoza And from a webpage by John Webb on "Death and Statistics" http://plus.maths.org/issue12/features/annuities/ >The first person to make actuarial calculations combining compound >interest and mortality rates was Johan de Witt, Prime Minister of the >Netherlands from 1653 to 1672. > >Johann de Witt had a distinguished mathematical background. He was born in >the period just before Isaac Newton (1642-1727) and Gottfried Leibniz >(1646-1716) revolutionized mathematics with the introduction of >differential and integral calculus. De Witt was the author of "The >elements of curves", the first treatise on conic sections to use >Descartes' recently-developed coordinate geometry. (It was de Witt, by the >way, who coined the term directrix.) > >The theory of probability was also at the forefront of mathematical >development in the first half of the 17th century. When de Witt moved into >government he was thus well prepared to apply his understanding of >probability to financial mathematics, and wrote a book entitled "The worth >of life annuities compared to redemption bonds". > >De Witt was one of the great statesmen of his day, at a time when the >Netherlands was developing as a major trading nation and posing a serious >challenge to the naval power of England. De Witt forged important treaties >with England and Sweden and under his leadership the Netherlands enjoyed >great commercial prosperity. But he fell out of favour when France invaded >the Netherlands in 1672 and was murdered by an angry mob. Another google lead: 'Valuation of annuities' by Johan de Witt, published in 1671. Certainly the safe calculation and social underwriting of risk appears historically to be an important component of capitalism. The safe management of risk remains so now - see the difficulties of health provider companies. Chris Burford London
