Babbage among the insurers: Big 19th-century data and the public interest

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Insurance Charles Babbage

Notes

seemed not to have taken the very steps in his own life that his firm urged so incessantly upon the public at large.

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The nature of this request for sympathy – for ‘some kind of promise’ – was precisely the kind of awkward personal pleading that insurance, by virtue of its formal contract, was supposed to render unnecessary.

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specific difficulty of anticipating risk,

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more general feature of insurance; namely, that it has long served to reveal the often fraught and hidden relations of dependence between the individual and the larger group

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knotty social question arises of who will bear the burden of risk

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supposedly scientific practice of insurance addressed itself towards the future, equipped with a vast trove of data about the past.

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question of the public interest in relation to these mass archives

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relentless desire of insurers to acquire ever more data about lives. The question of whether such a desire is reasonable

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seen insurance as suspicious and in some way intrusive, unfair or even – as early-modern critics held – impious

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the most instrumental of reasons for falling victim to archive fever: to predict, and therefore to price, the future correctly

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the collectivities which benefit from insurance do not necessarily map neatly onto the group of individuals whose data generated them in the first place

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interests of the insuring public and the public-at-large have not always aligned.

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insurance has generated new forms of collectivity,

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the idea of the public interest was invoked by advocates of one measure or another, even though its meaning was seldom obvious.

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campaigner for open data and occasional actuary, Charles Babbage

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a rhetorical device whose function in insurance discourse bears further examination

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whether the public interest consisted in anything beyond the aggregation of private goods.

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both a practical and also a moral measure.

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rhetorical dividing line separating the socially responsible from the

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advocating fundamental reform of the social contract

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Babbage was an instinctual reformer whose zeal for open access to information quickly ran into difficulty in an industry with which he was unfamiliar.

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Edmonds’s ambition for insurance data to act as a master key for unlocking improvements to public health, which was a political aim

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discovery of a general law of mortality

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If risk management is an unavoidable part of modern life then what influence should the subjects of risk, i.e., the demos, wield over the way that risk is conceived and calculated?

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traditional practice of risk-pooling may be reaching the end of its useful life

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personal tragedy for Babbage, during which he faced bad luck, business failure and the death of his father, his wife and child;

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data was assembled with a great deal of effort by actuaries – because the value of consistent record-keeping was not widely apparent

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longitudinal fashion, tracking the same individuals over long spans of time,

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look for a settled community, assume a stable population, and take a synchronic measure

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once institutions for life assurance had been in existence long enough to use their own records to calculate mortality.

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was it best to rely on data derived from an idealized sample that was supposedly representative, or from a company’s accumulating experience of mortality?

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improve the quality and the accessibility of their archive so the public could draw their own conclusions.

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The financial relation of insurance corporations to the State has thus been a complex symbiosis of public and private.

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clear moral hazard of gambling on human lives,

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left it to the free choice of every man to bequeath to his family, penury or independence.’

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life assurance offered a form of herd immunity, or strength in numbers. Each new policyholder not only conferred a benefit on their own family, but on all the other families as well. In this way, forms of individual insurance could be presented as public goods.

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counterintuitive blend of self-interest and altruistic motives,

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insurers could claim for themselves a degree of public virtue

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the problem of guarantees brings into relief the assumption that insurance institutions were permanent:

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insurers’ willingness to engage in a profound degree of moralizing.

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the capacity to anticipate the future, indicated by the insurance mindset, was the distinguishing mark of civilization itself. The writer of this pamphlet described the indifference towards the future displayed by native American tribes, an attitude he contrasted with that of the Christian, who dwells in a ‘rational creation,’

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projectile power of the mind,

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vague evangelicalism which pervaded the aspirational British classes, who could thus distinguish themselves from primitive people as well as the working-classes

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Dozens of insurers either went bust in the crash of 1826, folded completely, were taken over or involved in high- profile and remarkable scams

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more mundane problem of corporate mismanagement.

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although it delivered a detailed critique of the insurance industry, it was a defence of the principle of insurance in general.

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give the public the information - especially the raw data - to make supposedly more informed choices

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Babbage didn’t enjoy the work,

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The size of the salary Babbage was offered testifies not only to the scale of the 1824 bubble, but also to the importance of prestige in selling life assurance.

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Morgan stood accused of being overly cautious, secretive and mistaken,

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huge levels of surplus capital, as policyholders were effectively being overcharged.

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his failed job application was an example of the nepotism which ran against Babbage’s belief in the primacy of merit and the smooth transferability of expertise from one domain to another

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For reasons which remain unknown – but most likely an argument over principles between Babbage and certain directors – the company folded before it had launched,

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sufficiently burnt and annoyed by the experience to turn his back on the world of finance for good

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genius for calculation was no guarantee of commercial success.

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questions arose of how to define this accumulation (was it a form of profit?) and what do with it.

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Transparency with respect to the surplus was for Babbage a sine qua non for insurance, and the most glaring example of the way nearly all companies fell short of his scientistic ideal of open access to information.

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allowing the public to judge for themselves the quality of the archive

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if company directors were incompetent, dishonest, or both, it made no difference what the actuaries did

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trust between actuaries and the public was necessarily mediated by the company.

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a free market in insurance did not appear to lead to good information exchange

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the sort of attempt to create a depoliticised zone of raw data to have been repeatedly questioned by scholars and activists of statistics

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the ideal was shown to be wishful thinking immediately as the attempt to collate data was obstructed by certain life offices.

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there were scientific actuaries such as himself, motivated by a ‘disinterested zeal’

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On the other hand were those figures in the industry with base motives

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When figures such as Babbage, Jones and Edmonds referred to the public interest in mortality data, they articulated its nebulous ownership status. A dataset whose object was the public body, and that was collected by public authorities or by private companies citing the public benefit of their work, should not serve the partial interests of those companies.

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openness was good for the industry as a whole as well as the science on which was based, it was not so good for any given company,

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Actuaries, therefore, faced a perpetual balancing act which became the hallmark of their professional identity as men of science blessed with a unique form of practical judgement.

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Any deviations could be put down to local causes and the need for better, more refined data:

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indicate the kind of underlying regularity in human science that was being sought (and found) at that time in the physical and natural sciences.

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a recursive framework for ever-greater precision.

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utility of this approach in understanding not only mortality but also morbidity as phenomena of cohorts

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while a great deal of information had been accumulated about the longevity of well-heeled life policyholders, little was known about those at the sharp end of nineteenth-century mortality statistics: labourers, slum-dwellers, immigrants.

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rightly described as proto-Marxist,

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a universal law of mortality could be used as a diagnostic tool to discover whether certain people were dying more than they should be

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ameliorate the condition of the working class as ‘all are brought within the circle.’

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Life assurance should be set up by public authorities, suggested Edmonds,

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In a short time this country would possess an accumulation of curious and truly useful statistical facts,

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Gompertz did not seem to bear Edmonds ill will

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hard to make sense of the reason for De Morgan’s hostility.

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De Morgan was preoccupied with the novelty of the mathematics, whereas Edmonds understood himself to be creating a novel tool.

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Perhaps it was Edmonds’s propensity to overstate the importance of his discovery which so irritated De Morgan, perhaps it was his radical views, his gauche manner, or something else entirely (Alborn (1994: 454) describes the campaign against Edmonds as part of a proxy war by certain actuaries against William Farr).

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attacks on Edmonds by members of the mathematical establishment appear disproportionate:

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reducing the repetitive labour of computing tables would make the calculation of life contingencies more economical and, even, algorithmic.

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reams of disorderly mortality data might at base be legible.

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awkward distinctions between ‘true’ laws and ‘empirical’ laws, which included specific modifications to account for endless anomalous phenomena.

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Edmonds sought a strong law of mortality which could incorporate the full range of human existence, but this came at the cost of simplicity.

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Despite the increasing mathematicisation of insurance ever since, actuaries have not sought a predictive law for mortality; preferring instead more elaborate, yet ultimately traditional, forms of risk pooling.

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personalised archive, more detailed and informative than Edmonds could possibly have imagined.

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society itself is a technique of risk reduction.

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political status of insurance has remained ambiguous because it has been deployed so extensively in securing both private and public interests.

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ongoing appeal of insurance schemes into the future will depend to some extent on the willingness of the public to continue pooling risk.

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raise such questions not only as: ‘is it worth it?’ but also: ‘is it open?’ and ‘is it fair ?’

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potential to undermine traditional methods of risk pooling altogether by generating information it would be unfair to withhold from other members of the pool,

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success has been based precisely on limiting access to its archive of such data.

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the extent of surveillance at today’s insurers’ disposal is unprecedented.

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epistemic lacunae which create the conditions for probabilistic insurance in the first place risk unravelling completely

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whether it is even possible sustainably to operate forms of insurance which are freely bought and sold;

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