[Marxism] Query on insurance industry

Jurriaan Bendien andromeda246 at hetnet.nl
Fri Jun 25 12:41:49 MDT 2004

I don't know any good analysis. Marx regarded insurance as an enduring
phenomenon in human society, in the sense of keeping reserves of resources.
In capitalism, he considered insurance mainly as an "incidental expense"
(faux frais) of production, and as a means for securing private property.
Thus, the greatest insurer in Marx's theory is the state itself, insofar as
it guarantees the sanctity and security of private property ownership, in
return for a tax levy.

The growth of the insurance industry has to do with at least the following
main trends (in no particular order):

1. Privatisation of social insurance funds - government funds, cooperative
societies and credit unions are privatised and turned into capitalist
businesses, and previous social security guarantees now have to be met
privately by individuals.

2. Concentration of capital - the increased concentration of capital means
that investments can involve complex assets with a very large capital value,
in which case the risks of the loss of capital increase, and are more
consequential, and also that more money can be made, from insuring them.

3. Deregulation of capital and money markets, leading to the growth of
finance capital and speculative capital in all sorts of forms (gambling on
market fluctuations), in which case, risks and uncertainty can multiply, and
people try to hedge or insure for the risks.

4. The growth of socio-economic inequality - the rich have much more money,
to be able to insure their property and wellbeing against criminals, while
the have-nots are more motivated to attack private property in some way.

5. The changes in the original function of the insurance industry, where
insurers begin to function much more as banks, investors, property managers
and financial operators in their own right, taking advantage of large profit
differentials in globalised markets.

6. The ability to make significant capital gains from asset or property
ownership with the aid of new financial products, and the increase in the
average value of assets privately owned by individuals.

7. The growth of the general level of indebtedness that is part of the "live
now, pay later" lifestyle - as the costs of current activity are
increasingly displaced to the future or somewhere else, insurance provides
larger capitals with guarantees for their conservation.


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