13th June 2014

Are Markets Good for People? Exploring the politics and culture of social insurance

National Endowment for the Humanities Seminar Series, SUNY Potsdam, 9 June – 2 July 2014

Leader: Liz McFall, Open University

Organiser: Geoffrey Clark, SUNY Potsdam

Participants:  Geoffrey Clark, SUNY Potsdam; Kathleen M Connor SUNY Potsdam; Alan Draper, St Lawrence; Matthew J LaVine, SUNY Potsdam; SN Nyeck, Clarkson; Michael Popovic, SUNY Potsdam; Alla I Semenova, SUNY Potsdam; Joe Timmerman, SUNY Potsdam.

Seminar Overview

Ever since ‘society’ began to be recognized as something that governments had to manage insurance has been involved. Insurance offers a prospective solution to the management of all sorts of societal risks. Poverty, old age, illness, premature death, accidents and other catastrophes present obvious challenges for any social body. Insurance offers a way of spreading risk and managing the charge on the public purse when catastrophes take place that private individuals can’t manage without social assistance of some form. How the border between those risks that individuals are expected to manage alone – and those they are not – is defined raises political controversies that are almost as hot as they come. Equally it raises socio-cultural questions about how different forms of insurance appeal to individuals.

Insurance is a textbook example of the delicate interaction between what C. Wright Mills called ‘private troubles and public issues’. As the United States in 2013 moved from political deadlock to federal shutdown over the introduction of ‘Obamacare’, and as many countries across Europe struggle to address the crises facing their various welfare states, it is a great moment to pause and consider the history of social insurance. It is also a moment to consider the socio-cultural ‘appeal’ and promotion of insurance schemes. Advertising, branding and marketing scholarship has long tended to focus on products, especially luxury brands and fast moving consumer goods. Yet financial services industries have been historically among the most prolific and inventive of marketers. It was the need to find investors for railway schemes and other stocks as well as customers for insurance  that fuelled the emergence of professionalised advertising and marketing – at least as much as the development of new consumer products.

Attracting people is something private, commercial and state-sponsored insurance schemes both have to do. As contracts that work best over very long terms, insurance schemes have to develop means of appealing, recruiting, accommodating and retaining people within them. The seminars explore some notable successes and failures in accomplishing this in past market and state schemes and consider the implications this has for the design and operation of future schemes. Insurance has no inherent politics. It works by spreading risk across ‘pools’, deploying actuarial techniques, compensation and premiums, but this work can be organized according to a wide variety of political, moral and social principles. Insurance can lend itself to the ends of socialized or ‘welfare state’ schemes that make some risks, for example, old age, health care and unemployment, a societal responsibility. Just as easily, insurance can work as part of privatized, liberal schemes that regard these risks as primarily an individual responsibility. In most contexts some combination of the two is in operation.

This adaptability has been widely acknowledged in theory, but until recently, there have been few studies of precisely how market and state elements have interacted, collided and cooperated in devising insurance solutions. Literature is now emerging which documents the particular historical combinations of state and market insurance provision in different contexts. Understanding how these combinations arise, are sustained and eventually collapse, matters in a context in which large-scale socio-demographic changes are intensifying the pressures on both public and private forms of insurance. With decreasing mortality, aging populations, crises in health care provision and pension planning taking place in welfare based and privatized systems, it is crucial to improve popular understanding of the varieties of social insurance.

One way of tackling this is to explore in detail how states and markets have interacted in insurance provision in the past. In this, the strategies used to attract, retain and ‘re-serve’ individual members or customers; and to organize, innovate and adapt to changing circumstances, are of particular importance. This investigation can help explain why social insurance schemes have sometimes failed where they might have been expected to succeed, and why market solutions have sometimes succeeded where they might have been expected to fail. States and markets combine in devising insurance schemes; few states leave insurance entirely to the market and few feature exclusively socialised schemes. Hybrid schemes are common and even highly privatized schemes rely upon state regulation to manage the long-term liabilities. State and market schemes complement and imitate each other. This complex interdependence is sometimes obscured by more general arguments about marketization and the way markets today are thought to be extending their reach to encompass an increasing array of individuals, groups and organizations who must now perform according to the rules of markets rather than those of professions, bureaucracies or other public values.

If markets are in the ascendant as the ‘fundamental’ form of social and economic organisation it is more important than ever to understand them better. Yet the definition of markets tends to be abstract with economists and sociologists alike often taking the term as a given or settling on vague definitions. A practical approach might be to leave aside the technical definition of market properties and move towards more descriptive accounts of how markets actually operate in particular contexts. In the case of insurance systems, private, market based systems have managed to recruit people to schemes despite their expense and complexity. Understanding how this can happen is one of the core questions raised in the seminars. What it is that market schemes do well and why might this be relevant for thinking about the design of social insurance schemes? Why it is that individuals are so attached to markets? What it is about them that works for people, what it is, that in Harvey Molotch’s (2008) words, makes privately provided goods and services in certain contexts, seem so much ‘groovier’ than public offerings? Questions about how individuals are incorporated in the design of public insurance schemes on the one hand, and private commercial schemes on the other, matter. Whether the scheme in question is a national one that penalises missed premiums or a commercial life policy that rewards practices like health club membership with reduced premiums or uses the internet of things to audit and record what people actually do not just what they say they do, all schemes have consequences for individuals. How the design of the scheme accommodates lived experience is crucial.

To get a better sense of why this question of lived experience matters so much, we will look at the example of industrial insurance. Nineteenth century life insurance companies had used advertising and marketing primarily to stage a series of appeals designed to stir, either the heartstrings, with pleas about the plight of uninsured widows and orphans, or the purse-strings, with promises of unrivalled financial rewards. The new generation of industrial life companies were subtle by comparison, relying mainly on agents, not advertising, to recruit and retain customers. These agents were trained and organized to present a cogent appeal as ‘good average men’ working, not only to sell policies and collect premiums, but to be ‘guides, friends and philosophers’ to their policyholders. By providing a flexible mechanism for promotion, collection, delivery and market feedback, agents operated not just as a sales force but as something akin to the kind of digital Customer Relationship Management Systems used so effectively by companies like Amazon, Apple, Facebook and Google. The agent system helped ensure that industrial insurance offices sensed and responded to markets in a way that completely outperformed competing socialized schemes.

This history points to the importance of understanding insurance as a system that has to be designed to recruit and accommodate its users, a system that can collect feedback and enable provision to adapt to the changing needs and priorities of its users. As the systems delivering the Affordable Care Act in the US struggle to recruit and manage the first applicants, the necessity of what Lloyd George once referred to as ‘magnificent machinery’ to deliver insurance to mass populations and the political consequences of failure are clear. The series will conclude by considering how (or whether) new political settlements can be put deliberately into practice and how the new forms of social and cultural behaviour necessary to sustain them might be fostered.



1. The problem of social insurance: an overview

This seminar introduces the interdisciplinary aims and challenges of the approach to the debate. It then offers a brief overview of the history and aims of social insurance, moving from the introduction of local schemes in eighteenth century Europe and America through to the emergence of the private liberal versus state welfare dichotomy in the 1800s. It concludes with a brief discussion of the current situation including the demographic and financial crises being encountered in both welfare and non-welfare state arrangements.


Poovey, M. (2002) The Liberal Civil Subject and the Social in Eighteenth-Century British Moral Philosophy Public Culture, 14, 1, 125–145

Clark, G. (2009) Life insurance in the society and culture of London, 1700–75, Urban History, 24, 1

Murphy, S. (2011) Investing in Life; pp1-9

Baldwin, P. (1992) The Politics of Social Solidarity, Introduction pp1-54

Baker T. & J. Simon [eds.] (2002) Introduction Embracing Risk: The Changing Culture of Insurance and Responsibility, University of Chicago Press

Introduction to the seminar approach available at prezi.com/fe9ljodnaixy/?utm_campaign=share&utm_medium=copy&rc=ex0share



2. Razor strops to railways: the role of financial services and insurance in the history of advertising

This session explores the importance of financial services advertising in the nineteenth century development of promotional techniques. Life insurance offices were prolific and ingenious advertisers and developed a variety of styles of appeal and marketing techniques.


McKendrick, N. (1982) George Packwood and the Commercialization of Shaving: The Art of Eighteenth-century Advertising in McKendrick, Brewer, & Plumb The Birth of a Consumer Society. London, Hutchinson

McFall, L. & Dodsworth, F. (2009) Fabricating the Market Journal of Historical Sociology

Fullerton, R. A. (1988) How Modern Is Modern Marketing? Marketing’s Evolution and the Myth of the “Production Era”
 Journal of Marketing, 52, 1: 108-125

Alborn, T. (2003) The first fund managers: Life insurance bonuses in Victorian Britain. Victorian Studies, 45, 1: 65–92

Pearson, R. (1997) Towards an historical model of services innovation: The case of the insurance industry, 1700–1914. The Economic History Review, 50, 2: 235–256

The role of advertising in the history of insurance prezi at: prezi.com/5ddo5_r1_rmt/?utm_campaign=share&utm_medium=copy&rc=ex0share


3. Private troubles or public issues? governing societies

This session concentrates on the theoretical discussion of insurance as a means of pooling and governing risk according to different political logics and rationalities.


Donzelot, J. (1988) The promotion of the social, Economy and Society, 17, 3: 395-427

Ewald, F. (1991) Insurance and Risk; Burchell et al. [eds.] The Foucault Effect

O’Malley, P. (1996) ‘Risk and responsibility’, in Foucault and Political Reason, eds A. Barry, Osborne, T.  & Rose, N. University of Chicago Press, Chicago, IL, pp. 189-208

Heimer, C (2002) Insuring More, Ensuring Less, in Baker and Simon [eds.]

McCluskey, M. (2002) Rhetoric of risk and the Redistribution of Social Insurance, in Baker and Simon [eds.]

Lengwiler, M. (2010) The Rise of Mixed Welfare Economies, pp171-200, in Clark et al [eds.] The Appeal of Insurance



4. Social insurance schemes in historical and geographic contexts

An overview of the diverse mixture of uses of insurance in different places and times. In some territories insurance based welfare arrangements were in place by the end of the nineteenth century, in others a hybrid mixture saw private companies administering government schemes while other like the US developed employer based health insurance schemes.


Dobbin, F. (1992) The Origins of Private Social Insurance: Public Policy and Fringe Benefits in America, 1920-1950 The American Journal of Sociology, 97, 5: 1416-1450.

Lehtonen, T & Liukko, J. (2010) Justifications for commodified security: The promotion of private life insurance in Finland 1945-90, Acta Sociologica  53: 371

Baldwin, P. (1992) The Failure of the Solidaristic Welfare State: France and Germany The Politics of Social Solidarity, pp158-207

Shorloff, A. & Skocpol, T. (1984) Why not equal protection? explaining the politics of public social spending in Britain, 1900-1911 and the United states, 1880s-1920. American Sociological Review, 49: 726–750


5. Successes and Failures in insurance schemes: the silence of the poor

These session looks in detail at why some British social insurance schemes failed while other private schemes proved highly resistant to successive attempts at regulation


O’Malley (1998) Imagining insurance risk, thrift and industrial life insurance in Britain;

McFall, L. (2014) Groovy like the market: Problems with fit and adaptation in government schemes to insure the poor, Devising Consumption

Ossandon, J. (2014) Reassembling and cutting the social with health insurance, Journal of Cultural Economy, 7, 3: xx-xx


6. What is the good of markets?

Considers the debates about marketization and market fundamentalism alongside questions about how regulation might approach questions the division between public versus private services. Explores whether market schemes have any innate advantages over states schemes in how they accommodate people’s lived experiences.


Somers, M.R. & Block, F., (2005) From poverty to perversity: Ideas, markets, and institutions over 200 years of welfare debate. American Sociological Review, 70(2), pp.260–287.

Callon, M. (2007a). An Essay on the Growing Contribution of Economic Markets to the Proliferation of the Social. Theory, Culture & Society, 24(7-8), 139-163

Lehtonen, T. & Van Hoywegen, I. (2014) The Economization of Uncertainty, Introduction, Journal of Cultural Economy, 7, 4

P Vanhuysse, A Goerres (2013) Aging Populations in Post Industrial Societies;

Pickett & Wilkinson (2009) The Spirit Level

Picketty, T (2014) Chapter 13, A Social State for the 21st Century, Capital the 21st  Century, Belknap


7. Industrial Life Assurance in Britain 1850-1990

Investigates why an industry that politicians across the spectrum actively opposed was so hugely successful for so long.


Alborn, T. (2001) Senses of Belonging: The Politics of Working‐Class Insurance in Britain, 1880–1914;

McFall, L. (2014) Chapter 5 The Practical Heart of Markets, Devising Consumption


8. Obamacare and ‘Brosurance’: selling insurance schemes

Investigates the challenge of appeal in hard to reach groups. The health care exchanges of the Affordable Care Act need to recruit healthy young men to the insurance pool. These are a hard to reach group for insurance since young men are less likely to consider ill health a significant or proximate risk. Advertising (eg the ‘brosurance’ campaign) that appeals to their particular lifestyles and family ties is a suggested solution.


Maurer, B (2012) Regulation as Retrospective Ethnography

Baker, T. (2010) Health Insurance, Risk, and Responsibility After the Patient Protection and Affordable Care Act. U. Pa. L. Rev., 159, p.1577.

Haeder, S.F. & Weimer, D.L. (2013) You Can’t Make Me Do It: State Implementation of Insurance Exchanges under the Affordable Care Act. Public Administration Review, 73(s1), pp. S34–S47.

Sebelius, K., (2013) Implementing the Affordable Care Act: A Historic Opportunity for Public Administrators. Public Administration Review, 73(s1), pp.S13–S14.

Cappellanti, S. (2013) Premium Increases for “Young Invincibles” Under the ACA and the Impending Premium Spiral. Foro de Acción Americana, 2.