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Farber, Hannah

Underwriters of the United States: How Insurance Shaped the American Founding

UNC Press (Chapel Hill)

2021



OUR SYNOPSIS: Hannah Farber argues that “the old business of marine insurance became suddenly and deeply involved in the new business of American state making” in the Early Republic. By extension, “marine insurers underwrote the establishment of the United States.” (13) Insurance companies chartered by the state provided the capital for this capitalist state-building. However, insurance could also conflict with state interests through self-governing merchant decisions shaped primarily by capitalist competition. She emphasizes that “an insurer needed to be an expert in politics and law as well as in commerce” to understand and capitalize on these interrelationships. (18) Insurance also predated the American state and maintained transnational ties as this state developed. While merchants initially purchased insurance from London brokers in the colonial era, transnational brokerages began developing and earning trust in the American colonies. Insurance boomed during the Revolutionary War, setting brokerages up for further success after the conflict. Investors in the early U.S. then chartered many banks and insurance companies, establishing vital capitalist infrastructure rooted in American political economy. They also expanded from marine to include fire and later life insurance.

BIG QUESTIONS:

  • How did insurance companies and the state exert leverage and advantage over each other?

  • What factors did insurance brokers prioritize when evaluating risk to decide what was worth insuring?

  • To what extent were financial institutions instruments of governance in the Early Republic?

FEATURE QUOTES:

  • “Navigating unpredictable political crises, American marine insurers at times pushed the state away and at others drew it close. Unsurprisingly, they tended to proclaim whichever form of loyalty—to their fellow merchants or to their governments—seemed likely to yield them the most profit or security.” (18)

PRIMARY SOURCES:

BALTIMORE CONNECTIONS:

  • N/A

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