Re: Insurance industry vrs. Marx

[Doug Henwood <dhenwood@xxxxxxxxx>]

At 7:58 PM 3/30/95, n.gant@xxxxxxxxxxxxxx wrote:

>Prior to the rise of the insurance industry, the banking interests
> held the political power in the United States.  However today, I
> understand that it is the major insurance companies which by and
> large own the banking establishments.  So the chain of command
> in state monopoly capitalism ultimately leads us to the insurance
> industry, does it not?

The US system is much more fragmented than this. There's no simple chain of
command, and this is no monopoly-dominated economy. The classic elements of
American monopoly capitalism - like price leadership, control over the pace
of innovation, and managerial autonomy - are long dead.

The insurance industry does hold lots of financial assets - but so do
mutual funds, pension funds, and individuals. Compared with Europe and
Japan, ownership and control of corporate stock is extremely dispersed, and
debts and equity are typically held by different groups.

>Insurance is a reverse form of gambling by the masses, I believe, in
> that you are betting(by paying a monthly life insurance premium,
> for example) that you will "crap out" sooner or later in this
> capitalist game of life, and only under those circumstances do you
> win the "ante".  However, the laws of probability are such that
> most people paying insurance premiums do not "crap out" in the
> game(i.e., they are not seriously injured or stricken with an
> infirmity) and thus do not ever get to collect the "ante".

Insurance is a form of socializing risk. Profits may be appropriated
privately, but still the idea is spreading risk among lots of folks. This
is the opposite of gambling.


Doug

--

Doug Henwood
[dhenwood@xxxxxxxxx]
Left Business Observer
250 W 85 St
New York NY 10024-3217
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