What a concept. You get a few hundred or a few hundred thousand or a few million people together. Everybody contributes an affordable amount of money to a central kitty. When something bad—a death or tornado or flood or fire, among other things—happens to one or more of those people, they’re made whole by the kitty.

Of course, money can’t bring someone back from the dead, but it can rebuild a house, replace a car, or send someone to college after a family breadwinner can no longer work.

The companies who administer the kitty get to invest it, loan it out at interest, build skyscrapers with it, and hire actuaries to compute just how much money they can require people to contribute. Governments set up commissions to make sure the companies don’t invest in their in-laws’ shady business deals, charge extortionate interest, build buildings that can’t be rented out, or hire comptrollers who have been comped a top-floor suite in a Las Vegas hotel. They make sure that contracts are honored, that advertising is honest, that new houses show up on lots once paved with charcoal, that people who didn’t want to die but did anyway are still able, as benign ghosts, to give their kids an education.

What could go wrong? A bunch of things, it turns out, mostly having to do with humans deeply attracted to all seven of the deadly sins. Fallible humans try to get insurance payouts without having to endure the misfortune they’re insured against. They fake their own deaths, or kill themselves or burn down their houses to get out of paying debts, or kill someone who has named them a beneficiary, or take out policies on unsuspecting people, naming themselves as beneficiaries, and then kill those unsuspecting people.

But that’s not what you should worry about. There are safeguards in place against what we have learned to call insurance scams, and while they’re not perfect, they usually catch up with people who cheat the system. People can get away with faking death once, but the second time around, the authorities generally want to see a real corpse. Arson leaves traces. Murder causes indelible stains on heretofore stain-resistant consciences. The same actuaries who compute mortality tables can also tell when the odds don’t favor that many cars being stolen, that many trips ruined, that many spouses falling out of high windows.

You should worry more about the unspoken premise of the insurance industry, which is that individual people are more subject to bad luck than large groups of people. Actuaries in normal circumstances can look at a thousand people and tell, in any given year, how many of them will die, and what to charge them for life insurance, what interest to charge for loans, how much to pay accountants so they won’t fudge the numbers, and so on.

This whole scheme falls apart when circumstances stop being normal. A pandemic can cause enough excess deaths to take the profit out of life insurance policies. A tsunami can wipe out an expensive nuclear power plant and subject its owners to staggering liabilities. Wildfires can take out large fractions of cities, as can floods, tornadoes, and hurricanes. Crop and solar farm insurers are subject to hailstorms. Sea level rise can turn houses a dozen blocks back from the ocean into valuable beachfront property.

Insurance companies act like people in these circumstances. Self-preservation becomes a priority. They purchase reinsurance policies, which function like life insurance for insurance companies, and there are even reinsurance policies for reinsurance companies, and so on to infinity, or at least all the way to central banks. 

For individual policy holders, however, collective catastrophe looks like cancelled insurance, impossibly high premiums, the elimination of entire categories of protection, and, finally, direct exposure to misfortune. Negotiating with tragedy becomes impossible. Appealing to the sympathy of a company losing money becomes really impossible.

________

The concept of extractive capitalism might never have been invented if 16th century Dutch traders hadn’t banded together to share the considerable risks of their trade. In exchange for reduced best-case-scenario profits, they could protect themselves from worst-case-scenario catastrophic losses. Without this primitive form of insurance, people were instantly wealthy if their ship came in, instantly ruined if it was lost somewhere between Amsterdam and Indonesia.

It was a better deal for the Dutch than the Indonesians. It quickly became a better deal for the Spanish than for the Aztecs and Incas, a better deal for the English than for the Native Americans and African slaves. The large pools of capital that accumulated were put to use acquiring more colonies and their vast resources. The Dutch East India Company became the model for the modern corporation, and its voracious nature became the modus operandi for the rendering of animals, vegetables, and minerals into cash.

Corporations might be people according to our Supreme Court, but once corporate peoplehood became law, it changed what it meant to be human. You had to make money or cease to exist, which justified the destruction of anyone who got in the way of profits, or careers, or buying a house, or sending your kids to a prestigious university, or buying a better car than the neighbors. It’s not surprising that a system that constantly threatened its institutions with destruction turned him-or-me psychopathy into normalcy.

________ 

Insurance companies are pulling out of markets made unprofitable by climate change. Sea level rise, wildfire catastrophe, storm damage, and pandemic have upset the balance between the people we call corporations and the people they feed upon. Win-win becomes win-lose becomes lose-lose. Contrary to what you might expect, it’s the corporations that disappear first, simply because they cease to exist when they cannot make a profit.

A side note: If you want to make extractive capitalism stop extracting your resources, your money, your land, or your soul, simply make it unprofitable for it to do so.

When insurance companies pull out of markets, large numbers of people instantly lack insulation from catastrophe, or more accurately, their life narratives lack that insulation. It’s possible that was always the case. (Lives, of course, are subject to death, which, if it isn’t catastrophic, at least represents a great dislocation of cherished priorities.) But short of death, we pretend that we can pay money to keep misfortune at bay.

If you don’t have a stable meaning for your life, it’s hard to find a long-term reason for living. The retreat of the insurance industry, for many people, is the first crack between the horizon of their worlds and their skies, and those cracks aren’t the kind that let the light in. It’s hard to function when your story doesn’t hold together. For years, insurance has kept a lot of stories functioning even in desperate circumstances. Impossibly ridiculous stories are believed if they’re insured.

________

Insurance is low-hanging fruit for extractive capitalism. It requires the extractees to pay for extraction, and it gets them to do it voluntarily. It requires far less work and less violence than logging, mining, fur trapping, slavery, conquest, sharecropping, or convincing people they need to go into debt for college.

But there’s convincing evidence that hardcore capitalism will not leave a market if steps can be taken to maintain profitability, even at the cost of human lives or human habitat.

An apocryphal but all-too-believable story will serve to illustrate: In the last half of the last century, Japan built a new fleet of whaling ships about the time public opinion decided that killing whales—gentle endangered sentient creatures—was a bad thing, profitable or not. Anti-whaling advocates, attempting to determine how many whale-cash-equivalents they’d need to stop the slaughter, asked the owners of the whale fleet, “How many whales do you want, anyway?”

“All of them,” was the answer.

The Japanese whalers had penciled out the life of the ships and the numbers of whales left in the world and had concluded that they could make a profit, even though it would mean the extinction of whales. The deciding factor was the life of the ships.

I don’t think this story illustrates the weird nature of Japanese capitalism. It illustrates the weird nature of capitalism, period. When there is a resource to extract at a profit, it will be extracted. Capitalism, as many commentators have noted, is like a shark. If it stops swimming and eating, it dies.

That’s why wildlife refuges and National Monuments and even labor unions eventually succumb to legislative attacks or changes in administrations. These things represent resources protected from exploitation, which apparently makes them irresistible targets to the people who exploit resources.

________

I have little confidence that the nations of the world will leave coal or oil in the ground, especially if they think they own it. I have little confidence that anyone presently using the atmosphere as a dump for CO2 will stop as long as they’re making money. Shifting costs to the atmosphere or the oceans or stealing land or cash from the public are familiar strategies to keep a capitalistic economy going.

Unfortunately, that earth-is-ours-for-the-taking narrative is central to the lives of the rich and powerful, the movers and shakers, the people who decide where capital goes and what it does when it gets there. Without profits, their lives mean nothing. Without profits, the economy dies and people stop being able to imagine themselves with a future.

As the insurance industry discovered long ago, people will pay a great price to keep their life stories functional and free from chaos. I suppose we can look at homeless schizophrenics as what happens when your life story loses all meaning, and CEOs, lawyers, and college presidents as what happens when it still makes sense. But there is the question of how many CEOs, lawyers, and college presidents use the capitalist cultural straitjacket to keep their shit together.

________

Despite appearances, I am not writing an anti-capitalist rant here. Capitalism has allowed eight billion people to populate the planet, and has given a majority of them cars to drive and toilets to flush. Selfishly, I hope capitalism lasts a while longer, because Julie and I would like to last a while longer, and we won’t do well without the benefits of corporate civilization.

But capitalism, like sharks, eventually gets tired of swimming, runs out of food, gets sick, is murdered by organized crime (Chinese trawlers, in the case of sharks), or runs out of ocean (I know this is torturing a metaphor, but we are running out of ocean). Siphoning profits out of markets becomes a matter of violating fair play and common decency. Getting free stuff from the planet turns out to be stealing from our own future. Moral gangrene sets in.

Gangrene aside, it's getting harder to make money. Historically, when resources run low, new resources are found. When markets run short of things to sell, they sell new things. When energy sources go away, new (or very old, like slavery) sources of energy are put to work.

Adapting these solutions to our current predicament is possible, but it has implications that are disturbing in proportion to one’s position in the human hierarchy. My first reaction is to be thankful I’m not any closer to the bottom than I am. My second—because I read history—is to be glad I’m not any closer to the top. My third is to wish that some cosmic insurance agency could protect me from catastrophe, and that I could, for a few more years at least, afford to tithe the premiums.