Back in 1700s, the English were really into betting on just about anything: ships lost at sea, election results, the loser in a duel, or the outcome of sieges. One particularly gruesome wager involved betting on how many German refugees would survive starvation and death on the streets of London.
So says Michael Sandel in his 2012 book What Money Can’t Buy: The Moral Limits of Markets. This Harvard economics professor shows just how well the adage plus ça change, plus c’est la même chose applies to gambling and to its latest incarnation as insurance. Through his explanations, I think I finally understand something about the “derivatives” that went bust and launched the Great Recession.
But what has that to do with anything Acadian? Well, back in the 1700s, when the English would bet on just about anything, Louis XIV was the Sun King of France. During his reign, Acadie was the ping-pong ball in a war game between England and France.
Finally, in 1713, Louis gave up his claim to Acadie to the British in the Treaty of Utrecht. Because of various wars and high living (sound familiar?), his royal coffers were near bankrupt, and giving up Acadie seemed a good way to downsize. So what if all your former French subjects now found themselves required to take an oath of loyalty to the English king?
Then, on August 15, 1715, Louis fell ill. The English ambassador to his court made a bet that the king wouldn’t make it until fall.
Two scenes pop into mind
– a man in ruffles and hose, a coach rumbling over dirt then cobblestones, the sweaty flanks of dappled horses and
– a man in a Burberry trench coat, a limousine muscling down Fifth Avenue, the sweat and dirt of homeless men on 44th Street.
Both men are eager to reach their bookies, one working for the 18th century Lloyd’s, the other on 21st century Wall Street. One wants to bet on the death date of the enemy king, the other on that of a company’s employees.
Yes, in the 21st century U.S., companies can wager on the death dates of employees. It happens because a company can take out life insurance policies (nicknamed janitor’s insurance) – without an employee even knowing it. If the employee dies, the company collects. Some of these policies extend beyond a person’s employment with a company, so that it’s not “if” but “when” the former employee dies that determines the cash award. If I understand it right, bunches of these policies get bundled together and offered to investors.
That’s just messed up.
As messed up as it was back in 1715, when the English ambassador treated the impending death of a country’s leader as a situation no more significant than a horse race.
Louis died in September. The ambassador won. I cringe at the word “won.” Perhaps it would be better to say, the ambassador collected on his wager.
Sometimes, one wishes that the more things changed, the less they stayed the same.