3rd Annual Forum on Capital as Power: "Capitalizing Power: The Qualities and Quantities of Accumulation"
September 28-30, 2012, York University, Toronto
23. Towards a Political Economy of the Insurance Industry: Between Veblenian Institutionalism and the Theory of Regulation?
Mathieu Charbonneau, Carleton University (mathieucharbonneau@cmail.carleton.ca)
Although social scientists have recently begun to consider private insurance, there has been no extensive research on the political economy of the insurance industry. Indeed, it is necessary to have a better understanding of the nature of insurance capital. There is thus a need to explore institutional economics as the theoretical basis of future research on the insurance industry. Considering existing evidence, we suggest that a critical political economy of insurance could originate from the intersection of Veblenian institutionalism (VI) -- or the Capital as Power approach -- and theory of regulation (TR). After a short review of the literature, we first present the debate over the insurability of catastrophic risks and the case study of terrorism insurance. We show that the industry insures against terrorism risks through four means: precaution, responsibilization, state collaborations and financialization. Secondly, while the study of insurance represents a major gap in the regulationist literature, we note that TR sheds light on private insurers' core function in monetary systems as well as on their function as institutional investors. Thirdly, the insurance industry is a highly concentrated sector, and recent sociological studies have shown that private insurers are characterized by institutionalized fraud and deceptive selling. Hence, VI appears as a good lens through which one can analyze insurance capital's differential accumulation, by virtue of intense M&A activities and the implied sabotage of efficiency and solidarity. We conclude with a discussion concerning the problems of bridging VI and TR, especially in terms of a theory of value.
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