V. INSURANCE.
Insurance is usually supposed to be a modern idea representing one of those developments of the capitalization of mutual risks of life, property, and the like that have come as a consequence of modern progress. The insurance system of the Middle Ages, the organization of which came in the Thirteenth Century, is therefore extremely interesting. It was accomplished, as was every form of co-operation and co-ordination of effort, through special gilds or through the trade or merchant gilds. Among the objects of the gilds enumerated by Toulmin Smith is insurance against loss by fire. This was paid through the particular gild to which the merchant belonged, or in the case of the artisan through a special gild which he joined for the purpose. Provision was made, however, for much more than insurance by fire. Our fire insurance companies are probably several centuries old, so also are our insurance arrangements against shipwreck. Other features of insurance, however, are much more recent. Practically all of these were in active existence during the Middle Ages, though they disappeared with the so-called reformation, and then [{438}] did not come into existence again for several centuries and, indeed, not until our own time.
The old gilds, for instance, provided insurance against loss from flood, a feature of insurance that has not, so far as I know, developed in our time, against loss by robbery (our burglary insurance is quite recent), against loss by the fall of a house, by imprisonment, and then also insurance against the loss of cattle and farm products. All the features of life insurance also were in existence. The partial disability clauses of life or accident insurance policies are recent developments. In the old days there is insurance against the loss of sight, against the loss of a limb, or any other form of crippling. The deaf and dumb might be insured so as to secure an income for them, and corresponding relief for leprosy might be obtained; so that, if one were set apart from the community by the law requiring segregation of lepers, there might be provision for food and lodging, even though productive work had become impossible. In a word, the insurance system of the Middle Ages was thoroughly developed. It was not capitalistic. The charges were only enough to maintain the system, and not such as to provide large percentage returns on invested stock and on bonds, and the accumulation of huge surpluses that almost inevitably lead to gross abuses. What is best in our modern system of insurance is an imitation of the older methods. Certain of the trade insurance companies which assume a portion of the risk on mills, factories and the like, are typical examples. They know the conditions, enforce proper precautions, keep an absolute check on suspicious losses, accumulate only a moderate surplus and present very few opportunities for insurance abuses. The same thing is true for the fraternal societies that conduct life insurance. When properly managed they represent the lowest possible cost and the best efficiency with least opportunities for fraud and without any temptations to interfere with legislation and any allurements for legislators to spend their time making strike and graft bills instead of doing legislative work.