[T]here remains a puzzle. . . [T]he British remain the world's most insured people, paying more than 12 percent of GDP on premiums, roughly a third more than Americans spend on insurance and nearly twice what Germans spend. A moment's reflection, however, prompts the question, why should that be? Unlike the United States, Britain rarely suffers extreme weather events; the nearest thing to a hurricane in my lifetime was the storm of October 1987. No British city stands on a fault-line, as San Francisco does. And, compared with Germany, Britain's history . . . has been one of almost miraculous political stability? Why, then, do the British take out so much insurance?Note that I do not recommend this book, for reasons I hope to elaborate in a later post.
The answer lies in the rise and fall of an alternative form of protection against risk: the welfare state.
Friday, December 19, 2008
From Niall Ferguson's The Ascent of Money (2008) at 199 (footnote omitted):