Jonathan Levy: Risk as We Know It

Jonathan Levy, an assistant professor of history at Princeton University, is a fellow at the Center for Advanced Study in the Behavioral Sciences, at Stanford University.

Sail forth! steer for the deep waters only!
Reckless, O soul, exploring, I with thee, and thou with me;
For we are bound where mariner has not yet dared to go,
And we will risk the ship, ourselves and all.

—Walt Whitman, "Passage to India" (1871)

In the 19th-century United States, voyage was an im­age that Americans invoked time and again to capture what it was like to live on the stormy seas of capitalism. In 1871, Walt Whitman offered a maritime allegory of the experience of individual freedom. To do so he evoked risk. Long a technical concept in the financial arena of marine in­surance, at the end of the 18th century "risk" still simply referred to the commodity bought and sold in an insurance contract. Outside the world of long-distance maritime trade, risk had very little meaning or use.

Sometime during the 19th century it became all but impossible to imagine the modern condition without the word "risk." By 1871, Whitman was able to invest risk with great lyrical power. Capitalism—an economic system that thrives on radical uncertainty—was asserting control. Mean­while, men had begun to insure their own lives, brokers had begun to sell mortgage-backed securities, and farmers were beginning to buy commodities-futures contracts. Uncertainties and anxieties—some old, some new—had to be managed and coped with, perhaps even capitalized upon. Risk management was born....

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