Freaks of Fortune

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Until the early nineteenth century, "risk" referred specifically to the commodity in marine insurance contracts. This work explores how the modern concept of risk emerged in the United States, transitioning from the high seas to the heart of financial management in an uncertain capitalist future. By examining the hopes and anxieties of everyday people, Jonathan Levy illustrates the evolution of risk through the rapid growth of financial institutions such as insurance companies, savings banks, mortgage-backed securities, commodities futures markets, and securities markets, all while raising profound moral questions. Central to the rise of risk was a new vision of freedom, where being a free individual—whether an emancipated slave, a plains farmer, or a Wall Street financier—meant taking on and managing personal risk. However, this often involved transferring that risk to emerging financial institutions, now collectively known as the "financial services industry." Levy traces the trajectory of this vision of personal freedom within the context of the American financial system. As faith in divine providence waned in the nineteenth century, Americans faced unforeseen challenges to their independence and security amid the unpredictable landscape of capitalism. This work is one of the first to uncover the historical roots of our current financialized existence and risk-oriented lives.