Managing risk, managing race: racialized actuarial science in the United States, 1881-1948

Abstract

This dissertation investigates how insurers and the United States government relied on the supposed neutrality of actuarial science to justify their racially discriminatory policies. It argues that the use of race as a variable in the statistical assessment of risk transformed the nature of racism and, in turn, ushered racial disparities in health, wealth, and incarceration from the nineteenth century into the twentieth. Specifically, it investigates the explicit use of race in the actuarial formulas of insurers such as Prudential, in prison management and parole-hearing risk assessments, and in the underwriting manual used for the mortgage insurance decisions of the Federal Housing Administration. It finds that already by the dawn of the twentieth century, leading actuaries and statisticians knew that the social and environmental conditions concomitant with slavery, genocide, and indentured servitude distributed risk inequitably among races. However, capital was ambivalent about the wrongs of the past and the state viewed itself as responsible more for the welfare of capital than for the welfare of its citizens of color when it entered the insurance game during the New Deal.