DIGITAL SYNAPSE EXCHANGE · ECONOMICS

Economic sequel to four legal studies — France and the United States

ABSTRACT

French households save at a rate not seen outside the pandemic since the 1970s, and the same country records the highest institutional distrust its reference survey has measured in seventeen years. The standard explanations — ageing, pensions, public debt, inflation — account for much of the first fact and nothing of the coincidence. I propose the missing link, and it is juridical. Civil liability is, in economic function, an insurance contract: it promises that a patrimony wrongfully diminished will be restored. Four legal studies have established that its effective payout rate is near zero, in two different legal systems. An insurance whose payout rate is zero must be replaced by self-insurance. Each household therefore constitutes, privately, the provision the law will not pay — and deposits it with the very counterparties it distrusts. From this I derive a double provisioning of the same risk, a transfer with a negative sum, and a regime whose economic marker is rent rather than profit: feudalism minus commutativity.

Exergue — The Household as Its Own Compensation Fund

France has built, over forty years, a series of ad hoc compensation funds: asbestos, contaminated blood, medically induced injury, terrorism, one pharmaceutical scandal after another. Each was created because the ordinary law of reparation had failed to pay the victims of a known harm. Each required a political decision, taken late, under pressure, and confined to its own scandal.

What I describe in this study is the same institution, built privately, by twenty-nine million households, in advance, without a statute and without a name. A savings account held against a harm not yet suffered and a compensation not expected to arrive is a compensation fund of one member. Its capital is the reparation the system will not carry.

I. The Anomaly