Chapter Three. FROM NATURE'S URN TO THE INSURANCE OFFICE

Abstract

This chapter examines probability, which, during the eighteenth century, was customarily interpreted as the calculus of reasonableness for a world of imperfect knowledge. Enlightenment thinkers applied the mathematics of chance to an implausibly rich variety of issues. They used it to demonstrate the rationality of smallpox inoculation, to show how degrees of belief should be apportioned among testimonies of various sorts, and even to establish or preclude the wisdom of belief in biblical miracles. Probabilists also stressed the applicability of their subject to actuarial and demographic matters. Probability calculations based on mortality records had been used increasingly to set rates for life insurance and annuity purchases since Edmond Halley published the first life table in 1693. Mathematicians all over Europe, but especially in the great commercial states, the Netherlands and Great Britain, applied their skill to political arithmetic during the eighteenth century. Meanwhile, some of mathematician Pierre-Simon Laplace's most important contributions arose from his work on population estimates and other demographic problems.