Like, did they just shrug and be like “oh well, I guess we aren’t getting our pineapples this year” or was it a rare and problematic occurence?
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I can’t speak to the mindset of the ancients – but the greeks had romans already had a concept of “things get lost – lets have an insurance policy”
https://logistiq.com/the-origin-of-the-ocean-cargo-policy/
https://en.wikipedia.org/wiki/General_average
The concept is probably even older.
Yes, both insurance, the stock market and the concept of corporations were invented as ways to be able to collectively carry the loss of ships, because it wasn’t feasible to do if everyone involved was completely bankrupted every time they lost a ship.
Shakespeare’s “Merchant of Venice” is based around a moneylender, and how the shipping investors don’t know if they will be rich when the ship arrives, or if they are financially ruined from the ship sinking
In a word, yes.
Obviously depending on when and where you’re talking about the risk of a wreck (or loss of cargo) varied, but carrying cargo (or passengers) by ship was often considered a risky business. There are plenty of examples of important people lost at sea, or invasions wrecked by storms.
This meant treating shipping as a risky business. Certainly many merchants were ruined when vessels failed to arrive, and colonies could go the same way. It’s no coincidence that marine insurance was one of the most important and earliest, perhaps even the earliest, forms of insurance.
Recommended reading: The Merchant of Venice. If I remember correctly the protagonist has three commercial shipping voyages fail to reach their destination and that is what causes his debt to the merchant and creates the conflict.
The Dutch invented insurance specifically for spreading out the risk of an occasional cargohip sinking, which leads to more investors being willing to fund another venture.
Back in the day, it was a rich man’s game to finance ships going on ambitious trade routes. It basically created the concept of the stock market with the VOC. If you had money, a lot of money, you could hire a ship or even have one built, hire a crew, buy provisions, load it with local goods and send it to exotic places to trade those goods for spices, tulip bulbs, goods or (let’s not be gentle on history) slaves. If you were particularly savvy you could combine several stops on several continents, and maximize profits the moment your ship returned (as somebody pointed out: your ship had come in). That way, you could turn a lot of money into an absolute fuckton of money. But of course your ship could sink, get attacked by pirates, simply get lost at sea or everybody could die of scurvy. This would often bankrupt the financer. It was a high stakes high reward and high risk game.
However you might have heard the name Lloyd referenced at some point when it comes to shipping. In the 17th century, Edward Lloyd opened a coffee house in London where ship owners, merchants, etc. could come together to insure ships and cargoes. This was such a big business that to this day, Lloyds of London is a powerhouse collection of marine insurance brokers. To quote Wikipedia:
>In 2023 there were 78 syndicates managed by 51 “managing agencies” that collectively wrote £52.1bn of gross premiums on risks placed by 381 registered brokers.
Keep in mind that shipping was 99% trade. It was rarely “your” stuff getting lost at sea, and mostly luxury goods. Like indeed pineapples. People would invite the whole town over to come look at their pineapple and show off they could afford one.
Was reading James Clavell’s “Gaijin” and a Jon negligible part of it is just “oh man I hope that important letter I sent made it and that the supplies I ordered come in. It also goes into detail about how severe tampering with mail was and the timing of information you needed to read half way across the world. Fascinating time to live in.”
There’s a very good podcast on this exact issue. It’s an episode of “The Constant: A History Of Getting Things Wrong” (great title). The gist of it is that, if you were an orphan or a drunk or a petty criminal in London in the 1860s and were press-ganged into crewing a cargo ship, you were very likely a dead man before you even climbed aboard.
Due to a quirk in insurance regulation (which didn’t really exist), it was possible for ship owners to insure a ship for more than the combined value of the ship and its cargo. They actually made a profit if the ship sank. There was an incentive for owners to scrounge up unseaworthy vessels and load them up with as much cargo as could fit aboard, regardless of safety concerns. If the ship miraculously made it to its destination, hey, you made extra money by carrying extra cargo. And if the ship sank and everyone died, oh well– the insurance companies would pay off and you’d come out ahead anyway.
https://www.constantpodcast.com/episodes/shipwreckless9235205
I think it’s funny that people thought sending pineapples across the ocean was a solid investment strategy
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