Insuring the Community against Loss: Roycean Reflections on the Tasks of Interpretation

Introduction: Royce's Interest in Insurance

In the last few years of his life, Josiah Royce strove to make his conception of the Community of Interpretation, or the Universal Community of Loyalty he developed from the ideals of Pauline Christianity, more practical. In particular, the outbreak of World War I turned Royce's mind to the use of insurance to mitigate the problem of international war. As well stated by Stuart Gerry Brown:

[Royce's] later and last years were devoted almost entirely to a study of the community, in the hope that he could provide some direction, for a people who were to be organized willy-nilly into ever more and larger organizations, that their organizations might be more than organizations; and that their virtues and ideals as individuals might be preserved in the new forms.

(Brown 17)

In his War and Insurance (1914) and The Hope of the Great Community (1916), Royce gives an account of insurance as a vital example of a community of interpretation, and in this paper, I propose to explore some of what we can learn from using insurance not only as an example of Roycean interpretation, but as a model for some virtues and ideals of a self-critical community. In particular, I am interested in the question of risk management as something fundamental to interpretation, especially in terms of offering a guarantee against loss. Of course, for Royce, the problem of loss is existential as well as epistemic, as evidenced by his sustained engagement with the overcoming of betrayal through atonement.¹ In addition, given that the outbreak of international war was a prime motivation for Royce's late turn to insurance, reading insurance as an act of interpretation may also serve to highlight the role of interpretation in the maintenance and restoration of peace.

In an effort to re-open this question in the context of Royce's philosophy, this paper will have three main sections. First, I will briefly review Royce's notion of a community of interpretation as given in The Problem of Christianity (1913). Second, I will focus on Royce's characterization of insurance as one of three main examples of practical communities of interpretation in War and Insurance and The Hope for the Great Community. Also, I will address some of the background of Royce's conception of insurance through his adaptation of Peirce's use of insurance as a model of inductive reasoning, especially in the natural sciences. Third, I will focus on the problems of adverse selection and moral hazard, which stem from the notion that the guarantee of insurance tends to increase risky behavior. By taking these problems from the realm of insurance, I hope to offer a further specification of Royce's general theory of interpretation. My first two major sections will rely upon primary texts and philosophical commentaries, especially Kelly Parker's analysis of Royce's account of the consequence of different kinds of mediation on the nature of philosophy. The second and third major sections will benefit also from a symposium on War and Insurance published by the Connecticut Insurance Law Journal as a further aid for reading Royce's understanding of interpretation through the lens of insurance. Again, while I will address some qualms with Royce's conception of insurance, my primary interest is initiating an inquiry into what Royce's interest in insurance suggests about the nature of interpretation, and thus ultimately about philosophy.

1. Royce's Theory of Interpretation

Given the characteristic length of Royce's ruminations on community and interpretation, I can only highlight a few salient elements of his thought in this paper. First, Royce explicitly adopts William James's language of "cash-values" and "credit-values" for perceptions and conceptions, and expands it into the mediating third of "exchange-values" for the process of interpretation. From The Problem of Christianity:

[Interpretation] is a process of money-changing—a special form of exchange of values, but a form not simply analogous to the type of activities whereby conceptions are provided with their corresponding perceptions. And this form is...