Sunday, October 25, 2009

If there's something you don't want the peasants to get riled up about, just dismiss it as old news

Doesn't everyone know about dead peasant insurance? Isn't it old news?

One of the most effective strategies of ruling elites is to downplay the importance of anything that might ruffle the feathers of the peasantry and lead to -- perish the thought -- "class warfare," otherwise known as liberal legislation. Anything outside a tightly defined consensus of acceptable discourse is portrayed as old news that everyone who's anyone already knows, making it a crude social faux pas to even mention it. This sort of condescending dismissal is often directed at Michael Moore and his films by mainstream media.

That was the case with Moore's reference to dead peasant insurance in "Capitalism: A Love Story." Moore used it as a symbol of corporate callousness. Although he didn't go into detail, it turns out to be a (perfectly legal if morally dubious) corporate tax avoidance scheme that dates back to the Reagan years, a mechanism for almost magically transforming taxable income into tax-sheltered investment vehicles and tax-free life insurance death benefits.

I'm a news junkie and even worked for an insurance company for nearly 10 years, but like many people I had never heard of dead peasant insurance until Moore's film came out. But according to the New York Times, I must not really follow the news.
Like many of the stories Mr. Moore pulls together in this movie, dead peasant insurance might not be a revelation to those who follow the news, but it makes for infuriating viewing.
Really? Those who follow the news already know about it? Then the Times must have reported on it, right?

Wrong. I searched the NYT archives, and the paper never used the expression "dead peasant insurance" -- or the synonymous, "dead janitor insurance" -- before Moore's film came out. So it's hard to imagine that "those who follow the news" knew about it. I suspect that even film critic Manohla Dargis never heard of it until she saw the movie or read the press kit.

That's the beauty of the "old news" dismissal. It doesn't really have to be old news for it to work. In fact, it works best when it's not old news at all, and you just hope that those pesky peasants will slink away after they're cowed into admitting they've made another boorish faux pas by even bringing it up.


Anonymous said...

Well, the concept isn't new; it's been standard practice for the top brass, department heads, others high in the corporate hierarchy to have such insurance on them if it would cost the institution big bux to replace them on short notice, like dropping over or mis-timing the speed of an oncoming vehicle.

The bit about WalMart and their ilk putting such policies all the way down to the peon level is the new part. And I'm pretty sure I saw stories about it a few years back. Of course I used to read some fairly (okay very) obscure publications like the Arkansas Democrat-Republican, who iirc were the ones who broke the WM story.

Moore's genius was in the naming. Pretty sure he made up the term "dead peasant insurance", so of course earlier stories about the practice would have used some more corporate-friendly euphemism for the thing.

Billing it as an employment benefit was the brilliant move. "If you die we will pay your family $10k, aren't we saints?" while not mentioning that the policy was actually for $50k and the corp kept the difference...

great piece MG. thanks.


Madison Guy said...

Thanks, Anonymous. Actually, although "dead peasant insurance" sounds like something Moore must have made up, the term was used in a couple of memos by Winn-Dixie's insurance company to Winn-Dixie about the coverage (back in the '80s, I think). The only reason it became public knowledge is the docs showed up in court when some of the dead peasants' survivors sued.

dmark said...

The "dead peasant" insurance idea was addressed, at least superficially, in the Pension Act of 2006. Corporate Owned Life Insurance (COLA) provision covers some of the worst aspects of this practice. Good post.