Chapter41: **The Ominous Future Foretold by Statistics**
*Tap, tap, tap.*
Inside the temporary lodging in Florence, the sound of a quill scratching incessantly against parchment was the only thing echoing through the room.
Luca and Leo, two geniuses gifted with the formidable modern mathematical weapons of "statistics and probability," had been burning the midnight oil for days, obsessively tackling the assignment In-ho had given them.
"This is maddening. Even if we assume the probability of a knight dying in battle is roughly 15 percent, how on earth are we supposed to quantify the probability of a lord dying from illness?"
"Mr. Luca, you have to group them by age and apply a weighted average. There are countless nobles who drop like flies once they pass a certain age. We even have to factor in the probability of them suffering from gout."
When the young, intuitively brilliant Leo tossed out an idea, the manic former professor Luca would codify it into complex formulas and probability tables.
However, dark circles hung heavily beneath both their eyes. While they were confident in their ability to handle numbers, the task of converting the value of human life into currency and setting insurance premiums placed an immense burden upon them.
"Is it almost done?"
In-ho opened the door and stepped inside, scanning the mountains of parchment piled high on the table.
"Master. We have completed the rough standard rate table. However..."
Luca hesitated before continuing.
"We are concerned that the premiums we have calculated might be too high. To provide a profit when they return alive or pay a massive compensation to the bereaved if they fall in battle, the initial enrollment fee must be substantial. Will ordinary knights and lords be willing to pay such a large sum? Wouldn't it be better to lower the price slightly to increase the number of subscribers?"
Young Leo nodded in agreement with Luca.
Even though it was a matter of life and death, the premiums they had calculated far exceeded the common sense of the people of this era.
But In-ho shook his head firmly.
"No. Set the premiums even higher than what you calculated. Make them expensive, without exception."
"But, Master? If we do that, they will be reluctant to join."
In-ho chuckled as he looked down at the two geniuses.
They might be geniuses at mathematics, but they were still novices who did not understand "capitalism and human psychology."
"You are currently underestimating the situation of this era. This is a Europe where one never knows when a blade will be at their throat or when a plague will sweep through and wipe out an entire family. In the midst of such terrifying uncertainty, how great do you think the value of a promise that says, 'Even if I die, my family and heirs will be guaranteed security,' would be?"
In-ho’s eyes flashed.
"Lords want stability for their houses, and knights and serfs want a lifeline that ensures their wives and children won't be cast out onto the streets if they die tomorrow. If this is the only lifeline in the world, people will sell everything they own to grab hold of it."
In-ho had no intention of selling insurance cheaply from the start.
"In fact, if the premiums are cheap, they will be suspicious. Only when they pay a high price will they believe, 'Ah, this fund will never fail and will perfectly guarantee my future.'"
The Veblen effect.
This phenomenon, where a high price is perceived as high quality, was a fundamental concept in marketing.
In a situation where they had to establish a new benchmark, selling cheaply would only undermine the premium nature of the insurance.
Looking at it differently, insurance was essentially the act of selling "faith."
The faith that one would be provided for in the "event of an emergency."
It was not strange at all to charge a premium for this faith.
After all, the wealthier one is, the more one trembles at the fear of losing everything.
"…!"
"It is better to extract as much as you can, and in return, guarantee absolute safety. That is the core of this business."
The logic of arrogant capitalism, which only those who monopolize value can wield.
Luca and Leo swallowed hard and nodded.
"If it is absolute safety..."
"Just how much should we set the premiums for?"
"You don't have to return all the insurance money."
In-ho recalled modern insurance.
"The current premiums are based on a maturity-refund model, but depending on the product, we can also design them as pure protection plans."
"Maturity-refund model? Pure protection plan?"
The two were bewildered by the unfamiliar terms, and In-ho cleared his throat before continuing.
"A maturity-refund model means returning a portion of the money paid at the end of the insurance period, while a pure protection plan means there is no money returned, but the premiums are cheaper."
"Ah! In that case!"
"We can offer the maturity-refund model to knights and lords, and the pure protection plan to the serfs!"
"That is what insurance design is. Creating appropriate insurance tailored to the person. Do you understand now?"
The two stared blankly at In-ho, blinking their eyes.
In the mind of this young saint, even the essence of human nature, beyond mere numbers, was perfectly calculated.
"Finish the premium calculations that way. More importantly, have you extracted 'that statistic' I ordered yesterday?"
In-ho’s voice sank, becoming colder and more serious.
This was not just about a business item for making money.
"Yes, Master. We cross-referenced the data on France's population changes over the past 0 years and the grain import and production volumes of each territory, collected through your merchant network, but..."
Luca frowned as he pulled out another stack of parchment.
"The figures are strange. I thought I had miscalculated, so I checked them several times."
"How are they strange?"
"The population is skyrocketing too rapidly. On the other hand, the production of wheat and barley across France is stagnating, unable to keep pace at all. At this rate, a severe grain shortage will occur within a few years..."
In-ho’s expression hardened as he listened to Luca’s report.
The worst-case scenario he had anticipated was becoming reality.
"Malthusian Trap..."
"Pardon? Did a man named Malthus build a trap?"
"Yes. It is the worst-case scenario predicted by a man named Malthus."
In-ho stroked his chin and stared at the statistical table.
If history had followed its original course, France would have been ravaged by the "Hundred Years' War" with England by now, and the population would have plummeted as countless men fell in battle.
The invasion of Scotland would also have served as a bloody "brake," naturally regulating the population by incurring massive casualties.
Even if not that, there were plenty of things to reduce the population—plagues, looting, territorial wars—but that was no longer the case.
Because In-ho had intervened and stomped out every spark of population decline, millions of people who should have been dead were alive and demanding to be fed.
"How ironic... that the more lives I save, the more the quality of life plummets..."
Furthermore, with the supply of soap and Aqua Vitae produced in Rouen, even the infant mortality rate was noticeably decreasing.
"Master. If things continue like this, food will run out and riots will break out. Why on earth is the population increasing so abnormally?"
"That is the greatest trap of the Malthusian Trap."
The ears of the two geniuses perked up.
"Population explodes and increases 'geometrically (multiplication).' Two become four, and four become eight. But the land that produces food is limited. No matter how much we struggle, food production can only increase 'arithmetically (addition).'"
In-ho drew an intersection on a wooden board: a population graph curving sharply upward and a food graph crawling along gently.
The two, now accustomed to statistics, shuddered as they saw the potential future indicated by these graphs.
"This... this cannot be."
He pressed the charcoal hard onto the point where the two lines met.
"And this point where the two lines intersect. This limit where the population exceeds food production is the 'trap.' Once you fall into this trap, the nation's administrative power becomes paralyzed, and a hell unfolds where the starving devour one another."
*The Black Death must have played a huge role in destroying this Malthusian Trap. Because of the Black Death, the value of human life actually increased... It gives me goosebumps to actually be predicting it.*
In-ho smiled bitterly.
"Because I prevented the wars, we are about to face this trap head-on."
"My god..."
In-ho’s gaze turned toward the insurance statistics they had been designing earlier.
"Furthermore, the 'life insurance' business we are about to launch will cause the jaws of this trap to snap shut even faster."
At In-ho’s words, the two predicted the terrible future that the insurance would create.
To keep the insured serfs and knights alive during wars, the fund would mobilize massive capital and medical science, which would drastically lower the mortality rate.
Moreover, since the Crusades Preparation Fund was a business run by the Holy See, they would also have to prepare for famine, starvation, and plagues.
The kind and holy business of saving lives was, paradoxically, accelerating a massive catastrophe that would starve all of Europe to death.
The Malthusian Trap was an unavoidable disaster.
*Chemical fertilizers were invented to overcome the Malthusian Trap in the future, but it is difficult to hope for that with current technology. In this era, the Malthusian Trap is an ongoing process.*
"T-then shouldn't we stop this insurance business immediately? The money we worked so hard to earn will be reduced to ashes in a single food riot!"
Little Leo shouted with a pale face.
No matter how much of a genius he was, he could not help but feel terror in the face of nation-wide starvation.
"No. The business will proceed as scheduled."
"Master! How on earth do you intend to avoid this trap? Are you going to start a war to reduce the population? Or are you going to abandon the dying people?"
To Luca’s urgent question, In-ho slowly shook his head.
In the mind of In-ho, who had studied the rise and fall of countless nations as a political science student, a perfect solution had already been established.
"If you cannot reduce the denominator (population), you simply have to overwhelmingly increase the numerator (food and land)."
In-ho walked over and unfolded a map hanging on one wall.
It was a world map depicting Europe, the Mediterranean, and the world beyond.
"If France lacks land, we simply have to swallow up new land."
"New land? But expanding our territory into the Holy Roman Empire or Italy would require a massive amount of bloodshed. Besides, many lords within the Holy Roman Empire have already joined the Crusades Preparation Fund, and..."
"Who said anything about targeting the barren lands of Europe?"
In-ho’s finger traced across the Mediterranean, pointing precisely toward a vast, unknown continent where massive sandstorms and fertile deltas coexisted.
It was the extension of the Fertile Crescent, the land that had once served as the greatest breadbasket of the Roman Empire, churning out grain.
"Our life insurance and the Crusades Preparation Fund will be used to pioneer this place."
The place his finger indicated was a massive continent where the banner of Islam fluttered: North Africa.
"We are going to the true land of gold, the one most worthy of the name 'Crusade'."
The Saint’s grand gaze, aimed at shattering the Malthusian trap, was finally fixed upon Africa.
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