Тег: Insurance

How could a free market without state regulation of security issues have prevented 9/11?

anonymous question

I currently remind me a bit of Yulia Latynina, because I want to respond in the spirit of “you know, it’s like in that joke: first of all, there were no bullets…”.

Terrorist attacks such as 9/11, Beslan, Nord-Ost, the Boston Marathon, and so on, are directed against state policy. No state – no policy – no political terrorist attacks. Voila, the free market prevented them. Now let’s dig a little deeper.
Who ensures the safety of people in a free market? The people themselves. For the most part – directly. But the least troublesome and most obvious way, given that the market always tends to settle things through the division of labor, is to use market offers.

What does the market offer in terms of security? First, one can purchase a security service, for example, by installing an alarm system in the house and signing a contract with a security firm. Second, one can buy an insurance policy and simply know that, should something happen to you, either you or a designated circle of heirs will receive an insurance payout, so now it is the insurance company’s headache to figure out how to ensure people’s safety regarding insurance events.

Aha. So, if a terrorist attack occurs, the insurance company will suffer huge losses. There you have your potential beneficiary of terrorist attacks – competing insurance companies. The plan of action: blow up a plane, the company that insured the flight goes bankrupt, and we enter the vacated flight insurance market. There is, however, a problem: the plane is insured by one company, but each passenger is insured by any other; after all, they choose whose policy to take when insuring themselves against an accident or attack during a flight. Thus, decentralization makes commercial terrorist attacks aimed at seizing the insurance market ineffective. This applies not only to flights, but to all spheres of life in general.

But what about ideological terrorist attacks? For example, conservative fanatics might carry out mass shootings in gay clubs, exactly as they do now. To a certain extent, decentralization rules here too: when even the last gay man has a gun, a mass shooting becomes a problem. But a gun doesn’t save you from an explosion.
How does the free market prevent the spread of destructive ideologies? In the only way available to it: by making people richer and happier. This works slowly and does not provide a hundred percent effect, but it completely outperforms any state alternatives.

The only thing the market hasn’t learned to prevent yet is the appearance of insane maniacs. Economic incentives work poorly on someone who has lost their mind, just as they do on meteorites and tsunamis.

But once the market settles the raiders and Islamists, it will be the turn of the maniacs and natural disasters. Just laissez faire, laissez passer.

Psychos and Guns

Following up on the last post about the legalization of weapons. A topical issue: what about mentally unstable people who own weapons? Won’t legalization trigger mass shootings and such? What about road rage, when firearms instead of fists will be used?

anonymous question

As the practice of mass shootings in the States shows, they are often committed by mentally unstable people for whom this fact was recorded long ago, but it did not prevent them from acquiring a gun, despite the fact that a background check is supposedly required.

So, after the deregulation of weapon acquisition, the situation with mentally unstable people will not get worse. However, law-abiding citizens focused strictly on self-defense will have noticeably more guns in percentage terms. And the more criminogenic the situation was before deregulation, the greater the incentives will be to acquire self-defense weapons. Accordingly, the curve of armed crime will decline more sharply.

As for road rage, practice shows that the best prevention is liability insurance. There is no point in being rude to someone who doesn’t owe you money when you know that the money won’t come out of your own pocket.

A pistol and a glue gun are simply two different tools

If you beat up a clerk, he will lie in the hospital for a couple of days and return to work, having lost very little. But if you beat up the president, for example, his diplomatic visit will be disrupted; the damage is great. It turns out that different compensations are due to them as well. How does this correlate with the principle of equality before the law?

Alexey Ryazanov

Values are subjective; this is an axiom of economic theory.
Even the same clerk will incur different costs depending on at what point in his life he gets punched in the face. Therefore, in the case of a drunken brawl in a pub, half an hour later he will be merrily drinking with the person he was just fighting with, but if because of the fight he misses the trip of his dreams with his beloved girlfriend, it will be fraught with consequences for him more serious than the failure of some shitty diplomatic visit.

More or less quantifiable damage from violence is covered by an insurance policy, and the insurance company then recovers it from the person who applied the violence, if it so desires. Here, the president and the clerk are equal: the more expensive the policy they bought and the higher the premium provided for under it, the greater their chance of receiving it. As for moral damages, recovering them is even more difficult for the president. The clerk can be litigious, trying to prove to an arbitrator how seriously he was offended, but the president, as a public figure, will have to weigh his words so that his behavior in court does not cause more damage to his reputation than the violence under consideration. I don’t know about anyone else, but if I were the president, I would limit myself to demanding a public apology and profit from beautiful photos of conciliatory hugs.

here, take an example from the Greeks

I will gladly accept bitcoins from you as donations, and I won’t even consider their absence as moral damage. Wallet 1A7Wu2enQNRETLXDNpQEufcbJybtM1VHZ8

Let’s consider a situation: someone builds a pyrotechnics factory in the city center, and everyone’s fire insurance premiums go up. But the factory owner has not violated the NAP, so he owes nothing to anyone (and no one can forbid him from building this factory). Do libertarians not consider this a problem?

anonymous question

To answer this question more fully, Alexei Tereshchuk aka @kamendant, leader of the Austrian School of Economics public page on VKontakte and the chat on the same topic in Telegram, was brought in as an expert. Below is a mix of his explanations and my own thoughts.

What is the difference between the case of a factory that pollutes the surroundings and a factory that raises the cost of property insurance for its neighbors?

In the first case, the factory causes direct damage to those around it, and this damage can theoretically be subject to compensation, even if the methods of calculating the damage are quite unreliable — after all, to set the price for a bunch of radishes for an old woman at the market, it is also not necessary to calculate its cost price in detail.

In the second case, it is only a matter of increased risks, and the very attempt to insure these risks leads to additional costs. Such indirect damage is not related to a violation of the non-aggression principle and therefore is not subject to compensation. Indeed, we are surrounded by many factors that increase our risks, but which we are forced to put up with if we want to maintain our current lifestyle.

For example, in the city, we have a higher chance of getting into a car accident than in the village; this increases the risk and, accordingly, the price of insurance for this event — but it is not a reason to make property claims against all drivers in the city — only against the specific one who caused the accident in which the victim was involved.

So, libertarians do not consider it a problem that it is impossible to demand money from a pyrotechnics factory located in the city center simply for the fact of its presence in the center.

It is another matter that the insurance cost for the factory itself will be much higher if it is built in the center than if it is on the outskirts — because the risk of claims from neighbors affected by an accident will be insured, which means it is more profitable for the factory owner not to have neighbors in the danger zone.

explosion at a pyrotechnics factory – fun and scary

Libertarianism assumes only private companies (anarcho-cap.). But what about state hospitals? Does it mean a sick person will not be able to receive free help? There are quite many sick people, and not everyone has money. Charity is unlikely to help here.

anonymous question

Let’s keep it simple. Let’s open the consolidated budget of the Russian Federation for 2017 and look at health care spending. 2.8 trillion rubles. That is 20 thousand rubles per person per year, less than 1.7 thousand per month, and this amount includes all corruption, all kickbacks, embezzlement, and simply inefficient spending. Absolutely pittance, less than the average utility bill.

In a situation where there are no taxes or regulations, by very conservative estimates, wages would increase, say, by only 50%. Suppose that all those who were previously treated under a compulsory health insurance policy purchase voluntary insurance policies exactly in the amount of former government health expenditures, spending approximately 1,700 rubles per person per month, and all those who previously paid out of pocket maintain their habits. The median salary in Russia today, according to a very sloppily conducted survey on Navalny’s blog, is about 15,000 rubles.

What is the result? The median salary under ancap increases by 50% and becomes 22,500 rubles. Let’s say the median worker supports one dependent. He pays 3,400 rubles for two policies, and he has 19,100 rubles left. That is, he is still wealthier than he was before ancap, while also having good paid medicine.

Of course, there are still cases where a poor family faces an expensive-to-treat disease not covered by a standard policy. What does a poor family do now? They go to charitable foundations, and those foundations spam social networks with posts saying “Mashenka has a fucking disaster of a disease, we urgently need a trillion rubles.” Well, that is exactly what they will do under ancap, only the probability of receiving money to treat the disaster will increase by 50%, proportional to the increase in average income (assuming that people continue to donate to charity approximately the same percentage of their income as they do now).

Summary. Fully privatized and deregulated healthcare in the absence of taxes is capable of providing every Russian with medical service better than what they have now, without requiring amounts that would be critical for them.

treat the disaster!

If a libertarian penitentiary system is aimed at restitution, then how will it work in the case of a murderer?

anonymous question

The system will work exactly as it does with a robber. Compensation for damages resulting from a murder will be demanded by those who suffered that damage. This is precisely why insurance companies play such an important role in theoretical developments regarding ancap: they suffer direct financial loss from the death of the insured person, and therefore, a developed insurance market will obviously lead to a reduction in the murder rate.

If one attempts to limit feedback to such archaic mechanisms as blood feuds, this also works, of course, but it looks rather primitive in modern society; more effective market mechanisms have been developed in our time.

Suppose there is a terminally ill person who cannot be saved in any way, and has a couple of weeks left. Would euthanasia be a violation of the NAP? Is his consent/the consent of his relatives needed for this?

anonymous question

Euthanasia is not a violation of the non-aggression principle; it is merely the execution of the owner’s instructions regarding the disposal of their own body. You commission one specialist to give you a haircut, another for a massage, a third for an abortion, a fourth to remove a kidney for transplant, and a fifth to kill you. These are all perfectly correct instructions. The only subtlety in the euthanasia procedure is to ensure that the instruction is indeed given voluntarily and with a full understanding of the consequences. Well, the sale of real estate requires the observance of exactly the same legal precautions, as does any other important and responsible transaction.

The situation becomes slightly more complex when a person lacks the technical ability to give instructions for their euthanasia, for instance, because they are in a coma. In this situation, the decision is made by the person paying for the life support. It is this person who has the full right at any moment to consider further expenses impractical—and to offer any willing party the chance to take over the further burden of costs. If no willing parties are found, then life will no longer be supported.

Finally, a situation is possible where a person is in a coma and an insurance company is paying for their life support. Here, the company does not have the right to refuse to fulfill its obligations at any moment. First, it must fully exhaust the insurance premium due to the person under the contract in attempts to restore the insured health, and only after failure can it stop spending the money. Any attempts by the heirs of the insured person to claim something like “unplug him from the machine, and we will receive the remainder of the insurance as an inheritance; our father, had he been conscious, would have commissioned you to do this himself,” are most logically regarded as incitement to murder for mercenary purposes.

For mercenary purposes, I incite you to make a voluntary donation to the development of this channel. Drop some money to the bitcoin wallet 1A7Wu2enQNRETLXDNpQEufcbJybtM1VHZ8

I am a girl, and I’ve fallen in love with you, LPR-chan; how will protection against homophobia work under ancap?

anonymous question

That’s so sweet! ❤️

Protection from homophobia isn’t necessary. Anyone has the right to be afraid of us, since we’re so scary. Protection is needed from violence. When we choose an insurance plan, we’ll need to mention that we’re in a same-sex union; perhaps the insurance will be a bit more expensive. But if we wear a badge with the insurance company’s logo and a built-in tracker, there should be a discount. If we get weapons, the discount will increase.

Of course, the rate will become absolutely ridiculous if we choose the right neighborhood to live in, but those are capital investments, and we need to look closer—such paranoia might not pay off. On the other hand, the atmosphere there is friendlier, which is even more important than saving on premiums. Regular medical check-ups, first aid courses, and other ways to save on the insurance price—well, if we aren’t too lazy; most likely, we’ll manage without them.

And once we’re strolling together, having taken all these measures—then why should we, as ancaps, care? Let the homophobes be afraid; it’s very funny 👩‍❤️‍👩

Ancap insurance is the best remedy for fear! Of course, for this, you need ancap money. Send money here: 1A7Wu2enQNRETLXDNpQEufcbJybtM1VHZ8

Petya killed Vanya

Petya killed Vanya. Petya is on trial. During the trial, it is revealed that Vanya was a serial killer. By killing him, Petya eliminated a violator of the NAP and saved many lives. The problem is that Petya had no idea about his victim’s sins—Petya is simply a scumbag and a murderer.

Should we condemn Petya for murder or acquit him because Vanya violated the NAP?

In other words, at what point does a violator of the NAP exit the NAP—at the moment the crime is committed, or when a third party finds out about it?

In this problem, we are operating within the zone of libertarian law.

Evgeny Kvasov

Elevating the NAP to the rank of the primary principle of libertarianism leads to many disagreements and linguistic monstrosities, such as “violation of the moral NAP,” “I didn’t enter into a NAP with you,” or “exiting the NAP.” People perceive the non-aggression principle as something like a contract that can be entered into, terminated, and supplemented with additional conditions.

It is far more convenient to derive everything directly from the basic axiom of libertarianism—the axiom of self-ownership. Petya killed Vanya, thereby infringing upon Vanya’s private property—Vanya’s body. It does not matter whether Petya was a bounty hunter for the “Sonechko” insurance company hunting Vanya, a former contractor for the Moscow Kingdom, or a drunkard who killed a stranger for a sideways glance, or even if Petya was defending himself from Vanya’s attack. In any case, Petya damaged someone else’s property, and he must now be prepared to bear responsibility for it.

If someone is found who wants to, or is contractually obligated to, deal with Vanya’s killer, then Petya will have to either fight back or try to reach an agreement—either amicably or in court.

According to the conditions of the problem, Petya agreed to a trial. In the trial, in our case, it is revealed that Vanya in no way encroached upon Petya, and Petya was not acting on behalf of those to whom Vanya had previously caused harm. This means that there was a violation of the NAP on Petya’s part, and the plaintiff—for example, Vanya’s insurance company—can demand compensation. It also emerges in court that Vanya is a long-time violator of the NAP, and a reward has been placed on his head by another insurance company.

The most likely outcome of the case: Petya receives a reward for killing Vanya from one insurance company and pays compensation for killing Vanya to another insurance company. And that company, in turn, had already paid an insurance premium to Vanya’s heirs before any trial took place.

Obviously, the outcome of the case could be different: there might have been no reward for Vanya, and then Petya would find himself in more difficult financial circumstances.

By the way, speaking of difficult financial circumstances. I very much hope that everything is fine with your money, and you might even decide to thank this channel in monetary form. My wallet: 1A7Wu2enQNRETLXDNpQEufcbJybtM1VHZ8

What to do if an ancap society that has successfully formed in some territory begins to be squeezed by neighbors? For example, if they are a religious state, and its citizens, possessing some kind of superiority (or the support of their state), buy land, move in, but do not want to observe the NAP?

anonymous question

The topic of direct military conflict was best explored by Vladimir Zolotorev, whom I have mentioned repeatedly, in the series of articles “Insurance Company ‘Sonechko’ versus the Tsardom of Muscovy”.
Part 1
Part 2
Part 3
Part 4
Part 5
Part 6
Part 7
Most likely, this volume of material will be sufficient for you to address both the question you asked and several related ones.

But I will still make a small clarification regarding one of the models of creeping expansion you mentioned. Buying up all the land is very unrealistic, because the less unsold land remains, the more expensive it becomes, and the happy sellers of land receive more and more resources, which they can invest in assets that seem more profitable to them than the land they have just sold.

At the same time, the fact that a certain NAP violator is a landowner does not protect them in any way. They violated it — a conflict arose, now they either pay a penalty or they are fought against. In a state, the law may protect a NAP violator, but for ancaps, dealing with such problems is much simpler.

Sonechko