Okay. I think I was confused a bit by what looked like your definition of “insurance” - namely “pooling resources amongst people with an equally likely chance of randomness happening, with no previous knowledge of who exactly it will happen to”. Yes, people within a given insurance pool will have a roughly equal likelihood of incurring a given type of loss, to the best of probabilistic ability. But I’m still not sure what difference difference you see between “prepaid collision liability coverage” and “insurance”.
So are you saying than an individual has control over whether a crime is committed against them?
Crime is something an individual can insure themselves against. Maybe you should read the article you referred me to again.
I would call it by the name I refered to it in the post: limited liability coverage.
That doesn’t help me any, sorry. I still don’t see the difference between that and what you call “insurance”. I’m not saying there is necessarily no difference between them - just that I don’t see what you say is the difference between them.
I was refering to Bob Murphy’s plan which is sort of the reverse of most ancaps in that he thinks you would ‘insure’ yourself against COMITTING crime. That is certainly an example of limited liabiltiy coverage and not insurance qua insurance.
But to your point, there are most certainly actions you can take to avoid crime happening to you, at least certain crimes. Its certainly not completely up to chance. Wether those differences are enough to cause people to be grouped into different pools and wether or not its cost effective to find that kind of information is up to the market.
I work in the wireless industry at the retail level. We offer a package in which you pay a monthly fee and if your phone is lost, stolen, or damaged, you can pay a deductable and get it replaced. You have full control over wether or not the phone gets lost, stolen, or damaged, it would all be a result one way or another of your neglegance. I would not call this insurance, I would call it limited liabiltity coverage. You pay a monthly service for this coverage, and if you have to make a claim, you pay a reduced price than if you had to get it replaced w/o the coverage.
Oh. Obviously I agree that one can’t insure themselves against committing a crime.
On the subject of preventing crimes: well obviously some actions could be taken for certain crime, for example putting better locks on your house’s door, but I think that you can insure yourself against a crime being committed against you. This is analogous to your house insurer telling you to put a second fire alarm in your house.
I think most libertarians are very optomistic about how complex insurance and limited liability coverage would become in a free market. I think that we tend to focus on all the factors that it is possible to account for without really taking into account the cost of acquiring such information, as well as the benefits of simplicity that most consumers prefer. That is, companies might knowingly expose themselves to greater risk (or more likely over offer their prices and expose themselves to competition) for the sake of simplicity.
I think markets are the best way to have the world run as efficiently as it can, but that does not follow that every market activity is run with ‘perfect efficiency’
“It is not the responsibility of a victim (or “society”) to subsidize the security costs of the community by confining criminals.”
What about in a case like this?
http://www.bbc.co.uk/news/world-15936276
Norway massacre: Breivik declared insane
Would you be ok if this guy were let go and walked the streets again?
That probably wouldn’t be much of a problem in Libertopia (everybody could have guns etc.) One of the reasons psychots like that are able to commit mass murders is because guns are outlawed for ordinary citizen. Yeah, he could walk in streets, why do I care? Someone could hit him with a car, I wouldn’t care either.
And I’m not talking about prevention, which is completely another topic.
“Yeah, he could walk in streets, why do I care?”
Even if you have kids? And you guys are playing at the park? Sure, if he snipes one of your kids, you might kill him, but he might kill one of your kids first. That’s ok?
You are basically asking “if some evil guy killed my kids, would I appreciate that”. The answer is no. The thing is, why is he walking on a streets? Because of market failure? Or government failure? I guess the latter. I doubt that in free market majority of people would be ok with letting him freely go on the streets (their property, or “public property”). Imagine, where would he go? To shop? No one would let him to do that without insurance. Who would give him insurance if he is insane? He is practically walking corpse. Anyone could shoot him just for “greater good”. And I wouldn’t care.
Again. You are asking questions “in vacuum”. But Libertopia is not in vacuum, but a very decentralized community of mini “states”. Don’t forget about DRO/PDA. Any known criminal probably would not be allowed on anyones property without the owners permission so to speak. At least, I wouldn’t like to go to a shop that is famous for letting in insane criminals. Of course, unless they payed restitution to their victims or at least are working on that. But still, I wouldn’t be safe in such building. And many people wouldn’t be. And the shop keeper would lose his business.
Insurance companies providing insurance would be beneficial in several ways.
So insurance companies could pay for the prisons?
Hey Joe, sorry for dropping this. Maybe you’ll swing by sometime and see my new replies.
We might still have a discrepancy between definitions here. My own definition of “insurance” is “financial coverage up to some amount of economic loss”. Note that this requires the loss to be against oneself. It’s also presumed to be due to factors beyond one’s control. Committing a crime is certainly within one’s control, and it causes (or at least can cause) a loss against someone else, so I fail to see how insurance could exist for it under my definition.
The phrase “limited liability coverage” strikes me as denoting a restriction on one’s liability to the coverage he has. I don’t think this would exist in a free-market society - every individual would be considered fully liable for any judgement rendered against him.
Agreed. There may even be different policies among insurance companies. For example, some car-insurance companies may cover the cost of property stolen from within one’s vehicle (up to a certain amount) even if the doors were left unlocked, the windows were left rolled down, etc. I don’t think there’s any way to predict how much negligence would end up being subsidized by “the market”.
A person has full control over whether another person attacks him and runs off with his phone while he’s incapacitated? If you’re serious here, then I most definitely disagree with you. No one ever has control over anyone else’s actions. So I would indeed call the wireless package you’re referring to as “insurance”, as it involves financial coverage (up to a limit) in the event of an economic loss.
I definitely think we are still talking past each other. Yes I also agree that insurance could not exist for something that you have control over.
And on the limited liability coverage issue, I don’t think you are understanding the point of it. Yes I agree that limited liability should not exist in a ancap society. However, people could get ‘wiped out’ if they were exposed to having to bear the full brunt of a liability for say killing someone or something else extreme where we would think the damages awarded would be very high. Prepaid limited liability coverage is not designed to screw over victims, the victims still get paid in full, the just get paid from the company who ‘bought’ the offenders full liability costs (in exchange for a guaranteed monthly fee or whathaveyou).
SInce you have control over wether you commit a crime, I don’t think you can use the word insurance, at least not in a Austrian technical manner to describe that sort of situation, even though it may very well be the case that colloquially these companies are referred to as liability insurance company or crime insurance or offenders insurance, etc.
And Murphy’s point is that well, it may seem obvious at first glance that the people who don;t plan on committing crimes will simply not buy it and then only the people that do commit will buy it and then that cuts out the margin for the company to make any money because their rates would have to keep going up and up and eventually they can’t afford to cover anyone. However, Murphy thinks that these companies could serve an important role in signaling and in reputation. How do I know I can trust this random stranger who is going to patronize my business? Well he is covered for up to $100 million in damages and that is backed up from a well reputed firm that I DO know, and know could pay that out should such an atrocity occur.
but you would also be covered if you dropped the phone in a sink, or went swimming with the phone. Also, while its not your ‘fault’ that someone steals something from you, certain behaviors are going to lead to more victimizations of theft, and other behaviors are going to lead to less.
Thanks for clarifying. I think I do know what you’re talking about now. Basically you’re talking about surety bonds, such as performance bonds. These are bonds (or more generally, financial instruments) that are provided to cover things like failure to carry out contractual obligations and damages from negligence. While I don’t think they cover intentional damages, I don’t see why they couldn’t. Of course, the problems of moral hazard and adverse selection still come into play. I also agree with your and Murphy’s point that such “surety companies” could provide signaling for trustworthiness and reputation in general.
So to conclude, I think the distinction can be made between “insurance”, which is economic coverage for losses against oneself, and “suretyship”, which is economic coverage for losses somehow caused by oneself against others.
I understand your point, but first off, my point was that other people’s actions are necessarily not under one’s own control. Second, I seriously doubt that, even in this day and age, all or even most of the circumstantial variables have been controlled for when it comes to things like estimating probability of theft. Indeed, not all of those variables may even be known yet.
I think if they dealt with a lot of the victimless crime more reasonable there would only remain a lot of the more severe crimes and i could definitely see how a sort of prison system could develop within a private law society. Especially for such deranged violent individuals that are uncontrollable, that are in continuous psychosis. I find it very interesting as to how such an industry or organisation(s) would develop. I think that it would be different from today’s prisons by a large amount and more similar to today’s mental institutions. But I do think that today’s mental institutions and other similar juvenile based state institutions would no longer exist. Which would also change the mental health industry. As well the changes from lack of regulation in pharma industry. It would be a completely different situation, it would be difficult to make guesses about its characteristics.