From: Lee Daniel Crocker (lee@piclab.com)
Date: Mon Mar 24 2003 - 16:38:30 MST
> (Wei Dai <weidai@weidai.com>):
> On Sat, Mar 22, 2003 at 12:25:41PM -0500, matus wrote:
> > The Private Production of Defense
> > by Prof. Hans-Hermann Hoppe
> > http://www.libertarianstudies.org/journals/jls/pdfs/14_1/12hoppe.pdf
> > http://www.mises.net/journals/scholar/Hoppe.pdf
>
> Doesn't seem very plausible to me. Here are some quotes from it:
>
> > Yet what about defense against a state? How would insurers
> > protect us from state aggression?
> > ...
> > In the case of a successful attack and invasion, these
> > insurers would be faced with massive indemnification payments.
> > ...
> > Other things being equal, the risk of an attack-and hence the price of
> > defense insurance-would be higher in locations adjacent or in close
> > proximity to state territories than in places far away from any state.
>
> The obvious strategy for a belligerent state interested in taking over an
> area protected by insurance companies is to pre-announce an attack a year
> ahead of time (or whatever period long enough for most insurance policies
> to expire). Insurance rates for the targeted area would go way up, causing
> most people in that area to be unable to afford insurance. This would
> cause the insurance companies to raise their rates even further, or to
> decline to renew policies in the targeted areas at any price. The state
> can then move in largely unopposed.
That doesn't make sense to me at all--that would be an incredibly
stupid thing for insurance companies to do. If the agressive state
announced its intent, then /demand/ for insurance would go up and
people would be willing to pay more, and insurance companies would
be stupid not to take the business. They now have a built-in
excuse to charge higher than normal, and they have greater incentive
now to compete against each other by showing off how they're
spending the extra income on fancier new equipment and more people
and more training. They'd probably offer discounts to people who
had trouble affording protection but who could donate labor to a
volunteer reserve corps.
-- Lee Daniel Crocker <lee@piclab.com> <http://www.piclab.com/lee/> "All inventions or works of authorship original to me, herein and past, are placed irrevocably in the public domain, and may be used or modified for any purpose, without permission, attribution, or notification."--LDC
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