From: Hal Finney (hal@finney.org)
Date: Tue Mar 25 2003 - 19:42:39 MST
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
I don't see that this really addresses the "free rider" problem at all.
If my neighborhood is safe against an attack, then essentially I am
safe too. Therefore I would prefer to be a free rider and not pay.
Let my neighbors pay for the defense of the neighborhood. The result
is that too little is expended for defense and we all suffer.
And I think Wei's point is valid, too:
> 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).
It's not insurable if there is no uncertainty about the risk. You can't
get flood insurance when farms 200 miles upstream are flooded and it's
known that your farm is going to be under water in a few days. For the
same reason, you couldn't get insurance against an attack if the attack
was guaranteed to happen.
Now, you could still hire somebody to defend you, or take up arms
yourself, but it's not "insurance" any more. It's just an army.
I also think Hoppe's essay is wrong about a lot of other things, but
I won't go into them here unless there is more interest.
Hal
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