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AnCap Products I'd Like to Buy #1--Medical Condition Insurance

I believe that the most lasting way to remove coercion from society is to replace government institutions with voluntary institutions. Because of this, I often speculate about what sort of institutions would emerge in a free society.

I test these institutions against several ideas:

  1. Do they involve coercion? If so, they simply don't count as a voluntary institution.
  2. Are they monopolistic? Do the institutions themselves have high barriers to entry?
  3. How viable is the business model? Would sellers be motivated to offer the product at a price I could afford?
  4. Most strategically, do current governments establish barriers to entry for my speculative institutions? In other words, could we begin institutions today that are ready to compete with government institutions today and operate without governments in the future?

The first product I would like to buy is insurance against developing a particular medical condition. I would like to pay a regular premium to be insured against the possibility of developing, say, melanoma. If the condition is diagnosed, I would like to receive a lump-sum benefit completely independent of the course of treatment I may (or may not) choose. I am willing to pay larger premiums for unquantified risk, or alternatively to undergo screening tests to quantify risk to secure a lower premium. I would also expect there to be optional riders that raised the premiums and benefits linked to medical inflation.

The main advantage to me as a customer is that I would be in charge of my treatment. I could use my benefit payout to buy treatment from any provider I choose, or to spend on living expenses if the condition interferes with my income.

How does this compare against the points above? In particular, is it possible to simply place a bet against the possibility that I develop melanoma, or is it outlawed through insurance regulation laws?


Roger W. Garrison compares Keynes and Hayek on the Business Cycle

I really enjoyed Roger W. Garrison's lecture from the Mises University 2008 podcasts. He shows mathematically how Keynes' explanation of the business cycle is a simplification of the Austrian view, and thus Keynes' theory misunderstands the full relation between savings and consumption.

Unless you can perform phenomenal feats of mental visualization, it's also necessary to download the Microsoft PowerPointTM presentation "Sustainable and Unsustainable Growth; Keynes and Hayek: Head to Head" from here.


The Course of Human Events

Ad appearing in NY Times 4 July.

H/T Daily Paul


Open Source Wealth

One thing about homesteading farms--it really gives you a feel for the exponential nature of accumulating wealth.

When you start out with an empty piece of land and no infrastructure, it takes you most of the day just to feed and clean yourself. But if you manage to spend an hour or so working on fencing, or digging a septic tank, or building a house, or putting in a windmill, you gradually develop some infrastructure that makes your life easier. Suddenly, you have not just one hour a day to devote to getting ahead, but two, and your projects get done even more quickly. This leads to four hours of productive time, with even bigger payoffs, and so on. Eventually, you find that it takes very little time to actually keep yourself alive and most of your day is spent on either leisure or wealth creation.

Every now and then I'm struck again at the actual wealth of information that has been accumulated and is now freely available to human culture. Communication technology, medicine, philosophy of science--pick your field--even if you exclude the body of copyright protected works, the remainder would allow you to bootstrap your own little corner of civilization fairly rapidly.

Today's reminder was this project to develop an open source tractor (H/T Global Guerrillas).


You say yes, I say no

Looks like Amit and his near miss in yesterday's primary election is the subject of some more cosmo-/paleo- libertarian bickering. The cosmos seem to take the higher ground this time; I get the feeling that Lew just had to vent his disappointment without thinking too carefully about which "side" Amit was supposed to be on.

There must be a numerical term that measures how large a social group gets before it splits into warring factions. I would have thought that with all the discussion of polycentric market solutions that libertarianism would have a much larger number. Guess not.


Replacing the Federal Government

A few days ago, I asked the question, "If the US federal government [were to] collapse, what consensual institutions [would] fill the vacuum? Is the fed's monopoly so tightly held that these institutions cannot begin to form today? Or are there some, like private schools, which can begin to operate in the current environment and be ready for growth once their government subsidized competitors fail?"

I gave a partial answer:

Protection against criminals - The majority of criminal law is handled by State governments, not the feds.

Pensions - If social security disappears in part or in full, there are near infinite investments and charities to support people in their retirement.  

Health Care - If federal legislation on employers becomes unenforceable, insurance companies will have to start serving [individual policy holders as] their customers. There will be some evolution of existing insurance companies, and competitors with new models will arise, but I doubt doctors will stop their practices overnight because they hear on CNN that Medicare is not paying its bills. They will look for other revenue streams.

Currency - I have trouble imagining that financial companies will simply give up if the currency is so effectively debased that their customers are reluctant to accept dollars. I expect that they will compete with each other to offer accounts denominated in foreign currencies or other inflation-proof instruments.

Transportation - The road, rail, and air network is worth incredible value to businesses and individuals. So much of this industry is already semi-private, that I don't imagine it being unable to deal with the loss of subsidies and controls from the government. And I am committing an error of collectivism calling it "an industry"--we are talking about a market of competing companies, some of which will be so dependent on old business models that they go bankrupt and some of which will survive and prosper with new models. "The transportation industry" already exhibits that inherent resiliency of anarcho-capitalism--there is no systempunkt.

FDA, USDA - As soon as these two regulatory bodies close their doors, we would be left with the reputation of the drug company (or even their specific product) or food supplier as an indication of quality. How long would it take before independent labs start offering certifications? Is there any way for them to get a slice of a similar market today and move into drug or food certification when the federal monopoly ends?

With the exception of blatantly coercive acts--waging offensive wars, intimidating other states or individuals, confiscating property--is there a single function of the federal government that couldn't be replaced? If not, why wait?


The Next Boom Industry

Ever since seeing his comment here, I've been listening to a lot of Stefan Molyneux recently, including podcast "292: Freedom Through Debt".

It has me tinkering with a new meme: The federal government is balanced on the edge of collapse because of debt and a dollar rout. When it falls, what will go with it? How many State governments? Any foreign governments holding US debt? Will it be a relatively peaceful collapse as in South Africa and the former Soviet Union?

Which leads me to the title of this post. If the US federal government collapses, what consensual institutions will fill the vacuum? Is the fed's monopoly so tightly held that these institutions cannot begin to form today? Or are there some, like private schools, which can begin to operate in the current environment and be ready for growth once their government subsidized competitors fail?


Playing at the Margins

Okay, I know that some of you take offense at political action as either ineffectual or immoral, but I couldn't help appreciating the use of this familiar public choice argument at DownsizeDC (emphases theirs):

It is very well understood how government grows, and why it is so difficult for taxpayers to protect themselves from the large-scale looting that goes on in Washington . . .

  • Government confers huge, concentrated benefits on select groups of people, while spreading the cost over all taxpayers
  • The groups that benefit from government favors have large incentives to fight for those benefits, while taxpayers have small incentives to fight any particular instance of looting

This essential insight tells us something very important about strategy . . . NO strategy for curtailing government growth has ANY chance of success UNLESS that strategy makes it EASY for taxpayers to fight government growth, and, as a result, more DIFFICULT for politicians to make government grow. We have built our entire organization, and we are basing all of our future plans, on this crucial insight.


Darn! Just changed my mind again!

Okay, I was up this morning at 5:00 pondering your comment, Arthur.

The question of whether we should have gone to war with Iraq is not exactly equivalent to the moral question: "My neighbor appears to be beating his wife--do I intervene with force?" It is equivalent to "My neighbor has beaten his wife. Do I intervene with force to punish him?"

The first question is about stopping an attack in progress. The second question is about retribution, or revenge, or punishment after an attack has finished. But I still don't see an essential difference between individuals joining forces to punish a neighbor and a country going to war to remove a foreign tyrant.

Here are differences I could think of. Are you claiming that one or more of these makes the two questions inherently different?

  1. National war is funded by taxation, which is inherently immoral. I agree completely on the point that taxation is immoral, but I'm not sure that the problem would disappear if different funding were used. If the Iraq war had been directly paid for by private oil conglomerates, do you think it would have been just?
  2. The target of the war was collectively "Iraqis" instead of a specific individual. This isn't the way the war was sold, and this isn't why I think I was wrong to buy it. The objective was to remove Saddam Hussein from power and both overt military power and covert operations were targeted at that objective as specifically as technology could allow.
  3. The guys leading the war were a bunch of morons that made mistakes wiser leaders wouldn't. I don't trust any individual to outsmart reality and avoid unintended consequences. "My gang's smarter than your gang" isn't an effective check against bad decisions.
  4. UN Resolutions and International Law are inherently against our interests. I agree that participating in a crowd encourages you to think you aren't fully responsible for your actions. But this is true both among groups of individuals and groups of nations. And sharing your plans for peer review provides a good check against bad judgment.
  5. No victim raised charges against the aggressor. There were some Iraqis petitioning the US to remove Saddam. It was reasonable to assume that more probably hoped for his removal, but (like an abused wife) were too intimidated to voice their hopes.

I agree that is far safer in the short term and morally unambiguous to never punish an act. Is this the position you hold? Do you hold it on both the personal scale and the national scale? If not, I would be genuinely grateful if someone could show me a way to know when a punitive action (and not just a defensive action) was clearly just and when it wasn't.