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The simple answer is private insurance. More detailed answers can be found in all sorts of essays, books, and propositions regarding http://en.wikipedia.org/wiki/Polycentric_law.

So then the insurance company becomes the government. (Insurance companies will merge until there is a single one... if the history of companies is to be believed).

Or the insurance company also just says "No I don't like you, and since there is no actual way for you to enforce me paying you out, I just won't". Again, if the insurance company decides not to pay, they are enacting bad things on someone and not honoring an agreement. Fortunately since they have lots of free money and no expenses (other than those required to manipulate perception -- cheap payouts etc), they can just have their newspaper buddies out-shout anyone else and not actually be harmed by bad practices.

> So then the insurance company becomes the government.

Why? Retail stores don't become the government or merge into one. Neither do private security agencies. It's unlikely that any organization could "become the government" unless a vast portion of society accepts them as the sole legitimate purveyor of violence, which is precisely what I don't want to happen.

> Or the insurance company also just says "No I don't like you, and since there is no actual way for you to enforce me paying you out, I just won't".

Then what would you do? Personally, I would stop paying them (and probably switch to another insurance company), and I suspect a vast majority of their customers would do the same thing, and probably long before it got to the point where it "became the government."

The only ways for a private insurance company in a free society to remain dominant while consistently not honoring their agreements would be if society as a whole didn't care about the agreements being honored (which seems unlikely), if they gather enough power to physically oppress an entire region (which also seems unlikely these days, since very few governments are even able or willing to pull that off), or if they convince society that they should be allowed to have a monopoly on violence. That last one is a pretty good definition of "becoming a government," and it's certainly possible, but the whole argument I'm making is that society should not recognize any organization as having a monopoly on violence.

leot 4913 days ago

... and "in the long run" everything would work out, right?

Except for the most part, there's no such thing as "the long run", since the entire concept depends on the universe being relatively stationary (from a probabilistic/statistical perspective). In fact, the universe, and especially the economy/culture/society, is highly non-stationary, making the entire notion of "the long run" fallacious.

In other words, your model assumes that aggregate consumer demand for a particular basket of goods will "stay still" long enough for bad actors to get weeded out. But this is an empirical claim, and one that has been shown to be frequently false. Indeed, its falsehood is in part responsible for the 2008 financial crisis.

The world is always changing deeply and unpredictably. In the imagined scenario above, your needs for insurance wouldn't remain constant, and neither would the base of providers. Indeed, the entire ontology of the marketplace would be constantly in flux, making "in the long run" free market approaches mostly impotent as compared with collective action that directly deals with the problems we face right now.

> ... and "in the long run" everything would work out, right?

Don't be silly. The world would still be a horrible place. Heinous acts would be committed every day. People would be murdered, tortured, and raped. There would still be a lot of violence—it would just be a lot less than what we have today.

> In other words, your model assumes that aggregate consumer demand for a particular basket of goods will "stay still" long enough for bad actors to get weeded out. But this is an empirical claim, and one that has been shown to be frequently false. Indeed, its falsehood is in part responsible for the 2008 financial crisis.

Of course there is truth in all of this. But how is the government a better solution?

> The world is always changing deeply and unpredictably. In the imagined scenario above, your needs for insurance wouldn't remain constant, and neither would the base of providers.

Again, that's true of insurance just like it's true of cell phone providers, automobile manufacturers, etc. Again, how does government solve any of this?

You're the one proposing a radical change, onus of evidence and "how it would be better" is on you. By the way "but there would be no government!" is not a valid argument of how it would be better, only a tautological statement of "if there was no government, there would be no government". We have seen governments arise for as far back as there is history, and not really a lot of evidence of how great things are without government, suggesting (but not proving) that a government is a good thing.

leot 4912 days ago

The entire premise of libertarianism rests on the notion that the world will stay still long enough for market forces to weed out the baddies. Government can sometimes be the better solution because regulations can respond much more quickly to baddies (e.g., I can inspect the restaurant within a week of its opening, or we can wait 6-12 months for enough people to get sick and for the restaurant to develop a bad reputation). Without regulations, the restaurant can just close its doors if it develops a bad reputation, sell its assets, change its name, go somewhere else, and repeat the cycle.

The point isn't that "government will solve any of this", it's that laissez-faire economics can't. Bad actors can skip from exploitation to exploitation -- if there would be less government, then everyone would need to look out for themselves all the time and there would be less social trust, with all the attendant effects.

Nope, not even close to a reasonable response. If insurance is supposed to pay out in the cases of the big black swan events, and I in good faith of the insurance agreement have put a significant amount of capital towards restitution, repairs, what-have you, expecting to be reimbursed. Now the insurance says "oh nope, fuck you"... What means do I have of paying a different company? What means do I have of getting word out that they have fucked me? I can't afford to buy off majority of reporters like a big insurance company does.

I guess I could hope for one reporter to be nice... but all the others making crap up about me for a few $K would make the other customers not actually pay heed. No penalty for the shady insurance.

Similarly you are making a big fuss over the difference between physical and economic violence. Yet you adamantly refuse to explain how a bunch of economic policies via collusion of the players, resulting in a scenario of "play by our rules or else get no way of eating or sheltering yourself" is any less violence than "do what we say or we shoot you". To me the difference is a false one: forcing me to do something with one death threat really isn't different than with another.

Finally, you somehow are confusing free market with "open and transparent operation of all economic players". We already see that isn't the case - most business hide most information about themselves the best they can, and rebel against any attempt to shed light on them. In fact government is more open about operations than almost all businesses, yet somehow there will be magic knowledge transfer between consumers and business about what those businesses really do once you take away government.

> Now the insurance says "oh nope, fuck you"... What means do I have of paying a different company? What means do I have of getting word out that they have fucked me? I can't afford to buy off majority of reporters like a big insurance company does.

How do people find out that certain automobile are crappy? How do people know to avoid certain hospitals or certain doctors? I would never make the ludicrous claim that any arrangement of society would be utopia. People will get ripped off and bad things will always happen. It would simply be less common without government.

> you adamantly refuse to explain how a bunch of economic policies via collusion of the players, resulting in a scenario of "play by our rules or else get no way of eating or sheltering yourself" is any less violence than "do what we say or we shoot you". To me the difference is a false one: forcing me to do something with one death threat really isn't different than with another.

In the former situation, the "collusion of the players" is offering a crappy deal (with no physical violence) as an alternative to starvation. That means that if you truly would starve without the crappy deal (which would require you to be incapable of growing your own food), you are genuinely better off taking the deal. I don't see how this qualifies as "violence." You could make a decent argument that it is exploitation, which is a different argument altogether.

Mz 4913 days ago

I worked for an insurance company for five years. A good one with high ethics. The entire insurance industry is predicated on not paying you. It is the very basis of the business model.

I think you have no idea what you are talking about. None.

Are you claiming that the very idea of group insurance is fallacious? Or are you just saying the the big players in the industry are bad?

Mz 4913 days ago

I am saying that group insurance is so close to con artistry that it boggles my mind that it is legal.

clavalle 4913 days ago

What can private insurance do for me if I am killed?

What if I can't afford private insurance? What if I am not allowed private insurance?

Seems like decrying a 'monopoly of violence' and replacing it with a 'vibrant violence marketplace' is quite a few steps in the wrong direction.

> What can private insurance do for me if I am killed?

What can anything do for you if you are killed? I don't understand the relevance. You could still have private life insurance to provide for your family, but that's no different than today.

> What if I can't afford private insurance?

What if you can't afford the fees associated with litigation in the government court system? I never claimed that my suggestion would suddenly make everything fine for poor people. It's always going to be worse to have less wealth, just like it is in our current society.

> Seems like decrying a 'monopoly of violence' and replacing it with a 'vibrant violence marketplace' is quite a few steps in the wrong direction.

I don't understand how. Neither system is a utopia, but a competitive system motivated by profit would probably be cheaper (because customers like lower prices) and less violent (because violence is expensive and risky) than a government monopoly.

The only reason violence is currently risky is because the government will put forth a lot of resources (more than most businesses or individuals could afford or consider prudent) to stop violence or at least punish the perpetrators. In your system, there is no reason for me not to kill someone in a slightly sneaky manner - basically as long as it can't easily be pinned on me, there is no repercussion. No one will track me down. I can just come by and kill you whenever. Oh wait, you'd pay for security. Then the security companies would start enforcing rules in their zones (remember property doesn't exist without someone there to enforce the property). Those security guys could take over the zone next door. Oh and prevent people from living. Repeat for larger and larger groups. Suddenly we have government of the feudal or warlard kind all over again. Crap.

That's simply not true. Fear of government involvement is not the only thing that makes violence risky. The fact that people can and often do defend themselves is what makes violence risky. Try breaking into an American farm house in the middle of nowhere if you don't believe me.

> Then the security companies would start enforcing rules in their zones (remember property doesn't exist without someone there to enforce the property). Those security guys could take over the zone next door. Oh and prevent people from living. Repeat for larger and larger groups. Suddenly we have government of the feudal or warlard kind all over again.

There are so many leaps there that need justification.

clavalle 4913 days ago

>What can anything do for you if you are killed? I don't understand the relevance.

What is to keep someone from killing me to get their way? Private insurance? Are they going to go to war for me after I'm dead?

>What if you can't afford the fees associated with litigation in the government court system?

Well, if the conflict 'resolution' involves the other party resorting to violence or theft, I can turn the matter over to the into the State whether I can pay for it or not. There are hard limits placed on how far the other party can go in getting what they want.

>violence is expensive

I don't see how violence is expensive. Violence is cheap. Bullets don't cost much. Rocks are even cheaper.

In fact, violence can be very profitable. Got $10 in your pocket? Just paid for my bullet and then some. Got a $30,000 car? Well now, that should pay for a few rounds.

What you propose is a fantasy, pure and simple. And not even a very plausible one.

> What is to keep someone from killing me to get their way? Private insurance? Are they going to go to war for me after I'm dead?

Yes, that's the idea, although "going to war" is hyperbolic. Private insurance would be strongly incentivized to seek out and punish murderers, assuming of course that potential customers would find that service valuable. The leap from the government's monopoly on violence to a competitive alternative is no more drastic or complex than the leap from the government's monopoly on postal service to a competitive alternative. Features that customers valued would almost certainly abound, and ones they didn't care about or like would be less common. The key difference is that the competitive systems get their revenue from willing payers, while the government coerces money from every single employer.

> I don't see how violence is expensive. Violence is cheap. Bullets don't cost much. Rocks are even cheaper.

I don't mean the cost of weaponry. I mean that you have to pay thugs well, mostly because of the inherent risk I mentioned earlier. There is also risk of massive retaliation which can end up causing a lot of damage to humans and property.

> In fact, violence can be very profitable.

It can be, sure, but it's extremely expensive and extremely risky. That was my point.

clavalle 4913 days ago

>I don't mean the cost of weaponry. I mean that you have to pay thugs well, mostly because of the inherent risk I mentioned earlier. There is also risk of massive retaliation which can end up causing a lot of damage to humans and property.

If that were true people wouldn't be killed over pocket change today.

It seems to me that your position is only maintainable if you take many questionable assumptions as a given -- here are a couple:

-People are rational actors. -People will operate in an environment with good enough information available to make good decisions. (This would be tough to begin with but with overlapping rules in place this could really be a crippling burden in your purely market driven world.)

Keeping just those two assumptions intact seems...improbable.

rprasad 4913 days ago

> In fact, violence can be very profitable.

It can be, sure, but it's extremely expensive and extremely risky. That was my point.

Violence is only risky because government makes it risky to commit violence.

Reality does not bear out your claims that turning everything over to private parties would magically solve the violence problem. In fact, places like Somalia and every conflict in Africa and the Middle East are strong evidence that violence would increase tenfold without a strong government. In contrast, the places with the lowest levels of violence are frequently places like Singapore or Europe with the highest levels of government.