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Too high liability for protection insurance

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FlyingAxe posted on Sat, Apr 14 2012 10:45 PM

Someone asked me a question over the weekend:

What if, under the anarchist system of protection insurance, all insurances find a particular person uninsurable? I.e., he is too high liability for the companies, because, for example, he lives in too dangerous a neighborhood (e.g., a Black person living in a White supremacist neighborhood). And the premium required to pay for his protection is too high for him to afford, while no charity organization in town is willing to pick up the bill.

My answer was: first, in the case when all these things pile up, the person has to move to a safer neighborhood or live with a reality of no protection. That sucks, and his rights to live in peace should not be violated, but such is the reality. Also, what's the alternative? Forcing all the citizens of the town to pay for his insurance or, worse yet, accept some sort of monopoly of a protection agency that will cover him too?

Second, under the government, the situation may not be any better. When Blacks moved in to many communities in Brooklyn, NY or Roxbury, MA, many Jews had a choice whether to move or continue living there despite the increasing crime rates. Most moved to Boroughpark, NY or Brookline, MA, but some communities stayed. They made a decision to live in a place of greater crime, and there is a lot of crime (lots of assaults, robberies, rapes, etc.). So, a) it was their decision to stay, and they must pay the price in terms of reality of things, b) though they are supposedly protected by state police, it's almost as if they were not.

I was wondering if anyone has anything to add to my answer. (The other part of the question was: what if he is too rich and too prone to being robbed? My answer was that he has to pay more for protection.)

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Answered (Verified) gotlucky replied on Sun, Apr 15 2012 12:44 AM
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FlyingAxe:

What if, under the anarchist system of protection insurance, all insurances find a particular person uninsurable? I.e., he is too high liability for the companies, because, for example, he lives in too dangerous a neighborhood (e.g., a Black person living in a White supremacist neighborhood). And the premium required to pay for his protection is too high for him to afford, while no charity organization in town is willing to pick up the bill.

Let me pose a slightly different question:

A man lives in an area prone to dangerous forest fires.  Naturally, the insurance is incredibly high, too high for him to afford paying.  Think about the questions you were asked but with this scenario instead.  Why would it be okay for this man to force other people to pay for his reckless decisions?

The whole essence of the question is that under anarchy, some citizens will remain unprotected because they are too poor and/or because they live in unfavorable conditions. That is why, the argument goes, a minirchist system is better: it will not leave any citizens unprotected in principle. (That, by the way, also includes children, old people, and the homeless, whose protection scheme under anarchy is also not entirely clear to me.)

It will not be able to protect everyone.  Even so, do we really want to subsidize risky behavior?  Look at the quote in my tag.  Is that really what we want?  To fill the world with reckless people?  At the expense of those who don't take unnecessary risks?

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What "details"? What do they matter as long as they don't conflict with libertarian principles? They'll be settled randomly, no matter what process is applied to it. Theft (by non-governmental entities) is illegal in all states, and each one has their unique formulation of those laws for all kinds of historic and other reasons.  And those differences ARE COMPLETELY IRRELEVANT!!! A man who steals another mans car, is a criminal everywhere. You're nitpicking the irrelevant.

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They are not irrelevant.  They are what resolves disputes.

I see that you decided to not substantiate your ridiculous claims.  I accept your implicit concession.

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The details of how theft is criminalized, are irrelevant. Someone stole my car. He gets caught and punished and I get my car back. 140 states in the world have court systems which work that way, each one with their unique "details". Details are irrelevant. That somehow I would "compete" with the thief, is ridiculous. He must be forced by whatever means necessary to restore my property rights.

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That's true. But that's like saying: Markets won't necessarily produce plasma-screen TVs. They will produce whatever the customers desire.

Therefore what? Whatever the markets produce, it will be better than whatever government-run TV factories produce. And with the latter, innovation will happen more slowly, and prices will be higher.

The efficiency of production is not the issue - the issue is what kind of legal/security services are going to be produced. If non-libertarian legal/security services are what the market is going to produce, then it's small consolation for us libertarians that they're produced efficiently. I'd rather have inefficiently produced libertarian legal services than efficiently produced non-libertarian legal services. I am not making any argument against anarcho-capitalism, I'm just pointing out something that everyone should understand. It is foolish to just assume that libertarian law would emerge in the absence of a State - it might and it might not.

The main advantage of free-market–produced law is that you will have a few version of it coexisting at the same time, competing with each other.

Whenever there is a disagreement over a point of law in a dispute between two persons, one opinion is necessarily going to prevail over the other, which means that the loser in the case is going to be subjected to law with which he disagrees. And also, over time, the majority opinions on all legal questions tend to become precedent. If you have a minority opinion on some legal question, and you find yourself in a dispute with someone who holds the majority opinion, guess which view of the law is going to prevail? Not yours, which means you will be subjected to law with which you disagree. How is this different from being in a voting minority in a State with representative democracy? The point is: competition in the provision of legal services does not mean that somehow everyone gets to be subject only to the law which they prefer. There will tend to be a single law, determined by the preferences of the majority, even if there are multiple firms offering legal services on the basis of the same common legal tradition.

And, if it is really true that libertarian natural law is more effective, more fair, and more beneficial to the society, than the society will tend to select for libertarian lawyers and judges.

Or at least it will select for the judges whose "opinions" and legal philosophy would be better for the society. Just like in any other industry.

Again, the market only selects for what the consumers demand. I have no doubt that the market for legal services will produce whatever consumers demand with utmost efficiency. The issue is what will they demand, and that's dependent on value judgments, not economic calculations.

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Reason is great, but it only takes you so far.  It's like the market on oranges.  Do you know what the price of oranges should be in New York City?  What about Paris?  No, we cannot know the specific price, but we can know how the price of oranges comes about.

It's the same with law.  The details cannot be reasoned out, only the framework.

With a truly impersonal legal tradition, where there is no law code written by anyone, where the law is just accumulated precedent, what you have is a kind of democracy of ideas. Judges rule based on their desire to please the most of their customers, and so the law, determined by the precedents set by all these rulings, becomes nothing more than the expression of the majority opinions in society. This kind of impersonal legal tradition implies the idea that consensus is truth: whatever view is most common is the correct view.

The alternative is for individuals to sit down and reason about the law, and for society to recognize the wisdom of these individuals and follow (more or less) the low codes they produce. I think this is nearer to Rothbard's conception of stateless law. He does not want to open up the law to mob-rule, and I sympathize.

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If you have a minority opinion on some legal question, and you find yourself in a dispute with someone who holds the majority opinion, guess which view of the law is going to prevail? Not yours, which means you will be subjected to law with which you disagree.
nonsense. My opinion is always by definition minority, since I havent bothered to run around lining up and counting the people who agree with me, in order to see if they outnumber the ones who are left over. And majorities dont tend to count for much in a monopoly courtroom, the professional jurists tend to act as an oligarchy. In a private law society, the majoritarian position would likely be that the dispute is between those individuals anyway.
The point is: competition in the provision of legal services does not mean that somehow everyone gets to be subject only to the law which they prefer.
no, it means that they have the option to purchase legal services from whomever they wish, as opposed to under the current system where the sale of legal services is regulated by the state. You are responsible for procuring your own libertarian law, you cant ask non-libertarians to subsidize it for you "because I'm right."
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Helloween:

The details of how theft is criminalized, are irrelevant. Someone stole my car. He gets caught and punished and I get my car back. 140 states in the world have court systems which work that way, each one with their unique "details". Details are irrelevant. That somehow I would "compete" with the thief, is ridiculous. He must be forced by whatever means necessary to restore my property rights.

The details of how something came to be are relevant to the study of law.  The details of the origin of money are important to economics.  The details of the origin of species are important to biology.

That you don't care only shows that you do not care about the study of law.  That's fine with me.  You should probably stop offering your opinion on something you don't care about.

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@Minarchist

I did not say that reason is not useful.  I said that the framework can be reasoned but not the details.  This does not mean that reason cannot be used in particular cases.  Reason is the only tool available.  But we cannot sit in our armchairs and reason out what the laws ought to be.  I do not want mob-rule either.  But you create a false dichotomy when you state that it is either mob-rule or armchair theorizing.  There is a middle.

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My opinion is always by definition minority, since I havent bothered to run around lining up and counting the people who agree with me, in order to see if they outnumber the ones who are left over. And majorities dont tend to count for much in a monopoly courtroom, the professional jurists tend to act as an oligarchy. In a private law society, the majoritarian position would likely be that the dispute is between those individuals anyway.

I have no idea what you're talking about, it doesn't seem to have any bearing on my comments.

All that I'm saying is that the law will reflect the preferences of the majority.

For example, if 95% of the population believes that victimless drunk driving should be a crime, then a crime it will be: and the fact that you (as part of the 5% minority) disagree, will not save you from being prosecuted for drunk driving. As I already said: whenever there is a disagreement over some point of law in a legal case, someone wins and someone loses. The loser (e.g. the guy who argues that drunk driving is not a crime in a society where 95% of the people think it is) ends up being subjected to law with which he disagrees.

Again, my point is simple: competition in the provision of legal services does not mean everyone operates under their own law. It just means you get to choose which firm's legal services you want to use. They're going to all operate under more or less the same law.

no, it means that they have the option to purchase legal services from whomever they wish, as opposed to under the current system where the sale of legal services is regulated by the state. You are responsible for procuring your own libertarian law, you cant ask non-libertarians to subsidize it for you "because I'm right."

Again, no clue what you're talking about.

Law is not a product or a service which one individual buys. Law is about settling disputes between multiple people. I cannot "procure my own libertarian law" - I live in a society where there is law, and I am but a single voice in determing what it is. Anyway, yes, with a stateless society, you can choose which firm you want to patronize for their legal services. So what? My point is that you as an individual will be subject to the law determined by the preferences of the majority, just as you are now.

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@gotlucky

Sure, I agree with that.

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Minarchist:
All that I'm saying is that the law will reflect the preferences of the majority.

I'd say that the bulk of common law over the centuries and millennia resulted from the preferences of the majority. Do you agree or disagree?

Minarchist:
For example, if 95% of the population believes that victimless drunk driving should be a crime, then a crime it will be: and the fact that you (as part of the 5% minority) disagree, will not save you from being prosecuted for drunk driving.

What do you think that would actually mean in a stateless society? With all due respect, I think your formulation "believes that X should be a crime" is too vague.

Minarchist:
Law is not a product or a service which one individual buys. Law is about settling disputes between multiple people. I cannot "procure my own libertarian law" - I live in a society where there is law, and I am but a single voice in determing what it is. Anyway, yes, with a stateless society, you can choose which firm you want to patronize for their legal services. So what? My point is that you as an individual will be subject to the law determined by the preferences of the majority, just as you are now.

Among libertarians, there are some people (like Clayton and Graham Wright) who define "law" as "the settling of disputes" and others (like myself) who define it as "the process for settling disputes". I'll call them "legalists" and "moralists". As you can see, the difference is purely semantic, but it leads to very different-sounding statements. Legalists would say that one can "procure his own libertarian law", because that's equivalent to "procure settlement of disputes to which he is a party by choosing (in collaboration with the other party) from among freely competing dispute-settlement firms". On the other hand, moralists would agree with you that one cannot "procure his own libertarian law", because the process for settling disputes would by-and-large be the same among all of those freely competing dispute-settlement firms.


If I may offer my own thoughts on the matter, I think a "natural monopoly" can essentially exist when it comes to the process of settling disputes, but that this "natural monopoly" of sorts in no way extends to the actual settling of disputes. We see analogues to this in many areas - basically any area where common standards have been agreed upon. Even though many (if not most) of these common standards have been codified in government regulations, that doesn't mean they originated as such.

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 The alternative is for individuals to sit down and reason about the law, and for society to recognize the wisdom of these individuals and follow (more or less) the low codes they produce. I think this is nearer to Rothbard's conception of stateless law. He does not want to open up the law to mob-rule, and I sympathize.

Actually, I was sitting in a Barnes and Noble yesterday and happened to read an excerpt from Hayek’s Constitution of Liberty. He constrasts the view of a liberal (and by that he means a libertarian, obviously) and a democrat (a proponent of democracy). Basically, he says the same thing you just said: for a democrat, whatever the majority rules is the law and should be done; a libertarian disagrees: he looks at the contents of the law. If the law itself is liberal, it’s a good law, whether it was enacted by a democracy or by a tyranny. And the opposite: if the law is tyrannic, the fact that it was enacted by a democracy (Nazis come to mind) does not redeem it.

 

So, this is where constitutionalism comes in, in particular, the American kind: with a written Constitution. This is why my wife, for example, is a minarchist: she doesn’t want the law to be a mob rule. So, if in the South of 1860s (or Texas of today), the majority thinks that in an altercation between a Black and a White, the former is guilty unless proven innocent, she does not want that to be what the judges (eager to get business from local customers) rule.

Furthermore, that is why the advocates of American constitutionalism criticize British unwritten constitution, where the Parliament can over-rule a court’s decision.

So, the idea is that there should be a constitution that puts a limit over what kind of law the majority can decide over a minority. The Constitution should be decided not by a mob, but by a group of legal conservatives, who will interpret it in the strictest way possible.

But if you look at the state of affairs in today’s US Supreme Court (or local states’ supreme courts), the situation has deteriorated. Arguably, this system has never worked in the US to the full extent, starting from Jefferson’s times. The Court has always been inhabited by corrupt judges who, instead of conservatively interpreting the text, have simply imposed their personal political beliefs on the text. It has become particularly bad now, but that is quite well correlated with the particularly bad state of the general population’s views (a mix of socialist "liberalism" and fascist "conservatism"). So, if you look at the history, the judges were following the vox populi quite faithfully anyway, and the whole model of constitutionality was a pie in the sky.

 

I think what could be done is a combination of anarchist system and statist constitutionalist system: an anarchist constitutionalist system. That is basically what Jewish law has been for the last 2000 years: individual rabbis interpreted a set of legal texts, giving their opinions on how these applied to the changing society. Each rabbi gained or lost authority with local (and international) population based on his demonstrated scholarship, logic, etc., and thus became an authority. Different communities had different authorities, and different people who agreed with different authorities successfuly co-existed (and still co-exist) within the same geographical locations.

The problem is: the texts which Jewish law interpreted (the Bible and Talmud) were still products of a positive law. So, that doesn’t help much... But in theory, in an anarchist society, the judges could agree to be bound by some set of supra-legal written or unwritten principles, which would evolve much more slowly than the actual law.

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I'd say that the bulk of common law over the centuries and millennia resulted from the preferences of the majority. Do you agree or disagree?

I agree.

What do you think that would actually mean in a stateless society? With all due respect, I think your formulation "believes that X should be a crime" is too vague.

If 95% believe that X is immoral, and that people who do X should be punished, then the common law will likely reflect that preference of the majority, and X will be illegal: i.e. people of the majority opinion will have success in charging, convicting, and punishing people who do X.

Among libertarians, there are some people (like Clayton and Graham Wright) who define "law" as "the settling of disputes" and others (like myself) who define it as "the process for settling disputes". I'll call them "legalists" and "moralists". As you can see, the difference is purely semantic, but it leads to very different-sounding statements. Legalists would say that one can "procure his own libertarian law", because that's equivalent to "procure settlement of disputes to which he is a party by choosing (in collaboration with the other party) from among freely competing dispute-settlement firms". On the other hand, moralists would agree with you that one cannot "procure his own libertarian law", because the process for settling disputes would by-and-large be the same among all of those freely competing dispute-settlement firms.

Indeed, I took "procure one's own libertarian law" in the sense understood by the "moralists," as you call them.

If I may offer my own thoughts on the matter, I think a "natural monopoly" can essentially exist when it comes to the process of settling disputes, but that this "natural monopoly" of sorts in no way extends to the actual settling of disputes. We see analogues to this in many areas - basically any area where common standards have been agreed upon. Even though many (if not most) of these common standards have been codified in government regulations, that doesn't mean they originated as such.

I agree. In the absence of the State, I would expect  to see competition in the provision of legal services, but near-uniformity (at any given time) in the law itself: the law being that body of precedents (whether there's something like a Blackstone's commentary or just a big pile of records from previous rulings) upon which judges/arbitrators base their decisions about what is and is not a crime (as well as doctrines of restitution/retribution, evidentiary standards, etc).

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For example, if 95% of the population believes that victimless drunk driving should be a crime, then a crime it will be
that 95% of people will have to find the drunk drivers and take them to court, people domt just automatically get hooked up because they got behind the wheel of a vehicle with blood-alchohol content above a certain arbitrary (that most people agree to) amount. And if I drive drunk on my property, and on the property of other people who feel the same way as me, one of those 95% of people is going to have to file grievance against me. The other 95% of the people are largely irrelevant to the dispute between me and that specific moralizer.
and the fact that you (as part of the 5% minority) disagree, will not save you from being prosecuted for drunk driving.
you mean the fact that I have a dispute with someone else entails a disagreement with that individual. Nothing more.
As I already said: whenever there is a disagreement over some point of law in a legal case, someone wins and someone loses.
yes, and as I said already, they dont go around town lining up and counting the people who agree with them in order to see if its a majority or not. Even in our monopolistic legal system, they argue their case on its own merits. When you get an arbitrator who says "I dont care if the majority of people in this community think inebriated operation of a motor vehicle is 'wrong,' you have to show damage in order for me to award restitution, case dismissed" you will see what I mean.
Again, my point is simple: competition in the provision of legal services does not mean everyone operates under their own law. It just means you get to choose which firm's legal services you want to use.
no, thats my point. Your point is the sentence immediately following that one:
They're going to all operate under more or less the same law.
I was already aware that this was your opinion, however you have yet to substantiate it.
Law is not a product or a service which one individual buys. Law is about settling disputes between multiple people. I cannot "procure my own libertarian law" - I live in a society where there is law, and I am but a single voice in determing what it is. Anyway, yes, with a stateless society, you can choose which firm you want to patronize for their legal services. So what? My point is that you as an individual will be subject to the law determined by the preferences of the majority, just as you are now.
yes, but your point is a wholly unsubstantiated article of faith. People arent even subject to the same law in our current monopolistic system, what makes you think that competing firms are going to offer exactly, or even nearly, the same products? A free market in law is uniquely suited to offer legal services that only a minority of people would procure, because its a market. Bit players can stay in business as long as people are willing to buy their products. if two people want to pay to settle a dispute by roulette instead of a trial, who are you to tell them they cant? Who is going to say "you cant offer dispute resolution services that at least 51% of the population wouldnt buy!"?

modern libertarians need to learn to mind their own business.

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 if I drive drunk on my property, and on the property of other people who feel the same way as me, one of those 95% of people is going to have to file grievance against me. The other 95% of the people are largely irrelevant to the dispute between me and that specific moralizer.

I don't think that's true. When you're standing in front of a private judge who is considering whether driving drunk on someone else's property is a crime, the judge will consider the opinion of the majority... simply to stay in business. He will recognize that there is a greater demand for a legal philosophy which makes such behavior a crime.

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