Another take on Chapter 18. part 1, 2.0

I’ve been extremely busy this year, and that has a lot to do with why I haven’t kept up the blog. But there’s something else. I’ve also been wrestling with how to deal with this chapter while also remaining “respectable” and coming across as sane, while also being true to the science of economics.

What I am referring to here is the need for a state. And already I can see the reader jumping ship or rolling their eyes. If that is the case then it is their loss. Consider that just over 500 years ago there was no free market in regards to religion. taxes were used to build and maintain churches and to pay the salary of the clergy. If in 1516 someone had suggested that taxes and the state were not necessary in the upkeep and maintenance of religious institutions he might well have been regarded as a lunatic. But today we all know that such a man, had he existed was no lunatic at all, but merely ahead of his time. So hear me out, and wait until the end to decide if I am crazy, or merely have adopted the ideas of men who were ahead of their time.

Sowell says that a modern economy can not exist within a vacuum. But in more explicit terms what he is saying is that the market economy can not succeed without non market forces. Which is quite the contradiction considering most everything else he has said. He makes the assertion but never gets into the details of why not.

Could the market provide security? They do in shopping malls and at theme parks, why not for a city? As it is the police do not operate under a system of profit and loss. If someone breaks into your home and steals all you have the police do not get paid more if they catch the burglar and they do not get paid less if he strikes again. Today in some big cities there are neighborhoods in which the police don’t even go into unless shots are fired. They have no incentive to and every incentive not to. And because the state has a monopoly on bringing criminals to justice, no one else dares interfere.

But the free market would provide this service. No one can say exactly how. but many leading economic theorists suggest that the insurance companies would play a big role one way or another. They are the ones who stand to loose if burglars are not caught, if murders escape justice, and so on.

The idea is that either insurance companies would have a division dedicated to security, to catching car thieves, burglars, arsonists and other criminals, Or that they would pool their resources together between the different firms and contract with a security agency to do the same, or that there may be different and competing security agencies on contract with the different insurance companies. State Farm might have Bob’s Security Company working for them, while in the same town Progressive might be using Bill’s Security Company. Naturally it is in the best interests of both firms, whether they use the same security company or different ones to catch all criminals they can even if a particular victim is not their client. Think of how cell towers work. Merely because your carrier is Sprint, it doesn’t mean that you only have service when you are within signal range of a Sprint cell tower. You get coverage when you’re using an AT&T tower or a T-Mobile tower, and the cell phone companies settle with each other without you ever being bothered with it. It wouldn’t matter where you were at or who your insurance provider is, if you were the victim of a crime someone would be there to help you, and to seek justice on your behalf.

What about the poor? Yes there would be some who wouldn’t afford coverage. But in the first place a criminal stands much more to gain from preying off the more well affluent than off of indigents. And in any case someone who would attack a poor person, shows a disregard for life and/or property that can not go unanswered. The security agencies would still be interested in seeking justice in such cases. Though in all honesty there would likely, just as there is today under a state system, be less interest in solving the murder of a prostitute and drug addict than of a well-to-do wife and mother of 2 in a middle class neighborhood.

And I might digress here to point out that the advocacy of a market based security system is not utopian. It isn’t to say that nothing bad will ever happen, that no injustice will ever happen, or that no crime will ever go unsolved. The only claim is that the market is more efficient, that is better, and cheaper.

Let me address one more angle. What about the rights of the accused? The insurance agency doesn’t stand much to gain merely by throwing a scapegoat in jail. They need justice, they want to get the bad guys. And part of your premiums would go towards providing defensive legal council if accused. Naturally this could present a potential for a conflict of interest if the victim and the accused both have the same insurance company. The solution would likely come in the form of a recusal on one side or the other. State Farm would hand over the task of either prosecuting or defending the accused to another agency. A representative from a third agency might stand in as the role of judge. A jury trial may still be possible, but there would be one big difference. Aside from some sort of contractual agreement in the terms of an insurance policy, no juror would be in the court room as a result of compulsion. Either the jurors would be paid, or they would get a discount on their premiums by serving as a juror. For someone whose time is vastly more valuable, such as the owner of a construction company, he would likely not end up on a jury.

There is one other important difference, between a state run system of justice and one that is driven by people making free choices. That is that crimes, would take on a new meaning, or revert back to their old meaning. That is that there would need to be a victim in order for a security agent to drag you into court. College kids wouldn’t get cited for smoking pot, unless they were in violation of their landlord/tenant agreement, but presumably the college kids would seek out a living arrangement that was suitable to their recreational choices. There would not be a broad based law against smoking pot the way there is against assault or theft. and even in this case it is much more likely that the tenants would not be hauled into court, but merely be evicted.
There would in some form or fashion be a victim. victimless “crimes” would be a thing of the past.

This is a deep subject of which I have still only scratched the surface. Questions in the comment section are greatly appreciated.

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