Ep. 194 How a Voluntary Society Would Handle Blockades and Immigration
Bob elaborates on two ideas he had when he wrote his novel “Minerva” in grad school.
Mentioned in the Episode and Other Links of Interest:
- Bob’s archives at Strike the Root, which contain the serialized version of Bob’s novel, Minerva. (Note that the HTML formatting is incorrect for some characters, such as the em-dash turning up as an apostrophe.) UPDATE: A listener compiled a PDF version of Minerva here.
- Bob’s articles on the social function of stock speculators, futures markets, and call and put options.
- To learn more about Whole Life insurance policies, see the Foundations of IBC video series, particularly Module 3.
- Help support the Bob Murphy Show.
The audio production for this episode was provided by Podsworth Media.
About the author, Robert
Christian and economist, Chief Economist at infineo, and Senior Fellow with the Mises Institute.
Interesting episode, but just on the insurance thing, why is it that there is no system of third party car insurance that works like this now even though lots of people drive for the best part of their lives? Part of the reason why I thought there was a cash surrender value of life insurance was that they know they’re on the hook for a *specific* amount to each person and the only thing the insurer doesn’t know is when. Isn’t it this which leads naturally to the option of surrendering early? That’s not there with car insurance. I guess you could build in a surrender option to other insurances anyway but it then just seems like you’re combining insurance with some kind of savings account arbitrarily and we don’t seem to see that happening anywhere other than for life insurance.
That’s an interesting question Tuppenceworth. One important difference is that your mortality risk goes up over time, so if the insurance company is charging you a fixed premium on your Whole Life policy, then it necessarily has to be “overcharging” you in the early years to build up a surplus, which then helps cover the “undercharging” in later years. It’s not clear that there’s anything analogous in other arenas. I suppose if you had lifetime health insurance policies, but those don’t exist.
I don’t know if that’s the essential difference but it might be.
There’s a related concept in car insurance.
https://youngcardriver.com/insurance/no-claims-bonus/
In a nutshell, you build equity by sticking with the same insurance company and not having any crashes. You can’t cash it in but it is worth money in the form of discounts … the insurance company will never lose on these … because they already have your money and they know they are ahead after you made no claims. Another way to think about it is they roll forward some of the profit they made on you this year to provide a buffer for next year, thus making you cheaper to insure.
Such combo systems do exist … consider the compulsory “Medisave” system in Singapore where it gets advertised as an individual savings account, which is kind of is, but the savings account is held in reserve in case of any healthcare costs. Then they also have “MediShield” which is a more conventional health insurance scheme and “Medifund” which is straight government money, mostly to keep the poor people able to access some healthcare. I believe foreign workers can cash out the “Medisave” account when they leave Singapore, if they have no intention to return … and older residents can withdraw some money in various situations. On top of that it’s complicated with employer sponsored schemes.
What’s more interesting is that Singapore is introducing some aspect of life insurance into the system making “MediShield Life” which is kind of a combination healthcare life insurance. Some of this is at least in the ballpark of what Minerva is doing … and big coincidence Singapore is an island roughly the same size!
Of course, when you are in SIngapore, there’s only one vendor in these markets, and I guess it’s a difficult question as to whether they would be considered a private monopoly or a democratic government … but please call it whatever you prefer.
Highly recommend everyone read Minerva. One of the best, if not THE best, pieces of libertarian/ancap ficiton out there. Nothing gets it into your veins like a good story. Bravo, Bob!