Monday, 24 August 2009

Damn! That really is a good idea!

Via Samizdata, this:

"The fact that compensation would often not be forthcoming either because of inability to catch the offender or inability to pay if caught would motivate us to take out "crime insurance", which in turn would motivate the insurance company to catch such criminals as it profitably could. Criminals would have plenty to fear from these highly motivated companies, who of course would acquire from their clients the right to such compensation as they could exact, at least up to the level of full resitution. It would be interesting to know whether the net effect would be more satisfactory than the current system, but when you consider the all-but-total failure of the punishment system actually employed in, say, the United States and Canada, it is difficult to believe that it wouldn't be a major improvement. Everyone agrees that we have very far to go in the way of improving our system of responding to crime. It is a sobering thought that getting rid of one of the most spectacularly cost-effective systems in the history of mankind short of war is perhaps even less likely to be seriously considered than is abolition of war."

Jan Narveson, The Libertarian Idea, pages 230-231.

One of the few things I think the state should provide is a justice system. But it's blindingly obvious to me that what passes for a justice system in the UK doesn't provide "justice" unless your crime is against the state, in which case the justice is swift and merciless.

So if we allow insurers to go after criminals for crimes against the individual we free the rozzers up for more doughnut-eating and form-filling and hairdryer-waving and protester-bashing, while we "little people" actually get a form of justice. Or they might get jealous and start to actually take care of real crime again. What's not to like, either way?

So I can now even see a role for competition in the justice system. Bloody hell, isn't that a good idea?


Thomas Byrne said...

With regards to the police force: without any government interference, what motive is there for a private security company to abide by any reasonable code of conduct?

Say a security company operates in an area inhabited by a poor black community (that, purely for the sake of argument, commits 90% of the region’s crime) and a wealthy white community. What is there to stop this company operating a policy of setting a curfew for all black citizens and no such curfew for white citizens. Or giving longer prison sentences to black citizens. The white community can happily enjoy reduced crime. The security company enjoys huge profits because the white community is far wealthier than the oppressed black community. Everyone is happy and profits boom. Except if you’re born black.

Let's take a look at the hypothetical situation where there's only one security company in action, controlled (like in your case) by a wealthy majority. What would happen to minorities under such a situation?

Oh wait, we've seen exactly what happens! Or imagine a security force that gives longer prison sentences to black citizens. Oh wait, we already have this! It's called the state police!

Mark Wadsworth said...

The idea fails because most criminals aren't worth pursuing.

If the insurance company knows they have a chance in ten of catching the perp and then one chance in ten of getting and compensation, the insurance premiums would have to be more than one hundred times the compensation that would be due.

Anonymous said...

Obo, you need to read "Democracy: the God that Failed" by Hans-Herman Hoppe as it discusses private police forces and such straw man arguments as above. (As an off the cuff thought, in a Libetarian world the poor black people would be armed, how would such a curfew be enforced?)

Rothbard also liked the idea of private police forces and Judges and pointed out the historical examples of the British Transport Police and, much further back in time, the private travelling judges of Ireland.


Obnoxio The Clown said...

@Anonymous, I think you need to re-read Thomas's post. He's not saying anything about Libertarians, he's talking about what we have now. ;o)

@Mark W: Maybe the insurer's could sell the crims insurance too? :o)

Seriously, the OP did say "to catch such criminals as it profitably could". I still think the idea is worth a proper look, not a "back of the envelope". Unless you're more of a dark horse than I thought. :o)

bozo said...

This is the dumbest thing i have ever read. How has car insurance done in the fight against accidents? It will give them a chance to take fat premiums for no work, and they would wriggle out of payments that were due, or try that overinsured bollocks when they offer to pay half what you are due despite being up to date on your premiums. Or maybe they will just blame the insured. Or maybe "split liability" where you and your perpetrator in denial both lose your no claims bonus.

Don't insurance co's steal enough whilst perfoming a bad service, without being given yet another license to steal?

Jock Coats said...

Yeah, I became pretty convinced of this when I heard Hans-Hermann Hoppe talk about it at the Libertarian Alliance Conference last year. It is effectively the difference, to my mind, between "minimal statists" and true "market anarchists" since police, courts and the law are seen to be one of the few functions that most "minimal statists" concur has to remain a state function.

The problem is that it is this very state function that creates and defines the state - being the territorial monopoly of the final judgement in arbitration. It is this monopoly effectively that allows them to tax (in order to pay for the enforcement) and allows them to legislate (to control what it is they are going to enforce). And Hoppe for example argues that this makes a "minimal state" a logical impossibility because it will always tend to legislate (and therefore tax) more and more.

To my mind all the objections of people above are answered by the many good resources that are online about "private law". One of the best I found is four chapters of Morris and Linda Tannehill's bokk "The Market for Liberty" which you can get on MP3s here (chapters 7-12 in particular, but if you haven't read or heard it befeore I do recommend listening to the whole lot).

Also, as someone mentioned and I have referred to, stuff by Hans-Hermann Hoppe particularly " Protection and the Market for Security" from last month's Mises University (another MP3), "The Idea of a Private Law Society" which is the written version of the speech he gave at LA Conference last year more or less (and much of which comes from "Democracy; the God that Failed" as mentioned by someone else above.

There are similar Chapters in things like Murray Rothbard's "For a New Liberty" available in MP3 again at And a compendium of essays around this subject called "Anarchy and the Law".

I would certainly encourage sceptics to listen to the Tannehill chapters.