everyone's favorite industry
July 7th, 2008 by 
bkmarcus
On blog.Mises, as a late comment to Hans Hoppe's "On the Impossibility of Limited Government," Joe Stoutenburg makes an important point that I have yet to hear any of the better-known ancaps address:
Having an actuarial background and working for a large insurance company, I have long been intrigued with the idea of insurance companies providing security. I believe that the arrangements could work. There are two main factors (in addition to throwing off the yoke of oppressive government) that must be worked out:
The public greatly mistrusts insurance companies. How would they be convinced to accept insurance company services for government? [Though I have to wonder why they trust government more than insurance companies...]
Sadly, much of the mistrust is well-placed. Insurance companies enjoy many advantages through regulations, barriers to entry, tax laws and so forth. While the institutions of insurance require massive assets, I'm not convinced that individual companies must be so gigantic. There are markets for sharing risk, and insurance industries fight their development for fear of losing dominance. While insurance companies do compete among each, the level of innovation in a free market would drastically change the industry.
In short, the marketplace could provide the services outlined in this article. But the current insurance industry would probably drastically change if it was to adapt to an unfettered market.
Posted in strategy | 
July 7th, 2008 at 7:14 pm
The concept that Anarchy would be centered around insurance is a rather minor one amongst Anarchists. So the point, I would say, is rather moot.
July 7th, 2008 at 7:31 pm
The mistrust of insurance companies primarily derives from State regulation of insurance in the first place.
The anarcho-capitalist or agorist vision of justice/police and insurance bundled together is viable.
A free market insurance vendor would look practically nothing like the State-sanctioned insurance oligopolies of the present.
July 7th, 2008 at 9:43 pm
I've gotten puzzled looks from folks I know when I explain the idea that insurance companies could probably take on the role of government and do so justly and efficiently. This has always been because of prior experiences with insurance companies.
I do wish someone somewhere would do some kind of economic study of all of the interventions that occur in the industry. Just to show people what might change in a freed market.
July 22nd, 2008 at 6:37 pm
The mistrust of insurance companies is due to the fact that in many cases, when it comes time to pay up, the insurance companies find some excuse to NOT pay.
A typical attitude that seems to prevale in the industry is they (the companies) are more interested in the well being of their stockholders then their customers, hence their reluctance to payout.