From: Mix <mixmaster@remail.obscura.com>
Date: Fri, 7 Nov 1997 18:39:07 +0800
To: cypherpunks@cyberpass.net
Subject: Re: Protocols for Insurance to Maintain Privacy
Message-ID: <199711071011.CAA00433@sirius.infonex.com>
MIME-Version: 1.0
Content-Type: text/plain



-----BEGIN PGP SIGNED MESSAGE-----

Adam Back wrote:
>> Before the test, though, insurance might be useful--I could
>> essentially place a bet with someone that I had the disease--I pay
>> $1, and get a million dollars back if my test comes back
>> positive--just enough to pay for my treatment.
>
>The insurance company would have no financial incentive to take on
>such risks -- I reckon they'd sooner let the wanna-be customer die.
>Nasty, but it's reality.

They could charge an addtional $1 premium.

Insurance, if properly administered, is a bad bet for the customer if
we only pay attention to financial considerations.  However, the
customer can lose more than money, he or she can lose her life, which
is worth an up front premium to the insurance company.

The numbers we have been working with here are interesting, though.
Usually, the cost of the tests isn't justified by the information they
give us.  Presumably if the tests were economical, they would be
required.  Insurance companies do require checkups sometimes which is
really just a set of tests.

>And being a hard line anarcho capitalist, I draw the conclusion that
>if you can't afford to keep yourself alive, that is your problem.
>(Heartless ain't it:-)

In practice you might not be so heartless.  Even Monty Cantsin has
been known to help those who have fallen upon hard times.

The real philosophical question is whether other people should be
forced to support our charities.  (The real world question is whether
other people should be forced to support alleged charities.)

Those who advocate forced "charity" are making a curious assertion.
They themselves do not wish to dispense the charity they so highly
value, but they wish others to do so, at gunpoint if necessary.

I do not see any way in which such behavior may be defended as
civilized or decent.

>A charity could also refuse to help people who hadn't donated, if
>it chose.
>
>I bet it would work too, and a lot more efficiently than the
>government regulated setup now.

Many decades ago there used to be organizations called "mutual aid
societies".  They were sort of like mutual insurance companies, except
they may have been more flexible in the benefits they guaranteed.

They took care of whole sets of misfortunes for their members.  For
instance, if your house burned down or you were laid off, or whatever,
the other members of the society would help you get on your feet
again.  Note: the other members had a strong incentive to get you on
your feet.  (This cannot be said of welfare bureaucrats whose market
share dwindles the more they succeed.)

They were typically organized into local chapters which would then
belong to larger organizations which would, to some extent, insure
that the local chapter remained financially solvent.

The societies were more than insurance companies - they were also
social clubs.  This aspect was used to manage the moral hazard
problem.

These societies were tremendously successful.  A conservative estimate
of membership in the United States showed ten times as many people
belonged to these societies as belong to labor unions at the peak of
the labor movement.  Yet, they have been almost entirely ignored by
academia, probably because they do not fit nicely in a patronizing
ideological framework.

Tom Palmer of the Cato Institute has studied the subject.

Monty Cantsin
Editor in Chief
Smile Magazine
http://www.neoism.org/squares/smile_index.html
http://www.neoism.org/squares/cantsin_10.htm

-----BEGIN PGP SIGNATURE-----
Version: 2.6.2

iQEVAwUBNGLDQpaWtjSmRH/5AQFiNAf9Eb8qyHkL2881F0xpDaOUeNUCqX4UsrZd
zJtihskZi5Vg+FOiFAqSWFHsNHmDlhnw7W1fvFL2vs8+Pe5h6MtAUY1vWGaweG7Y
OjtwnnKt8q0jGeq/thV+cieYy0wdMcRLe9LQc79F2mmKniOIcZxwt+OHR9RtTqxn
d6aJJF3rsapZjb9OfS/1B/kFEcy80VuhnExF56za9YfDiKuW9b0Re3+8iwNeZrK3
a4ToHmL6AUImwmO+03BJfavCr/g+NqknL/gJOMcPAZTf4+PHhGRZctBKp4N/qQcg
hZmrFWKYBQXRxLx4HJuGIW46N5WNKpCcOilZ7mSHv5RUv/+fzRgkww==
=vH+d
-----END PGP SIGNATURE-----