London's Burning (and not with boredom!)

Why has almost nothing been done to stave off the rampant destruction in London? The answer clearly lies in the fact that governments are not punished for failing to defend us. While the government has been entrusted with protecting the people's property, it will not be liable to pay for the damages that have been done. Essentially, the government has very little incentive to deploy its forces barring massive public support for the measure. It is afraid of deploying the military because it is afraid of the negative public reactions that will result from such a massive display of force, especially since giving the army discretionary power will inevitably lead to abuses that go unpunished (which is partially what triggered most of these riots: look up Mark Duggan for more on that).

Instead of trusting in the government's wisdom and benevolence in dealing with crime, why can't we hire private companies to insure our property against these threats? It is because the government has monopolized the use of force within its domain (especially in the UK, where all gun ownership is illegal). Insurance companies would only be able to provide such protection and reimburse us the full amount of the damage done if they were given the power to use force to catch these criminals. As a pacifist who wants to see coercion reduced to a minimum, I wonder why protection can't be provided by the market...it's clear that monopoly government hasn't done the job all that well.

It seems obvious to me that voluntary association with insurance companies could easily replace our current justice system. Each of us would hire these insurance companies to provide two services that would fill the gap. First of all, we would hire an insurance company that would guarantee to pay us for any damages done by criminals against our property: if such were the case, that company would do everything in its power to ensure our protection, and if any damages were done, they would do everything they could to catch that criminal and force him to pay those damages. How would that criminal have an obligation to pay? This is where the second aspect of these insurance companies comes into play.

To prevent a person from being seen as an outlaw by the community, to prevent a person from being socially ostracized and strangled from all social interactions, that person (even if s/he did not have property) would have to have an insurance company guarantee that it would pay any damages that that person inflicted on others. The entire motivation to commit crimes would be removed under such a system because crime would be nearly impossible, successful criminals would almost always be caught, and after being caught, these criminals would become uninsurable, which would basically force them to live as outlaws unless they submitted themselves to severely strict regulations (such as house arrest).

Since the cost of these damages would be put onto private companies that were subject to competition, our protectors would have economic motivations to protect us, and they would ensure that we were actually safe from rampant destruction. In addition, criminals would be able to voluntarily choose their penal colonies.

For more on this, check out Robert Murphy's Chaos Theory: http://mises.org/books/chaostheory.pdf

http://www.youtube.com/watch?v=V0_Jd_MzGCw