Brilliant article from Left2Right on the market. Article in memory of my less favorite Hayek. The poor cannot, by nature, predict the free market, otherwise the free market would not be free....
"For the function of the market isn't to reward people for past good behavior. It's to direct them toward producing for current demand, regardless of what they did in the past...."
"Several implications follow.... (a) The claim "I deserve my pretax income" is not generally true.... (b) The claim that people rocked by the vicissitudes of the market... are getting what they deserve is also not generally true.... It is in principle impossible for even the most prudent to forsee all the market turns that could undo them. (If it were possible, then efficient socialist planning would be possible, too. But it isn't.)... (d) The volatility of capitalist markets creates a profound and urgent need for insurance, over and above the insurance needs people would have under more stable (but stagnant) economic systems. This need is increased also by the fact that capitalism inspires a love of personal independence.... This fact does not yet clinch the case for social insurance... maybe private insurance would do a better job meeting people's needs for insurance in the event of unemployment, disability, loss of a household earner, sickness, and old age.... [But] no argument that people have a moral claim to their pretax incomes, sufficient to preclude taxing it for insurance purposes, has survived critical scrutiny. Certainly, "I deserve it" doesn't."
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Posted by: insurance | Jun 07, 2005 at 03:22 AM