[ExI] those damn greedy workers

Stathis Papaioannou stathisp at gmail.com
Wed Jun 17 11:34:00 UTC 2009

2009/6/17 Mirco Romanato <painlord2k at libero.it>

>> If people couldn't insure their homes and their cars, everyone would
>> be more careful. Are you opposed to insurance in general?
> I'm not.
> But insurances must be a private enterprise, with a rational management
> of costs and incomes. They must give a service and profit from it, so
> they will continue to give a service in the future.

The government insurer also tries to do this, and in the case of
health insurance, does it more efficiently than the private
alternative. This is evidenced by the difference in health costs and
health outcomes in the mostly privately funded US system compared to
the mostly publicly funded systems in other OECD countries.

> Governments and large bureaucratic companies like GM (without a real
> owner) have not the right incentives to manage rationally the costs and
> to plan rationally for the future. Their personal future horizon is 3-5
> years, not decades. Why do sacrifice today when the profits will be
> reaped by others? Why do not enjoy today and leave the bill to be footed
> by others tomorrow?

You have this the wrong way around: private enterprise generally only
looks a few years into the future, while governments undertake
projects that might not show a reward for decades. For example,
governments may take measures to mitigate global warming, assuming it
is believed to be a problem, which private corporations would have no
incentive to do anything about. At best, a private corporation may
invest in enterprises that would benefit from global warming, provided
that the investment was going to show a return in a few years;
otherwise, the shareholders would sack the board of directors for
wasting money.

> Private markets punish people that don't plan well and reward people
> that planned well. The alternative is, like today, to punish people for
> good planning and rewarding people for bad planning.

It certainly looks like you are opposed to insurance. To the extent
that adverse events are under anyone's control, insurance consists of
the careful subsidising the careless.

Stathis Papaioannou

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