Fixed supply, really?

[teukon]

May I ask: Do you believe that bank insurance (as you outlined earlier) is largely just or more of a necessary evil?

I'm not judging; I'm genuinely curious.

Well, I may see this questions on two sides.

The first doesn't even need to see it as a "necessary evil" or not. Insurance, in general, exists because there are certain events that, albeit unlikely, can be very catastrophic to those caught in it. Someone's home burning up is an example. Someone's bank going bankrupt in another. Someone having cancer is a third. Insurance offers protection to that; in that you pay a small fee over time, but if something bad happens, then it'll pay for you.

If you're "lucky", and nothing bad happened to you, then you'll have payed for nothing. So you lost money with this deal. but a lot of people pay for insurance instead, because we cannot know beforehand if it will happen to us, and we prefer to be slightly less rich, but safe, than risk losing everything.

But all insurance program rely on the fact that most (or at least, some) members will be "lucky" and that nothing bad will happen to them; and that therefore the payments of these members will subsidise those who are unlicky, because, otherwise, insurance would not exist; it would just be advanced payment for the eventual catastrophe.

But insurance is a "special" product that does not behave normally: for a given monthly payment, has "more" value the more people use it. It does not behave like a standart "free market" service where only offer and demand drive the value.

Therefore, if a majority of the people decide that they'd be better off being insured than not, then they have the incentive to make everybody subscribe to that insurance.

And because it is a matter of collective well-being, then it is somewhat legetimate to bypass the individual freedom of not subscribing to insurance. (Especially since the reasoning here is that you are better off being insured, so your "right" to not be insured is only a "right" to be stupid. Because in the first place, if most people believed insurance was bad, then they wouldn't vote for such law to begin with. It is a completely different case of your example where "two wolf and a sheep cannot democratically chose what's for dinner", because, in that example, the democratic "majority" choses to vote to considerably diminish one of the members of the group's well being, wereas, in mandatory inusrance, in theory, the honest will of the majority is to increase everybody's well being)


The other point of view does view it as a necessarely evil. A major bank collapsing would financially ruin a LOT of people. It would necessary lead to civil unrest, which is usually seen as a bad thing. (see: the Great Depression) Therefore, the government insuring the people's deposits in banks is a simple and effective way of preventing that from happening. It is less an an insurance for individual persons against bad banks, but an insurance for the society against the bad banks.

Thanks for the detailed response.

[ZephramC]

If it is really everybody's well-being which is in stake, why do not leave insurance voluntary? All will insure themselves in a moment when they see the "clear and indisputable advantage." in insuring

... The problem is that insurance can be set with wrong parameters. Eg. too high insurance for too low risk. And it is everybody's task to decide what the right balance is. Not for some central "right balance" to be enforced (either by dictator, commission or democratic vote).
Should smoking ban, drugs ban, suicide ban, etc. also be enforced "for the well-being" of all?

[un_ordinateur]

If it is really everybody's well-being which is in stake, why do not leave insurance voluntary? All will insure themselves in a moment when they see the "clear and indisputable advantage." in insuring

... The problem is that insurance can be set with wrong parameters. Eg. too high insurance for too low risk. And it is everybody's task to decide what the right balance is. Not for some central "right balance" to be enforced (either by dictator, commission or democratic vote).
Should smoking ban, drugs ban, suicide ban, etc. also be enforced "for the well-being" of all?

As I said earlier, the fact that the majority decides something is good for everybody does not gives, by itself, that majority the legetimity to force something onto everybody. Only when it is both done in the for the common well being, AND that people opting out is detrimental for the succes of the measure then it might become legetimate to enforce it.

To take your smoking example, I do not think banning smoking (wether it be tobacco of pot) should be forbidden. However, forbidding to smoke in public places is could be, because it causes inconvenience to other people.

In the topic of insurance, then, as I said earlier, some people are more wreckless that other. So some people do not see a clear and indisputable advantage to that. It is fully their right. But in the unfortunate event that a bank collapses, if not enough people (the vast majoryty of them) are insured, then it will lead to social chaos that it is in the interest of the whole society to prevent from happening. Now, if not enough people are willing to voluntary subscribe to such insurance, how do you determine who shall be forced to take it? It is a lot fairer to just ensure everybody.

(Also, in the case of bank insurance, it is not even forcing individuals to take an insurance. It is the government that takes upon itself to ensure deposits.)

[teukon]

As I said earlier, the fact that the majority decides something is good for everybody does not gives, by itself, that majority the legetimity to force something onto everybody. Only when it is both done in the for the common well being, AND that people opting out is detrimental for the succes of the measure then it might become legetimate to enforce it.

This seems pretty reasonable to me.  I'd give an example as something like "forcing people not to pollute the sea".  I believe that this is not legitimate myself but the argument is subtle and would take us too far astray.  Perhaps we can just agree to disagree on this.

Anyway, I think you're arguing well here.

In the topic of insurance, then, as I said earlier, some people are more wreckless that other. So some people do not see a clear and indisputable advantage to that. It is fully their right. But in the unfortunate event that a bank collapses, if not enough people (the vast majoryty of them) are insured, then it will lead to social chaos that it is in the interest of the whole society to prevent from happening. Now, if not enough people are willing to voluntary subscribe to such insurance, how do you determine who shall be forced to take it? It is a lot fairer to just ensure everybody.

I would debate several of your assumptions but see how, under these assumptions, bank insurance becomes a tragedy of the commons and therefore fits your criteria for being legitimately democratic.

One question:  What happens in a society composed entirely of democrats that accept your "common-good + common-tragedy" axiom but where the majority don't believe that bank insurance follows this axiom.  Would it still be a legitimately democratic matter?

(Also, in the case of bank insurance, it is not even forcing individuals to take an insurance. It is the government that takes upon itself to ensure deposits.)

You're letting yourself down here.  Government forcing individuals to pay for their own bank insurance would be less objectionable (still not good).  The original proposal implies government forcing people to pay for other people's bank insurance.

[teukon]

The problem is that insurance can be set with wrong parameters. Eg. too high insurance for too low risk. And it is everybody's task to decide what the right balance is. Not for some central "right balance" to be enforced (either by dictator, commission or democratic vote).

Yes, this is certainly one issue.  I think un_ordinateur is accepting this setback as being outweighed by the benefit of reducing the risk of civil unrest.

By the way ZephramC.  May I ask: Are you an anarchist or more of a minarchist?

[un_ordinateur]

As I said earlier, the fact that the majority decides something is good for everybody does not gives, by itself, that majority the legetimity to force something onto everybody. Only when it is both done in the for the common well being, AND that people opting out is detrimental for the succes of the measure then it might become legetimate to enforce it.

This seems pretty reasonable to me.  I'd give an example as something like "forcing people not to pollute the sea".  I believe that this is not legitimate myself but the argument is subtle and would take us too far astray.  Perhaps we can just agree to disagree on this.

There is a subtle difference between "forcing people not to pollute the sea" and "forcing people to take insurance". One is to force people to not do something, and the other is to force people to do something. I believe the first is a lot more easy to justify that the second; ones argument to justify to force to do something must be a lot damn stronger that ones that to justify to not do something.

Why? Because forcing somebody to do something he dissagrees with is a lot more "painful" to him than to not do something he'd like to.

I believe your objection might lie somewhere along these lines?

One question:  What happens in a society composed entirely of democrats that accept your "common-good + common-tragedy" axiom but where the majority don't believe that bank insurance follows this axiom.  Would it still be a legitimately democratic matter?

If the society was entirely made of democrats, then I'd believe that choosing if something is democratic or not is itself a democratic choice. (Which exactly is a Bill of Rights/Charter of Freedom: A democratic choice in which democrats decided to specifically exclude some choices as being democratic.) Thus if the majority decides that bank insurance is not a democratic choice, then it isn't until they decide otherwise.

(Also, in the case of bank insurance, it is not even forcing individuals to take an insurance. It is the government that takes upon itself to ensure deposits.)

You're letting yourself down here.  Government forcing individuals to pay for their own bank insurance would be less objectionable (still not good).  The original proposal implies government forcing people to pay for other people's bank insurance.

Ahhh! Hmm. I guess you believe that the least government the better? I guess that's why you dissagree strongly here; because I do not have such objections. In fact, I believe that in every case the state decides, by a tragedy of the commons argument, that everybody should take/subscribe/use something, then the only "fair" way to do this is if the government takes the job itself. Because giving it to the private sector is essentially granting them a "free" monopoly, and letting the unavoidable profits (I'ts difficult to fail with a monopoly) end in the hands of a few, wheras the whole point of this was for the common good. So then the government should run the thing and use the profits for the common good. (I'm of course assuming the governemnt does a -good- job at managing those assets. Which it doesn't always do. But it is not impossible that it did, and in any case, that a give implementation of an idea is flawed does not undernmine the idea itself)

I'll take for example Hydro-Quebec, the power company from where I live. It is almost run as a private company, but the government owns all the shares. Hydro-Quebec is really efficient with it's assets, produces huge profits, (so huge that a lot of people pressure the government to pressure the company to reduce the cost of electricy even if it already costs us about 60% of the price of electricity elsewhere), and all those profits goes to the government.

A second point of view, specific to the bank insurance, was more what I tought when I said "Also, in the case of bank insurance, it is not even forcing individuals to take an insurance. It is the government that takes upon itself to ensure deposits." -> If the governement forces everybody to take their own insurance, that's one thing. If the governement provides insurance to banks, without forcing anybody to pay anything, except the usual taxes, then I might be seen not as "the government provides insurance to the people", it might be seen as "the government takes insurance for itself against civil unrest". The difference is subtle, and the end result, exactly the same. It's not just the same moral footing.

Anyway, I think you're arguing well here.

Well thak you! I'm happy to see that my arguments are clear, because English is not my first language.


I'd like to end this on a side note. It's a really interesting talk. I like debating with people of different opinion of mine. The Bitcoin community is interesting in that it provides an interesting sample of right-leaning people that have smarter arguments than I'm used to. I've have interesting arguments with the left two years ago during the Quebec student strike. I myself see myself as moderately left-leaning liberal-democrat. (I'm using these words in an "absolute" political sense, not in reference to any party that might have these words in their name)

In that, I'm not specifically excited by some of the features of bitcoin that excites most of it's early adopters. But I don't dissagree with those features eighter; I understand how some might like them.
-I don't really care about anonymity. (On the contrary, the ability to track funds troughout the blockchain will, someday, be very useful to law enforcement I believe. Bitcoin does help "small" crimes (drug transaction), but it makes impossible to launder huge amounts of money. Both things I like.)
-I don't really care about fixed supply. (in fact, I believe that a small but know inflation might be better. But it's just an intuition. In any case, if the fixed supply ever gets a problem, then this can be changed by concensus).
-I don't really care about the fact that it is not government issued.

What I -do- care a lot about is that it is trustless system that enables people to send money all over the world. No intermediates like VISA, paypal that take huge fees and get to chose who gets to use their service or not. Just that makes Bitcoin revolutionary.

I also like that it gives back to the people some power over the monetary policy. The fact that we are currently all dependent upon banking institution for our money gives them way too much power. If something gets too big to fail, It should be dismantled. (I did say earlier that "I don't really care about the fact that it is not government issued" -> I don't see contradiction here as I believe that a (good) government expresses the will of the people. But currently, government prints money, but banks dictates money policy.)

[teukon]

I believe your objection might lie somewhere along these lines?

Not really; I just didn't express myself well.  I would actually object to "forcing people not to pollute the sea" (I'm an anarchist).

I'd like to end this on a side note. It's a really interesting talk. I like debating with people of different opinion of mine. The Bitcoin community is interesting in that it provides an interesting sample of right-leaning people that have smarter arguments than I'm used to.

Thanks.  May we both continue to learn and grow.

[ZephramC]

The problem is that insurance can be set with wrong parameters. Eg. too high insurance for too low risk. And it is everybody's task to decide what the right balance is. Not for some central "right balance" to be enforced (either by dictator, commission or democratic vote).

Yes, this is certainly one issue.  I think un_ordinateur is accepting this setback as being outweighed by the benefit of reducing the risk of civil unrest.

By the way ZephramC.  May I ask: Are you an anarchist or more of a minarchist?

I am more of a minarchist, perhaps classical liberal or something between liberal and libertarian.

[teukon]

I am more of a minarchist, perhaps classical liberal or something between liberal and libertarian.

Thanks.