Jim Choate wrote: > > On Thu, 26 Apr 2001, Ken Brown wrote: > > > Jim Choate replied to Tim May: > > > > [...] > > > > > And what would your solution be? We can't kill the cows, spread the hurt > > > around, and get on with our lives by your view. We can't let the farmers > > > shoulder the burden of the cost of vacination alone > > > > insurance > > You're an idiot if you think insurance will mediate a Hoof and Mouth > outbreak. Insurance is predicated upon a SMALL PERCENTAGE of the market > being in distress, it's an economic way to spread the load during times of > light market distress. However, insurance falls down when the entire > market is in distress because the premiums paid are insufficient to cover > everyone (you've created a situation where the people paying for it are > the people experiencing the distress. Something that is clearly absurd > since it's clear the farmers as a whole don't have the resources to handle > that sort of market 'reboot', if the did they wouldn't need the insurance. > The efficiency of the 'government' model in this case is that it mediates > the impact over the entire population, and since the entire population is > effected by such an outbreak that seems fair. Farming is less than 2% of UK business. Meat farming perhaps a quarter of that. Maybe 5% of those have had their stock culled. The main economic impact of the disiease has in fact been on tourism - a far bigger business than agriculture in this country. One IRA bomb in Bishopsgate in London wiped more value off the UK insurance market in 30 seconds than this whole "crisis" has. I heard it go off. At Canary Wharf a few years later I saw another bomb do about a billion dollars of damage. The one in Manchester was almost as bad. The insurance business could easily cope with the effects of Foot & Mouth. > It won't save the farmers, it won't put meat on the table, and > it won't keep the insurance companies in business. So, now instead of > spreading the problem around up front we've created a situation where we > have no effective cattle industry, and won't have for about 5 years. We're talking about Britain here, not Texas! We alreaady *don't* have an "effective cattle industry" and we haven;t had for a lot longer than 5 years! > We > won't have food on the table from local production so we have to import, > raising the prices even further. Meaning that even more people are having > to do with out, those on the lower end of the income range being the > hardest hit, and we've got insurance companies which are broke because > they paid out premiums that are insufficient to handle a complete market > melt-down. So the next time the farmers do get their cattle there won't be > any insurance because it doesn't make sense. We got over that, in the 1830s & 40s. > > > because it will put them out of business > > > > Letting them go out of business, if they can't help themselves, *is* the > > free market solution. It might be a bad idea but there it is. > > Then people, instead of cows, die. However you measure that bottom line, > it ain't black but red. In most countries, but not in Britain which is where we're talking about. > Life is about more than a profit margin. > > Despite what crypto-anarcho-capitalist-libertarians might wish, a lightly > regulated market is more stable than a free market. Why? Because free > markets can't take large perturbances and still remain stable. (Hayek's > eternally unanswered question of where the market stability comes from). You are probably right. So?
