Insured Contracts in LFC Society

[intellectualammo]

The issue of financing a government in LFC has come up time and time again here, so I am not exactly sure if this particular part of it is covered in other threads here on the subject or not, so forgive me in that, but this particular idea of Ayn Rand's in this recording http://www.aynrand.o...reg_ar_politics and it's mention in the essay on the financing the government in VoS has me wondering how this might be applied, this idea of hers of insured contracts in a free society.

I'm only a little familar with private defense, in a so called free market anarchy/anarcho-capitalism, with the concept of insurance in it, but what might insured contracts look like in LFC? What contracts could be insured and what if you don't insure them? It's easy for me to see paying a small extra price voluntarily (NOT taxed) on contracts that, if breached, could be costly to have the government be of service, so one might pay a certain amount determined constitutionally or whatnot on your contract. And if you did not take the insurance out on it, perhaps then you would have to fit the bill totally on your own if there was a breach and you wanted to do something about it legally. So would the governemtn be like an insurance company in some respects? I'm not familiar with this area all that much, so if anyone would care to comment, feel free, just trying to get a better understanding.

When I speak of contracts, I'm kinda borrowing the term or rather referrring to it generally, since I don't know what contracts it would be, would it be on, say employer/employee contracts? And taking the insurance out on whatever it be that one could take it out on, would help finance the government, is the idea, right? What about taking insurance just generally for the government, local/regional/national, so that you can use it if you need it in certain specified things, and if you didn't take such insurance out, you'd have to fit the bill for whatever it would be? I can't be specific because I don't know what any of this would really look like in LFC, hence this topic.

Edited April 24, 2011 by intellectualammo

[Grames]

What contracts could be insured and what if you don't insure them?

Only contracts that are credit transactions where monetary units are to be paid in the future. The insurance is useful to ensure future payment is made even when the trade goods are delivered immediately and in full.

When I speak of contracts, I'm kinda borrowing the term or rather referrring to it generally, since I don't know what contracts it would be, would it be on, say employer/employee contracts?

Never thought of that. If a job is selling labor and time then putting in two weeks of work and then getting paid afterward is a sale. This is nothing less than the return of the income tax, Objectivist style, except of course you can work without a contract and not be arrested for tax evasion.

And taking the insurance out on whatever it be that one could take it out on, would help finance the government, is the idea, right?

Right.

What about taking insurance just generally for the government, local/regional/national, so that you can use it if you need it in certain specified things, and if you didn't take such insurance out, you'd have to fit the bill for whatever it would be?

No, you want the people relying on contracts the most to be paying for them as they use them, proportional to the value of the contract.

[intellectualammo]

I want to try to understand this further as I am having a discussion about this still.

When Rand means "insured contracts" does that mean, that if I loan money out to someone, I can insure it with the governemtn, so that if she does not pay me or is not able to pay me for whatever reason, I would get my money through that insurance then, the amount owed still? And then she also wouldn't get into any kind of trouble, as the contact was insured for shit happennig like that?

What happens when one doesn't take the insurance out, and something happens , they can't use the governements services at all, or can pay soemthing at that point?

Edited May 2, 2011 by intellectualammo

[Grames]

When Rand means "insured contracts" does that mean, that if I loan money out to someone, I can insure it with the governemtn, so that if she does not pay me or is not able to pay me for whatever reason, I would get my money through that insurance then, the amount owed still?

No. The government confiscate property for you as restitution. Willful disobedience of court orders can result in prison time. The government is not paying anybody, you are paying the government.

[intellectualammo]

No. The government confiscate property for you as restitution. Willful disobedience of court orders can result in prison time. The government is not paying anybody, you are paying the government.

I wonder if there is anything wrong with the idea of it being like an insurance company? People would find it easier to lend out money then knowing that if they pay a certain fee, their ass is covered, which it wouldn't necessarily be monetarily, if they can't get their money back they loaned out, say.

I guess I don't know clearly what Rand meant by "insured contracts"... I thought that what it meant. Contract enforcement would be a better way of saying that, if that's what she meant.

Also, what about taking enforcement out on ohter economic exchanges? Contracts, loans, credit transactions, purchases, maybe even some types of investing?? I'm not familiar with all the various activity in the economic sphere, but maybe they could pay to have enforcement on such things?

[Grames]

I wonder if there is anything wrong with the idea of it being like an insurance company?

Government is not in the insurance business.

People would find it easier to lend out money then knowing that if they pay a certain fee, their ass is covered, which it wouldn't necessarily be monetarily, if they can't get their money back they loaned out, say.

You just reinvented mortgage insurance. Like all insurance, the business only works when all customer's premiums total to more than payouts to all customers. Premiums are set by the insurance firm, but payouts are out of their control and can ruin the business. The insurance terms require certain known and low probability qualifying events (fire, flood, accident) for the insurance to payout. It cannot payout for any random reason, like Joe Blow lost his money in Vegas. The government does tackle those situations but not by paying off the creditor.

Also, what about taking enforcement out on ohter economic exchanges?

Any kind of transaction where goods are delivered up front for money paid later or in installments can benefit from law enforcement of terms.

[intellectualammo]

Thank you so much. I now have a full understanding of it, I think.