So a single individual worker can save a company consisting of dozens, hundreds, or even thousands of workers from going under?
I can see Mr. Jones's point about unemployment benefits. If there really was a demand for a safety net "just in case," people could purchase unemployment insurance. This would be far superior to statist welfare considering that no insurance company would want a lingering member who cannot find work and therefore is leeching off of other customers. It would probably include a get-back-to-work program of some kind.
Mises Community Natural Rights Discussion Group
It would be insurance for business risk, which is not really something that can be underwritten with actuarial methods.
The old-fashioned "community chest" concept is probably more of what would evolve, but even private arrangements like this have a large incentive toward fraud. You need a really cohesive community with a strong work ethic to keep it solvent.
In Canada, we pay mandatory unemployment insurance, but they take the surplus each year (it is hard to claim, hard to live off) and roll it into general revenue, and have been for quite some time. It's infuriating, because you know that if there is mass joblessness, the first thing they will do, is raise the rate and claim that the fund is underfunded, when in fact it has been looted for nearly a decade.
If you find something evil that wobbles, push it. - Gary North
Stranger: You're reintroducing socialism through corporations. Now maybe you wouldn't mind having welfare insurance from your employer, but every other employee must also want that or else the company cannot make it work. And your choice also doesn't make any sense. You claim that you might not have enough savings and this is why you need the insurance, but if instead you accepted a higher salary you could build up your savings and thus have no need for insurance.
You're reintroducing socialism through corporations. Now maybe you wouldn't mind having welfare insurance from your employer, but every other employee must also want that or else the company cannot make it work.
And your choice also doesn't make any sense. You claim that you might not have enough savings and this is why you need the insurance, but if instead you accepted a higher salary you could build up your savings and thus have no need for insurance.
The welfare insurance could only be optional. Even if this scheme were compulsary for every employee, I would still have the option to leave.
The choice that you are talking about, though, is different to the one that I am talking about. You seem to think that you would have $10 taken from your salary, and after twelve months you would be entitled to $120 of welfare money. If this were the case, why would anybody take insurance out on anything?
Byzantine: Let this thread be a reminder to everyone never to venture on the Information Superhighway without helmet, elbow pads, life jacket, ear muffs, woolen mittens, and distress whistle.
Let this thread be a reminder to everyone never to venture on the Information Superhighway without helmet, elbow pads, life jacket, ear muffs, woolen mittens, and distress whistle.
And let it be a reminder to you that unsavoury actions can cause undesirable consequences.
Byzantine:It would be insurance for business risk, which is not really something that can be underwritten with actuarial methods. The old-fashioned "community chest" concept is probably more of what would evolve, but even private arrangements like this have a large incentive toward fraud. You need a really cohesive community with a strong work ethic to keep it solvent.
Wouldn't it be rational to think that unemployment insurance companies would guard against fraud just like auto insurance and health insurance companies?
krazy kaju:Wouldn't it be rational to think that unemployment insurance companies would guard against fraud just like auto insurance and health insurance companies?
They would do that by not offering unemployment insurance.
Microsecession as a strategy for revolution | Challenge to minarchist | How would a private road system work?
Auto accidents and disabling illness and injury are true casualty, i.e., fortuitous events. Business risk involves conscious decisionmaking by numerous actors and the variables in the macro business environment. Insurers like neat, easily-packaged risks.
I don't think the concept is out of the question, but it's hard to see how you'd get a profitable premium-paying risk pool out of it. The incentive would be more for, as Stranger said, a higher salary to fund individual savings.
Mr Jones: Byzantine: Sure. Like getting lectured at over the internet by effete Brits. How can I be effete after what I did to your grandmother?
Byzantine: Sure. Like getting lectured at over the internet by effete Brits.
Sure. Like getting lectured at over the internet by effete Brits.
How can I be effete after what I did to your grandmother?
Elderly Brits. Sorry.
Stranger: krazy kaju:Wouldn't it be rational to think that unemployment insurance companies would guard against fraud just like auto insurance and health insurance companies? They would do that by not offering unemployment insurance.
What if, instead of giving a cash payout, they were able to guarantee the policy holder employment within X amount of time?
Or, another option might be to take a lump sum cash payout. That way pretending to be looking for work would in no way benefit the policy holder.
Mr Jones: What if, instead of giving a cash payout, they were able to guarantee the policy holder employment within X amount of time? Or, another option might be to take a lump sum cash payout. That way pretending to be looking for work would in no way benefit the policy holder.
I am not going to reply. Instead you are going to tell us why this business model makes sense from the point of view of the buyer and seller.
Byzantine:Sorry.
It's never too late for an apology kid. You're forgiven.
Stranger: Mr Jones: What if, instead of giving a cash payout, they were able to guarantee the policy holder employment within X amount of time? Or, another option might be to take a lump sum cash payout. That way pretending to be looking for work would in no way benefit the policy holder. I am not going to reply. Instead you are going to tell us why this business model makes sense from the point of view of the buyer and seller.
First idea:
Buyer -- "if my company goes bust, I will not have to worry about looking for another job."
Seller -- "I will only offer insurance to those individuals who are employed by companies I do not expect to go bust."
Second idea:
Buyer -- "if my company goes bust, I will have much more money to sustain myself until I find another source of income, relative to how much I would have if I had saved"
Mr Jones:Seller -- "I will only offer insurance to those individuals who are employed by companies I do not expect to go bust."
How would an actuary calculate this risk?
Stranger: Mr Jones:Seller -- "I will only offer insurance to those individuals who are employed by companies I do not expect to go bust." How would an actuary calculate this risk?
Surely however they saw fit?
If you are implying that it would be impossible to do so, I am interested to hear your reasons why you think so.
I could be wrong.
Mr Jones: Surely however they saw fit? If you are implying that it would be impossible to do so, I am interested to hear your reasons why you think so.
That would be speculation, not risk insurance.
Mr Jones: Buyer -- "if my company goes bust, I will not have to worry about looking for another job."
This is a moral hazard no insurer would touch.
Mr Jones: Buyer -- "if my company goes bust, I will have much more money to sustain myself until I find another source of income, relative to how much I would have if I had saved"
Only if the insurer can find a large enough pool to pay premiums. Everybody in the company would still be insufficient, since in the event of a total shutdown the loss would equal the reserve, and in the event of downsizing as opposed to a total shutdown, the remaining employees would be subsidizing the unemployed. Include numerous employers and the problem remains the same. Why should employees of Company A subsidize the laid-off employees of Company B? There's just really no incentive for such a scheme.
Current unemployment insurance works only because 1) participation is mandatory, and 2) the payout is limited to a fraction of your former pay. With the administrative costs and the fact that the employer affords the premiums by paying you a lower salary to begin with, you're better off just setting up your own savings plan.
You're changing the definition to meet your needs.
No, but I would suggest you took offence from posts less lightly when online. As for your post, I merely wanted clarification.
How long has this situation been going on? Twenty years? Maybe more? While a deep crisis would of course have followed the steel mill closure, government intervention just made it much longer and more painful. That's it. Also ask yourself what caused the steel mill closure: market fluctuations or something else (been English you know the answer all too well)?
PS: if my post is to be deleted can I at least know what I've done wrong this time? No public debate, just a PM or an email. Thanks.
Yes, it's time for the Dr Goebbels show!
Methinks you need to read Mises on case and class probability and its relation to insurance of this sort.
-Jon
To darkness I condemn you...
Ludwig von Mises Institute | 518 West Magnolia Avenue | Auburn, Alabama 36832-4528
Phone: 334.321.2100 · Fax: 334.321.2119
contact@Mises.org | webmaster | AOL-IM MainMises
Mises.org sitemap