Market Competition for Security Measures

[Sampo Syreeni]

On Wed, 24 Oct 2001, Tim May wrote:

>Federalizing or socializing the costs of security is like federalizing
>or socializing flood insurance: it takes the efficiencies of the market
>away and creates distortions.

A bare one objection to comprehensive market based security: a market
needs private property, and other civil rights, in order to function
efficiently, as predicted. Protection is what guarantees those rights. If
you place protection on the market, you no longer have a guarantee that
the market itself can function as originally intended.

Cf. piracy (in its original form) -- an evolutionary system like pure
market economy (anarcho-capitalism) will likely settle in a state with
parasitic activity present. It is not clear that this stable state (you
would call it a Schelling point) would not include a major proportion of
rights violating commerce (like mafia protection rackets and the like).
Hence it is not clear that it indeed guarantees maximum economic
efficiency; it might be just a local maximum.

The above, of course, has very little to do with Tim's analysis of private
security of the airline industry. But it does have a lot of relevance to
placing *all* of the normal police activity in the private sector. If I'm
not wrong, Tim's essay is part of precisely such an agenda.

Sampo Syreeni, aka decoy - mailto:decoy at iki.fi, tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2