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Scott Adam’s last blog post tongue-in-cheekily proposes that the US Government transform itself into an insurance company. More a thought experiment than actual proposal, i feel it shows some interesting aspects of the whole system-of-government problem.

He says that the government already provides insurance to society anyway, and thus that it would not be too much of a change after all. Well, yes, the government, amongst other things, works as insurance. The 64k question obviously is what are those “amongst other things” — and also the genius of his idea to completely disregard the issue.

It is interesting that nowadays many people direct inquiry into the form of “what service does it provide?”, the ii in case being replaceable by any number of things. What service does the government provide? The obvious endpoint of such an argument is to consider ways to enhance this service, whereby every political faction will argue that the course of action they do prefer anyway to be the only way to enhance the government service.

But even the most rabid proponent of laizes-faire still wants to keep a government of sorts. That being the case because even though the government can’t provide any service more efficiently than the private sector by definition (or, at least, by their definition…), still without a government there would be no private sector to speak of. This is implicit in Smith’s analysis of the whole conundrum and i guess the overall mindset about the issue remains the same he proposes.

I think at the hearth of the matter lays the fact that the government does not provide anything to society, the government creates society. It is not that we sustain a government in order to it to collect our garbage, it actually is the case that there was a government, and that because of it we are here, and, since that is the case, well, you know what?, they could collect the garbage and maybe also fix the kitchen sink.

Keeping with his hypothesis that the government is a service-provider, Scott assumes that given the possibility to pay for insurance against threats foreign (to him) governments would just cease to maintain their armies. And maybe here is where the trick is revealed, for it is almost impossible to imagine a nation without an army, even if many of them do not have good and capable armies.

It seems artificial to talk about an army as something you buy and sell.

Instead, i believe that armies are maintained out of a bid for power. Power, in this case, extends beyond services. It exists almost in a different dimension, as for example when we define power to be the faculty to deny service.

When the political situation stabilizes itself, the army is at it’s post and the various government agencies are working reasonably well and society as a whole sustains it’s metabolism without big hiccups, then the internal group dynamics will tend to revolve around what share of the services are directed at each group or individual. But government itself, so to say in it’s essence, probably has nothing to do with services or providing services.

Thus i think that Scott Adam’s argumentation, which is mostly directed at showing that the government services would be maximized if USG became AIG, is mostly misguided. When we deal with government systems, services are unimportant. No, what i like about his whole crazy idea is something else.

He says that the government, as well as insurers, works not only to refund losses but also to reduce risks. And i am guessing this is the most powerful component of the idea: That to govern is to deal with risks.

Such a claim is one of those so broad as to be almost meaningless, of course. But consider: This would explain why almost no issue of politics can ever be decided by consensus, why there is always some moron to defend even the most clueless of policies. Because in the end it all revolves around dealing with probabilities that we do not know in advance.


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