Re: [tlug][OT] Free markets

["Stephen J. Turnbull" <stephen@example.com>]

Edward Middleton writes:

 > It was AIGFP[1] a financial services company.

Sure, what I meant is that the "rocket scientists" who did the
calculations started out as AIG actuaries.

 > Alico the insurance company, at least in Japan, is suppose to be
 > doing well.

My wife isn't at all sure that they're doing well, and she's pretty
sure that what they're doing ain't good. ;-)  Her argument is that
cheap prices and lavish care from humans sounds more like the old
"insurance lady" model, and not much like a modern financial service.

 > So there is inherently a high level of uncertainty, i.e. risk.

Right.  Insurance (as in the regulated retail variety) depends heavily
on the law of large numbers, which reduces the individual risk.  But
there's still systematic risk (eg, natural disasters), and modern
societies tend to ask insurance companies to bear at least some of
that.  That requires a cushion, ie, capital adequacy regulation.  But
this is a calculable need.

 > Well it would be democratic?  But would it lead to highly over
 > regulated markets, an increase in trade barriers and a long drawn
 > out depression?

I don't know.  That really depends on the politics, and the skill of
the leading staff members in government and advising politicians.