It's been a while since I've posted. One of the drawbacks of traveling 6 days a week.

I had an exchange in the comments of this post a few days (a week?) ago. What Neu Mejican is missing is one of the most important part of Free Markets. Just because something happens consistently or spontaneously doesn't mean that it's good for all parties. Everything happens "spontaneously"; I mean, I believe in divine intervention, but I'm not convinced that God directly intervenes in the GDP of Brazil. Events can only be assumed to be mutually beneficial (at least on average) when both parties consent to the relationship. The fact that government involuntarily "regulates" industry consistently is actually a support for small-government beliefs.

The trouble is that there are other options. For instance, the insurance industry in Florida is heavily regulated ever since hurricane Andrew because so many insurance companies were too poorly capitalized to cover the losses to their clients and declared bankruptcy instead of paying out. The state ended up buying up those policies and ended up in the insurance business. Now, they're smart enough to know they don't want to be in the insurance business, so as I understand it, they said, "everybody has to be properly capitalized to do business here and we'll price ourselves higher than the top 10 insurance companies." Unfortunately, with the increased number of hurricanes and the reinsurance requirements, the top 10 insurance companies no longer sell hurricane insurance in Florida; no one knows what to charge. Now, my Dad is pissed because the state turned over his neighbor's policy to a private company for over $1000 a year less than his rates, but not his. He's not willing to change to private insurance, of course, but it's the unfairness that gets to him.

I can't help but think there's a better solution, however. Why isn't there an industry stating "such-and-such a company has certified your insurance company has the money and will definitely back you up." Auditing firms with standards that are unrealistic will never have their standards met and auditing firms that are too easy have no meaning to their brands. The government's role is now reduced to trademark enforcement (you don't want people impersonating an auditing firm's Seal of Approval), which it's good at. It's a model that worked well for Sun when Microsoft tried to push their own version of Java the way the pushed their own version of JavaScript on Netscape. Sun successfully sued for trademark infringement and Microsoft had to rename their Java variant J# (I think I have the right Microsoft product). And, Microsoft had to implement a JVM according to Sun's standard so that Java would run on Microsoft machines. I'm not aware of such a system, so I can only assume there's a reason. What could that reason possibly be?